FINANCIAL REPORT - Merced County

County of Merced State of California

Annual Comprehensive

Financial Report

For the Fiscal Year Ended June 30, 2021

PreparedbyCountyAuditor‐Controller’sOffice

LisaCardella‐Presto,CPA,Auditor‐ControllerJaneyCabral,AssistantAuditor‐Controller

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TABLE OF CONTENTS Cover Image by Mark Cowart

PageINTRODUCTORY SECTION

Letter of Transmittal……………………………………………………………………………………………………………………………………………………………… iOrganization Chart……………………………………………………………………………………………………………………………………………………………… viiiBoard of Supervisors and Fiscal Officers………………………………………………………………………………………………………………………………………… ix

FINANCIAL SECTIONIndependent Auditor's Report…………………………………………………………………………………………………………………………………………………… 1Management's Discussion and Analysis (Required Supplementary Information)……………………………………………………………………………………………… 3Basic Financial Statements:

Government-wide Financial Statements:Statement of Net Position………………………………………………………………………………………………………………………………………………… 17Statement of Activities…………………………………………………………………………………………………………………………………………………… 18

Fund Financial Statements:Governmental Funds:

Balance Sheet………………………………………………………………………………………………………………………………………………………… 19Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of

Net Position - Governmental Activities………………………………………………………………………………………………………………………… 20Statement of Revenues, Expenditures, and Changes in Fund Balances……………………………………………………………………………………………… 21Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of

Governmental Funds to the Government-wide Statement of Activities - Governmental Activities…………………………………………………………… 22Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund……………………………………………………… 23Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Road Fund…………………………………………………………. 37Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - COVID-19 Emergency Response…………………………………… 38

Proprietary Funds:Statement of Fund Net Position……………………………………………………………………………………………………………………………………… 39Statement of Revenues, Expenses, and Changes in Fund Net Position……………………………………………………………………………………………… 40Statement of Cash Flows…………………………………………………………………………………………………………………………………………… 41

Fiduciary Funds:Statement of Fiduciary Net Position………………………………………………………………………………………………………………………………… 43Statement of Changes in Fiduciary Net Position…………………………………………………………………………………………………………………… 44

Notes to the Financial Statements…………………………………………………………………………………………………………………………………………… 45Required Supplementary Information (other than MD&A)

Merced County Employees' Retirement Association - Schedule of the County's Proportionate Share of the Net Pension Liability and Schedule of theCounty's Contributions……………………………………..………………………………………………………………………………………………………… 91

Other Post Employment Benefits (OPEB) Plan - Schedule of Changes in the County's Net OPEB Liability and Related Ratios………………………………………… 92Other Post Employment Benefits (OPEB) Plan - Schedule of OPEB Contributions………………………………………………………………………………………… 93

COUNTY OF MERCEDANNUAL COMPREHENSIVE FINANCIAL REPORT


TABLE OF CONTENTS

PageCombining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds:Combining Balance Sheet………………………………………………………………………………………………………………………………………………… 94Combining Statement of Revenues, Expenditures, and Changes in Fund Balances…………………………………………………………………………………… 95

Special Revenue Funds: ……………………………………………………………………………………………………………………………………………… 96Combining Balance Sheet………………………………………………………………………………………………………………………………………… 98Combining Statement of Revenues, Expenditures, and Changes in Fund Balances…………………………………………………………………………… 100Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Special Revenue Funds:

Fire…………………………………………………………………………………………………………………………………………………………… 102First Five Merced County…………………………………………………………………………………………………………………………………… 103Child Support Services Agency……………………………………………………………………………………………………………………………… 104Sheriff-Inmate Welfare……………………………………………………………………………………………………………………………………… 105Light and Drainage Districts………………………………………………………………………………………………………………………………… 106Medical Assistance Program………………………………………………………………………………………………………………………………… 107Workforce Investment Act…………………………………………………………………………………………………………………………………… 108Spring Fair…………………………………………………………………………………………………………………………………………………… 109Fish and Game……………………………………………………………………………………………………………………………………………… 110Dairy Loan Program………………………………………………………………………………………………………………………………………… 111Housing Loan Program……………………………………………………………………………………………………………………………………… 112

Debt Service Funds: ………………………………………………………………………………………………………………………………………………… 113Combining Balance Sheet………………………………………………………………………………………………………………………………………… 114Combining Statement of Revenues, Expenditures, and Changes in Fund Balances…………………………………………………………………………… 115Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Debt Service Funds:

Juvenile Hall 2013 Certificates of Participation (COP)……………………………………………………………………………………………………… 116Pacific Gas & Electric (PG&E) Retrofit Loan……………………………………………………………………………………………………………… 117Energy Retrofit Bond………………………………………………………………………………………………………………………………………… 118Courthouse Construction Certificate of Participation (COP)………………………………………………………………………………………………… 119Mental Health Facility Bond………………………………………………………………………………………………………………………………… 120Solar Array Bond…………………………………………………………………………………………………………………………………………… 121

Capital Projects Fund: ……………………………………………………………………………………………………………………………………………… 122Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Capital Projects Fund…………………………………………… 123



TABLE OF CONTENTS (Continued)

Page

Enterprise Funds……………………………………………………………………………………………………………………………………………………………… 124Combining Statement of Fund Net Position……………………………………………………………………………………………………………………………… 125Combining Statement of Revenues, Expenses, and Changes in Fund Net Position……………………………………………………………………………………… 126Combining Statement of Cash Flows…………………………………………………………………………………………………………………………………… 127

Internal Service Funds: ……………………………………………………………………………………………………………………………………………………… 129Combining Statement of Fund Net Position……………………………………………………………………………………………………………………………… 130Combining Statement of Revenues, Expenses, and Changes in Fund Net Position……………………………………………………………………………………… 131Combining Statement of Cash Flows…………………………………………………………………………………………………………………………………… 132

Fiduciary Funds: …………………………………………………………………………………………………………………………………………………………… 134Combining Statement of Fiduciary Net Position - Other Custodial Funds……………………………………………………………………………………………… 135Combining Statement of Changes in Fiduciary Net Position - Other Custodial Funds………………………………………………………………………………… 136

STATISTICAL SECTION (Unaudited)Net Position by Component……………………………………………………………………………………………………………………………………………………… 137Changes in Net Position………………………………………………………………………………………………………………………………………………………… 138Fund Balances of Governmental Funds………………………………………………………………………………………………………………………………………… 140Changes in Fund Balances of Governmental Funds……………………………………………………………………………………………………………………………… 142Assessed Value of Taxable Property…………………………………………………………………………………………………………………………………………… 144Direct and Overlapping Property Tax Rates……………………………………………………………………………………………………………………………………… 145Principal Property Taxpayers…………………………………………………………………………………………………………………………………………………… 146Property Tax Levies and Collections…………………………………………………………………………………………………………………………………………… 147Ratios of Outstanding Debt by Type……………………………………………………………………………………………………………………………………………… 148Schedule of Direct and Overlapping Debt……………………………………………………………………………………………………………………………………… 150Computation of Legal Debt Margin……………………………………………………………………………………………………………………………………………… 151Demographic and Economic Statistics…………………………………………………………………………………………………………………………………………… 152Principal Employers……………………………………………………………………………………………………………………………………………………………… 153County Employees by Function ………………………………………………………………………………………………………………………………………………… 154Operating Indicators by Function ……………………………………………………………………………………………………………………………………………… 155Capital Assets Statistics by Function …………………………………………………………………………………………………………………………………………… 156


TABLE OF CONTENTS (Continued)


INTRODUCTORY SECTION

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AUDITOR-CONTROLLER

Lisa Cardella-Presto, C.P.A. Auditor-Controller 2222 “M” Street Merced, CA 95340 (209) 385-7511 (209) 725-3900 Fax www.co.merced.ca.us

February 18, 2022 Honorable Board of Supervisors County of Merced Merced, California 95340 To the Board of Supervisors and Merced County Citizens: The Annual Comprehensive Financial Report (ACFR) of the County of Merced (County) for the fiscal year ended June 30, 2021, is hereby submitted in compliance with Sections 25250 and 25253 of the Government Code of the State of California. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon an internal control framework established for this purpose. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operation of the various funds of the County. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than an absolute, assurance that the financial statements are free of any material misstatement. All disclosures necessary to enable the reader to gain an understanding of the County’s financial activities have been included. The independent auditor’s report is located at the beginning of the financial section of this report. Brown Armstrong Accountancy Corporation has issued an unmodified (“clean”) opinion on the County’s financial statements for the fiscal year ended June 30, 2021. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the financial statements. This letter is designed to complement the MD&A and should be read in conjunction with it. Profile of the Government The County was incorporated in 1855 and is located in the heart of the San Joaquin Valley in California, the agricultural hub of the State. The County’s abundant flat land and nearby sources of water support the local agricultural economy. The County occupies approximately 1,978 square miles of land and water serving an approximate population of 285,000 ethnically diverse citizens. Six incorporated cities are within the County: Atwater, Dos Palos, Gustine, Livingston, Los Banos and Merced and numerous smaller unincorporated communities. The County’s agricultural-related industries are a major source of employment, along with food processing, retailing, and light manufacturing. Agriculture continues to be the economic base for the County with $3.4 billion in gross production for the 2020 calendar year, placing the County as the sixth largest agricultural producing County in the State as well as the nation. The higher education system also provides cultural and social influence throughout the County. The County is also home to the University of California (UC) Merced, the UC system’s 10th campus. The County government functions as a local government body to serve the needs of its residents. As geographical and political subdivisions of the State, counties serve a dual role: providing municipal services in the unincorporated areas and acting as administrative agents for the State and Federal government programs and services. Policymaking and legislative authority is vested in the County Board of Supervisors (Board) which consists of an elected supervisor from each of the five districts. The Board is responsible, among other things, for passing ordinances, adopting budgets, and appointing committees, the County Executive Officer (CEO) and non-elected department directors. Supervisors are elected to four year staggered terms with elections occurring every two years for alternate districts. The County has five elected department directors responsible for the offices of the Assessor-Recorder, Auditor-Controller, District Attorney, Sheriff-Coroner, and Treasurer-Tax Collector. An organizational chart reflecting the various functional areas of the County is included later in this report.

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M EfiCEDA COUNTY

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The County, with approximately 2,087 employees, provides a full range of services. Citizens residing in unincorporated areas of the County receive municipal services from the County including law enforcement, fire protection, land use and zoning, building permits, local road building and maintenance, animal care and control, and public libraries. Every resident of the County, directly or indirectly, benefits from these services. In addition, most services performed by the County are provided for all residents regardless of whether those residents live in cities or unincorporated areas. The County’s principal functions include seven major areas: general government, public protection, public ways and facilities, health and sanitation, public assistance, education, and recreation and cultural services. The State and Federal governments mandate certain minimum service levels in areas of public assistance and health services. Included in operations are various component units which provide specific services Countywide or to distinct geographical areas within the County. The governmental reporting entity consists of the County and its component units. They include the Merced County Employees’ Retirement Association (MercedCERA), the Other Post Employment Benefits Retirement Investment Trust, the Merced Tobacco Funding Corporation, and the First Five Merced County Children & Families Commission. While these entities are legally separate from the County, the County has some financial accountability for them, or they are organizations whose nature and significant relationship with the County are such that exclusion would cause the County’s financial statements to be misleading or incomplete. The County is required by State law to adopt a final budget each year. This annual budget serves as the foundation for the County’s financial planning and control. Budgets are adopted for all governmental and proprietary funds and are prepared in accordance with the State Budgetary Act. The County maintains budgetary controls to assure compliance with legal provisions embodied in the annual appropriated budget approved by the Board. Activities of the general and special revenue funds are included (except for Tobacco Securitization, Business Loan Program and the Perpetual Conservation Easement), the capital projects fund, and debt service funds (except for the Merced County Tobacco Funding Corporation) in the annually appropriated budget. Project-length financial plans are adopted for the capital projects fund. The level of budgetary control (that is, the level at which expenditures cannot exceed the appropriated amount) is established at the object level within each department or budget unit, except for capital assets which are budgeted for at the sub-object level. The County also maintains an encumbrance accounting system to assist departments in accomplishing budgetary control. Unencumbered annual appropriations lapse at year-end. An encumbrance reserves a portion of an appropriation at the time a commitment is made to acquire goods or services. Open encumbrances are reported as reservations of fund balances at fiscal year-end and are re-appropriated as part of the following year’s budget. The legal level of control for appropriations is exercised at the department, within fund level. Appropriations at this level may only be adjusted during the year with approval by the Board. Management may make adjustments at their discretion below that level. Such adjustments by the Board and management are reflected in the revised budgetary data presented in the financial statements. The County’s internet site at http:/www.countyofmerced.com provides additional information about the County government and its services to the citizens of the County and to those who visit. The County’s website includes information about the Board, including how to contact the Board, and provides Board agendas and minutes, County job listings, County department directories, information on assessment appeals, voter information, County permits and forms, and financial information such as the County Annual Budget. There are also online services to use, including the ability to view live and archived Board meetings, look up election results and polling places and pay property taxes. Economic Overview

The fiscal year 2020-2021 showed signs of recovery from the sharp economic downturn in response to the COVID-19 pandemic that began abruptly late in first quarter 2020. Starting in the latter half of March 2020, the country and State saw mandated closures of businesses with the economic indicators such as unemployment rates rising as high as 15.5% in April 2020 and sharp declines in retail sales but rebounded in the fiscal year 2020-2021 as discussed below. In response to help offset some of the impact, government stimulus packages included cash flow relief to business owners, one-time payments to taxpayers and expanded unemployment benefits to the newly unemployed. This, coupled with some public health mandates relaxing, allowed some business to reopen and there were modest rebounds to the unemployment rate and consumer spending as discussed below.

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Employment Data The County’s unemployment rate has improved considerably this year as compared to the initial year of the COVID-19 pandemic in 2020. The unemployment rate was 10.8% in June 2021 as compared to the June 2020 figure of 14.4%. The County’s unemployment rate is typically significantly higher than the State of California’s unemployment rate due to its large agricultural employment base and the level of seasonal unemployment. The June 2021 unemployment rate for the State of California was 8.0% and the United States’ unemployment rate was 5.9%. The County’s unemployment rate for the fiscal year of 2020/2021 and beyond has shown consistent improvement with the high being in July 2021 at 13.9% to a low of 8.2% in September 2021. As of the most recent data available, September 2021, the County unemployment rate has decreased to 8.2% as compared to the State’s rate of 6.4% and the United States’ rate of 4.6%. Agriculture currently accounts for 20% of wage and salary employment for the County. Other important sources of employment include government (22%), goods producing (16%), wholesale and retail trade (11%) and education and health services (12%) as of September 2021 on a non-seasonally adjusted basis.

Personal Income

Per capita personal income improved going from $41,077 in 2019 to $43,914 in 2020, increasing 6.9%. This compares with a per capita income for the State as a whole of $70,192 in 2020. Merced County ranks as the 54th county in the state (out of 58 counties) in terms of per capita income.

Real Estate The economic downturn in many segments of the economy in 2020 rebounded strongly in the local housing market. The Countywide median price on all types of home sales increased 23.1% to $370,000 at September 2021 as compared to $300,500 at September 2020. Sales volume also increased year to date for single family homes by approximately 8% as of September 2021. The certified valuation of total taxable property values increased by 5.7% from fiscal year 2019/2020 to fiscal year 2020/2021.

Agriculture The County remains a leading agricultural county in the State and in the nation. Total gross production was $3.4 billion in 2020. Leading commodities include milk, almonds, chickens, sweet potatoes, cattle and calves and tomatoes. Total production experienced a 7% increase from the previous year due to increased production and some increases in commodity prices.

As of the time of this report, economic recovery has shown signs of improvement, but remains quite unpredictable. The country, the State of California and our local economy remain in a state unprecedented in recent history and the economic future is remains uncertain. In addition to the widespread uncertainty, additional factors such as commodity prices and water resources and access may also impact the County’s revenue and tax base.

Major Initiatives With constant challenges facing our State, regional and local economies, Merced County continues to place great value on its ability to deliver meaningful services and programs for its population. The County well understands its role and prides itself on delivering said programs for the purpose of improving the quality of life of its residents. There is always some fiscal uncertainty in Sacramento, which can place strains on local governments throughout California, and Merced County is not an exception. While not an exhaustive list, following are a number of accomplishments made by Merced County that aim to illustrate the County’s firm commitment to providing outstanding programs for the community and maintaining essential services with resources becoming more finite. COVID-19: While County government covers a broad array of vital services, our foremost concern as an organization is the health and safety of our residents. That is why the County and its partners collectively sprang into action in late January 2020 when the magnitude of the COVID-19 pandemic became apparent. At that time, the Merced County Office of Emergency Services, Public Health Department Operations Center, and Human Services Agency Department Operations Center activated. In March 2020, the Merced County Office of Emergency Services and Department of Public Health proclaimed a local and public health emergency,

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which was ratified by the Board of Supervisors soon after. These measures enabled the County to fight back against the deadly disease and mitigate its impacts. While we saw significant successes in the form of safety protocols, testing sites, as well as ongoing financial assistance for struggling businesses and residents—we also saw the deadly toll this disease can take. To date, Merced County has tragically lost more than 650 residents to COVID-19. Significant County resources have been pulled together to help fight against the outbreak, including scores of employees from various County agencies reassigned to assist Public Health. Various State and local assistance programs have also been implemented to help businesses navigate through the shutdown. Monetarily, the County was allocated approximately $28.9 million of federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding. Through the end of fiscal year 2020-2021, approximately $19.5 million of these funds had been spent. Additionally, in May of 2021, Merced County received its first allocation of American Rescue Plan Act (ARPA) funding in the amount of nearly $27 million. The County will receive an equal amount in May of 2022 as a second tranche. As of the publication of this document, the Merced County Board of Supervisors is actively soliciting community feedback to determine how to best allocate the funding to benefit the community. Transportation Infrastructure: While the pandemic poses logistical challenges for all projects, Merced County continues to stay on schedule on its most critical endeavors that will position this region for success in the future. One of the foremost priorities for Merced County is the completion of Campus Parkway, which will connect Highway 99 with the UC Merced community via a four-lane expressway. In 2020, Segment II, which connects the expressway with Highway 140, was completed and opened to the public. Segment III is currently underway and will extend the expressway to Yosemite Avenue once complete. Segment III is more than 80 percent complete as of the publication of this document. In addition to Campus Parkway, staff is also in the process of completing preliminary work and searching for funding for Phase 1B of the Atwater-Merced Expressway project, which will extend the expressway from its current interchange along Highway 99 and over to Castle Commerce Center, opening the door for future economic development at the site. Campus Parkway and the Atwater-Merced Expressway represent two major components of the “Merced Loop System,” which will circle the City of Merced and connect surrounding communities, including the City of Atwater once completed. The project will greatly reduce traffic congestion, improve regional connectivity, increase economic development opportunities, and allow for easier access to UC Merced. In addition to major regional projects, the Roads Division of the Merced County Department of Public Works continues to catch up on the deferred maintenance to our dilapidated road system, which is a top priority of the Board of Supervisors. Thanks to additional funding through the Measure V half-cent sales tax approved by the voters in 2016 and the Senate Bill 1 transportation funding package approved by the legislature in 2017, Merced County was able to repave an additional 17 miles of roads in 2020. This is down from nearly 40 miles of roads repaved the previous year, mainly because the County is now repairing roads that are in much worse condition and require complete replacement instead of a simple overlay. There are more than 1,600 miles of paved road in Merced County’s unincorporated areas. Currently, it costs approximately $380,000 to repave one mile of roadway. We are also proud to recognize the replacement of the 70-year-old bridge along La Grange Road (J59) over Dry Creek about four miles north of Snelling. The existing bridge suffered from structural issues and had to be closed multiple times due to safety concerns during storm events. The new bridge (constructed approximately 200 feet to the west) is safer and provides increased sight distance for drivers. The project was 88.5 percent federally funded with an 11.5 percent local match. Construction was completed last year. Jail Renovation Project: Plans are moving forward for a reconstruction of the County’s John Latorraca Correctional Center (JLCC). Planned improvements will help address security and infrastructure concerns at the JLCC while improving the capacity to house programs that reduce recidivism. The plan also includes mental health treatment facilities and assessment programs in an effort to better address inmate needs and help reduce the number of re-offenses upon release.

More specific plans to renovate the facility include remodeling the existing dormitory space to bring the structures up to current code, providing additional exercise

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yard space, a new 10,000 square foot programming/classroom building, a medical/mental health unit with 30 beds, new laundry and kitchen facilities, a new intake/release building and administration building with video visitations, and security upgrades and enhanced fencing for the entire site. The total project budget is approximately $71 million, which is made up of $40 million in State funding, $31 million in County match.

The County is continuing to work with the State as the project moves closer to breaking ground.

Transportation Research Center at Castle Commerce Center: In 2021, Merced County completed construction of a $2.1 million expansion of the automotive research and testing site at Castle Commerce Center. The new site will offer vehicle manufacturers, suppliers and innovators a variety of test areas that will replicate real-world highway, rural and urban scenarios. Autonomous vehicle technologies and high-speed testing will be two primary focuses of the facility. The 225-acre site formerly known as the “California AutoTech Testing and Development Center” is now known as “TRC California.” TRC (short for “Transportation Research Center, Inc.) is an Ohio-based company that will manage the site. TRC is an industry-recognized leader in automotive testing and innovation. Under a contract awarded to Central Valley-based Avision Construction, the project includes construction of TRC California’s 2.2-mile high-speed test track, installation of privacy fencing along the perimeter, assembly and placement of vehicle barriers, modification of pavement markers, and improvements to onsite infrastructure to increase the safety, confidentiality, security and capabilities of the test facility. Other activities on the site include work on a control building and workshop, and installation of test equipment, with a total project budget of $6.5 million.

TRC California has already attracted a number of companies that are actively testing at the facility, and a full-time proving ground director and operations manager have been appointed to assist clients with their engineering and technical needs. Castle Commerce Center is already home to Waymo, Google’s autonomous vehicle development company. Waymo (which is also expanding its footprint) is separate from the TRC California site. TRC California’s facilities and specialist staffing will continue to expand in the near future as TRC completes the build-out of additional testing capabilities and services, especially those geared toward research on electrification and autonomous and connected vehicles. Included will be additional roadway complexes, road surfaces, and intersections all designed for testing advanced transportation technologies, including driver-assistance systems, in a safe, secure and repeatable real-world environment.

Housing and Homelessness: As California continues to face a severe housing shortage and increased cost of living, the current homelessness crisis continues to escalate across the State. In Merced County and its cities, there are approximately 835 homeless individuals, which is an increase of 199 compared to the previous year, according to the Continuum of Care’s 2021 Homeless Point-in-Time Count and Survey Report. The increase can be partly attributed to a much more accurate and comprehensive counting process. The report did show a decrease of unsheltered homeless individuals—that total went down to 313 from 455.

This is an issue that cannot be addressed by one agency alone. As part of a collaborative effort, Merced County is working with its six cities and the Continuum of Care to develop a Regional Homelessness Plan that focuses on a variety of key areas, including outreach and engagement, navigation services and transitional housing, long-term supportive housing, and the system supports needed to coordinate these activities. The development of this plan will better position the County and its partners to access State and Federal funding dedicated to addressing the statewide homelessness crisis. This is part of a long-term goal to address and resolve chronic homelessness in Merced County through a holistic approach as opposed to a patchwork of scattered services.

While there is much work to be done, Merced County and its partners have already taken several steps to help manage the situation. The County has created an “Encampment Task Force” to improve coordination between agencies when responding to homeless encampments, helped orchestrate the opening of the “New Direction Outreach and Engagement Center” to bring together County and community-based organizations to better address homeless needs, and recently finished construction of a permanent Navigation Center to connect homeless individuals with available resources. The 15,000 square-foot facility was constructed from modified shipping containers to save money, cut down on construction time, and provide for a versatile and modern look. The County contracted with the Merced Rescue Mission to manage the new facility, which is operating 24/7.

The Navigation Center serves as a low-barrier emergency sheltering option for individuals currently residing in public spaces and other areas not suitable for human

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habitation. This initial step of transitioning individuals out of homelessness includes providing a safe and service-rich temporary shelter with connections to onsite supportive services. Clients are assigned a case manager who aims to link Navigation Center clients to permanent supportive and affordable housing units as quickly as possible, while simultaneously working on barriers to sustainability such as lack of income and behavioral health challenges. This new facility complements the nearby “D Street Homeless Shelter,” which houses 60 individuals a night with an aim toward permanent housing, leading to an average of 40 permanent homeless placements a year. The total cost of the Navigation Center was approximately $7.3 million and will require nearly $1.8 million annually to operate.

As part of the regional approach to address homelessness countywide, Merced County has also contracted with the Merced Rescue Mission to provide distributive housing units, or mini navigation centers, in other communities such as Los Banos, Livingston, and Atwater. Each distributive housing unit provides approximately 6-8 additional shelter beds. Similar to the Navigation Center, the distributive houses serve as low-barrier emergency or temporary shelters. Case management and onsite services are provided along with connection to community resources. Currently, six units have been secured and are operational. The annual operational expense for each distributive housing unit is approximately $100,000.

Homelessness is an issue that needs to be addressed comprehensively by all levels of government. Solutions must also include the faith-based and business communities. We can proudly say this coordination is happening and will continue to happen as we look to improve the lives of others while bettering our community.

Black Rascal Creek Flood Control Project: Local area flooding has been a chronic issue in Merced County going back as long as historical data has been documented on storm events. Several detention basins and other flood-control infrastructure help protect the County from major storm events. However, there is one remaining uncontrolled watershed: Black Rascal. Severe weather events have brought about flooding events impacting areas in and around the Franklin-Beachwood area just outside of the City of Merced, causing millions of dollars in damage to homes and agricultural land. The Merced County Department of Public Works has made progress on the construction of a flood control basin along the Black Rascal watershed. The County was successful in securing a $10 million Regional Conservation Partnership Program grant to construct the flood control basin northeast of the City of Merced. More recently, Public Works was able to secure a $9.7 million Small Communities Flood Risk Reduction grant to be used on the project, as well as $1 million from the California Department of Water Resources Integrated Regional Water Management program. Merced County and the City of Merced are working collaboratively to identify options to fund the rest of the $35 million project. At this time, Merced County is working on the right-of-way and design of the project. This project is anticipated to result in a reduction in expected annual damages of $21 million and a reduction in annual flood insurance costs to almost 2,000 policies. In addition to flood control protection for communities and agricultural land, this project also provides benefits of sedimentation control, groundwater recharge, and wetland restoration. University of California Merced: University of California Merced has continued its expansion. Located alongside Lake Yosemite approximately 3 miles north-east of the City of Merced, the school markets itself as the first new research university of the 21st century. The site is complete with housing; a library; Schools of Engineering, Natural Science, Social Sciences, Humanities and Arts, and Research Institutes; and a wellness center/gym. Enrollment has grown to over 8,800 students. Future plans include the planning for a School of Management. Beginning in 2016, the university announced a four-year project that will nearly double the physical capacity of the campus and is expected to accommodate the near-term projected enrollment of 10,000 students and a growing staff and facility by the year 2022. The project is essentially complete for its new teaching, research, and residential facilities of its existing campus. The UC, with the research facilities and business that it attracts to the area, along with the resulting community activities it helps to create, should provide a stimulus for growth to the area in the future. Other Information Pension Trust Fund Operations The County participates in and contributes to a defined benefit pension plan covering all full-time employees. Contributions are made by both the County and employees as recommended by the actuary and approved by the Board of Retirement and the Board of Supervisors. The MercedCERA is reported as a fiduciary

trust fund (Pension Trust) in these statements; a complete financial report is available from the MercedCERA.

Cash Management The County Treasurer's office manages the Treasury Investment Pool (Pool). The Pool is comprised of all County and agency funds that are deposited in the County Treasury for operating purposes. A formal investment policy is administered by the Treasurer's staff to ensure that investments satisfy legal guidelines, provide liquidity to meet the daily demands upon the Treasury, and provide competitive interest earnings within those constraints. A Treasury 0-versight Committee is responsible for regulatory oversight. Further information about the Pool is included in Note 2 to the Financial Statements.

In addition, the Merced CERA Pension Trust Fund is governed by the Board of Retirement and an asset management advisory firm assists in the administration of investments. The Board of Retirement has adopted an investment policy intended to provide sufficient benefits within an investment structure intended to minimize investment risk and while maintaining a competitive investment return. The investments in MercedCERA are long-term in nature. Additional information about the operations of the MercedCERA is available from the MercedCERA office.

Single Audit As a recipient of Federal and State financial assistance, the County is also responsible for ensuring that an adequate internal control structure is in place to provide reasonable assurance for compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management, the internal audit staff of the County, and an annual audit performed by a public accounting firm in compliance with the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Risk Management The County maintains a comprehensive risk management program administered by a full time risk manager and staff. The County is partially self-insured on its workers' compensation, dental, unemployment insurance, general liability, and auto liability plans. Outside insurance is provided for claims in excess of the selfinsured limits, subject to certain limitations, and for other types of risks such as property damage, medical malpractice and fiduciary liabilities. The County records estimated liabilities for such claims filed or expected to be filed for incidents that have occurred. County officials believe that assets of the Risk Management Fund and funds that are to be provided in the future will be adequate to meet the self-insured claims as they come due.

Independent Audit The accounting firm of Brown Armstrong Accountancy Corporation was selected by the County's Board of Supervisors. In addition to meeting the requirements set forth in State statutes, the audit was also designed to meet the requirements of the Federal Single Audit Act of 1996, and the related Uniform Guidance. The independent auditor's report on the basic financial statements including combining and individual fund statements and schedules is included in the financial section of this report. The auditor's reports on internal controls and compliance with applicable laws, regulations, contracts and grant agreements can be found in the separately issued Single Audit Report.

Acknowledgments The preparation of the Annual Comprehensive Financial Report is accomplished with the efficient and dedicated services of the entire staff of the AuditorController's office. Thank you goes to all the County departments for their cooperation and participation in creating this report and to the Board of Supervisors for their leadership and continual efforts to ensure the general fiscal health and integrity of the County.

cg~R•c~~-h Lisa Cardella-Presto, CPA Auditor-Controller

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Assessor Matthew May

Merced County Voters

Auditor-Controller Lisa Cardella-Presto

Board of Supervisors Rodrigo Espinoza

Josh Pedrozo Daron McDaniel

Lloyd Pareira Scott Silveira

Sheriff- Coroner

Vernon Warnke

District Attorney Kimberly Lewis

Treasurer- Tax Collector

Karen D. Adams

Superior Court of California,

County of Merced Judges

John D. Kirihara Brian L. McCabe

Carol Ash Donald Proietti David Moranda Mark Bacciarini

Paul Lo Steven Slocum Shelly Seymour

County Counsel

Adult Corrections

Coroner Inmate Welfare Court Security Animal Control

Public Administrator

Victim Witness Program

Boards & Commissions

County Executive

Officer

Administration Roads

Building Inspection Building Services

Professional Services Parks & Recreation

Fleet Services Light & Drainage

Maintenance

Department of Public Works

County Library

Information Systems

Cooperative Extension

Administration Criminal Division Juvenile Division

Family Law Traffic

Juvenile Hall

Grand Jury

Probation

Human Services Agency

Agricultural Commissioner

Public Health

Behavioral Health & Recovery Services Public

Guardian/ Conservator

Administration Human Resources

Employee Development

Risk Management

Veterans Services

Area Agency On Aging

Aid to Indigents

Spring Fair

Public Defender

Weights & Measures

Department of Workforce Investment

Environmental Health

Emergency Services

MAP First 5

Commission Alcohol & Drug Program

Child Support Services Agency

Planning & Community

Development Commerce, Aviation & Economic

Development Castle Airport Development

Center Castle Water and

Sewer

County Fire

Indigent Defense

Registrar of Voters Elections

Retirement Association

Administrative Services

Recorder County Clerk

Navigation Center Homelessness

Resources

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County of Merced Board of Supervisors and Fiscal Officers

(As of June 30, 2021)

Board of Supervisors

District 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rodrigo Espinoza District 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Josh Pedrozo District 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Daron McDaniel, Chairperson District 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lloyd Pareira District 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scott Silveira

Fiscal Officers

Assessor. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matthew May

Auditor-Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lisa Cardella-Presto, C.P.A. Assistant Auditor-Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Janey Cabral County Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . James L. Brown Grand Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ellie Jorritsma (Foreperson) Superior Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Donald J. Proietti (Presiding Judge) Treasurer-Tax Collector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Karen D. Adams, C.P.A.

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FINANCIAL SECTION

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INDEPENDENT AUDITOR’S REPORT To the Honorable Board of Supervisors County of Merced, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the County of Merced, California (the County), as of and for the fiscal year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the County’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the County, as of June 30, 2021, and the respective changes in financial position, and, where applicable, cash flows, and the respective budgetary comparison for the General Fund, the COVID-19 Emergency Response Fund, and the Road Fund, thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

BROWN ARMSTRONG CERTIAED Pueuc ACaJ'J>.'TAXl'i

B AKERSFIEL D 4200Tnixtun Avenue, Suite 300 Bakersfield, CA 93309 661- 324-4971

FRESNO 10 River Park Place East, Suite 208 Fresno, CA 93720 559-476- 3592

STOCKTON 2423 \.Vest March Lane, Suite 202 Stockton, CA 95219 209-451-4833

RE.GISTER£D w1tll thr'.' Pul•ltc Compan_11 AC'f.'(ttmtm_,;:- ~,.~,l Board mid At£,\ IBER nf t/u~ .Anu.Tlm,r lnst tfMr oJ Crrl~fied PuN1c r\avunt.im~

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Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion analysis, schedules of the County’s proportionate share of the net pension liability and the County’s pension contributions, the schedule of changes in the County’s net other post-employment benefits (OPEB) liability and related ratios, and schedule of OPEB contributions, as listed in the table of contents, 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 (GASB), who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 18, 2022, on our consideration of the County’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 County’s internal control over financial reporting and compliance. BROWN ARMSTRONG ACCOUNTANCY CORPORATION Bakersfield, California February 18, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS

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Management’s Discussion and Analysis The County of Merced’s (County) Management’s Discussion and Analysis (MD&A) is designed to present a narrative overview of the financial activities of the County and an analysis of the County’s financial position and performance for the fiscal year (FY) ended June 30, 2021. This should be read in conjunction with the transmittal letter at the front of this report and the County’s basic financial statements following this section. Financial Highlights The assets and deferred outflows of resources of the County exceeded its liabilities and deferred inflows of resources at the 2020-2021 fiscal year-end by

$363.8 million. This is referred to as net position. Of this amount, negative $222.0 million (unrestricted net position) is primarily the result of the County’s unfunded pension and other post employment benefits, $76.2 million is restricted for specific purposes (restricted net position), and $509.7 million is the net investment in capital assets.

The County’s total net position increased by $47.8 million from the 2019-2020 fiscal year-end. Net position in the governmental activities increased by $63.6 million, while that in the business-type activities decreased by $15.9 million.

As of the close of the 2020-2021 fiscal year, the County’s governmental funds reported a combined ending fund balance of $250.8 million, an increase of $45.3 million from the prior year. Of this amount, $85.1 million is available for the County’s ongoing obligations related to programs with external restrictions (restricted fund balance). Of the remaining amount, $77.6 million is available to fund ongoing commitments of the County’s programs for citizens (committed and assigned fund balance) and another $87.1 million are funds which are currently unassigned.

As of the close of the 2020-2021 fiscal year, the fund balance for the General Fund was $135.1 million, of which $47.3 million is available to fund ongoing commitments of the County’s programs (restricted, committed and assigned fund balance) and $87.1 million are funds that are currently unassigned.

The County’s total long-term liabilities increased by $16.6 million in comparison with the prior year. The increase in long-term liabilities is largely due to a $12.9 million increase to the County’s unfunded net pension liability, a $4.6 million increase from the net result of refinancing the 2005 tobacco bonds with the issuance of the 2020 tobacco bonds, and a $2.5 million increase to earned compensated absences. These increases were offset by debt service payments of principal in the amount of $3.4 million.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the County’s basic financial statements. The County’s basic financial statements are comprised of three components: (1) Government-wide financial statements, (2) Fund financial statements, and (3) Notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. These statements provide both long-term and short-term information about the County’s overall status. Financial reporting at this level uses a perspective similar to that found in the private sector with its basis in the full accrual basis of accounting and the elimination or reclassification of internal activities. The Statement of Net Position presents information on all of the County’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The Statement of Activities presents information showing how the County’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods. Both of the government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, public protection, public ways and facilities, health and sanitation, public

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assistance, education, and recreation and cultural services. The business-type activities of the County include the Castle Airport Development Center, Medical Facility Lease Operations, and Castle Water and Sewer. The government-wide financial statements include the following blended component units: the Merced County Employees’ Retirement Association (MercedCERA), Other Post Employment Benefits (OPEB) Retirement Investment Trust, the Merced County Tobacco Funding Corporation, and the First Five Merced County Children & Families Commission. Blended component units, although legally separate entities, are, in substance, part of the County’s operations. These component units are included in the County’s reporting entity because of the significance of their financial and operational relationship and their mutual governing body. There are no component units of the County that meet the criteria for discrete presentation. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating what financial resources are available in the near future to finance the County’s programs. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the County’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains numerous individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, the COVID-19 Emergency Response Fund, the Road Fund and the Tobacco Securitization Fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The County adopts an annual appropriated budget for all of the individual governmental funds except the Merced County Tobacco Funding Corporation, the Tobacco Securitization Fund, the Business Loan Program Fund and the Perpetual Conservation Easement Fund. Budgetary comparison schedules have been provided for each applicable fund to demonstrate compliance with this budget. Proprietary funds consist of two different types of funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for the Medical Facility Lease Operations, Castle Airport Development Center, and Castle Water and Sewer operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for its Fleet Service Management, Administrative Services and Insurance Pool operations. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Castle Airport Development Center operations, which is considered to be a major fund of the County. The County’s two remaining enterprise funds are considered to be nonmajor funds and are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for these two funds are provided in the form of combining statements elsewhere in this report. Furthermore, the County’s three internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for these three internal service funds are also provided in the form of combining statements elsewhere in this report.

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Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The note disclosures can be found on pages 45-90 of this report. Required Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Schedule of the County’s Proportionate Share of the Net Pension Liability and County Contributions, Schedule of Changes in the County’s Net OPEB Liability and Related Ratios and the Schedule of OPEB Contributions. Required supplementary information can be found on pages 91-93 of this report. Combining and Individual Fund Statements and Schedules. The combining and individual fund statements referred to earlier provide information for nonmajor governmental, enterprise, internal service and custodial funds and are presented immediately following the required supplementary information. Government-wide Financial Analysis

Summary of Net Position Governmental Activities Business-type Activities Total 2021 2020 2021 2020 2021 2020 Variance Current and other assets $ 582,619,964 $ 459,075,431 $ 9,981,640 $ 18,131,196 $ 592,601,604 $ 477,206,627 24.18% Capital assets 458,564,462 431,170,943 77,514,665 83,609,613 536,079,127 514,780,556 4.14% Total assets $ 1,041,184,426 $ 890,246,374 $ 87,496,305 $ 101,740,809 $ 1,128,680,731 $ 991,987,183 13.78% Deferred outflows of resources $ 102,455,562 $ 101,126,486 $ 321,333 $ 344,286 $ 102,776,895 $ 101,470,772 1.29% Total deferred outflows of resources $ 102,455,562 $ 101,126,486 $ 321,333 $ 344,286 $ 102,776,895 $ 101,470,772 1.29% Current and other liabilities $ 265,507,616 $ 189,305,199 $ 2,599,376 $ 914,430 $ 268,106,992 $ 190,219,629 40.95% Long-term liabilities 595,184,729 579,419,216 1,617,262 1,694,618 596,801,991 581,113,834 2.70% Total liabilities 860,692,345 768,724,415 4,216,638 2,609,048 864,908,983 771,333,463 12.13% Deferred inflows of resources 2,696,533 6,045,429 8,568 20,986 2,705,101 6,066,415 (55.41%) Total deferred inflows of resources $ 2,696,533 $ 6,045,429 $ 8,568 $ 20,986 $ 2,705,101 $ 6,066,415 (55.41%) Net position Net investment in capital assets $ 432,173,158 $ 402,666,265 $ 77,514,665 $ 83,609,613 $ 509,687,823 $ 486,275,878 4.81% Restricted 76,088,869 73,863,756 99,557 508,747 76,188,426 74,372,503 2.44% Unrestricted (228,010,917) (259,927,005) 5,978,210 15,336,701 (222,032,707) (244,590,304) (9.22%) Total net position $ 280,251,110 $ 216,603,016 $ 83,592,432 $ 99,455,061 $ 363,843,542 $ 316,058,077 15.12% Net position may serve over time as a useful indicator of the County’s financial position. Assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $363.8 million at June 30, 2021, for the County. The largest portion of the County’s net position, $509.7 million or 140.1%, reflects its net investment in capital assets (e.g., land, construction in progress, buildings and improvements, equipment, and infrastructure), which takes into account any related debt used to acquire those assets that is still outstanding. The

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County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the County’s net position, $76.2 million or 20.9%, represents resources that are subject to external restrictions on how they may be used and are listed as restricted. The remaining component, those resources reported as unrestricted, totaled negative $222.0 million or negative 61.0% and is largely due to the net pension liability, which was $465.0 million as of June 30, 2021. Governmental activities. Net position in the County’s governmental activities increased by $63.6 million, or 29.4%, during the current fiscal year. The key components changed as follows: Current and other assets increased by $123.5 million or 26.9%, most of which can be attributed to an increase in cash and investments of $135.2 million,

offset by a decrease in receivables of $6.3 million and in restricted assets of $4.7 million. The increase in cash and investments can be attributed to increases in the General Fund of $67.5 million, the COVID-19 Emergency Response Fund of $37.0 million, the Capital Projects Fund of $16.0 million, the Tobacco Securitization Fund of $11.6 million, the Road Fund of $1.6 million, and increases to various funds totaling $1.5 million. The decrease in receivables is due to the COVID-19 Emergency Response Fund of $9.4 million and the Road Fund of $4.4 million, offset by increases to the General Fund in the amount of $3.3 million, and with increases in all other funds in the amount of $4.2 million. The decrease in restricted assets is due to cash held within the General Fund for the navigation center decreasing in the amount of $4.2 million.

Capital assets increased $27.4 million or 6.4% due primarily to increases in Construction in Progress (CIP) of $17.6 million, infrastructure of $6.9 million, buildings and improvements of $2.2 million, and land of $0.8 million. The increases are offset by depreciation of capitalized assets.

Deferred outflows of resources increased by $1.3 million or 1.3%. The increase is primarily due to deferred outflows of resources in the amount of $1.0 million associated with the net pension liability (NPL), and by an increase of $0.3 million in deferred outflows of resources that were recognized associated with other post employment benefits (OPEB).

Current and other liabilities increased by $76.2 million or 40.3%. This increase is in part due to increases in unearned revenue from advanced funding for various grants within the General Fund in the amount of $49.6 million, and in the COVID-19 Emergency Response Fund of $26.6 million.

Long-term liabilities increased by $15.8 million or 2.7%. The increase in long-term debt is largely due to a $13.0 million increase to the County’s unfunded net pension liability, a $4.6 million increase from the net result of refinancing the 2005 tobacco bonds with the issuance of the 2020 tobacco bonds, and a $2.5 million increase to earned compensated absences. These increases were offset by debt service payments of principal in the amount of $3.4 million, and a $0.8 million prior period adjustment to the balance for the long-term self-insurance debt.

Deferred inflows of resources decreased by $3.3 million or 55.4%. The decrease is primarily due to deferred inflows of resources in the amount of $2.1 million in deferred inflows of resources that were recognized associated with OPEB, and of $1.2 million associated with the net pension liability (NPL).

Business-type activities. Net position in the County’s business-type activities decreased $15.9 million, or 15.9%, from the previous year. The key components of the decrease are as follows: Current and other assets decreased by $8.1 million or 44.9%. This is primarily due to a decrease of $10.8 million in cash, within the Medical Facility Lease

Operations Fund, as the funds were transferred to the Capital Projects Fund. The decrease was primarily offset by a $2.5 million increase to receivables within Castle Airport Development Center Fund.

Capital assets decreased by $6.1 million or 7.3%. The primary cause of the decrease is due to depreciation on capital assets in the amount of $6.0 million. Current and other liabilities increased by $1.7 million or 184.3%. The primary cause of the increase is due to an increase of accounts payable of $2.2 million

offset by a decrease in due to other funds of $0.5 million in Castle Airport operations.

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The following table compares revenues, expenses, transfers and changes in net position for governmental and business-type activities for the two fiscal years ending June 30, 2021 and 2020:

Summary of Changes in Net Position

Governmental Activities Business-type Activities Total Revenues 2021 2020 2021 2020 2021 2020 Variance Program revenues Charges for services $ 49,053,047 $ 44,714,081 $ 3,024,215 $ 2,604,205 $ 52,077,262 $ 47,318,286 10.06% Operating grants and contributions 365,439,815 341,208,893 3,338,292 104,212 368,778,107 341,313,105 8.05% Capital grants and contributions 24,984,304 35,730,205 - - 24,984,304 35,730,205 (30.08%) General revenues Property taxes 110,699,743 104,833,079 - - 110,699,743 104,833,079 5.60% Sales and use taxes 18,110,963 15,134,693 - - 18,110,963 15,134,693 19.67% Other taxes 2,659,205 2,289,978 - - 2,659,205 2,289,978 16.12% Unrestricted investment earnings 7,485,368 7,883,997 110 339,021 7,485,478 8,223,018 (8.97%) Other 583,710 905,055 - - 583,710 905,055 (35.51%) Gain on sale of capital assets - 1,379,001 - - - 1,379,001 (100.00%) Total revenues 579,016,155 554,078,982 6,362,617 3,047,438 585,378,772 557,126,420 5.07% Expenses General government 43,392,338 40,252,030 - - 43,392,338 40,252,030 7.80% Public protection 158,571,124 151,720,962 - - 158,571,124 151,720,962 4.51% Public ways and facilities 27,448,593 77,227,187 - - 27,448,593 77,227,187 (64.46%) Health and sanitation 98,673,629 88,479,626 - - 98,673,629 88,479,626 11.52% Public assistance 189,053,894 183,731,513 - - 189,053,894 183,731,513 2.90% Education 3,775,061 3,981,735 - - 3,775,061 3,981,735 (5.19%) Recreation and cultural services 2,650,730 2,852,857 - - 2,650,730 2,852,857 (7.09%) Interest on long-term debt 3,462,400 2,833,915 - - 3,462,400 2,833,915 22.18% Medical Facilities Lease Operations - - 201,455 1,914,474 201,455 1,914,474 (89.48%) Castle Airport Development Center - - 10,956,916 8,065,774 10,956,916 8,065,774 35.84% Castle Water and Sewer - - 245,457 266,047 245,457 266,047 (7.74%) Total expenses 527,027,769 551,079,825 11,403,828 10,246,295 538,431,597 561,326,120 (4.08%) Excess (deficiency) before transfers 51,988,386 2,999,157 (5,041,211) (7,198,857) 46,947,175 (4,199,700) (1217.87%) Transfers 10,821,418 639,786 (10,821,418) (639,786) - - 0.00% Change in net position 62,809,804 3,638,943 (15,862,629) (7,838,643) 46,947,175 (4,199,700) (1217.87%) Net position - July 1 216,603,016 212,964,073 99,455,061 107,293,704 316,058,077 320,257,777 (1.31%) Prior period adjustment 838,290 - - - 838,290 - 100.00% Net position-beginning, as restated 217,441,306 212,964,073 99,455,061 107,293,704 316,896,367 320,257,777 (1.05%) Net position - June 30 $ 280,251,110 $ 216,603,016 $ 83,592,432 $ 99,455,061 $ 363,843,542 $ 316,058,077 15.12%

Governmental activities. These activities increased the County’s net position by $63.6 million or 29.4%. Total revenues increased by $24.9 million or 4.5% while total expenses decreased by $24.1 million or 4.4% from the prior year. The key elements of these changes are as follows: Revenues Charges for services increased by $4.3 million or 9.7%. The increase is due to increases of revenue within the general government function of $5.9 million,

in the public protection function of $0.2 million, and in the health and sanitation function of $0.3 million, offset by decreases in the public ways and facilities function of $1.9 million and in the education function in the amount of $0.1 million.

Operating grants and contributions increased by $24.2 million or 7.1%. The increase is due to increases within the health and sanitation function of $18.0 million, in the public protection function of $9.5 million, the public assistance function of $0.6 million, and the general government function of $0.1 million. These increases were offset primarily by a decrease to the public ways and facilities function of $3.8 million and in the education function of $0.1 million.

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Capital grants and contributions decreased by $10.7 million or 30.1%. The decrease is primarily due to a decrease within the public ways and facilities government function in the amount of $10.7 million.

Property taxes increased by $5.9 million, or 5.6%, primarily as a result of increased value assessments. Total taxable assessed values increased by 5.7% as of the end of the 2020/2021 fiscal year compared with fiscal year-end 2019/2020.

Sales and use taxes increased by $3.0 million or 19.7% primarily as a result of the mandatory stay at home orders being lifted resulting in increased business activities.

Unrestricted investment earnings decreased $0.4 million, or 5.1%, due to the application of the required Governmental Accounting Standards Board (GASB) Statement No. 31, to bring investments to a fair market value in comparison to cost.

Other revenue decreased by $0.3 million or 35.5%. The decrease is primarily due to decreases within the Homelessness Navigation Center Fund in the amount of $0.2 million and the remainder of the decrease is due to less insurance proceeds received of $0.1 million.

Expenses The governmental activities categories with increases in expenses are general government with an increase of $3.1 million or 7.8%, public protection with an

increase of $6.9 million or 4.5%, health and sanitation with an increase of $10.2 million or 11.5%, and public assistance with an increase of $5.3 million or 2.9%, offset by decreases in public ways and facilities with an decrease of $49.8 million or 64.5% due to $48.3 million in CIP costs being expensed in the prior year as compared to the current year, education with a decrease of $0.2 million or 5.2%, and recreation and cultural services with a decrease of $0.2 million or 7.1%. The increase in the aforementioned expenses is largely due to increased Federal and State Aid for Assistance, allowing for more funding of programs and associated costs including those additional costs incurred in handling the response to the ongoing COVID-19 pandemic.

Other functional areas experienced increases in expenses such as interest on long-term debt of $0.6 million or 22.2% which is due to an increased amount of principal from the issuance of the 2020 tobacco bonds.

Business-type activities. In aggregate, activities caused the net position in the County’s business-type activities to decrease $15.9 million or 15.9% from the previous year. The key elements of the change are as follows: Revenues Revenues increased by $3.3 million or 108.8% as compared to the prior year. The overall increase is largely due to increased operating grants and

contributions within the Castle Airport Development Center. Expenses Expenses increased by $1.2 million or 11.3% from the previous year. The increase in expenses is primarily within Castle Airport operations in the amount of

$2.2 million, due to increased operational costs, associated with repairs made to the runway and taxi ways, offset by decreases in salaries and benefits, general and administrative, and depreciation expense as compared to the prior year.

Financial Analysis of the County’s Funds As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The general government functions are contained in the General, Special Revenue, Debt Service, Capital Projects, and Permanent Funds. The focus of the County’s governmental funds is to provide information on near-term inflows and outflows, and balances of spendable resources. Such information is useful in assessing the County’s financial requirements. In particular, unassigned fund balance may serve as a useful measure of the County’s net resources available for spending at the end of the fiscal year. At June 30, 2021, the County’s governmental funds reported combined fund balances of $250.8 million, a $45.3 million or 22.0% increase from the prior year. Of this amount, $85.1 million is available for the County’s ongoing obligations related to programs with external restrictions (restricted fund balance). These include restrictions such as (1) to pay future debt service payments ($4.1 million), (2) to pay future capital projects and equipment purchases ($21.3 million), and (3) by contract or grant agreement ($42.8 million including $16.9 million held in escrow for tobacco securitization). Of the remaining amount, $56.4 million is available to fund ongoing commitments of the County’s programs (committed fund balance). These commitments include items such as strategic reserves for economic uncertainty ($22.8 million) and reserves for County payroll ($7.6 million). In addition, there are numerous other programs and projects for which funds have been

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committed ($26.0 million). Of the remaining amount, $21.1 million is available to fund the County’s programs (assigned fund balance). These assigned balances include items such as reserves for the various road and bridge projects ($4.9 million) and various capital projects ($11.7 million). In addition, there are numerous other programs and projects for which funds have been assigned ($4.5 million). Unassigned fund balance totaled $87.1 million and is available for unspecified other purposes of the County. Of the total fund balance for the County, $1.1 million is deemed nonspendable in form and includes advances to other funds, inventories, permanent funds and prepaid items. See Note 16, Net Position/Fund Balances for further information. The General Fund is the chief operating fund of the County. At June 30, 2021, the unassigned fund balance of the General Fund was $87.1 million, while the total fund balance was $135.1 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and the total fund balance to total fund expenditures. Unassigned fund balance represents 19.3% of total General Fund expenditures, while the total fund balance represents 30.0% of that same amount. The fund balance for the General Fund increased by $18.8 million during the current fiscal year. The following schedule presents a summary of General Fund revenues, by source, for the current and prior fiscal year (FY) and the percentage change in relation to the prior year:

FY 2020/21 FY 2019/20 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount of Change Taxes and assessments $ 104,011,463 22.79% $ 97,385,792 22.63% $ 6,625,671 6.80% Licenses, permits and franchise fees 5,266,371 1.15% 4,786,124 1.11% 480,247 10.03% Fines, forfeitures and penalties 8,392,952 1.84% 5,050,512 1.17% 3,342,440 66.18% Use of money and property 911,376 0.20% 3,996,884 0.93% (3,085,508) (77.20%) Aid from other governmental agencies 288,111,725 63.12% 266,871,728 62.02% 21,239,997 7.96% Charges for current services 42,818,867 9.38% 41,143,797 9.56% 1,675,070 4.07%

Other revenues 6,973,902 1.52% 11,084,623 2.58% (4,110,721) (37.08%) Total $ 456,486,656 100.00% $ 430,319,460 100.00% $ 26,167,196 6.08%

The most significant changes in the overall $26.2 million or 6.0% increase in General Fund revenues include: The increase in taxes and assessments of $6.6 million or 6.8% was primarily a result of an increase in secured property taxes and supplemental taxes due to an

increase in total assessed values for the year of 5.7%, and by an increase in sales and use taxes as a result of mandatory stay at home orders being lifted, resulting in increased business activities.

Licenses, permits and franchises increased by $0.5 million or 10.0% due to increased construction permits and franchise revenue. Fines, forfeitures and penalties increased by $3.3 million or 66.2%. This increase is largely due to an increase in revenues from the penalties on property

taxes through the Teeter Plan of $3.5 million, offset by a modest decrease in vehicle code fines of $0.2 million. Revenues from the use of money and property decreased by less than $3.1 million or 77.2%. This was primarily due to decreases in market rates at year-end

that are utilized in the Fair Value adjustment made to investments in accordance with the requirements within GASB Statement No. 31. Aid from other governmental agencies comprises, by far, the greatest source of revenue for the General Fund. Revenue in this category is comprised of a

multitude of grants and contracts for the reimbursement of eligible costs, primarily from the State of California and the Federal Government. This year, the overall revenue received from these sources increased by $21.2 million or 8.0% over the prior year. The increase is largely due to an increase in State Aid for Public Safety Service of $4.5 million, in State Aid for Public Assistance in the amount of $3.8 million, in the Mental Health Services Act of $5.6 million, and in Federal Aid containing funding from the CARES Act and the American Rescue Plan Act in the amount of $10.1 million. These increases were offset by a decrease in State Motor Vehicle Tax Realignment of $1.4 million and in Public Assistance Realignment of $1.3 million.

Charges for current services increased by $1.7 million or 4.1%. The increase is largely due to Medi Cal charges in the amount of $1.5 million. Other revenues decreased by $4.1 million or 37.1%. The decrease is due to decreased funds for the Homelessness Navigation Center Fund as compared to the

amount received in the prior year.

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The following schedule presents a summary of General Fund expenditures, by function, for the current and prior fiscal year and the percentage change in relation to the prior year:

FY 2020/21 FY 2019/20 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount of Change General government $ 45,670,310 10.13% $ 38,342,366 8.83% $ 7,327,944 19.11% Public protection 121,173,775 26.89% 120,710,593 27.79% 463,182 0.38% Health and sanitation 91,339,557 20.27% 84,117,168 19.37% 7,222,389 8.59% Public assistance 186,238,467 41.33% 184,041,288 42.37% 2,197,179 1.19% Education 3,590,515 0.80% 3,766,357 0.87% (175,842) (4.67%) Recreation and cultural services 2,626,930 0.58% 3,391,876 0.77% (764,946) (22.55%) Total $ 450,639,554 100.00% $ 434,369,648 100.00% $ 16,269,906 3.75%

The most significant changes in the overall $16.3 million or 3.8% increase in General Fund expenditures include:

General government expenditures increased by $7.3 million or 19.1%. Within government expenditures, salaries and benefits increased by $0.8 million. Salaries and wages increased in the county executive office by $0.1 million, the auditor-controller’s office by $0.1 million, the human resources office by $0.2 million, the registrar of voters’ office by $0.2 million and the public works building services division by $0.2 million. Services and supplies increased within the general government expenditures by $0.4 million which was primarily within the administrative services support office of $1.0 million and the elections office of $0.3 million, offset by the capital improvement program in the amount of $1.0 million. Other charges increased within general government expenditures by less than $1.0 million, with no significant increase in any one program. Capital expenditures increased by $3.3 million primarily within the capital improvement program in the amount of $4.0 million with no significant decrease in any one program within the remaining $0.7 million. Intrafund and interfund transfers decreased by $2.7 million primarily due to the capital improvement program in the amount of $2.7 million.

Public protection expenditures increased by $0.4 million or 0.4%. Salaries and wages within public protection expenditures increased by $1.2 million. The increase is largely due to salaries and benefits expense increases within the district attorney’s office of $0.2 million, the public defender’s office of $0.1 million, the sheriff’s department in the amount of $0.1 million, and in the sheriff’s corrections department in the amount of $0.6 million, with no significant increase in any one program within the remaining $0.2 million. Services and supplies decreased within the public protection expenditures by $0.2 million, with no significant decrease in any one program. Capital expenditures in the public protection function decreased by $0.3 million primarily in creek projects for flood control in the amount of $0.1 million and in the sheriff’s department in the amount of $0.2 million. Intrafund and interfund transfers increased by less than $0.1 million with no significant decrease in any one program.

Health and sanitation expenditures increased by $7.2 million or 8.6%. Salaries and wages within health and sanitation expenditures increased by $1.8 million. The increase is due to an increase of $1.1 million in salaries and wages in the health department and the behavioral health department of $0.7 million. Services and supplies within the health and sanitation function increased $1.0 million due to an increase of $2.0 million within the health department, offset by a decrease of $1.0 million within the behavioral health department. Other charges within the health and sanitation function increased by $4.6 million primarily due to the behavioral health department in the amount of $4.6 million. Capital expenditures in the health and sanitation function decreased by $0.2 million largely due to the behavioral health department in the amount of $0.2 million. Intrafund and interfund transfers remained at relatively the same level.

Public assistance expenditures increased by $2.2 million or 1.2%. The increase is partially offset by a decrease in salaries and benefits of $3.0 million within the human services agency in the amount of $2.5 million and in the department of workforce investment in the amount of $0.5 million. Services and supplies increased $5.3 million primarily due to an increase within the homelessness resources program of $4.3 million, the department of workforce investment of $2.5 million, and the continuum of care of $0.5 million, offset by decreases in the human services agency of $1.8 million, with no significant decrease in any one program in the remaining $0.2 million. Other charges increased within the public assistance function by $1.2 million and is primarily due to the assistance to the needy program in the amount of $0.8 million, the human services agency of $0.1 million and the area agency on aging of $0.2 million, with no significant amount in any one department in the remaining $0.1 million. Intrafund and interfund transfers increased by $1.4 million primarily due to the homelessness resources program in the amount of $1.0 million, with no significant amount in any one department in the remaining $0.4 million.

Education expenditures decreased by $0.2 million or 4.7%. In the county library, the decrease in salaries and benefits accounts for half of the decrease in the amount of $0.1 million. Services and supplies decreased $0.1 million primarily due to a decrease within the county library.

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Recreation and cultural services decreased by $0.8 million or 22.6%. Salaries and wages within recreation and cultural expenditures decreased by $0.3 million, primarily in the department of public works parks division in the amount of $0.3 million. Capital expenditures in the public recreation and cultural services expenditures decreased by $0.4 million primarily in the department of public works parks division in the amount of $0.3 million.

Other financing sources and uses in the General Fund are presented below to illustrate changes from the prior year:

Increase/ FY 2020/21 FY 2019/20 (Decrease) Amount Amount Amount Transfers in $ 20,872,114 $ 13,318,389 $ 7,553,725 Transfers out (7,922,107) (4,600,601) (3,321,506) Capital lease financing - 36,967 (36,967) Total $ 12,950,007 $ 8,754,755 $ 4,195,252

Key elements of the changes in other financing sources and uses from the previous year are as noted: Transfers in increased by $7.6 million or 56.7% from the prior fiscal year. The increase is largely due to the increase of transfers in from the COVID-19

Emergency Response Fund which accounted for the majority of the transfers during the fiscal year in the amount of $20.0 million. Transfers out increased by $3.3 million or 72.2% from the prior fiscal year. The increase is largely due to transfers to the Capital Projects Fund as there were

increases in capital projects funding during the fiscal year. Capital lease financing decreased $0.4 million or 100.0%. The decrease is due to no new leased equipment within any department within the General Fund as

compared to the prior year when Human Services Agency (HSA) entered into a lease. The COVID-19 Emergency Response Fund is used to account for the activities of the various costs incurred in responding to the COVID-19 pandemic.

Revenues are derived from the Federal Coronavirus Aid, Relief and Economic Security (CARES) Act and the American Rescue Plan (ARP) Act, passed through from the State of California. The use of program income is restricted, depending on the terms and conditions of the CARES Act, the ARP Act and the State of California. As of June 30, 2021, the fund balance of the COVID-19 Emergency Response Fund was $583. Of this amount, $583 is for the uses as stipulated by the CARES Act, the ARP Act and the State of California terms and conditions. Total fund balance increased by $583 during the current fiscal year. The increase is due to principal payments received from participants exceeding expenditures. The Road Fund is utilized to account for both the costs associated with maintaining the public roads in the unincorporated areas of the County and the revenues received to provide those services, primarily from State highway use taxes and Federal/State grants. As of June 30, 2021, the restricted portion of fund balance in this fund was $23.5 million which consists primarily of fund balance that is restricted for road projects as the revenue source dictates. Total fund balance was $29.1 million and represents a decrease of $0.6 million from the previous year. The decrease is attributable to expenditures exceeding revenues from decreased revenues from state and federal aid for construction resulting in decreased expenditures for construction, with a net decrease of $0.6 million. The Tobacco Securitization Fund is used to account for the proceeds received when the County securitized its future tobacco settlement funds during the 2001-2002 fiscal year. The proceeds are held by a third-party trustee and interest earned on these funds is periodically transferred to the General Fund. As of June 30, 2021, the total fund balance was restricted and was $16.9 million. Total fund balance increased by $11.7 million during the current fiscal year primarily as a result of transfers in from long-term debt proceeds from the 2020 tobacco bonds issued exceeding transfers out. Proprietary funds. The County’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The Castle Airport Development Center Fund is used to account for the operation of activities associated with the civilian re-use of the former Castle Air Force Base, the assets acquired from both the Air Force through quit claim deed and those purchased/constructed by the County, and the liabilities incurred as a result of those activities. As of June 30, 2021, the total net position of this fund is $80.8 million. Of this amount, $77.5 million is net investment in capital assets, and $0.1 million consists of restricted assets. Total unrestricted assets are $3.2 million. During the current fiscal year, total net position decreased by $5.1 million,

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due to operating losses which are primarily attributable to costs, associated with repairs made to the runway and taxi ways, offset by decreases in salaries and benefits, general and administrative, and depreciation expense as compared to the prior year. Additional factors concerning the finances of these funds have already been addressed in the discussion of the County’s business-type activities. General Fund Budgetary Highlights The County’s final amended budget appropriations differ from the original budget by $38.9 million or 6.94%. Supplemental appropriations of $38.9 million or 6.94% were approved during the fiscal year. Major changes can be summarized as follows: An additional $9.7 million was appropriated to the Department of Public Works (DPW)-Creek Projects Division to cover the costs of the Black Rascal Flood

Control project. The increase was from State Funding. An additional $9.5 million was appropriated to the Homelessness Resources for the Merced County Emergency Rental Assistance Program, to provide

eligible households financial assistance with expenses related to housing due to the Covid-19 pandemic, and also cover the costs of related professional and special service fees. The increase was from Federal/State Funding.

An additional $5.4 million was appropriated to the Capital Improvement Program to fund the office remodeling in the main administration building, the homeless Navigation Center, the Video Conference Equipment of the County jails, the Behavioral Health Recovery Services (BHRS) Youth Campus improvement and the HSA Castle Conference Rooms improvements. It also covers the costs of Dale Hale Hall Renovation and Houlihan Park Renovation. The majority of the increase was from Federal/State Funding, the remainder of the increase was from transfers from other County departments due to unexpected increase in revenues.

An additional $3.7 million was appropriated to the Department of Workforce Investment to fund small business grant awards, to provide supportive services to clients affected by COVID-19, and help reduce COVID-19 transmission through contact tracing. The increase was from Federal/State Funding.

An additional $2.1 million was appropriated to the Behavioral Health and Recovery Services department to fund the Homelessness Navigation Center, to pay for telehealth infrastructure for mental health services and LGBTQ supportive services as well as digital training on cultural Humility and Preventions and Early Intervention. The increase was from State Funding.

An additional $1.8 million was appropriated to the Human Services Agency to add additional funding for the Housing Support Program and Housing and Disability Advocacy Program, to fund All Moms Matter and All Dad Matter Programs. The increase was from Federal/State Funding.

An additional $1.6 million was appropriated to the department of Administrative Services-Emergency Resources to purchase PPE/Sanitation supplies for Countywide use, and to purchase necessary technology/software to enable employee telework/conferencing. The increase was from Federal Funding.

An additional $1.4 million was appropriated to the Health department to fund the replacement of emergency medical care provider Automated External Defibrillators (AED) in the field that are nearing the end of their service life, to fund Health-COVID-19 Unit, to fund the new California Home Visiting Program, to increase the funding of the REACH program, the Immunization Program for COVID-19 immunization response activities and purchase modular office furniture to accommodate staff for COVID-19 response. The majority of the increase was from Federal/State funding, the remainder was from the increased revenues from fines, forfeitures and penalties of the department.

An additional $1 million was appropriated to the department of Sheriff-Corrections to fund the Jail Project to house State inmates. The increase was from State funding.

An additional $1 million was appropriated to the Operating Transfers to provide funding to transfer to Office of Emergency Services (OES) Response/Recovery for an agreement with Central Valley Opportunity Center (CVOC) to administer a Rental, Mortgage and Utility Assistance program. The increase was from Federal funding.

The remaining increases totaling $1.7 million were spread over numerous departments and were based either on unanticipated State/Federal funding or increased departmental revenues.

During the year, actual revenues and other financing sources were less than budgetary estimates by $62.6 million while expenditures and other financing uses were $140.4 million less than budgetary estimates. Key variances of actual to budgetary estimates include:

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Revenues: Taxes and assessments exceeded the budget by $11.2 million. This was primarily due to revenues exceeding the estimate for property taxes and sales and use

taxes due to the housing market and continued increases to assessed property valuations. Fines, forfeitures and penalties exceeded the budget by $2.5 million. The variance is due primarily to higher revenues associated with penalty and cost in the

Teeter fund. Aid from other governmental agencies was less than the budget by $62.5 million. This was due primarily to lower than anticipated funding received from the

Federal and State Government for programs in public assistance and other federal funded programs. Other revenues were less than the budget by $15.3 million. The variance is due primarily to lower revenues associated with the Health Department in the

amount of $10.0 million, the Department of Behavioral Health and Recovery Services in the amount of $5.2 million and numerous County Departments in the amount of $0.1 million.

Charges for current services were less than the budget by $2.8 million. The variance is due primarily to lower revenues associated with Medi-Cal Services in the Department of Behavioral Health and Recovery Services in the amount of $0.5 million, Sanitation Services in the Health Department in the amount of $0.4 million, Environmental Special Services in the Planning Department in the amount of $0.4 million, Investment services in the County Treasury in the amount of $0.3 million, Personnel Services in the DPW-Admin in the amount of $0.3 million and Court Operations in the Sheriff’s Department in the amount of $0.3 million. The remaining variance of $0.6 million is due to lower than anticipated charges for current services in numerous types of services in many departments within the County.

Revenues from use of money and property were less than the budget by $0.5 million. This was due primarily to lower than anticipated interest revenues from investments in the County Treasury pool.

Licenses, permits and franchise fees were less than budget by $0.1 million. The variance is due primarily to lower revenues associated with construction permits in the Department of DPW-Building Division and the Department of Health-Environmental Health in the amount of $0.4 million, offset by higher than anticipated franchise revenues in the amount of $0.3 million.

Expenditures: Unspent appropriations for salary and employee benefits were $35.3 million. These savings included the following: General Government of $4.1 million,

Public Protection of $8.1 million, Health and Sanitation of $11.8 million, Public Assistance of $10.4 million, Education of $0.6 million and Recreation and Cultural Services of $0.3 million. Cost savings were realized across all functions as the result of holding open unfilled positions and other cost savings measures.

Unspent appropriations for services and supplies expenditures were $52.1 million. These savings included the following: General Government of $4.5 million, Public Protection of $7.8 million, Health and Sanitation of $14 million, Public Assistance of $25.1 million, Education of $0.2 million, Recreation and Cultural Services of 0.4 million and Debt Services of $0.1 million. Cost savings were realized across all functions as well as reduced expenditures in various functions due to lower than forecasted revenues as discussed above.

Unspent appropriations for other charges were $17.2 million. These savings included the following: General Government of $0.4 million, Public Protection of $0.5 million, Health and Sanitation of $4.3 million, Public Assistance of $11.5 million and Recreation and Cultural Services of $0.5 million. This was due to lower than forecasted revenues and due to cost savings.

Expenditures for capital assets were $31.7 million less than appropriated as a result of equipment and construction related expenditures which were budgeted but not procured in this fiscal cycle. These savings included General Government of $19.3 million, Public Protection of $11 million, Health and Sanitation of $0.3 million, Public Assistance of $0.3 million, Education of $0.4 million and Recreation and Cultural Services of $0.4 million.

Contingencies were established in the budget of $9.4 million, of which no expenditures occurred. Capital Asset and Debt Administration Capital assets. The County’s investment in capital assets for both its governmental and business-type activities as of June 30, 2021, amounts to $536.0 million net of accumulated depreciation. This investment in capital assets includes infrastructure, buildings and improvements, land improvements, equipment, construction in progress and land. Overall, the County’s investment in capital assets increased by $21.2 million, or 4.14%, from the previous fiscal year. The amount attributable to governmental activities increased by $27.3 million, or 6.35%, while the amount attributable to business-type activities decreased by $6.0 million, or 7.29%.

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Merced County's Capital Assets

(Net of depreciation) Governmental Activities Business-type Activities Total 2021 2020 2021 2020 2021 2020 Variance Infrastructure $ 119,644,576 $ 112,738,946 $ 6,020,615 $ 6,878,194 $ 125,665,191 $ 119,617,140 5.06% Buildings and improvements 118,490,038 116,297,017 28,658,196 34,578,425 147,148,234 150,875,442 (2.47%) Land improvements - - 267,756 305,455 267,756 305,455 (12.34%) Equipment 33,542,998 33,422,202 448,103 397,518 33,991,101 33,819,720 0.51% Other capital assets 5,621,606 5,846,116 - - 5,621,606 5,846,116 (3.84%) Construction in progress 154,341,294 136,716,448 1,007,746 337,772 155,349,040 137,054,220 13.35% Land 26,923,950 26,150,214 41,112,249 41,112,249 68,036,199 67,262,463 1.15% Total $ 458,564,462 $ 431,170,943 $ 77,514,665 $ 83,609,613 $ 536,079,127 $ 514,780,556 4.14%

Major capital asset transactions/events during the current fiscal year included the following: Governmental Activities: Infrastructure increased by $6.9 million or 6.13% as a result of land improvements, completion of the La Grange Bridge, O’Banion Park and various road

projects. These projects totaled $20.1 million, exceeding depreciation on existing infrastructure of $13.1 million. Buildings and improvements increased by $2.1 million or 1.89% due primarily to the depreciation of $5.9 million exceeded by the sum of new capital outlays,

including the completion of the Los Banos Judicial Center and Marie Green Facility Improvements in the amount of $8.2 million. Equipment increased slightly, primarily due to the purchase of workstations in various departments. Other capital assets decreased by less than $0.2 million or 3.84% due to depreciation of $1.5 million, offset by the purchase of ONESolution Phase III. Construction in progress increased by $17.6 million or 12.89% for the County. New construction in progress totaled $53.6 million and transfers totaled $30.2

million, due to the completion of various building improvement and infrastructure projects. Land increased by $0.8 million with the purchase of property for a new neighborhood park in the Beachwood/Franklin area of Atwater.

Business-Type Activities: Construction in progress increased by $0.7 million or 198.35% as a result of the construction project, California AutoTech Testing and Development Center

at Castle Commerce Center. This project is a multi-million dollar investment to construct a state-of-the-art world class vehicle testing facility. All other categories of capital assets showed decreases due to depreciation. Buildings and improvements decreased by $5.9 million, due to depreciation of

$5.0 million and the removal of numerous buildings at Castle Commerce Center. Equipment increased slightly, due to the purchase of equipment necessary for on-going construction at Castle Commerce Center.

Additional information on the County’s capital assets can be found in Note 7 of this report.

15

Long-term debt

Merced County's Outstanding Long-Term Debt

Governmental Activities Business-type Activities Total 2021 2020 2021 2020 2021 2020 Variance PG&E retrofit loan $ 124,694 $ 231,575 $ - $ $ 124,694 $ 231,575 (46.15%) Energy retrofit bond 3,658,138 3,884,728 - - 3,658,138 3,884,728 (5.83%) Solar array bond 5,472,669 5,776,081 - - 5,472,669 5,776,081 (5.25%) Mental health facility bond 5,895,000 6,400,000 - - 5,895,000 6,400,000 (7.89%) Tobacco settlement bonds 34,500,000 29,856,971 - - 34,500,000 29,856,971 15.55% Certificates of participation 11,820,492 12,805,547 - - 11,820,492 12,805,547 (7.69%) Self-insurance debt 21,918,082 22,773,627 - - 21,918,082 22,773,627 (3.76%) Earned compensated absences 15,602,944 13,136,860 66,456 54,749 15,669,400 13,191,609 18.78% Capital lease obligations 424,358 516,396 - - 424,358 516,396 (17.82%) Other post employment benefits 32,186,678 32,592,816 104,003 115,226 32,290,681 32,708,042 (1.28%) Net pension liability 463,581,674 450,606,325 1,446,803 1,524,643 465,028,477 452,130,968 2.85% Total $ 595,184,729 $ 578,580,926 $ 1,617,262 $ 1,694,618 $ 596,801,991 $ 580,275,544 2.85%

At the end of the current fiscal year, the County had total long-term debt outstanding of $596.8 million. The County’s total long-term debt increased by $16.5 million, or 2.8%, during the current fiscal year. Key elements of this change include: Tobacco settlement bonds had an increase of $4.6 million, or 15.6%, due to the net result of refinancing the 2005 tobacco bonds with the issuance of the 2020

tobacco bonds. See Note 9 for additional information. Net pension liability, which is the result of GASB Statement No. 68, experienced an increase of $12.9 million or 2.9%. The increase is based upon the

estimated liability as stated within the actuarial report. Additional information regarding the net pension liability can be obtained in Note 12 of this report. Other Post Employment Benefits (OPEB) liability debt decreased by $0.4 million, or 1.3%. The decrease is based upon the estimated liability as stated within

the actuarial report. Additional information regarding the OPEB liability can be obtained in Note 13 of this report. Estimated self-insurance debt decreased by $0.9 million, or 3.8%, due principally to a decrease in the estimated balance of outstanding general and auto

liability, County Dental Plan and Unemployment Insurance claims incurred in the fiscal year ended June 30, 2021, as compared to estimated claim payments for these insurance programs. See Note 15 for additional information.

Earned Compensated Absences increased by $2.5 million or 18.8%. The increase is spread throughout various departments and not significant within any specific department nor due to any policy change.

Capital lease obligations decreased by $0.1 million or 17.8%. The decrease is largely due leased equipment within the Human Services Agency (HSA) offset by regular scheduled principal payments on existing capital leases. Additional information regarding capital lease obligations can be obtained in Note 8 of this report.

Decreases in the amount of long-term debt owed on Certificates of Participation of $1.0 million, Mental Health Facility Bond of $0.5 million, Solar Array Bond of $0.3 million, Energy Retrofit Bond of $0.2 million, and the Pacific Gas & Electric (PG&E) Retrofit Loan of $0.1 million were primarily the result of regularly scheduled principal payments. See Note 9 for additional information.

Economic Factors and Next Year’s Budget and Rates The national, state and local economies have experienced an unprecedented level of uncertainty since the development of the COVID-19 pandemic beginning

in March of 2020. Initially retail sales and unemployment rates showed significant rates of decline throughout the nation, state and local economies, but there have also been meaningful recoveries in the most recent fiscal year. Government stimulus has been a key factor in the economic recovery but cannot be accurately forecasted into the future. Despite this significant economic volatility, growth was again realized in the local property values. The total assessed value of taxable property within the County increased by 5.7% from the previous year. The overall economy volatility places pressure on the County’s ability to increase or maintain its revenue base through property, sales, or other taxes in the upcoming fiscal year. The County’s 2021-2022 fiscal year budget reflects this situation.

16

As a political subdivision of the State of California, the County is dependent on the State for a large portion of its funding and is subject to policy fluctuations within the State Assembly and Senate. The ramifications of the State’s budget and its effect on the County and its various programs require frequent monitoring. For these reasons, the County is constantly monitoring events at the State level and will subsequently make any necessary adjustments to bring its operating costs in line with its available resources. Any State fiscal uncertainties will continue to impact County revenues and its programs.

The County’s fund balance remains sufficient. The Board of Supervisors has continued its effort in 2021-2022 to remain conservative in its future planning to help weather the current and potential future economic conditions.

The County will continue to review all of its fee rates and will adjust as needed to recover its cost of service, as appropriate. As of the end of the fiscal year, unassigned fund balance in the General Fund totaled $87.1 million. The County has appropriated the full amount for spending in the 2020-2021 fiscal year budget. Requests for Information This financial report is designed to provide a general overview of the County’s finances for all those with an interest in the County’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Auditor-Controller’s Office, 2222 ‘M’ Street, Merced, CA 95340.

BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements

Governmental Business-typeActivities Activities Total

ASSETSEquity in pooled cash and investments $ 489,784,101 $ 7,377,047 $ 497,161,148Receivables, net 77,896,993 2,502,547 80,399,540Internal balances 44,678 44,678Prepaid items 513,655 513,655Inventories 562,466 2,489 564,955Restricted assets 13,818,071 99,557 13,917,628Capital assets:

Nondepreciable 181,265,244 42,119,995 223,385,239Depreciable, net 277,299,218 35,394,670 312,693,888

Total assets 1,041,184,426 87,496,305 1,128,680,731

DEFERRED OUTFLOWS OF RESOURCESDeferred pensions 88,160,774 275,143 88,435,917Deferred other post employment benefits 14,294,788 46,190 14,340,978

Total deferred outflows of resources 102,455,562 321,333 102,776,895

LIABILITIESAccrued liabilities 31,040,910 2,473,118 33,514,028Internal balances 44,678 44,678Unearned revenue 234,466,706 81,580 234,548,286Long-term liabilities:

Due within one year 12,084,392 13,639 12,098,031Due in more than one year 583,100,337 1,603,623 584,703,960

Total liabilities 860,692,345 4,216,638 864,908,983

DEFERRED INFLOWS OF RESOURCESDeferred pensions 1,311,191 4,092 1,315,283Deferred other post employment benefits 1,385,342 4,476 1,389,818

Total deferred inflows of resources 2,696,533 8,568 2,705,101

NET POSITIONNet investment in capital assets 432,173,158 77,514,665 509,687,823Restricted for:

Public protection 22,368,139 22,368,139Public ways and facilities 19,476,796 19,476,796Health and sanitation 13,613,595 13,613,595Public assistance 8,967,100 8,967,100Debt service 4,619,361 4,619,361Perpetual use:

Expendable 184,421 184,421Other purposes 6,859,457 6,859,457Castle Airport operations 99,557 99,557

Unrestricted (228,010,917) 5,978,210 (222,032,707)Total net position $ 280,251,110 $ 83,592,432 $ 363,843,542

COUNTY OF MERCEDSTATEMENT OF NET POSITION

June 30, 2021

Primary Government

The notes to the financial statements are an integral part of this statement.

17

Operating CapitalCharges for Grants and Grants and Governmental Business-type

Functions/Programs Expenses Services Contributions Contributions Activities Activities TotalPrimary government:

Governmental activities:General government $ 43,409,004 $ 22,288,233 $ 2,508,452 $ $ (18,612,319) $ $ (18,612,319)Public protection 158,571,124 16,589,436 55,875,462 23,540 (86,082,686) (86,082,686)Public ways and facilities 27,448,593 850,942 18,744,938 24,960,764 17,108,051 17,108,051Health and sanitation 98,673,629 8,208,069 105,924,374 15,458,814 15,458,814Public assistance 189,053,894 93,718 182,285,450 (6,674,726) (6,674,726)Education 3,775,061 15,768 96,658 (3,662,635) (3,662,635)Recreation and cultural services 2,650,730 1,006,881 4,481 (1,639,368) (1,639,368)Interest on long-term debt 3,462,400 (3,462,400) (3,462,400)

Total governmental activities 527,044,435 49,053,047 365,439,815 24,984,304 (87,567,269) (87,567,269)Business-type activities:

Medical Facility Lease Operations 201,455 (201,455) (201,455)Castle Airport Development Center 10,956,916 2,723,156 3,338,292 (4,895,468) (4,895,468)Castle Water and Sewer 245,457 301,059 55,602 55,602

Total business-type activities 11,403,828 3,024,215 3,338,292 (5,041,321) (5,041,321)Total primary government $ 538,448,263 $ 52,077,262 $ 368,778,107 $ 24,984,304 (87,567,269) (5,041,321) (92,608,590)

General revenues:Taxes:

Property taxes 110,699,743 110,699,743Sales and use taxes 18,110,963 18,110,963Other taxes 2,659,205 2,659,205

Investment earnings 7,485,368 110 7,485,478Miscellaneous 583,710 583,710Gain on sale of capital assets 16,666 16,666

Transfers 10,821,418 (10,821,418)Total general revenues 150,377,073 (10,821,308) 139,555,765Change in net position 62,809,804 (15,862,629) 46,947,175

Net position - beginning 216,603,016 99,455,061 316,058,077Prior period adjustment 838,290 838,290

Net position - beginning, as restated 217,441,306 99,455,061 316,896,367Net position - ending $ 280,251,110 $ 83,592,432 $ 363,843,542

COUNTY OF MERCEDSTATEMENT OF ACTIVITIES



Program RevenuesPrimary Government

Net (Expense) Revenue andChanges in Net Position

18


Fund Financial Statements

COVID-19 Other TotalEmergency Tobacco Governmental Governmental

General Response Road Securitization Funds FundsASSETS & DEFERRED OUTFLOWSOF RESOURCESAssets:

Equity in pooled cash and investments $ 284,631,758 $ 37,019,847 $ 34,049,485 $ 16,862,898 $ 68,288,984 $ 440,852,972Receivables, net

Accounts 51,101,988 8,409,335 5,205,018 64,716,341Notes 6,740,249 6,740,249Taxes and assessments 3,766,229 874,076 4,640,305

Due from other funds 11,355,760 50,828 1,065,907 12,472,495Prepaid items 456,263 57,392 513,655Inventories 217,282 188,992 406,274Restricted assets 2,834,823 96,163 4,027,628 6,958,614

Total assets 354,364,103 37,019,847 42,794,803 16,862,898 86,259,254 537,300,905

Total assets & deferred outflows of resources $ 354,364,103 $ 37,019,847 $ 42,794,803 $ 16,862,898 $ 86,259,254 $ 537,300,905

LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCESLiabilities:

Accrued liabilities $ 17,932,862 $ $ 5,321,219 $ $ 6,966,752 $ 30,220,833Due to other funds 2,003,468 10,460,422 115,653 1,122,468 13,702,011Advances from grantors & third parties 199,320,349 26,558,842 8,294,475 8,373,173 242,546,839

Total liabilities 219,256,679 37,019,264 13,731,347 16,462,393 286,469,683

Fund balances:Nonspendable 673,545 188,992 241,813 1,104,350Restricted 2,834,823 583 23,464,049 16,862,898 41,897,765 85,060,118Committed 31,070,000 25,370,250 56,440,250Assigned 13,444,848 5,410,415 2,287,033 21,142,296Unassigned 87,084,208 87,084,208

Total fund balances 135,107,424 583 29,063,456 16,862,898 69,796,861 250,831,222

Total liabilities, deferred inflows of resourcesand fund balances $ 354,364,103 $ 37,019,847 $ 42,794,803 $ 16,862,898 $ 86,259,254 $ 537,300,905


COUNTY OF MERCEDBALANCE SHEET

GOVERNMENTAL FUNDSJune 30, 2021

19

Fund balances - Total Governmental Funds (page 19) $ 250,831,222

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not 453,058,078reported in the governmental funds.

Other long-term assets are not available to pay for current period expenditures and therefore are 8,160,133deferred in the governmental funds.

Deferred outflows of resources are not financial resources and therefore are not reported in the 99,557,762governmental funds.

Internal service funds are used by management to charge the costs of certain activities, such as 30,359,868the management of fleet services, electronic data processing functions, printing and reproductionservices, and both the self-insurance and other insurance activities of the County. The assetsand liabilities of these service funds are included in governmental activities in the statement ofnet position.

Long-term liabilities, including accrued interest payable, are not due and payable in the currentperiod and therefore are not reported in the governmental funds:

Pacific Gas & Electric retrofit loan $ 124,6942020 Tobacco Settlement asset-backed bonds 34,500,000Mental health facility bond 5,895,000Juvenile Hall 2013 Certificates of Participation 6,985,000Courthouse Construction Certificates of Participation 4,835,000 Add: Unamortized issuance premium 492Compensated absences 15,064,149Capital leases 424,358Energy retrofit bond 3,658,138Solar array bond 5,472,669Other post employment benefits (OPEB) obligation 31,238,737Net pension liability (NPL) 450,557,758Accrued interest payable 341,062 (559,097,057)

Deferred inflows of resources are not financial liabilities due and payable in the current period (2,618,896)and therefore not reported in the governmental funds.

Net position of governmental activities (page 17) $ 280,251,110

June 30, 2021


COUNTY OF MERCEDRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO

THE GOVERNMENT-WIDE STATEMENT OF NET POSITION - GOVERNMENTAL ACTIVITIES

20

COVID-19 Other TotalEmergency Tobacco Governmental Governmental

General Response Road Securitization Funds FundsREVENUES

Taxes and assessments $ 104,011,463 $ $ 8,961,849 $ $ 20,231,805 $ 133,205,117Licenses, permits and franchise fees 5,266,371 242,558 6,019 5,514,948Fines, forfeitures and penalties 8,392,952 290 1,003,906 9,397,148Revenue from use of money and property 911,376 583 7,327,358 8,239,317Aid from other governmental agencies 288,111,725 20,029,971 41,271,673 19,929,626 369,342,995Charges for current services 42,818,867 329,740 1,738,503 44,887,110Other revenues 6,973,902 275,426 800,178 8,049,506

Total revenues 456,486,656 20,030,554 51,081,536 51,037,395 578,636,141

EXPENDITURESCurrent:

General government 45,646,168 40,002 330,761 46,016,931Public protection 121,173,775 31,978,110 153,151,885Public ways and facilities 51,671,691 51,671,691Health and sanitation 91,339,557 3,209,260 94,548,817Public assistance 186,238,467 4,669,916 190,908,383Education 3,590,515 3,590,515Recreation and cultural services 2,626,930 2,626,930

Debt service:Principal 33,541,883 33,541,883Interest 2,832,145 2,832,145Administration 24,142 889,808 913,950

Capital outlay 209,260 209,260Total expenditures 450,639,554 51,671,691 40,002 77,661,143 580,012,390

Excess (deficiency) of revenues over (under) expenditures 5,847,102 20,030,554 (590,155) (40,002) (26,623,748) (1,376,249)

OTHER FINANCING SOURCES (USES)Transfers in 20,872,114 13,729 11,766,518 20,297,649 52,950,010Transfers out (7,922,107) (20,029,971) (34,471) (61,501) (13,916,202) (41,964,252)Long-term debt proceeds 35,645,000 35,645,000

Total other financing sources (uses) 12,950,007 (20,029,971) (20,742) 11,705,017 42,026,447 46,630,758

Net change in fund balances 18,797,109 583 (610,897) 11,665,015 15,402,699 45,254,509

Fund balances - beginning 116,310,315 29,674,353 5,197,883 54,394,162 205,576,713Fund balances - ending $ 135,107,424 $ 583 $ 29,063,456 $ 16,862,898 $ 69,796,861 $ 250,831,222


COUNTY OF MERCEDSTATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDSFor the Fiscal Year Ended June 30, 2021

21

Net change in fund balances - total governmental funds (page 21) $ 45,254,509

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over 27,041,713their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays and other capital relatedadjustments ($52,186,957) exceeded the book value of disposed capital assets ($1,056,736) and depreciation ($24,088,508) in the current period.

Governmental funds report the funding of loans to program participants as expenditures and the subsequent repayment of principal as revenue. 935,679However, in the statement of activities the former is accounted for as an increase and the latter as a decrease to notes receivable. This isthe amount by which the amount of new loans funded ($977,598) exceeded the sum total of principal repaid ($41,919) in the current period.

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds:

Revenues not considered "available" as of the balance sheet date. $ 168,673

This amount represents revenues which are not considered "available" as of the balance sheet date. 168,673

New debt and capital lease agreements provide current financial resources to governmental funds, but issuingdebt increases long-term liabilities in the statement of net position:

2020 Tobacco Settlement asset-backed bonds $ (35,645,000) (35,645,000)

Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduceslong-term liabilities in the statement of net position:

PG&E retrofit loan $ 106,881Capital leases 92,0382005 Tobacco settlement asset-backed bonds 31,415,000Dairy loan program 0Juvenile Hall 2013 Certificates of Participation 550,000Courthouse Construction Certificates of Participation 435,000Solar array bond 303,412Energy retrofit bond 226,590Mental health facility bond 505,000 33,633,921

Some expenses reported in the statement of activities do not require the use of currentfinancial resources and, therefore, are not reported as expenditures in the governmental funds:

Change in accrued interest payable $ 7,360Amortization of debt issuance discounts/premium (412,974)Bad debt expense on notes receivable (48,018)Increase in Pension/OPEB obligation (6,977,052)Increase in compensated absences (2,362,058) (9,792,742)

Internal service funds are used by management to charge the costs of certain activities to individual funds. The netrevenue (expense) of those activities is reported with governmental activities. 1,213,051

Change in net position of governmental activities (page 18) $ 62,809,804

GOVERNMENT-WIDE STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTIVITIESFor the Fiscal Year Ended June 30, 2021


COUNTY OF MERCEDRECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

22

REVENUESTaxes and assessments $ 92,761,456 $ 92,761,456 $ 104,011,463 $ 11,250,007Licenses, permits and franchise fees 5,353,762 5,353,762 5,266,371 (87,391)Fines, forfeitures and penalties 5,361,487 5,870,664 8,392,952 2,522,288Revenue from use of money and property 1,412,018 1,412,018 911,376 (500,642)Aid from other governmental agencies 325,407,775 350,655,568 288,111,725 (62,543,843)Charges for current services 45,069,522 45,640,475 42,818,867 (2,821,608)Other revenues 22,153,926 22,234,675 6,973,902 (15,260,773)

Total revenues 497,519,946 523,928,618 456,486,656 (67,441,962)

EXPENDITURESGeneral Government

Legislative and AdministrativeBoard of Supervisors

Salaries and employee benefits 1,843,165 1,842,985 1,582,539 260,446Services and supplies 2,097,778 2,097,958 530,457 1,567,501Intrafund and interfund transfers 96,911 96,911 96,911Capital outlay 32,625 32,625 32,625

Total Board of Supervisors 4,070,479 4,070,479 2,209,907 1,860,572

County Executive OfficeSalaries and employee benefits 3,408,002 3,408,002 2,550,020 857,982Services and supplies 687,489 827,191 428,273 398,918Intrafund and interfund transfers (232,451) (232,451) (467,005) 234,554

Total County Executive Office 3,863,040 4,002,742 2,511,288 1,491,454

Special AuditingServices and supplies 155,000 155,000 100,909 54,091Intrafund and interfund transfers (8,620) (8,620) (7,900) (720)

Total Special Auditing 146,380 146,380 93,009 53,371


COUNTY OF MERCEDSTATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUALGENERAL FUND


Final BudgetOriginal Final Actual AmountsVariance withBudgeted Amounts

23 (continued)

Board of EqualizationServices and supplies $ 11,000 $ 11,000 $ 4,358 $ 6,642

Total Board of Equalization 11,000 11,000 4,358 6,642

FinanceAuditor-Controller

Salaries and employee benefits 3,785,743 3,785,743 3,180,025 605,718Services and supplies 1,134,515 1,134,515 1,088,563 45,952Intrafund and interfund transfers (28,000) (28,000) (30,130) 2,130Capital outlay 390,356 390,356 295,941 94,415

Total Auditor-Controller 5,282,614 5,282,614 4,534,399 748,215

AssessorSalaries and employee benefits 4,620,171 4,620,171 4,089,593 530,578Services and supplies 507,368 507,368 430,590 76,778Capital outlay 5,500 5,500 4,581 919

Total Assessor 5,133,039 5,133,039 4,524,764 608,275

Tax CollectorSalaries and employee benefits 612,691 612,691 543,759 68,932Services and supplies 528,829 528,829 257,291 271,538Intrafund and interfund transfers (65,268) (65,268) (43,840) (21,428)Capital outlay 7,000 6,965 35

Total Tax Collector 1,076,252 1,083,252 764,175 319,077

TreasurerSalaries and employee benefits 1,136,487 1,136,487 972,254 164,233Services and supplies 333,016 333,016 199,388 133,628Intrafund and interfund transfers 65,268 65,268 33,212 32,056

Total Treasurer 1,534,771 1,534,771 1,204,854 329,917



Budgeted Amounts



Actual AmountsFinalVariance withFinal BudgetOriginal

24 (continued)

Salaries and employee benefits $ 1,960,237 $ 1,960,237 $ 1,753,923 $ 206,314Services and supplies 2,903,082 4,227,222 3,285,949 941,273Intrafund and interfund transfers (3,254,129) (3,254,129) (2,634,206) (619,923)Capital outlay 4,700 4,700 4,700

1,613,890 2,938,030 2,405,666 532,364

CounselCounty Counsel

Salaries and employee benefits 3,876,959 3,859,959 3,224,595 635,364Services and supplies 832,986 832,986 291,063 541,923Intrafund and interfund transfers (1,079,154) (1,062,154) (904,322) (157,832)

Total County Counsel 3,630,791 3,630,791 2,611,336 1,019,455

PersonnelHuman Resources

Salaries and employee benefits 2,601,225 2,601,225 2,428,778 172,447Services and supplies 766,798 760,479 316,543 443,936Intrafund and interfund transfers (112,725) (112,725) (50,226) (62,499)

Total Human Resources 3,255,298 3,248,979 2,695,095 553,884

ElectionsRegistrar of Voters

Salaries and employee benefits 1,166,130 1,166,130 1,016,723 149,407Services and supplies 406,875 406,875 276,377 130,498

Total Registrar of Voters 1,573,005 1,573,005 1,293,100 279,905

ElectionsSalaries and employee benefits 270,248 272,648 227,680 44,968Services and supplies 2,014,413 2,182,360 1,742,088 440,272Capital outlay 252,349 544,363 84,548 459,815

Total Elections 2,537,010 2,999,371 2,054,316 945,055



Budgeted Amounts



Actual AmountsOriginal Final Final BudgetVariance with

Total Administrative Services - Support Services

Administrative Services - Support Services

25 (continued)

Property ManagementDPW - Building Services Division

Salaries and employee benefits $ 1,971,333 $ 1,971,333 $ 1,811,761 $ 159,572Services and supplies 3,472,342 3,470,320 3,349,357 120,963Intrafund and interfund transfers (3,608,455) (3,608,455) (3,124,791) (483,664)

Total DPW - Building Services 1,835,220 1,833,198 2,036,327 (203,129)Division

Taxes and AssessmentsSalaries and employee benefits 380,000 380,000 379,903 97Other charges 100 100 3 97

Total Taxes and Assessments 380,100 380,100 379,906 194

Plant AcquisitionCapital Improvement Program

Services and supplies 2,325,125 2,929,000 3,934,046 (1,005,046)Intrafund and interfund transfers (8,425,545) (9,122,045) (3,119,390) (6,002,655)Capital outlay 23,210,192 29,402,390 10,651,736 18,750,654

Total Capital Improvement 17,109,772 23,209,345 11,466,392 11,742,953Program

District ProjectsServices and supplies 22,437 22,437 22,437Other charges 76,349 43,133 14,800 28,333Intrafund and interfund transfers 89,973 123,189 90,000 33,189Capital outlay 3,587 3,587 3,587

Total District Projects 192,346 192,346 104,800 87,546




Budgeted Amounts


Final Actual AmountsVariance withFinal BudgetOriginal

26 (continued)

PromotionAdvertising

Services and supplies $ 10,000 $ 10,000 $ 533 $ 9,467Other charges 412,985 412,985 79,938 333,047

Total Advertising 422,985 422,985 80,471 342,514

Commerce, Aviation and EconomicDevelopment

Salaries and employee benefits 695,071 695,071 653,959 41,112Services and supplies 177,519 177,519 112,554 64,965

Total Commerce, Aviation and 872,590 872,590 766,513 106,077Economic Development

Other General GovernmentRisk Management


Total Risk Management 1,872,628 1,872,628 1,597,841 274,787


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL

GENERAL FUND

Final BudgetVariance with


COUNTY OF MERCED

Budgeted AmountsFinal Actual AmountsOriginal

27 (continued)

Public Works AdministrationSalaries and employee benefits $ 2,537,756 $ 2,537,756 $ 2,413,368 $ 124,388Services and supplies 146,213 146,213 113,259 32,954Intrafund and interfund transfers (305,000) (305,000) (218,976) (86,024)

Total Public Works 2,378,969 2,378,969 2,307,651 71,318Administration

Total General Government 58,792,179 66,816,614 45,646,168 21,170,446

Public ProtectionJudicial

County Court OperationsServices and supplies 100,000 100,000 100,000Other charges 1,760,500 1,760,500 1,760,493 7

Total County Court Operations 1,860,500 1,860,500 1,760,493 100,007

Grand JuryServices and supplies 55,671 55,671 30,474 25,197

Total Grand Jury 55,671 55,671 30,474 25,197

District AttorneySalaries and employee benefits 13,763,482 13,647,069 11,619,484 2,027,585Services and supplies 1,875,232 1,955,391 1,644,854 310,537Intrafund and interfund transfers (355,662) (259,590) (473,578) 213,988Capital outlay 2,241 20,249 17,321 2,928

Total District Attorney 15,285,293 15,363,119 12,808,081 2,555,038

Public DefenderSalaries and employee benefits 4,537,446 4,537,446 3,969,816 567,630Services and supplies 819,604 819,604 699,318 120,286Intrafund and interfund transfers (200,311) (200,311) (246,125) 45,814

Total Public Defender 5,156,739 5,156,739 4,423,009 733,730





Variance withFinal BudgetOriginal Final Actual Amounts

Budgeted Amounts

28 (continued)

Indigent DefenseServices and supplies $ 2,891,498 $ 2,891,498 $ 2,626,014 $ 265,484

Total Indigent Defense 2,891,498 2,891,498 2,626,014 265,484

SheriffSalaries and employee benefits 25,709,886 25,709,886 25,502,628 207,258Services and supplies 8,345,648 8,453,620 7,426,534 1,027,086Other charges 111,081 111,081 70,000 41,081Intrafund and interfund transfers (1,881,557) (1,791,557) (1,801,499) 9,942Capital outlay 684,188 684,188 33,033 651,155

Total Sheriff 32,969,246 33,167,218 31,230,696 1,936,522

Detention and CorrectionSheriff's Correctional Facilities

Salaries and employee benefits 16,671,518 16,671,518 17,164,633 (493,115)Services and supplies 11,371,249 11,365,449 10,414,961 950,488Intrafund and interfund transfers (1,975,868) (1,975,868) (1,661,951) (313,917)Capital outlay 8,000 13,800 7,534 6,266

Total Sheriff's Correctional 26,074,899 26,074,899 25,925,177 149,722Facilities

Juvenile HallSalaries and employee benefits 8,435,803 8,435,803 6,546,176 1,889,627Services and supplies 2,005,702 2,025,702 1,823,178 202,524Other charges 398,057 350,057 115,394 234,663Intrafund and interfund transfers 107,483 107,483 107,483Capital outlay 28,000 26,256 1,744

Total Juvenile Hall 10,947,045 10,947,045 8,511,004 2,436,041





Original Final Actual AmountsVariance withBudgeted AmountsFinal Budget

29 (continued)

ProbationSalaries and employee benefits $ 13,865,616 $ 13,865,616 $ 11,810,036 $ 2,055,580Services and supplies 4,642,208 4,715,434 3,970,310 745,124Intrafund and interfund transfers 4,126,354 4,233,084 3,724,919 508,165Capital outlay 95,000 113,500 75,745 37,755

Total Probation 22,729,178 22,927,634 19,581,010 3,346,624

State InstitutionsOther charges 240,000 240,000 61,676 178,324

Total State Institutions 240,000 240,000 61,676 178,324

Flood ControlDPW - Creek Projects Division

Services and supplies 1,257,669 1,257,669 255,635 1,002,034Capital outlay 1,452,068 11,160,706 902,999 10,257,707

Total DPW - Creek Projects 2,709,737 12,418,375 1,158,634 11,259,741Division

Protection InspectionAgricultural Commissioner

Salaries and employee benefits 3,649,904 3,649,904 2,994,273 655,631Services and supplies 1,066,496 1,066,496 708,816 357,680Intrafund and interfund transfers (75,000) (75,000) (86,459) 11,459

Total Agricultural Commissioner 4,641,400 4,641,400 3,616,630 1,024,770

Special Pest ControlServices and supplies 95,000 95,000 22,212 72,788Intrafund and interfund transfers 75,000 75,000 75,000

Total Special Pest Control 170,000 170,000 97,212 72,788

Sealer of Weights and MeasuresSalaries and employee benefits 448,476 448,476 408,922 39,554Services and supplies 55,210 55,210 37,040 18,170

Total Sealer of Weights and 503,686 503,686 445,962 57,724Measures





Variance withBudgeted AmountsFinal BudgetOriginal Final Actual Amounts

30 (continued)

DPW - Building DivisionSalaries and employee benefits $ 1,371,984 $ 1,371,984 $ 963,490 $ 408,494Services and supplies 613,347 613,347 178,236 435,111

Total DPW - Building Division 1,985,331 1,985,331 1,141,726 843,605

Other ProtectionRecorder

Salaries and employee benefits 1,040,267 1,040,267 901,809 138,458Services and supplies 735,112 824,228 369,282 454,946Intrafund and interfund transfers 200,000 200,000 66,217 133,783Capital outlay 22,000 27,300 22,405 4,895

Total Recorder 1,997,379 2,091,795 1,359,713 732,082

CoronerSalaries and employee benefits 1,321,548 1,321,548 1,232,984 88,564Services and supplies 317,310 317,310 248,636 68,674

Total Coroner 1,638,858 1,638,858 1,481,620 157,238

Planning and Community DevelopmentSalaries and employee benefits 2,168,121 2,168,121 1,874,061 294,060Services and supplies 1,050,079 1,419,675 545,084 874,591Capital outlay 28,469 28,469 28,469

Total Planning and Community 3,246,669 3,616,265 2,447,614 1,168,651Development

Local Agency Formation CommissionOther charges 42,109 42,109 42,109

Total Local Agency Formation 42,109 42,109 42,109Commission





FinalVariance withBudgeted AmountsFinal BudgetActual AmountsOriginal

31 (continued)

Animal ControlSalaries and employee benefits $ 1,339,291 $ 1,339,291 $ 1,148,915 $ 190,376Services and supplies 721,087 721,087 497,534 223,553Intrafund and interfund transfers 106,335 106,335 106,335Capital outlay 40,500 40,500 14,068 26,432

Total Animal Control 2,207,213 2,207,213 1,766,852 440,361

Predatory Animal ControlServices and supplies 80,916 80,916 80,915 1

Total Predatory Animal Control 80,916 80,916 80,915 1

Merced County Association of GovernmentsServices and supplies 10,000 10,000 10,000Other charges 55,000 55,000 44,589 10,411

Total Merced County Association 65,000 65,000 44,589 20,411of Governments

Airport Land Use CommissionServices and supplies 4,500 4,500 4,500

Total Airport Land Use 4,500 4,500 4,500Commission

Water ResourcesSalaries and employee benefits 211,975 211,975 185,637 26,338Services and supplies 759,412 759,412 264,283 495,129

Total Water Resources 971,387 971,387 449,920 521,467

County ClerkSalaries and employee benefits 101,770 101,770 98,806 2,964Services and supplies 34,826 34,826 25,948 8,878

Total County Clerk 136,596 136,596 124,754 11,842

Total Public Protection 138,610,850 149,257,754 121,173,775 28,083,979

Health and SanitationHealth Department

Salaries and employee benefits 18,632,399 19,254,210 13,990,024 5,264,186Services and supplies 24,602,936 24,436,680 15,501,180 8,935,500Other charges 379,986 382,986 52,435 330,551Intrafund and interfund transfers (8,825,745) (8,470,745) (4,648,424) (3,822,321)Capital outlay 8,500 84,472 83,241 1,231

Total Health Department 34,798,076 35,687,603 24,978,456 10,709,147



Variance withBudgeted AmountsFinal BudgetOriginal Final Actual Amounts



32 (continued)

Mental HealthSalaries and employee benefits $ 40,402,057 $ 38,780,887 $ 32,231,879 $ 6,549,008Services and supplies 17,125,813 18,005,442 12,961,766 5,043,676Other charges 22,450,042 23,380,042 19,354,895 4,025,147Intrafund and interfund transfers 4,528,997 6,453,468 1,699,284 4,754,184Capital outlay 403,500 403,500 113,277 290,223

Total Mental Health 84,910,409 87,023,339 66,361,101 20,662,238

Total Health and Sanitation 119,708,485 122,710,942 91,339,557 31,371,385

Public AssistanceAdministration

Human Services AgencySalaries and employee benefits 75,214,575 75,095,135 65,664,241 9,430,894Services and supplies 25,481,571 25,432,511 16,498,074 8,934,437Other charges 10,202,771 12,013,968 9,319,962 2,694,006Intrafund and interfund transfers (191,657) (86,657) (184,267) 97,610Capital outlay 300,000 350,000 21,850 328,150

Total Human Services Agency 111,007,260 112,804,957 91,319,860 21,485,097

Continuum of CareServices and supplies 3,242,122 3,242,122 1,278,187 1,963,935

Total Continuum of Care 3,242,122 3,242,122 1,278,187 1,963,935

Homelessness ResourcesServices and supplies 4,788,086 14,246,745 4,811,138 9,435,607Intrafund and interfund transfers (2,080,191) (1,665,191) (1,272,183) (393,008)

Total Continuum of Care 2,707,895 12,581,554 3,538,955 9,042,599

IHSS Public AuthoritySalaries and employee benefits 273,260 273,260 258,288 14,972Services and supplies 80,729 80,729 48,063 32,666Intrafund and interfund transfers (112,689) (112,689) (103,483) (9,206)

Total IHSS Public Authority 241,300 241,300 202,868 38,432

Aid ProgramsAssistance to the Needy

Services and supplies 332,672 332,672 149,441 183,231Other charges 89,369,822 89,369,822 81,078,448 8,291,374

Total Assistance to the Needy 89,702,494 89,702,494 81,227,889 8,474,605

General ReliefAid to Indigents

Other charges 179,192 179,192 123,291 55,901Total Aid to Indigents 179,192 179,192 123,291 55,901


COUNTY OF MERCED

Variance withBudgeted AmountsFinal Budget


GENERAL FUNDFor the Fiscal Year Ended June 30, 2021

Original Final Actual Amounts

33 (continued)

Other AssistanceDepartment of Workforce Investment

Salaries and employee benefits $ 2,082,787 $ 2,082,787 $ 1,399,758 $ 683,029Services and supplies 5,543,831 8,894,522 4,746,833 4,147,689Other charges 291,516 491,516 334,075 157,441Intrafund and interfund transfers (728,301) (638,309) (99,675) (538,634)Capital outlay 78,236 78,236 57,627 20,609

Total Department of Workforce 7,268,069 10,908,752 6,438,618 4,470,134Investment

Area Agency on AgingSalaries and employee benefits 858,599 844,396 610,184 234,212Services and supplies 884,474 941,450 535,613 405,837Other charges 1,419,988 1,458,468 1,123,058 335,410Intrafund and interfund transfers (374,132) (374,132) (230,020) (144,112)Capital outlay 50,001 75,001 69,964 5,037

Total Area Agency on Aging 2,838,930 2,945,183 2,108,799 836,384

Total Public Assistance 217,187,262 232,605,554 186,238,467 46,367,087

EducationLibrary Services

County LibrarySalaries and employee benefits 3,099,057 3,099,057 2,499,628 599,429Services and supplies 1,015,509 1,025,943 866,838 159,105Intrafund and interfund transfers (160,656) (174,044) (133,777) (40,267)Capital outlay 325,000 379,000 379,000

Total County Library 4,278,910 4,329,956 3,232,689 1,097,267

Agricultural ExtensionSalaries and employee benefits 387,063 387,063 354,442 32,621Services and supplies 86,805 86,805 73,398 13,407Intrafund and interfund transfers (76,939) (76,939) (70,014) (6,925)

Total Agricultural Extension 396,929 396,929 357,826 39,103

Total Education 4,675,839 4,726,885 3,590,515 1,136,370



GENERAL FUND

Budgeted AmountsFinal BudgetOriginal Final Actual Amounts


COUNTY OF MERCED

Variance with

34 (continued)

Recreation and Cultural ServicesRecreation Facilities

DPW - Recreation DivisionSalaries and employee benefits $ 323,386 $ 323,386 $ 287,086 $ 36,300Services and supplies 20,384 20,384 12,518 7,866Other charges 584,617 584,617 123,000 461,617

Total DPW - Recreation Division 928,387 928,387 422,604 505,783

DPW - Special Recreation DivisionServices and supplies 248,102 248,102 9,242 238,860Capital outlay 99,662 99,662 99,662

Total DPW - Special Recreation 347,764 347,764 9,242 338,522Division

DPW - Parks DivisionSalaries and employee benefits 1,759,967 1,759,967 1,461,990 297,977Services and supplies 696,557 696,557 531,763 164,794Other charges 2,846 2,846 2,846Capital outlay 1,644,706 464,081 201,331 262,750

Total DPW - Parks Division 4,104,076 2,923,451 2,195,084 728,367

Total Recreation and Cultural Services 5,380,227 4,199,602 2,626,930 1,572,672


Original Final Actual Amounts


BUDGET AND ACTUAL



GENERAL FUND

35 (continued)

Debt ServiceInterest on Tax Anticipation Notes

Services and supplies $ 142,000 $ 142,000 $ 24,142 $ 117,858Total Debt Service 142,000 142,000 24,142 117,858

MiscellaneousContingencies 9,500,000 9,380,000 9,380,000

Total Miscellaneous 9,500,000 9,380,000 9,380,000

Total expenditures 553,996,842 589,839,351 450,639,554 139,199,797

Excess (deficiency) of revenues over (56,476,896) (65,910,733) 5,847,102 71,757,835(under) expenditures

OTHER FINANCING SOURCES (USES)Transfers in 3,971,067 16,023,071 20,872,114 4,849,043Transfers out (6,511,909) (9,130,076) (7,922,107) 1,207,969

Total other financing sources (uses) (2,540,842) 6,892,995 12,950,007 6,057,012

Net change in fund balance (59,017,738) (59,017,738) 18,797,109 77,814,847

Fund balance - beginning 91,317,716 91,317,716 116,310,315 24,992,599Fund balance - ending $ 32,299,978 $ 32,299,978 $ 135,107,424 $ 102,807,446


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCECOUNTY OF MERCED

Original Final Actual Amounts Final BudgetVariance withBudgeted Amounts



36

REVENUESTaxes and assessments $ 4,504,026 $ 7,434,026 $ 8,961,849 $ 1,527,823Licenses, permits and franchise fees 101,632 101,632 242,558 140,926Fines, forfeitures and penalties 290 290Revenue from use of money and property 280,000 280,000 (280,000)Aid from other governmental agencies 57,838,699 57,838,699 41,271,673 (16,567,026)Charges for current services 528,500 528,500 329,740 (198,760)Other revenues 172,000 172,000 275,426 103,426

Total revenues 63,424,857 66,354,857 51,081,536 (15,273,321)

EXPENDITURESPublic ways and facilities

Salaries and employee benefits 7,713,574 7,713,574 5,437,266 2,276,308Services and supplies 12,265,554 12,253,783 8,491,419 3,762,364Capital outlay 71,090,511 74,005,511 37,743,006 36,262,505


Excess (deficiency) of revenues over (under) (27,644,782) (27,618,011) (590,155) 27,027,856expenditures

OTHER FINANCING SOURCES (USES)Transfers in 500 13,729 13,729Transfers out (34,471) (74,471) (34,471) 40,000

Total other financing sources (uses) (33,971) (60,742) (20,742) 40,000

Net change in fund balance (27,678,753) (27,678,753) (610,897) 27,067,856

Fund balance - beginning 29,178,795 29,178,795 29,674,353 495,558Fund balance - ending $ 1,500,042 $ 1,500,042 $ 29,063,456 $ 27,563,414


Final Final BudgetAmountsOriginal


BUDGET AND ACTUALROAD FUND

Variance with


Budgeted Amounts Actual

37

REVENUESRevenue from use of money and property $ $ $ 583 $ 583Aid from other governmental agencies 20,030,949 20,029,971 (978)

Total revenues 20,030,949 20,030,554 (395)

Excess (deficiency) of revenues over (under) 20,030,949 20,030,554 (395)expenditures

OTHER FINANCING SOURCES (USES)Transfers out (20,030,949) (20,029,971) 978

Total other financing sources (uses) (20,030,949) (20,029,971) 978

Net change in fund balance 583 583

Fund balances - beginningFund balances - ending $ $ $ 583 $ 583

COUNTY OF MERCED

Final BudgetOriginal Final AmountsVariance withBudgeted Amounts Actual

COVID-19 EMERGENCY RESPONSEFor the Fiscal Year Ended June 30, 2021

BUDGET AND ACTUALSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

38

OtherEnterprise

FundsASSETSCurrent assets:

Equity in pooled cash and investments $ 4,485,346 $ 2,891,701 $ 7,377,047 $ 48,931,129Receivables, net 2,483,201 19,346 2,502,547 1,800,098Due from other funds 47,186 1,275 48,461 1,513,586Inventories 2,489 2,489 156,192Restricted assets 99,557 99,557 6,859,457

Total current assets 7,117,779 2,912,322 10,030,101 59,260,462Noncurrent assets:

Capital assets:Land 41,112,249 41,112,249Land improvements 1,714,208 1,714,208Buildings and improvements 101,264,564 101,264,564 1,862,837Infrastructure 16,177,535 16,177,535 219,279Equipment 1,787,251 19,495 1,806,746 14,680,523Construction in progress 1,007,746 1,007,746 289,518

Other capital assets:Software 6,730 6,730 964,077

Less accumulated depreciation and amortization (85,555,618) (19,495) (85,575,113) (12,509,850)Total noncurrent assets 77,514,665 77,514,665 5,506,384

Total assets 84,632,444 2,912,322 87,544,766 64,766,846

DEFERRED OUTFLOWS OF RESOURCESDeferred pensions 275,143 275,143 2,476,799Deferred other post employment benefits 46,190 46,190 421,001

Total deferred outflows of resources 321,333 321,333 2,897,800

LIABILITIESCurrent liabilities:

Accrued liabilities 2,445,329 27,789 2,473,118 479,015Due to other funds 31,789 61,350 93,139 239,392Compensated absences 13,639 13,639 129,637Unearned revenue 81,580 81,580 80,000Liability for self-insurance 4,945,675

Total current liabilities 2,572,337 89,139 2,661,476 5,873,719Noncurrent liabilities:

Compensated absences 52,817 52,817 409,158Long-term self-insurance debt 16,972,407Other post employment benefits (OPEB) obligation 104,003 104,003 947,941Net pension liability 1,446,803 1,446,803 13,023,916

Total noncurrent liabilities 1,603,623 1,603,623 31,353,422Total liabilities 4,175,960 89,139 4,265,099 37,227,141

DEFERRED INFLOWS OF RESOURCESDeferred pensions 4,092 4,092 36,837Deferred other post employment benefits 4,476 4,476 40,800

Total deferred inflows of resources 8,568 8,568 77,637

NET POSITIONNet investment in capital assets 77,514,665 77,514,665 5,506,384Restricted 99,557 99,557 6,859,457Unrestricted 3,155,027 2,823,183 5,978,210 17,994,027

Total net position $ 80,769,249 $ 2,823,183 $ 83,592,432 $ 30,359,868

Castle Airport Internal


DevelopmentCenter Total

ServiceFunds

GovernmentalActivities

COUNTY OF MERCEDSTATEMENT OF FUND NET POSITION

PROPRIETARY FUNDSJune 30, 2021

Business-Type Activities - Enterprise FundsMajor Fund

39

Castle Airport OtherDevelopment Enterprise

Center FundsOperating revenues:

Charges for services $ 2,723,156 $ 301,059 $ 3,024,215 $ 80,944,490Total operating revenues 2,723,156 301,059 3,024,215 80,944,490

Operating expenses:Salaries and benefits 751,794 751,794 7,926,156Materials and supplies 1,175,290Insurance 99,630 99,630 46,065,477Professional and specialized services 161,725 126,873 288,598 2,453,586Special departmental expense 109,296 185 109,481 2,457,228General and administrative 286,257 103,091 389,348 2,442,979Repairs and maintenance 2,674,220 8,298 2,682,518 953,690Rents and leases 53,526Depreciation and amortization 6,011,190 211 6,011,401 1,206,643Claims 14,618,607

Total operating expenses 10,094,112 238,658 10,332,770 79,353,182Operating income (loss) (7,370,956) 62,401 (7,308,555) 1,591,308

Non-operating revenues (expenses):State and Federal grants 3,338,292 3,338,292Interest income 110 110Net investment loss (19,633) (201,455) (221,088) (220,647)(Loss) on disposition of capital assets (843,171) (6,799) (849,970) (615)

Total non-operating revenues (expenses) 2,475,488 (208,144) 2,267,344 (221,262)

Income (Loss) before capital (4,895,468) (145,743) (5,041,211) 1,370,046contributions and transfers

Capital contributions 7,345Transfers in 4,769 4,769 98,649Transfers out (210,662) (10,615,525) (10,826,187) (262,989)

Change in net position (5,101,361) (10,761,268) (15,862,629) 1,213,051

Total net position - beginning 85,870,610 13,584,451 99,455,061 28,308,527Prior period adjustment 838,290

Total net position - beginning,as restated 85,870,610 13,584,451 99,455,061 29,146,817

Total net position - ending $ 80,769,249 $ 2,823,183 $ 83,592,432 $ 30,359,868

COUNTY OF MERCEDSTATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDSFor the Fiscal Year Ended June 30, 2021

GovernmentalBusiness-Type Activities - Enterprise Funds

Service

ActivitiesInternal

Major Fund


Total Funds

40

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers $ 219,029 $ 228,561 $ 447,590 $Receipts from interfund services provided 80,252,636Payments to suppliers (1,935,937) (149,308) (2,085,245) (55,442,999)Payments to employees (813,906) (813,906) (6,869,944)Claims paid (15,919,304)Other receipts (payments) 1,903 1,903 383,733

Net cash provided by (used in) operating activities (2,528,911) 79,253 (2,449,658) 2,404,122

CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESFederal, State, and Local assistance 106,066 106,066Transfers in 404,769 404,769 1,500,717Transfers out (610,662) (10,615,525) (11,226,187) (1,649,430)

Net cash (used in) noncapital (99,827) (10,615,525) (10,715,352) (148,713)financing activities

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESCapital contributions from other governments 3,232,226 3,232,226Purchase of capital assets (468,409) (468,409) (1,620,987)Proceeds from sale of capital assets 93,940

Net cash provided by (used in) capital and relatedfinancing activities 2,763,817 2,763,817 (1,527,047)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received on investments (19,633) (201,345) (220,978) (220,647)

Net cash (used in) investing (19,633) (201,345) (220,978) (220,647)activities

Net increase (decrease) in cash and cash equivalents 115,446 (10,737,617) (10,622,171) 507,715

Cash and cash equivalents - beginning 4,469,457 13,629,318 18,098,775 55,282,871Cash and cash equivalents - ending $ 4,584,903 $ 2,891,701 $ 7,476,604 $ 55,790,586

Reconciliation to Statement of Fund Net Position:Equity in pooled cash and investments $ 4,485,346 $ 2,891,701 $ 7,377,047 $ 48,931,129Restricted assets 99,557 99,557 6,859,457

Total cash and cash equivalents $ 4,584,903 $ 2,891,701 $ 7,476,604 $ 55,790,586

Other


Total

InternalServiceFunds

Development

COUNTY OF MERCEDSTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFor the Fiscal Year Ended June 30, 2021

GovernmentalActivitiesMajor Fund

Business-Type Activities - Enterprise Funds

Castle Airport

FundsEnterprise

Center

41 (continued)

Reconciliation of operating income (loss) to netcash provided by (used in) operating activities:

Operating income (loss) $ (7,370,956) $ 62,401 $ (7,308,555) $ 1,591,308Adjustments to reconcile operating income (loss) to

net cash provided by (used in) operating activities:Depreciation and amortization 6,011,190 211 6,011,401 1,206,643

Decrease (increase) in:Receivables (2,456,247) (15,449) (2,471,696) (369,758)Due from other funds (46,938) 1,268 (45,670) 157,870Inventories (919) (919) (21,727)Deferred outflows of resources - pensions 19,741 19,741 (184,573)Deferred outflows of resources - other post employment benefits 3,212 3,212 (34,835)

Increase (decrease) in:Accrued liabilities 1,922,590 (30,528) 1,892,062 (147,549)Due to other funds (521,771) 61,350 (460,421) (195,333)Compensated absences 11,707 11,707 104,026Unearned revenue 961 961 20,000Other post employment benefits obligation (11,223) (11,223) 47,253Liability for self-insurance (855,545)Net pension liability (77,840) (77,840) 1,172,373Deferred inflows of resources - pensions (4,525) (4,525) (30,147)Deferred inflows of resources - other post employment benefits (7,893) (7,893) (55,884)

Net cash provided by (used in) operating activities $ (2,528,911) $ 79,253 $ (2,449,658) $ 2,404,122

Noncash investing, capital, and financing activities:Capital contributions $ $ $ $ 7,345Disposal of capital assets 843,171 843,171 69,883

Total noncash investing, capital, and financing activities $ 843,171 $ $ 843,171 $ 77,228

OtherMajor Fund

DevelopmentCastle Airport

FundsEnterprise

ActivitiesGovernmentalBusiness-Type Activities - Enterprise Funds

PROPRIETARY FUNDSSTATEMENT OF CASH FLOWS


Center Totals FundsServiceInternal

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ASSETSEquity in pooled cash and investments $ 823,828 $ 1,106,851 $ 757,390 $ 812,577,709 $ 38,493,036 $ 853,758,814Receivables (net):

Accounts 13,335,545 24,887 13,360,432Taxes 9,941,137 11,893,919 21,835,056Securities sold 65,888 65,888Interest and dividends 608,546 608,546Contributions 2,388,837 2,388,837

Investments, at fair value:Short-term investment funds 8,132,086 8,132,086Fixed income securities

U.S. government and agency obligations 49,045,240 5,062,041 54,107,281Mutual funds 13,143,507 13,143,507Domestic 192,544,624 4,644,670 197,189,294

EquitiesCommon stocks (Individual equities) 31,836,007 31,836,007Mutual funds 42,935,828 42,935,828Bonds 64,781 64,781Index fund 243,030,022 243,030,022International equity fund 251,148,371 251,148,371Real estate separate account 88,925,417 88,925,417Alternative investments 294,762,576 294,762,576

Direct real estate investment 475,000 475,000Prepaid items 114,216 114,216Capital assets, net of accumulated depreciation of $1,890,499 1,493,077 1,493,077

Total assets 1,165,393,735 66,957,678 757,390 835,854,391 50,411,842 2,119,375,036

LIABILITIESAccounts payable 626,102 9,966,518 24,896,129 35,488,749Securities purchased 2,839 2,839Unclaimed contributions 85,403 85,403

Total liabilities 714,344 9,966,518 24,896,129 35,576,991

NET POSITIONRestricted for:

Pensions 1,164,679,391 66,957,678 1,231,637,069Pool participants 757,390 757,390Individuals, organizations & other governments 825,887,873 25,515,713 851,403,586

Total net position $ 1,164,679,391 $ 66,957,678 $ 757,390 $ 825,887,873 $ 25,515,713 $ 2,083,798,045

Total

OtherCustodial Funds

PARS


Trust Trust Funds

External

PoolTrustInvestmentOPEB

COUNTY OF MERCED

FIDUCIARY FUNDSJune 30, 2021

PensionMercedCERA

Investment Custodial

STATEMENT OF FIDUCIARY NET POSITION

43

ADDITIONSContributions

Employer $ 65,867,256 $ $ $ $ $ 65,867,256 Plan members 11,895,243 11,895,243 Contributions to investment pool 2,495,960 - 2,446,700,139 357,956,895 2,807,152,994

Total contributions 77,762,499 2,495,960 - 2,446,700,139 357,956,895 2,884,915,493

Investment incomeNet increase in fair value of investments 247,932,943 10,118,752 258,051,695 Investment income 8,332,633 3,669,483 - - 12,002,116 Other revenue 15,153 15,153 Less investment expense (2,760,110) (2,760,110)

Net investment income 253,520,619 13,788,235 - - - 267,308,854 Total additions 331,283,118 16,284,195 - 2,446,700,139 357,956,895 3,152,224,347

DEDUCTIONSBenefits 82,836,595 82,836,595 Refunds of contributions 977,485 977,485 Distributions from investment pool 753,132 38,255 2,239,024,633 377,905,378 2,617,721,398 Administrative expenses 2,356,527 2,356,527 Depreciation 264,552 264,552

Total deductions 86,435,159 753,132 38,255 2,239,024,633 377,905,378 2,704,156,557

Change in net position 244,847,959 15,531,063 (38,255) 207,675,506 (19,948,483) 448,067,790

Net position - beginning of the year 919,831,432 51,426,615 795,645 618,212,367 45,464,196 1,635,730,255 Net position - end of the year $ 1,164,679,391 $ 66,957,678 $ 757,390 $ 825,887,873 $ 25,515,713 $ 2,083,798,045

Custodial Funds

COUNTY OF MERCED

FIDUCIARY FUNDSFor the Fiscal Year Ended June 30, 2021

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION


TrustPension

MercedCERA

TrustInvestment

Funds TotalCustodial

PARSOPEBTrust Pool

ExternalInvestment

Other

44


Notes to the Financial Statements

COUNTY OF MERCED

NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2021

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The County of Merced (County) is a political subdivision organized under the general laws of the State of California (the State), and as such can exercise the powers specified by the constitution and laws of the State. The County is governed by an elected five member Board of Supervisors (Board). The accounting methods and procedures adopted by the County conform to accounting principles generally accepted in the United States of America as applied to governmental entities. These financial statements present the County and its component units, entities for which the Board is considered to be financially accountable. Reporting for component units on the County's financial statements can be blended or discretely presented. Blended component units, although legally separate entities, are, in substance, part of the County's operations. Blended component units are an extension of the County and so data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize they are legally separate from the County. Each component unit has a June 30th year-end. Blended Component Units The Merced County Employees’ Retirement Association (MercedCERA) is governed by a nine-member board (4 elected, 4 appointed by the Board, and the County Treasurer is Ex Officio). The County establishes benefit levels and approves actuarial assumptions used in the determination of contribution levels. It is reported as a Pension Trust Fund in these statements. MercedCERA issues a publicly available financial report that includes financial statements and the required supplementary information. The financial report may be obtained by contacting MercedCERA at 3199 “M” Street, Merced, California 95340. The Other Post Employment Benefit (OPEB) Retirement Investment Trust is governed by the Board Chairperson and Vice-Chairperson, County Executive Officer, County Counsel, County Auditor-Controller and the County Treasurer. The County establishes benefit levels and approves actuarial assumptions used in the determination of contribution levels. It is reported as a Retirement Investment Trust Fund in these statements. The Merced County Tobacco Funding Corporation (Corporation) is a non-profit public benefit corporation organized under California Law for the sole purpose of handling the County’s tobacco securitization. The Corporation is governed by three directors, two of which are officials of the County. Transactions related to the Corporation have been included in these financial statements as a blended component unit of the County, including a liability for the 2020 Tobacco Settlement Asset - Backed Refunding Bond debt in the amount of $34,500,000 as of June 30, 2021. However, in the event of a decline in the tobacco settlement revenues for any reason, including the default or bankruptcy of a participating cigarette manufacturer, resulting in a decline in the tobacco settlement revenues and possible default on the tobacco bonds, neither the California County Tobacco Securitization Agency, the County nor the Corporation has any liability to make up any such shortfall. The First Five Merced County Children & Families Commission (First 5) has been established to promote, support and improve the early development of children from prenatal stage to five years of age. Revenues consist primarily of funds generated by a State tax increase on cigarettes and tobacco products as mandated by Proposition 10. First 5 is also a legally separate entity from the County and is reported as a Special Revenue Fund in these statements. Additional detailed information and separately issued financial statements can be obtained from First 5 at 260 East 15th Street, Merced, California 95341. Discretely Presented Component Units There are no component units of the County which meet the criteria for discrete presentation. B. Basis of Presentation Government - Wide Financial Statements The statement of net position and the statement of activities report information on all of the non-fiduciary activities of the primary government and its component units. Eliminations have been made to minimize the double counting of internal activities. The financial statements report governmental activities, which normally are supported by taxes and intergovernmental revenues, separately from business-type activities that rely, to a significant extent, on fees charged to external parties.

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The statement of activities presents a comparison between direct expenses and program revenues for each function of the County’s governmental activities and for each segment of the County’s business-type activities. Direct expenses are those that are specifically associated with a service, program, or department and thus are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly classified as program revenues are instead reported as general revenues. Fund Financial Statements Separate financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The emphasis on fund financial statements is on major governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds. The County reports the following major governmental funds The General Fund is used to account for all financial transactions of the County not accounted for in other specialized funds. Fund revenues include taxes and

assessments; licenses, permits and franchise fees; fines, forfeitures and penalties; revenue from the use of money and property; aid from other governmental agencies; charges for current services; and other revenue. Expenditures are classified by function: general government, public protection, public ways and facilities, health and sanitation, public assistance, education, recreation and cultural services, and debt service expenditures to pay interest charges on short-term debt.

The COVID-19 Emergency Response Fund This fund was established to account for the activities of the various costs incurred in responding to the COVID-19 pandemic. Revenues are derived from the Federal Coronavirus Aid, Relief and Economic Security (CARES) Act and the American Rescue Plan (ARP) Act, passed through from the State of California. The use of program income is restricted, depending on the terms and conditions of the CARES Act, the ARP Act and the State of California.

The Road Fund provides for planning, design, construction, maintenance and administration of County roads. Revenues consist primarily of the County’s share of State highway use taxes and are supplemented by Federal grants.

The Tobacco Securitization Fund is used to account for the proceeds received when the County securitized its future tobacco settlement funds. The proceeds are held by a third-party trustee and interest earned on these funds is periodically transferred to the General Fund.

The County reports the following major enterprise fund The Castle Airport Development Center Fund is used to account for the operation of activities associated with the civilian reuse of the former Castle Air Force Base. The County also reports the following additional fund types Internal Service Funds are used to account for the financing of goods and services provided by one department or agency to another department or agency of the County,

or to other governments, on a cost reimbursement basis. The County uses separate internal service funds to account for its fleet service management and administrative services operations. In addition, the County uses a separate internal service fund to account for both its self-insurance and other insurance activities.

The MercedCERA Pension Trust Fund is used to account for activities of MercedCERA. The OPEB Retirement Trust Fund is used to account for activities of the Public Agency Retirement Services (PARS). The Investment Trust Fund accounts for the assets of legally separate entities that deposit cash with the County Treasurer, for the purpose of earning interest. The External Investment Pool Fund is a fiduciary fund type used by the County to report trust arrangements under which principal and income benefit other governments.

These entities include school and community college districts; other special districts governed by local boards, regional boards and authorities; and pass through funds for tax collections for cities. These funds represent the assets, primarily cash, and the related liability of the County to disburse these monies on demand..

Other Custodial Funds are custodial in nature and do not involve measurement of results of operations. Such funds have no equity accounts since all assets are due to entities at some future time. These funds account for assets held by the County as an agent for various local governments and individuals.

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C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide, proprietary and pension trust fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On the accrual basis of accounting, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Also, in governmental funds, general capital asset acquisitions are reported as expenditures while proceeds from the issuance of long-term debt and capital leases are reported as other financing sources. Revenues susceptible to accrual include real and personal property taxes, sales taxes, interest, charges for current services, and certain state and federal grants. Revenues which are not measurable and available for accrual include licenses and permits, fines and forfeitures, and penalties and, as such, are recognized as revenue when they are received. For its business-type activities and enterprise funds, the County has elected to follow only those Financial Accounting Standards Board (FASB) pronouncements issued on or before November 30, 1989, which have been incorporated into Governmental Accounting Standards Board (GASB) Statement #62, which was issued in December 2010. Proprietary funds distinguish between operating revenues and expenses and non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the County’s enterprise and internal service funds are charges to customers for sales and services. Operating expenses for the enterprise and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All other transactions not meeting this definition are reported as non-operating revenues and expenses. D. Budgeting In accordance with provisions of Sections 29000 through 29143 of the California Government Code and other statutory provisions, commonly known as the County Budget Act, the County prepares and legally adopts a final balanced budget on or before August 31 of each fiscal year (except when extended by legislative authority). Until the adoption of this final balanced budget, operations are governed by the adopted proposed budget approved by the Board. An operating balanced budget is adopted each fiscal year for the General, Special Revenue (except for Tobacco Securitization and the Business Loan Program), Debt Service (except for the Corporation), and Capital Projects Funds on the modified accrual basis of accounting. Public hearings are conducted on the adopted proposed budget to review all appropriations and the source of financing. Because the final budget must be balanced, any shortfall in revenue requires an equal reduction in appropriations. Budgetary control is exercised at the object level except for capital assets which are controlled at the sub-object level. All amendments or transfers of appropriations within the object level (except for capital assets) within the same department are approved by the County Executive Officer. Amendments and transfers of appropriations between object levels, capital assets, departments and supplemental appropriations financed by unanticipated revenues must be approved by the Board of Supervisors. All transfers and amendments in budget appropriations are included in the budgetary schedules. Such amendments were not significant to the originally approved budget. Appropriations not encumbered at year-end lapse and are available to finance succeeding periods. The Budget adopted by the County for Fiscal Year 2020-2021 uses the fund balance language of the County Budget Act which has not yet been updated to reflect GASB

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Statement #54. The County has presented the Statement of Revenues, Expenditures, and Change in Fund Balances – Budget and Actual in conformity with GASB Statement #54. E. Investments and Cash Equivalents Investments consist of debt and equity securities. Debt securities consist primarily of bonds, negotiable certificates of deposit, repurchase agreements, U.S. Government Securities, commercial paper, medium term corporate notes and bankers' acceptances. Investments in the Pool maintained by the County Treasurer’s Office are reported at fair value. MercedCERA’s investments are maintained in a separate portfolio and are also reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities are valued at the last reported sales price at current exchange rates. Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with a maturity of three months or less at the date of acquisition. In the statement of cash flows for proprietary funds, cash and cash equivalents include all assets in the Pool maintained by the County Treasurer. This pool is similar to a demand deposit account for enterprise and internal service funds in that they may deposit and withdraw cash at any time without prior notice or penalty. This treatment is in conformity with GASB Statement #9, which states that deposits in cash management pools that have the general characteristics of demand deposit accounts are appropriately classified as cash. F. Interfund Transactions Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are included as either “Due from other funds” or “Due to other funds” as appropriate. Noncurrent portions of these interfund loans are equally offset by a reserve of fund balance which indicates that they are not available for appropriation and do not constitute available spendable financial resources. Transfers between funds are also indicative of funding for capital projects, lease or debt service payments; subsidies of various County operations; or reallocation of special revenues. All such outstanding balances between funds at fiscal year-end are also recorded as either Due from other funds or Due to other funds. Balances outstanding between the various governmental or enterprise funds at fiscal year-end are netted and any residual balances are reported in the government-wide financial statements as “internal balances.” G. Inventories Inventories are stated at cost (first-in, first-out basis) for governmental funds and are charged to expenditures as they are used. Inventories in proprietary funds are stated at the lower of cost (first-in, first-out basis) or market and are charged to expense as they are used, consistent with the consumption method. H. Restricted Assets Restricted assets represent cash and investments restricted by donors and other outside sources which are to be used for specific purposes. I. Fund Equity In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the County is bound to honor constraints on how specific amounts can be spent. • Nonspendable fund balance – amounts that cannot be spent because they are either (a) not spendable in form or (b) legally or contractually required to be maintained

intact. • Restricted fund balance – amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations

of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. • Committed fund balance – amounts that can only be used for specific purposes determined by formal action of the County’s highest level of decision-making authority

(the Board) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period.

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• Assigned fund balance – amounts that are constrained by the County’s intent to be used for specific purposes. The intent can be established at either the highest level of decision-making authority, or by a body or an official designated for that purpose.

• Unassigned fund balance – the residual classification for the County’s General Fund that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

The Board establishes, modifies or rescinds fund balance commitments and assignments by passage of an ordinance or resolution. This is done through adoption of the budget and subsequent budget amendments that occur throughout the year. When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, then unrestricted resources as they are needed. J. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure, are recorded as expenditures in the appropriate governmental fund at the time of purchase or construction and are capitalized in the applicable governmental or business-type activities columns in the government-wide financial statements. These assets are capitalized at cost or estimated cost where costs are not available. In the case of acquisitions through gifts or contributions, such assets are recorded at fair value at the time received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized. Self-constructed assets are capitalized at cost plus ancillary charges, including interest. The County capitalizes equipment (including lighting structures) with a cost of at least $5,000 and an estimated useful life in excess of one year; land, buildings and infrastructure (excluding roads) with a cost of at least $10,000 and an estimated useful life in excess of one year; and road costs of at least $20,000 per mile and an estimated useful life in excess of five years. All capitalized assets used in operations are depreciated or amortized (assets under capital leases) using the straight-line method over their estimated useful lives in the government-wide statements. In addition, the depreciation or amortization of those capitalized assets associated with proprietary funds and pension trust funds are reported in the appropriate fund financial statements. The estimated economic lives used to determine annual rates of depreciation or amortization are subject to periodic review and revision to assure that the cost of the respective assets will be written off over their economic lives. The following analysis details the estimated useful lives for the various types of assets:

Estimated Useful

Type of Asset Life in Years Land improvements 10 to 40 Building and building improvements 6 to 50 Leasehold improvements 5 to 40 Equipment 5 to 30

Infrastructure 15 to 50 K. Liability for Earned Compensated Absences Unused vacation leave may be accumulated by County employees up to a specified maximum and is paid at the time of termination from County employment. There is no maximum on the amount of unused sick leave which employees may accumulate; however, the County is not obligated to pay for unused sick leave if an employee terminates prior to retirement. Upon retirement, employees are entitled to be paid for up to one half of their unused sick leave, up to a specified maximum, depending on the employee’s job classification. The remainder of the accumulated balance will be credited towards time worked for retirement purposes. Earned compensated absences paid upon termination/retirement are paid out of the respective governmental or proprietary fund for which the employee worked at the time of employment separation. Because these leave balances do not require the use of financial resources, no liability is recorded within the governmental funds. However, this liability is reflected in the

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government-wide statement of net position. The accrued liability for these balances relating to the proprietary funds is recorded in those funds in the period incurred. L. Long-Term Obligations In the government-wide financial statements and the proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the obligation using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. M. Pensions In the government-wide financial statements, retirement plans are required to be recognized and disclosed using the accrual basis of accounting, regardless of the amount recognized as pension expenditures on the governmental fund financial statements, which use the modified accrual basis of accounting. In general, the County recognizes a net pension liability, which represents the County’s proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial report provided by MercedCERA. The net pension liability is measured as of the County’s prior fiscal year-end. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred. For purposes of measuring the net pension liability and deferred outflows/inflows of resources relating to pensions and pension expense, information about the fiduciary net position of the County’s pension plan with MercedCERA and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by MercedCERA. For this purpose, benefit payments are recognized when due and payable in accordance with the benefits terms. Investments are reported at fair value. Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period of recognition. N. Other Post Employment Benefits (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the County’s plan (Public Agency Retirement Services - PARS) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as pensions. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. O. Encumbrances Encumbrances are commitments related to executory contracts for goods and services, and recorded for budgetary control purposes in the general, special revenue, debt service and capital projects funds. Encumbrance accounting is utilized to assure effective control and accountability and to facilitate effective cash planning and control. Encumbrances outstanding at year-end do not constitute expenditures or liabilities. Unencumbered appropriations lapse at year-end and encumbrances outstanding at that time are re-appropriated by the Board of Supervisors for future expenditure and are reported as restricted, committed, or assigned fund balance, as appropriate.

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P. New Accounting Pronouncements In January 2017, GASB issued Statement #84, Fiduciary Activities, effective for financial statements for fiscal years beginning after December 15, 2019. The statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identity fiduciary component units and post employment benefit arrangements that are fiduciary activities. The County has implemented this statement and the provisions are contained within the financial statements. In June 2017, GASB issued Statement #87, Leases, effective for financial statements for fiscal years beginning after June 15, 2021. The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The County is in the process of evaluating the future impact of this statement on its future financial statements. In June 2018, GASB issued Statement #89, Accounting for Interest Cost Incurred before the End of a Construction Period, effective for financial statements for fiscal years beginning after December 15, 2020. The objectives of this statement are (a) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (b) to simplify accounting for certain interest costs. This statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. The County is in the process of evaluating the future impact of this statement on its future financial statements. In August 2018, GASB issued Statement #90, Majority Equity Interest- an Amendment of GASB Statements No. 14 and No. 61, effective for financial statements for fiscal years beginning after December 15, 2019. The primary objectives of this statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. It defines a majority equity interest and specifies that a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. The County has implemented this statement and the provisions are contained within the financial statements. In May 2019, GASB issued Statement #91, Conduit Debt Obligations, effective for financial statements for fiscal years beginning after December 15, 2021. The primary objectives of this statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The County is in the process of evaluating the future impact of this statement on its future financial statements. In January 2020, GASB issued Statement #92, Omnibus 2020. The requirements related to the effective date of GASB Statement #87 and Implementation Guide 2019-3, reinsurance recoveries, and terminology used to refer to derivative instruments are effective upon issuance. The requirements related to intra-entity transfers of assets and those related to the applicability of GASB Statements #73 and #74 are effective for fiscal years beginning after June 15, 2021. The requirements related to application of GASB Statement #84 to post employment benefit arrangements and those related to nonrecurring fair value measurements of assets or liabilities are effective for reporting periods beginning after June 15, 2021. The requirements related to the measurement of liabilities (and assets, if any) associated with asset retirement obligations in a government acquisition are effective for government acquisitions occurring in reporting periods beginning after June 15, 2021. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics and includes specific provisions. The County is in the process of evaluating the future impact of this statement on its future financial statements.

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In March 2020, GASB issued Statement #93, Replacement of Interbank Offered Rates. The requirements of this statement, except for paragraphs 11b, 13, and 14, are effective for reporting periods beginning after June 15, 2020. The requirement in paragraph 11b is effective for reporting periods ending after December 31, 2021. The requirements in paragraphs 13 and 14 are effective for fiscal years periods beginning after June 15, 2021. The objective of this statement is to address accounting and financial reporting implications that result from the replacement of the interbank offered rate (IBOR). The County has implemented this statement, except for paragraphs 11b, 13, and 14, and the provisions are contained within the financial statements. The County is in the process of evaluating the future impact of paragraphs 11b, 13, and 14 of this statement on its future financial statements. In March 2020, GASB issued Statement #94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, effective for fiscal years beginning after June 15, 2022. The primary objective of this statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). The County is in the process of evaluating the future impact of this statement on its future financial statements. In May 2020, GASB issued Statement #96, Subscription-Based Information Technology Arrangements, effective for fiscal years beginning after June 15, 2022. This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The County is in the process of evaluating the future impact of this statement on its future financial statements.

In June 2020, GASB issued Statement #97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32. The requirements in (1) paragraph 4 of this statement as it applies to defined contribution pension plans, defined contribution OPEB plans, and other employee benefit plans and (2) paragraph 5 of this statement are effective immediately. The requirements in paragraphs 6–9 of this statement are effective for fiscal years beginning after June 15, 2021. All other requirements of this Statement are effective for reporting periods beginning after June 15, 2021. The primary objectives of this statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other post employment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The County is in the process of evaluating the future impact of this statement on its future financial statements.

In October 2021, GASB issued Statement #98, The Annual Comprehensive Financial Report, effective for fiscal years ending after December 15, 2021. This statement

establishes the term annual comprehensive financial report and its acronym ACFR. That new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments. The County has implemented this statement and the provisions are contained within the financial statements. Q. Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 2. CASH AND INVESTMENTS The County Treasurer's Office maintains a diversified fixed income investment pool, referred to as the County Treasury Pool that is available for use by all local agencies. The Treasury pool participants include the County, schools, college, special districts and independent agencies. In addition, the County has other cash and investments, outside of the Treasury Pool that are managed by outside fiscal agents. These include the Tobacco Securitization funds, the Tobacco Funding Corporation funds, the

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Courthouse Construction COP funds, Facility Retrofit Loan funds and the Other Post Employment Benefit (OPEB) funds. The investments of the Merced County’s Retirement Association (MercedCERA) are also included in the County’s fiduciary funds and are managed by the Merced County Retirement Board. The County Treasury pool is accounted for on a cost basis during the year and adjusted to fair value at year-end. The value of pool shares that may be withdrawn is determined on a cost basis, which differs from fair value. Interest earned on investments held in the Treasurer’s pool is apportioned quarterly on an accrual basis of accounting based on cost which differs from the fair value basis used in these financial statements. The County of Merced has not provided or obtained any legally binding guarantees during the fiscal year to support the value of pool shares. The County Treasurer’s pool includes both voluntary and involuntary participation from external entities. Statutes of the State require certain special districts and other governmental entities to maintain their cash surplus with the County Treasurer. The net position of involuntary participation in the pool totaled $675,066,283 at June 30, 2021. The County Treasury pool is not registered with the Securities and Exchange Commission (SEC) as an investment company. Investments made by the Treasurer are authorized by the California Government Code and by the Merced County Investment Policy Statement. The objectives of the policy in order of priority are safety of principal, liquidity and yield. The County has established a Treasury Oversight Committee (Committee) to monitor and review the management of public funds maintained in the pool in accordance with Article 6, Section 27131 of the California Government Code. The Committee and the Board each review and approve the investment policy annually. In addition, the Treasurer prepares a comprehensive investment report in accordance with Section 53646 of the California Government Code. This quarterly report is submitted to the members of the Committee, the County Executive Officer, the County Auditor-Controller, and the Board. Investments - Investments in the County Treasury are restricted per Government Code Section 53600 et.seq. This code requires that the investments be made with the prudent investor standard, that is, when investing, reinvesting, purchasing, acquiring, exchanging, selling or managing public funds, the trustee (Treasurer and staff) will act with care, skill, prudence, and diligence under the circumstances then prevailing.

The Government Code also requires that when following the investing actions cited above, the primary objective of the trustee is to safeguard the principal, secondarily meet the liquidity needs of depositors, and then achieve a reasonable rate of return on the funds. Further, the intent of the Government Code is to minimize risk of loss on County held investments from:

a. Interest rate risk c. Concentration of credit risk b. Custodial credit risk d. Credit risk

Government Code Section 53601 lists the investments which the Treasurer may purchase. The Treasurer has developed an Investment Policy Statement (IPS) that is

accepted by the County Board of Supervisors upon the annual renewal of the Treasurer’s investment authority pursuant to Government Code Sections 27000.1 & 53607. In addition, the County Treasurer has self-imposed restrictions outlined in the Investment Policy that surpass the mandated code requirements. The list of investments the County Treasurer may purchase, per the Investment Policy Statement, is as follows: Permissive fixed income investments include U.S. Treasuries, Federal Agencies (GSE), supranationals, corporate medium-term notes, commercial paper, certificates of deposits, bankers’ acceptances, local agency bonds, state warrants, investment funds and government structured money market funds.

The OPEB funds are maintained in a separate fixed and equity portfolio designed to meet the defined benefit funding liability.

The County was in full compliance with its own more restrictive policy, and therefore was also in compliance with the above cited Government Code Sections.

Accordingly, the County believes it is not at significant risk as to the four risk areas cited above. Interest Rate Risk - This is the risk that changes in market interest rates will adversely affect the fair value of an investment. The County Treasurer’s Investment Policy

Statement has a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Of the County’s $1.4 billion portfolio, 36.82% of the investments have a maturity of six months or less as of June 30, 2021.

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Custodial Credit Risk - The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. At year-end, the County did not have any uninsured or uncollateralized deposits. The County does not participate in any reverse repurchase agreements or securities lending that would result in any possible risk in this area.

Concentration of Credit Risk - This is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. Nearly 37.99% of the County’s investments at year-end are in U.S. Government or Agencies issues. At June 30, 2021, the County had 9.52% of its investment pool in Federal Farm Credit Banks, 4.84% in Federal Home Loan Bank, 8.82% in Federal Home Loan Mortgage Corporation, 3.98% in Federal National Mortgage Association, 0.76% in Federal Agricultural Mortgage Corporation, 0.54% in Private Export Funding Corporation and 9.53% in U.S. Treasury Notes. Of the 24.65% of the portfolio invested in Corporate Medium- Term Notes, 5.89% of the portfolio invested in Commercial Paper and 5.88% of the portfolio invested in Certificates of Deposit, no investment in a single issuer exceeds 5% of the total Treasury pool’s investment portfolio.

Credit Risk - This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the holder of the investment. This is often measured by the assignment of a rating by a nationally recognized statistical rating organization. Per Government Code Section 53601.7, the County is permitted to hold investments of issuers with a short-term rating of A-1/P-1 and a minimum long-term rating of A by the top two nationally recognized statistical rating organizations (rating agencies). The County is permitted to invest in the State’s Local Agency Investment Fund (LAIF) which is the authorized State Pool and not rated.

The County’s investment in LAIF at fair value was $150.0 million as of June 30, 2021. The total amount invested by all public agencies in LAIF at June 30, 2021, was $37.1 billion. LAIF is part of the State of California Pooled Money Investment Account (PMIA), whose balance at June 30, 2021 was $193.46 billion. The PMIA is not SEC-registered or rated, but is required to invest according to California State Code. The average maturity of PMIA investments was 291 days as of June 30, 2021. The Local Investment Advisory Board (Advisory Board) has oversight responsibility for LAIF. The Advisory Board consists of five members as designated by state statute. The value of the pool shares in LAIF, which may be withdrawn, is determined on an amortized cost basis.

The following schedule indicates the credit and interest risk at June 30, 2021. The credit ratings listed are for Standard and Poor's Investor Services (S&P).

S & PCredit Rating

Treasury Pool Local Agency Investment Fund (LAIF) Unrated $ 150,012,446 $ $ $ $ $ 150,012,446 Commercial Paper (CP) A-1 69,986,782 9,997,132 79,983,914

Certificates of Deposit (CD) AA/A-1 9,965,099 60,006,815 9,970,221 79,942,135 Federal Agricultural Mortagage Corp (FAMC) AA+ 10,347,400 10,347,400 Federal Farm Cr Bks Cons (FFCB) AA+ 129,372,400 129,372,400 Federal Home Ln Bks (FHLB) AA+ 5,001,950 5,049,000 55,707,200 65,758,150 Federal Home Ln Mortgage Corp (FHLMC) AA+ 119,812,500 119,812,500 Federal Natl Mortgage Assn M/T/N (FNMA) AA+ 54,138,888 54,138,888 Corporate Medium Term Note (MTN) AAA/BBB+ 35,049,300 17,526,475 55,833,950 153,611,900 262,021,625

AAA/AA- 13,176,986 59,735,413 72,912,399 Private Export Funding Corporation (PEFCO) * Aaa 7,333,349 7,333,349

AAAm 197,700,098 197,700,098 AA+ 5,004,500 5,075,800 119,329,500 129,409,800

Total Investments in Investment Pool 457,750,576 42,493,206 139,142,551 719,358,771 1,358,745,104

* Moody's rating

Maturity

Under 31 - 180 180 - 365 1 - 5 Over 5 FairInvestments 30 Days Days Days Years Years Value

Municipal Bonds

Money Market Fund (MMF) United States Treasury Notes (USTN)

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The following schedule indicates the credit and interest risk at June 30, 2021. The credit ratings listed are for Standard and Poor's Investor Services (S&P).

S & PCredit Rating

Investments Other Than Treasury Pool

AAA/A+ $ $ 843,559 $ 1,191,616 $ 4,047,616 $ $ 6,082,791 AAAm 10,112,879 10,112,879

AAAm 3,199,477 3,199,477

AAAm 828,151 828,151

AAAm 51,205 51,205

AA- 64,781 64,781 AA+ 135,647 1,177,792 1,516,579 2,830,018 AAA/Bb- 10,034 1,335,669 2,694,408 4,040,111

Corporate Issues * Aaa/Baa3 335,219 269,339 604,558 A+/BB 1,899,098 11,244,409 13,143,507 Unrated 42,935,828 42,935,828 AA+ 11,943 658,553 670,496 AA+ 1,561,528 1,561,528 AAAm 1,106,668 1,106,668

A+/BB 37,529 400,871 438,400 Unrated 809,190 809,190 AAAm 169,285 169,285

Total Investments outside Investment Pool 59,348,330 843,559 1,201,650 8,844,866 18,410,468 88,648,873 Total County Investments $ 517,098,906 $ 43,336,765 $ 140,344,201 $ 728,203,637 $ 18,410,468 $ 1,447,393,977

* Moody's rating

Mutual Funds-Equity Money Market Funds

Mutual Funds-Equity Federal Home Loan Mortgage Corp (FHLM) Federal National Mortgage Association (FNMA) Money Market FundsRetirement Mutual Funds-Fixed Income

Money Market FundsOther Post Employment Benefits (OPEB): Municipal Bonds United States Treasury Notes (USTN) Corporate Issues

Mutual Funds-Fixed Income

Money Market Funds (Tax Exempt)Tobacco Funding Corporation: Money Market Funds (Tax Exempt)Courthouse Construction COP: Money Market FundsFacility Retrofit Loan:

Tobacco Securitization: Municipal Bonds

FairInvestments 30 Days Days Days Years Years Value

Maturity

Under 31 - 180 180 - 365 1 - 5 Over 5

A reconciliation of the carrying value of cash and investments to the sum of the amounts noted as (1) equity in pooled cash and investments, (2) restricted assets, and (3) investments in the financial statements is as follows:

Financial Statements: County of Merced $ 1,447,393,977 Governmental Activities $ 503,602,172 Merced County Employees' Retirement Association 1,158,482,467 Business-Type Activites 7,476,604 Fair Value of Cash Deposits (15,288,684) Fiduciary Funds 2,079,508,984 Total Investments and Cash Deposits $ 2,590,587,760 Total Cash and Investments $ 2,590,587,760

Fair Value of Investments:

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The following represents a condensed statement of net position and changes in net position for the Treasury pool at June 30, 2021:

Assets Cash and investments $ 1,358,745,104 Pool deposits 9,306,870 Total Assets 1,368,051,974Liabilities Unfunded checks and warrants (32,008,866)Net Position Equity of internal pool participants 522,708,009 Equity of external pool participants 813,335,099 Total Net Position $ 1,336,043,108

Net position at July 1, 2020 $ 1,051,715,718Net change in pooled cash and investments 284,327,390Net position as June 30, 2021 $ 1,336,043,108

Statement of Net Position

Statement of Changes in Net Position

Fair Value Measurements – The Treasury pool categorizes its fair value measurements within the fair value hierarchy established by GASB Statement #72. GASB Statement #72 recognizes a three-tiered fair value hierarchy, as follows: ∙ Level 1: Investments reflect prices quoted in active markets; ∙ Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not

considered to be active; and ∙ Level 3: Investments reflect prices based upon unobservable sources.

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The Treasury pool has the following recurring fair value measurements as of June 30, 2021:

Investments by fair value level

Quoted Price inActive Markets

for IdenticalAssets

(Level 1)

SignificantOther

ObservableInputs

(Level 2)

SignificantUnobservable

Inputs(Level 3)

Managed Pool Accounts $ 347,712,544 $ $ 347,712,544 $Mutual Funds-Fixed Income 13,581,907 13,581,907 Meduim Term Notes 185,980,675 185,980,675 Mutual Funds-Equity 43,745,018 43,745,018 Federal Agency Coupon Securities 388,994,711 388,994,711 Treasury Coupon Securities 132,239,817 132,239,817 Supranational IBRD, IFC, IADB 76,040,950 76,040,950 Municipal Bonds 79,059,971 79,059,971 Corporate Bonds 4,644,670 4,644,670 Money Market Funds 15,467,665 15,467,665 Total investments measured at fair value $ 1,287,467,928 $ 175,984,835 $ 1,111,483,093 $

Investments measured at amortized costCommercial Paper 79,983,914 Negotiable CDs 79,942,135 Total pooled and directed investments $ 1,447,393,977

Fair Value Measurements Using

The MercedCERA Board (Retirement Board) has exclusive control over all investments of MercedCERA and is responsible for establishing investment objectives, strategies and policies. Pursuant to the California Constitution and California Government Code Sections 31594 and 31595, the Retirement Board is authorized to invest in any investment that it deems prudent. The Retirement Board has adopted an investment policy, which provides the framework for the management of MercedCERA’s investments. The investment policy establishes MercedCERA’s investment objectives and defines the principal duties of the Retirement Board, the custodian bank and the investment managers. The asset allocation plan is an integral part of the investment policy and is designed to provide an optimum and diversified mix of asset classes with return expectations to satisfy expected liabilities while minimizing risk exposure. MercedCERA currently employs external investment managers to manage its assets subject to the provisions of the investment policy.

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Fixed Income SecuritiesU.S. Government agency obligations $ 25,902,118 Commercial Mortgage Backed Securities 376,108 Asset Backed Securities 3,641,643 U.S. Treasury and TIPS 23,143,122 Corporate and Other Credit 188,332,235 Collateralized Mortgage Obligations 194,638

241,589,864 Equities

Domestic 31,836,007 International 251,148,371 Index Funds 243,030,022

526,014,400 Other Investments

Short-Term Investment Funds 6,715,210 Real Estate 89,400,417 Alternative Investments 294,762,576

390,878,203 Total Investments $ 1,158,482,467

As of June 30, 2021 MercedCERA had the following fixed income investments:

Investment Type ValueWeight of Total Fixed Income

Effective Duration (Years)

U.S. Government agency obligations $ 25,902,118 10.72% 4.02Commercial Mortgage Backed Securities 376,108 0.16% 0.28Asset Backed Securities 3,641,643 1.51% 1.74U.S. Treasury and TIPS 23,143,122 9.58% 9.87Corporate and Other Credit 188,332,235 77.95% 8.35Collateralized Mortgage Obligations 194,638 0.08% 1.38

$ 241,589,864 100.00%

Portfolio Effective Duration 6.48

Total Fair Value

As of June 30, 2021, MercedCERA investments had the following S&P ratings:

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Quality Fixed IncomeAaa 1.12%Aa 0.83%A 6.01%

Baa 7.16%Ba 0.36%B 0.01%

Caa 0.04%Ca 0.08%

NR* 10.07%NA** 74.32%

100.00%

*Represents those securities that are not rated. **Represents those securities that are not applicable to the rating disclosure requirements. Credit Concentration/Custodial Risk MercedCERA’s investment policy does not allow for an investment in any one issuer that is in excess of 5% of the value of a portfolio and no single industry (based on North American Industry Classification System (NAICS) codes) can represent more than 15% of the market value of the investment portfolio. These single security and single industry restrictions do not apply to U.S. Government issued or guaranteed investments, investments in mutual funds, external investment pools and other pooled investments. As of June 30, 2021, MercedCERA had no single issuer that exceeds 5% of total investments or fiduciary net position. Interest Rate Risk MercedCERA’s investment policy statement does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. MercedCERA’s bond portfolios are managed duration neutral to their benchmark, the Barclay U.S. Aggregate Bond Index and the Barclays US Government 1-3 and 1-5 year Indices. An investment grade security is defined as a security which has been rated investment grade (BBB or higher) by at least one (but preferably two) of the three nationally recognized rating agencies: Fitch Ratings, Moody’s Investor Service (Moody’s) and S&P. MerecdCERA’s core fixed income portfolio requires that no more than 5% of an investment manager’s fixed income portfolio may be invested in below investment grade rated securities (BB or B rated bonds). No security rated below single B may be purchased at any time. Securities that have at least a single B but subsequently fall below single B ratings shall be sold in an orderly manner. Derivatives MercedCERA’s investment policy permits the use of derivative instruments to minimize the exposure of certain of its investments to adverse fluctuations in financial and currency markets and enhance yields. MercedCERA does not use derivatives for speculative use or to create leverage. Exposure to risk by the use of derivative instruments must be consistent with MercedCERA’s overall investment policy as well as an individual manger’s specific investment guidelines. Any other derivative investment purpose may be allowed by the explicit authorization of the Retirement Board. MercedCERA does not have any derivative instruments as defined by GASB Statement #53 as of June 30, 2021. 3. PROPERTY TAXES The County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions including schools and special districts within the County. The Board levies property taxes as of September 1, for property values certified on July 1. Property taxes secured by real property are payable in two equal installments, due on November 1 and February 1. They become delinquent with penalties after December 10 and April 10, respectively. The lien date is January 1 of each year. Real property transactions are subject to supplemental assessments for the period beginning the first day of the month following change in ownership or completion of

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construction and are then part of the next January 1 lien. Property taxes on the unsecured roll are due on the January 1 lien date. They are levied on June 30 and become delinquent if unpaid after August 31. Property taxes are accounted for in the Property Tax Collection Fund, an agency fund, until apportionment and disbursement to taxing jurisdictions. All jurisdictions within California derive their taxing authority from the State Constitution and various legislative provisions contained in the State Government Code and Revenue and Taxation Code. The County is permitted by Article XIIIB of the State of California Constitution (commonly referred to as Proposition 13) to levy a maximum tax of $1.00 per $100 of full cash value. Taxes levied to service voter-approved debt are excluded from this limitation. For the fiscal year of 2020-2021, the County recorded $110,699,743 in property taxes that were used to finance general government services. Property tax receivables are recognized when levied to the extent that they are measurable and available under the alternative method of tax allocation (commonly referred to as the Teeter Plan). The County elected the Teeter Plan effective July 1, 1993, whereby the County purchases, through Property Tax Collection Funds, the current secured unpaid taxes remaining at year-end from participating agencies. In return, the Property Tax Collection Fund records tax receivable and receives the delinquent penalties and redemption interest accruing to delinquent collections related to participating agencies. The participating agencies, including the County, special districts and school districts, in turn, receive their full tax distribution with no liability for uncollected taxes to the Property Tax Collection Fund. In addition the Teeter Plan requires that a property tax reserve be maintained in an amount of 1% of the current year’s secured tax levy which is shown as a reservation of fund balance in the General Fund. 4. RECEIVABLES Receivables at June 30, 2021 of the County’s major individual funds and nonmajor and internal service funds in the aggregate, including allowances for uncollectible accounts, were as follows:

Taxes and Gross Allowance for Net Governmental activities Accounts Notes Assessments Receivables Uncollectibles Receivables General fund $ 51,101,988 $ $ 3,766,229 $ 54,868,217 $ $ 54,868,217 Road fund 8,409,335 8,409,335 8,409,335 Other governmental funds 5,205,018 7,088,203 874,076 13,167,297 (347,954) 12,819,343 Internal service funds 1,800,098 1,800,098 1,800,098 Total governmental activities $ 66,516,439 $ 7,088,203 $ 4,640,305 $ 78,244,947 $ (347,954) $ 77,896,993 Business-type activities Castle airport development center fund $ 2,638,610 $ $ $ 2,638,610 $ (155,409) $ 2,483,201 Other enterprise funds 19,346 19,346 19,346 Total business-type activities $ 2,657,956 $ $ $ 2,657,956 $ (155,409) $ 2,502,547

Governmental funds report unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental and proprietary funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At June 30, 2021, the various components of unearned revenue reported were as follows:

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Advances from Grantors & Third

Parties Governmental funds General fund Grant proceeds received prior to meeting all eligibility requirements $ 199,320,349 COVID-19 Emergency Response Fund Grant proceeds received prior to meeting all eligibility requirements 26,558,842 Road fund Impact fees received prior to meeting all eligibility requirements 8,294,475 Nonmajor funds Impact fees received prior to meeting all eligibility requirements 213,040 Notes receivable 8,160,133 Total Governmental funds $ 242,546,839 Proprietary funds Castle airport development center fund Customer deposits $ 81,580 Nonmajor funds Customer advance payment 80,000 Grant proceeds received prior to meeting all eligibility requirements Total Proprietary funds $ 161,580

5. ACCRUED LIABILITIES Accrued liabilities at June 30, 2021 were as follows: Salaries Accounts and Benefits Interest Governmental activities Payable Payable Payable Total General fund $ 10,371,034 $ 7,561,828 $ $ 17,932,862 Road fund 5,093,451 227,768 5,321,219 Other governmental funds 6,695,686 271,066 6,966,752 Internal service funds 261,850 217,165 479,015 Reconciliation of balances in fund financial statements to government-wide financial statements 341,062 341,062 Total governmental activities $ 22,422,021 $ 8,277,827 $ 341,062 $ 31,040,910 Business-type activities Castle airport development center fund $ 2,418,813 $ 26,516 $ $ 2,445,329 Other enterprise funds 27,789 27,789 Total business-type activities $ 2,446,602 $ 26,516 $ $ 2,473,118 6. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS During the course of normal operations, the County has numerous transactions between funds, including expenditures, reimbursements, transfer of resources to provide services, and debt service. The accompanying financial statements reflect such transactions as due from other funds and due to other funds.

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COVID-19 Castle AirportEmergency Road DevelopmentResponse Fund Center

General $ 10,460,422 $ 92,264 $ 621,288 $ 23,175 $ 20,071 $ 138,540 $ 11,355,760 Road Fund $ 11,558 38,048 1,222 50,828 Nonmajor Governmental 646,467 43 418,720 677 1,065,907 Castle Airport Development Center 5,451 456 41,279 47,186 Nonmajor Enterprise 27 1,248 1,275 Internal Service 1,339,965 23,346 42,708 6,715 100,852 1,513,586

Total $ 2,003,468 $ 10,460,422 $ 115,653 $ 1,122,468 $ 31,789 $ 61,350 $ 239,392 $ 14,034,542

General

Payable Fund

TotalEnterprise ServiceNonmajor

Receivable Fund

Individual interfund receivables (due from other funds and departments) and payables (due to other funds and departments) at June 30, 2021, were as follows:

InternalGovernmental

Nonmajor

All of those interfund balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made.

Castle AirportRoad DevelopmentFund Center

General $ 500 $ $ 7,916,838 $ 4,769 $ $ 7,922,107 COVID-19 Emergency Response $ 18,482,863 13,229 1,533,879 20,029,971 Road 34,471 34,471 Tobacco Securitization 15,726 45,775 61,501 Nonmajor Governmental 1,899,874 11,766,518 151,161 98,649 13,916,202 Castle Airport Development Center 210,662 210,662 Nonmajor Enterprise 10,615,525 10,615,525 Internal Service 262,989 262,989

Total $ 20,872,114 $ 13,729 $ 11,766,518 $ 20,297,649 $ 4,769 $ 98,649 $ 53,053,428

Transfers Out General

Transfers In

TobaccoTotal

NonmajorService

The following schedule briefly summarizes the County's transfer activity for the year ended June 30, 2021:

InternalGovernmentalSecuritization

Of the transfers made from the General Fund, $7,916,838 was transferred to the Nonmajor Governmental Funds to either service the County’s various debt obligations ($2,177,358) or support the Capital Projects Fund ($4,222,557) and other Nonmajor governmental funds ($1,516,923). Of the transfers made to the General Fund, $15,726 was transferred from the Tobacco Securitization Fund; $18,482,863 was transferred from the COVID-19 Emergency Response Fund; $1,899,874 was transferred from the Nonmajor Governmental Funds; and $210,662 was transferred from the Castle Airport Development Enterprise Fund. Of the remaining transfers, $13,229 was transferred from the COVID-19 Emergency Response Fund to the Road Fund, $11,766,518 was transferred from the Merced County Tobacco Funding Corporation to Tobacco Securitization Fund, $34,471 was transferred from the Road Fund to the Energy Retrofit and the PG&E Debt Service Funds, $45,775 was transferred from the Tobacco Securitization Fund to the Capital Projects Fund, $10,615,525 was transferred from the Medical Facility Lease Operation Fund to the Capital Projects Fund, $98,649 was transferred from the Nonmajor Governmental Funds to Internal Services Funds, $1,533,879 was transferred from the COVID-19 Emergency Response Fund to Nonmajor Governmental funds and $151,161 was transferred among Nonmajor Governmental Funds.

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7. CAPITAL ASSETS Capital asset activity for the year ended June 30, 2021, was as follows:

Governmental activities

Land $ 26,150,214 $ 779,084 $ (5,348) $ - $ 26,923,950 Construction in progress 136,716,448 47,978,702 (260,471) (30,093,385) 154,341,294

Total capital assets, not being depreciated 162,866,662 48,757,786 (265,819) (30,093,385) 181,265,244 Capital assets, being depreciated

Buildings and improvements 211,110,722 887,639 (720,940) 7,619,963 218,897,384 Equipment 90,597,842 3,979,976 (2,205,581) 768,044 93,140,281 Other capital assets 11,438,174 - (56,194) 1,517,538 12,899,518 Infrastructure 408,986,307 15,500 (219,359) 20,187,840 428,970,288

Total capital assets, being depreciated 722,133,045 4,883,115 (3,202,074) 30,093,385 753,907,471 Less accumulated depreciation for:

Buildings and improvements (94,813,705) (5,974,262) 380,621 - (100,407,346) Equipment (57,175,640) (4,456,794) 2,035,151 - (59,597,283) Other capital assets (5,592,058) (1,742,048) 56,194 - (7,277,912) Infrastructure (296,247,361) (13,134,288) 55,937 - (309,325,712)

Total accumulated depreciation (453,828,764) (25,307,392) 2,527,903 - (476,608,253) Total capital assets being depreciated, net 268,304,281 (20,424,277) (674,171) 30,093,385 277,299,218

Governmental activities capital assets, net $ 431,170,943 $ 28,333,509 $ (939,990) $ - $ 458,564,462

Capital assets, not being depreciatedJuly 1, 2020 Additions Deletions Transfers June 30, 2021

Balance Balance

Business-type activitiesCapital assets, not being depreciated

Land $ 41,112,249 $ - $ - - $ 41,112,249 Construction in progress 337,772 669,974 - - 1,007,746

Total capital assets, not being depreciated 41,450,021 669,974 - - 42,119,995 Capital assets, being depreciated:

Buildings and improvements 104,046,765 - (2,782,201) - 101,264,564 Equipment 1,710,295 96,449 - - 1,806,744 Other capital assets 6,730 - - - 6,730 Land improvements 1,714,208 - - - 1,714,208 Infrastructure 16,177,535 - - - 16,177,535

Total capital assets, being depreciated 123,655,533 96,449 (2,782,201) - 120,969,781 Less accumulated depreciation for:

Buildings and improvements (69,468,340) (5,070,260) 1,932,232 - (72,606,368) Equipment (1,312,777) (45,864) - - (1,358,641) Other capital assets (6,730) - - - (6,730) Land improvements (1,408,753) (37,699) - - (1,446,452) Infrastructure (9,299,341) (857,579) - - (10,156,920)

Total accumulated depreciation (81,495,941) (6,011,402) 1,932,232 - (85,575,111) Total capital assets being depreciated, net 42,159,592 (5,914,953) (849,969) - 35,394,670

Business-type activities capital assets, net $ 83,609,613 (5,244,979) $ (849,969) $ - $ 77,514,665

June 30, 2021July 1, 2020 Additions Deletions TransfersBalance Balance

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Depreciation expense was charged to governmental functions as follows: Governmental activities General government $ 5,750,977 Public protection 2,342,155 Public ways and facilities 13,132,909 Health and sanitation 1,618,062 Public assistance 952,609 Education 71,257 Recreation and cultural activities 253,810 Depreciation on capital assets held by the County’s internal service funds 1,185,613 are charged to the various functions based on their usage of the assets Total depreciation expense – governmental activities $ 25,307,392 Business-type activities Castle Airport Development Center $ 6,011,191 Castle Water and Sewer 211 Total depreciation expense – business-type activities $ 6,011,402 Construction in Progress at June 30, 2021 is comprised of the following:

Project

Expended through Governmental activities

Authorization

06/30/2021

Public Works - Various Road Projects

$ 119,884,506

$ 119,884,506 Public Works – Various Bridge Projects

15,315,193

15,315,193

Public Works – Bikeway / Pedestrian Projects 321,330 321,330 Courthouse Museum 1,075,660 24,440 Irrigation System Project 300,000 103,000 Roads Radio Equipment 120,000 105,712 Behavioral Health & Recovery Services-Livingston 48,867 48,867 Behavioral Health & Recovery Services Key FOB 100,000 64,023

Behavioral Health & Recovery Services Youth Campus

365,000

259,529 Behavioral Health & Recovery Services Navigation Center

7,241,197

7,115,010

Probation Coffee Trailer 58,394 57,695 Adobe Building Tenant Improvements 598,078 471,487 Adobe Alley Project 250,000 11,560 Merced Veteran’s Hall Improvements 1,473,508 821,690

Atwater Veteran’s Hall ADA Improvements

576,340

318,650 Los Banos Veteran’s Hall ADA Improvements 401,649 399,736 Gustine Veteran’s Hall ADA Improvements 394,360 49,819 Livingston Veteran’s Hall ADA Improvements 324,610 14,606

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Governmental activities (continued) Project Expended through Authorization 06/30/2021 Administration Building 3rd Floor / Basement Remodel $ 1,558,365 $ 1,510,742 Administration Complex – Outdoor Improvement Project 930,327 398,954 Administration Building A/V Upgrade 130,000 97,361 Merced Library – Gracey Room A/V Equipment 18,000 4,116 Merced Library – Handrail Replacement Project 400,000 12,330

Parks – Community and Veterans Halls

1,077,360

578,945 Ballico Park Irrigation System 119,500 33,475 Courthouse Park Irrigation System 244,000 69,010 Houlihan Park ADA Upgrade & Renovation 533,298 504,197 Le Grand Park Irrigation System 176,500 49,714 Franklin Beachwood Park 785,600 6,466 Spring Fair Water System 150,000 87,260 Accessibility Mitigation Projects 2,542,300 519,328

Spring Fair Tank Removal

967,604

917,092 Human Services Agency Improvements – Wardrobe

180,001

158,669

Castle / Winton WWTP EIR 200,000 113,172 Elections / Warehouse Fence Project 182,000 7,894 John Latoracca Facility Expansion 4,750,000 1,734,948 Lake Yosemite Main Beach & Concession Area 184,988 45,373 Lake Yosemite Walking Pier 33,853 15,243 Snelling Design Project 10,057 10,057 Del Hale Repair / Remodel 261,060 16,729 Fire Structures & Improvements Projects 45,000 1,774 Fire Department Type 1 Engine 770,000 684,065 Fire Department Mt. Bullion Radio Project 50,000 20,123 Fire Department Central Site Radio Project 170,000 103,342 Video Conferencing System 50,000 48,307 Eastside Access for UC Merced 25,839 25,839 Sheriff’s CAD System Upgrade 200,000 146,977

Warrant System Upgrade

100,000

47,332 Countywide Radio Communication 1,253,500 807,598 Microwave Interoperable Communication Equipment 122,135 122,135 Phone System Upgrade 120,000 55,875 $ 167,189,979 $ 154,341,295

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Business-type Activities Project Expended through Castle Airport Development Center Fund Authorization 06/30/2021

FAA 20 Airport Layout Plan $ 96,600 $ 7,709 Castle Airport Structures & Improvements 5,590,469 1,000,037 $ 5,687,069 $ 1,007,746 8. LEASES A. Capital Leases The County has entered into certain lease agreements as lessee for financing the acquisition of various equipment and buildings. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date of each respective lease. Principal and interest payments on capital leases are budgeted annually and disbursed from the fund acquiring the capital asset under lease. At June 30, 2021, the County included the following amounts that have been capitalized under lease purchase agreements:

Governmental Business-type Activities Activities Buildings and equipment $ 599,727 $ Less: Accumulated amortization 173,161 Total $ 426,566 $ The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2021 are as follows:

Governmental Business-type Year Ended June 30: Activities Activities 2022 $ 76,280 $ 2023 71,752 2024 58,264 2025 52,868 2026 46,752 Thereafter 122,724 Total future minimum lease payments 428,640 Less: Amount representing interest 4,282 Present value of minimum lease payments $ 424,358 $

B. Operating Leases The County conducts some operations from leased facilities. The County does not have any operating leases that have initial or remaining noncancelable lease terms in excess of one year as of June 30, 2021. Rents collected by the County from various tenants occupying property either owned or controlled by the County for the fiscal year ended June 30, 2021, was approximately $3,010,078.

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9. LONG-TERM DEBT Long-term liability activity for the year ended June 30, 2021, was as follows:

Balance Balance Due Within Governmental activities July 1, 2020 Additions Deletions June 30, 2021 One Year 2005 Tobacco settlement asset-backed bonds $ 30,270,000 $ $ (30,270,000) $ $ Less: Issuance discounts (413,029) 413,029 2020 Tobacco settlement asset-backed bonds 35,645,000 (1,145,000) 34,500,000 860,000 Mental health facility bond 6,400,000 (505,000) 5,895,000 520,000 Juvenile justice 2013 certificates of participation 7,535,000 (550,000) 6,985,000 575,000 Long-term self-insurance debt, as restated (See Note 15) 22,773,627 14,705,978 (15,561,523) 21,918,082 4,945,675 Courthouse construction certificates of participation 5,270,000 (435,000) 4,835,000 450,000 Add: Issuance premiums 547 (55) 492 55 Earned compensated absences 13,136,860 17,975,725 (15,509,641) 15,602,944 4,011,792 Capital lease obligations (See Note 8) 516,396 (92,038) 424,358 73,844 Energy retrofit 3,884,728 (226,590) 3,658,138 233,501 Solar array project 5,776,081 (303,412) 5,472,669 307,646 PG&E retrofit loan 231,575 (106,881) 124,694 106,879 Other post employment benefits (OPEB) obligation (See Note 13) 32,592,816 107,370 (513,508) 32,186,678 Net pension liability (See Note 12) 450,606,325 13,850,160 (874,811) 463,581,674

Total long-term debt of governmental activities $ 578,580,926 $ 82,284,233 $ (65,680,430) $ 595,184,729 $ 12,084,392

Business-type activities Earned compensated absences $ 54,749 $ 57,457 $ (45,750) $ 66,456 $ 13,639 Other post employment benefits (OPEB) obligation (See Note 13) 115,226 (11,223) 104,003 Net pension liability (See Note 12) 1,524,643 (77,840) 1,446,803 Total long-term debt of business-type activities $ 1,694,618 $ 57,457 $ (134,813) $ 1,617,262 $ 13,639

Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above totals for governmental activities. All of the long-term self-insurance debt is attributable to internal service funds and the resources needed to liquidate these liabilities, have in the past, come from those funds. In addition, at year-end, $538,796 of the compensated absences was attributable to internal service funds. The balance of capital lease obligations and earned compensated absences have historically been liquidated by the respective County department.

2020 Tobacco Settlement Asset-Backed Refunding Bonds On September 30, 2020, the California County Tobacco Securitization Agency issued bonds on behalf of the Merced County Tobacco Funding Corporation, a blended component unit of the County of Merced, in the amount of $35,645,000. The bonds were issued to refund the County’s 2005 Tobacco Bonds and permitted the County to take advantage of market opportunities to generate additional proceeds which were unavailable in 2005. The issuance consisted of $13,645,000 in Series 2020A tax-exempt bonds and $22,000,000 in Series 2020B tax-exempt bonds structured as follows:

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Expected Turbo Stated Redemption

Series Par Coupon Yield Maturity Date 2020B $ 22,000,000 5.000% 3.750% June 1, 2050 June 1, 2041 2020A 465,000 3.000% 0.320% June 1, 2021 June 1, 2021 2020A 950,000 4.000% 0.410% June 1, 2023 June 1, 2023 2020A 5,740,000 5.000% 1.218% June 1, 2033 June 1, 2033 2020A 6,490,000 5.000% 2.360% June 1, 2042 June 1, 2041

As of June 30, 2021, the annual debt service requirements of the bonds to maturity are as follows assuming turbo term bonds are redeemed from available funds: Year Ending June 30 Principal Interest Total

2022 $ 860,000 $ 1,650,600 $ 2,510,600 2023 925,000 1,612,500 2,537,500 2024 960,000 1,570,850 2,530,850 2025 995,000 1,522,850 2,517,850 2026 1,160,000 1,473,100 2,633,100 2027-2031 6,815,000 6,444,750 13,259,750 2032-2036 9,485,000 4,482,250 13,967,250 2037-2041 13,300,000 2,056,000 15,356,000

$ 34,500,000 $ 20,812,900 $ 55,312,900 Resources to service this obligation are being maintained by a third-party trustee in the name of the Corporation. The resources are derived from payments required to be made after May 1, 2003, to the State of California under a Master Settlement Agreement entered into by participating cigarette manufacturers, 46 states and 6 other U.S. jurisdictions, in November of 1998 in settlement of certain cigarette smoking-related litigation and made payable to the County pursuant to agreements with the State and other parties. Mental Health Facility Bond On November 1, 2016, the County issued a bond by way of a direct purchase lease agreement in the amount of $8,160,000 to assist in the financing of a new mental health facility for the County of Merced. The entire project cost is estimated at $31,636,400. Annual installments are due ranging from $320,000 beginning on June 1, 2017, to $665,000 on June 1, 2031. The interest rate on the bond is 2.750%. The Mental Health Facility Bond debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total 2022 $ 520,000 $ 162,113 $ 682,113 2023 535,000 147,812 682,812 2024 550,000 133,100 683,100 2025 565,000 117,975 682,975 2026 580,000 102,438 682,438 2027-2031 3,145,000 264,275 3,409,275 $ 5,895,000 $ 927,713 $ 6,822,713

Resources to service this obligation are currently being budgeted for in the Mental Health Facility Debt Service Fund.

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Juvenile Justice 2013 Certificates of Participation (COP) On June 6, 2013, the County issued $10,885,000 in certificates of participation to assist in the refunding of the 2002 Certificates of Participation which were used to finance the construction of a juvenile justice facility. The issuance consisted of $9,260,000 in serial bonds due in annual installments ranging from $445,000 beginning on June 1, 2014, to $770,000 on June 1, 2029, a sum total of $1,625,000 in term bonds due annually on June 1, 2030, and June 1, 2031. Interest rates on the bonds range from 2.0% to 3.625% for the serial bonds and for the term bonds. The Juvenile Justice 2013 COP debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total 2022 $ 575,000 $ 256,600 $ 831,600 2023 595,000 233,600 828,600 2024 620,000 206,825 826,825 2025 655,000 178,925 833,925 2026 690,000 159,275 849,275 2027-2031 3,850,000 425,381 4,275,381 $ 6,985,000 $ 1,460,606 $ 8,445,606

Resources to service this obligation are currently being budgeted for in the General Fund. Courthouse Construction Certificates of Participation (COP) On June 1, 2005, the County issued $10,200,000 in certificates of participation to assist in financing the construction of a new courthouse facility. The full cost of the project was $24.2 million. Of the remaining $12 million, $3.0 million from the State is reimbursement for construction features they requested. The remaining $9.0 million is from assessments imposed on court fines. The issuance consisted of $7,285,000 in serial certificates due in annual installments ranging from $225,000 beginning on June 1, 2006, to $510,000 on June 1, 2025, a sum total of $1,095,000 in term certificates due annually on June 1, 2026, and June 1, 2027, and a sum total of $1,820,000 in term certificates due annually beginning on June 1, 2028, and ending on June 1, 2030. Interest rates on the certificates range from 3.0% to 4.3% for the serial certificates to 4.4% and 4.4% on the term certificates. The net interest cost is 4.2% after amortization of $1,375 in total certificate premiums. Courthouse Construction COP debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total 2022 $ 450,000 $ 209,358 $ 659,358 2023 470,000 190,232 660,232 2024 490,000 170,257 660,257 2025 510,000 149,188 659,188 2026 535,000 127,258 662,258 2027-2030 2,380,000 265,641 2,645,641 $ 4,835,000 $ 1,111,934 $ 5,946,934

Resources to service this obligation are currently being budgeted for in the Courthouse Construction COP Debt Service Fund. Energy Retrofit On December 28, 2016, the County entered into a master lease purchase agreement in the amount of $4,525,046 to assist in the financing of various facility energy conservation measures. Annual installments are due ranging from $207,060 beginning on December 28, 2017, to $334,861 on December 28, 2034. Interest rate on the master lease purchase agreement is 3.050%. The Energy Retrofit master lease purchase agreement debt service requirements to maturity are as follows:

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Year Ending June 30 Principal Interest Total 2022 $ 233,501 $ 111,573 $ 345,074 2023 240,623 104,452 345,075 2024 247,961 97,113 345,074 2025 255,524 89,550 345,074 2026 263,318 81,756 345,074 2027-2031 1,442,069 283,300 1,725,369 2032-2034 975,142 60,079 1,035,221 $ 3,658,138 $ 827,823 $ 4,485,961

Resources to service this obligation are currently being budgeted for in the Energy Retrofit Debt Service Fund. Solar Array Bond On April 19, 2017, the County issued New Clean Renewable Energy Bonds in the amount of $6,681,414 to assist in the financing of solar array projects at various County facilities. Annual installments are due ranging from $310,980 beginning on February 1, 2018, to $378,735 on February 1, 2037. Interest rate on the bonds is 4.250%. The Solar Array Bond debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total 2022 $ 307,646 $ 232,588 $ 540,234 2023 311,939 219,513 531,452 2024 316,293 206,256 522,549

2025 320,707 192,814 513,521 2026 325,182 179,184 504,366 2027-2031 1,695,264 684,716 2,379,980 2032-2036 1,816,903 314,277 2,131,180 2037 378,735 16,096 394,831 $ 5,472,669 $ 2,045,444 $ 7,518,113

Resources to service this obligation are currently being budgeted for in the Solar Array Bond Debt Service Fund. PG&E Retrofit Loan On August 16, 2018, the County financed a loan with Pacific Gas and Electric (PG&E) in the amount of $418,615 to assist in the financing of an energy retrofit project to upgrade street lighting in unincorporated areas of the County where PG&E provides power. Monthly installments in the amount of $8,907 are due beginning in August 2018, to June 2022. Interest rate on the loan is 0.0%. The PG&E Retrofit Loan debt service requirements to maturity are as follows:

Year Ending June 30 Principal Interest Total 2022 $ 106,879 $ - $ 106,879 2023 17,815 - 17,815 $ 124,694 $ - $ 124,694

Resources to service this obligation are currently being budgeted for in the PG&E Retrofit Loan Debt Service Fund.

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Arbitrage The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the yield paid to bond holders. Generally, all interest paid to bondholders can be retroactively considered taxable if applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five years. During the current year, the County performed calculations of excess investment earnings on various bonds and financing, and at June 30, 2021, does not expect to incur a liability. 10. TAX ABATEMENTS The County provides property tax abatements through the Agricultural Preserve Program, as provided by the California Land Conservation Act of 1965, also known as the Williamson Act. The objective of the program is to protect agricultural lands for continued agricultural production and to preserve open space uses. The County’s Rules of Procedure to Implement the California Land Conservation Act of 1965 provide the standards for property eligibility and land use restrictions within the preserve and for those lands under a Williamson Act Contract. They also provide procedures for terminating contracts and monitoring the agricultural preserve. An agricultural preserve has been established by the County for those areas devoted to agricultural and open space uses as per the Williamson Act. Establishment of the agricultural preserve is a prerequisite for landowners to enter into land conservation contracts with the County. A land conservation contract is an agreement entered into by and between the property owner and the County to restrict the use of the land for agricultural and open space compatible uses for a minimum term of 10 years, in return for a reduction in property taxes. Any landowner meeting the qualification standards may apply to enter into a land conservation contract with the County at any time applications are being accepted. Following the recordation of a contract, the property is reassessed on the basis of the agricultural income producing capability of the land then compared to the fair market value and Proposition 13 value. The lower of the values will be enrolled each tax year. No other commitments were made by the County as part of the Williamson Act Contracts. For the fiscal year ended June 30, 2021, the Williamson Act tax abatements were $1,517,911. 11. MERCED COUNTY EMPLOYEES' RETIREMENT ASSOCIATION (MercedCERA) Plan Description MercedCERA was established on July 1, 1950 by vote of the County electorate under and subject to the legislative authority of the State as enacted and amended in the County Retirement Act of 1937 (the “1937 Act”). Management of MercedCERA is vested in the Retirement Board, consisting of nine members and two alternates. Day to day management of MercedCERA is vested in a Plan Administrator who is appointed by and serves at the direction of the Retirement Board. MercedCERA is a cost-sharing multiple-employer contributory defined benefit pension plan covering all permanent full-time and permanent part-time employees of the County, Merced Superior Courts, the Merced Cemetery District, and the Merced County Regional Waste Management Authority. Plan members are classified as either Safety or General members with different levels of benefits as a result of that classification. Coverage is optional to employees hired after age 60 and elected officials. MercedCERA issues a publicly available financial report that includes financial statements and the required supplementary information. The complete Annual Comprehensive Financial Report for MercedCERA may be obtained by contacting the MercedCERA at 3199 “M” Street, Merced, California 95340. Benefit Provisions The plan provides retirement and disability benefits, annual cost-of-living adjustments (as applicable), post-retirement health and dental care benefits, and death benefits to plan members and beneficiaries. Benefits are established in accordance with the 1937 Act while the authority to make changes rests with MercedCERA and the Board of Supervisors in accordance with the 1937 Act, as amended. Pursuant to the 1937 Act, the Retirement Board makes an annual determination of MercedCERA’s ability to provide financial assistance to defray the costs of retiree health care. Historically, MercedCERA has provided some measure of financial support toward such costs; however, the level of such support has varied. Retirees have no vested right to receive such financial support and the availability of such support is not guaranteed. MercedCERA

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reserves the right to alter the level of financial support, to alter the method by which it provides such support, or to terminate such support, as permitted by law. Summary of Significant Accounting Policies Basis of Accounting - MercedCERA’s financial statements are prepared on the accrual basis of accounting. As such, income is recognized when earned, and expenses are recognized when the obligations are incurred. Employee and employer contributions are recognized when due. Benefits and refunds are recognized when due and payable under the terms of the plan. Cash and Investments – The Retirement Board has exclusive control over all investments of MercedCERA and is responsible for establishing investment objectives, strategies and policies. Pursuant to the California Constitution and California Government Code Sections 31594 and 31595, the Retirement Board is authorized to invest in any investments the Retirement Board deems prudent. MercedCERA reports investments at fair value based upon the closing sale prices reported on recognized securities exchanges on the last business day of the period. For listed securities having no reported sales price and for unlisted securities, fair value is based upon the last reported sales price. Short-term investments are reported at cost, which approximates fair value. Funding Policy - Employee contributions are defined in the 1937 Act. Employer contributions are actuarially determined to provide the defined benefit after subtracting employee contributions and are appropriated on an annual basis. Member contribution rates are based on a formula reflecting the age at entry into the system. The basic rates are such as to provide an average annuity that is equal to a fractional part of the highest year(s) salary, based on membership and tier. For members integrated with Social Security, the above contributions are reduced by 1/3 of that portion of such contribution payable with respect to the first $350 of monthly salary. Member contributions are refundable upon termination from the system. Employee contribution rates vary by member group and tier.

Annual Pension Cost – For fiscal year ended June 30, 2021, the County's annual pension cost was equal to the County's required contributions. The required contribution was determined as part of the June 30, 2020 actuarial valuation using the Entry Age Normal Actuarial Cost Method. The actuarial assumptions included 7.00% investment rate of return and 2.75%, plus service-based rates, projected salary increase. The actuarial value of MercedCERA's assets was determined using the techniques that smoothed the effects of short-term volatility in the market value over a 5-year period. MercedCERA's unfunded actuarial accrued liability is amortized as a level percentage of projected future payroll cost over a closed 16-year period from June 30, 2013. Effective with the June 30, 2014 valuation, any new sources of unfunded actuarial liability due to actuarial gains and losses or method changes is amortized over a closed 24-year period, with a 5-year ramp up period at the beginning of the period, a 4-year ramp down at the end of the period, and 15 years of level payments as a percentage of payroll. Assumption changes will be amortized over a closed 22-year period, with a 3-year ramp up period, 2-year ramp down period, and 17 years of level payments as a percentage of payroll. Schedule of Employer Contributions – The following is a schedule of annual required employer contributions and the percentage actually contributed for the current year and each of the two preceding years:

Year Actuarially Determined Percentage of Ended Contribution (ADC) ADC Contributed

6/30/19 $ 66,586,464 100% 6/30/20 67,413,475 100% 6/30/21 64,512,161 100%

12. PENSIONS Plan Description The County provides pension benefits to eligible employees through cost-sharing multiple-employer defined benefit pension plans (pension plans) administered by the Merced County Employees’ Retirement Association (MercedCERA). Members of the pension plans include all permanent employees appointed to permanent positions or

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permanent part-time positions within the County of Merced, Merced Superior Courts, Merced County Regional Waste Management Authority and the Merced Cemetery District. Merced Superior Court and Merced Regional Waste Management Authority employee participants are those who were employed prior to their entities’ separation from the County. MercedCERA issues a publicly available financial report that may be obtained at the following location: 3199 “M” Street, Merced California 95348. The web address is http://www.mercedcera.com/annual-reports-0. MercedCERA was established July 1, 1950, under and subject to the legislative authority of the State of California as enacted and amended in the County Employees Retirement Act of 1937 (the “1937 Act”) and is administered by the Board of Retirement (Retirement Board) to provide service retirement, disability, death and survivor benefits for employees of the County and participating districts. The governing board is an independent governmental entity separate and distinct from the County of Merced and derives its authority from California Government Code Sections 31450 et seq., and the California Constitution. MercedCERA administers four pension plans. With the passage of the Public Employees Pension Reform Act (PEPRA), the County established a new pension plan tier, Tier IV, with two rate tiers – one for safety and one for general members. As of January 1, 2013, Tier IV is the only pension plan tier available to new employees. PEPRA made several changes to pension benefits that may be offered to employees hired on or after January 1, 2013, including increasing minimum retirement ages, increasing the percentage required for member contributions and excluding certain types of compensation as pensionable. PEPRA has also created limits on pensionable compensation tied to Social Security taxable wage base. The cumulative effect of these PEPRA changes will ultimately reduce the County’s retirement costs. Summary of Plan Tiers and Eligible Participants Open for New Enrollment: Tier IV General Members – General members hired on or after January 1, 2013 may continue in the plan tier. Safety Members – Safety members hired on or after January 1, 2013 may continue in the plan tier. Closed to New Enrollment: Tier I

General Members – General members hired before June 13, 1994 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012 may participate in the plan tier as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000.

Safety Members – Safety members hired before June 13, 1994 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012 may participate in the plan tier as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000.

Tier II

General Members – General and Probation safety members hired after June 13, 1994 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012 may participate in the Tier I plan as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000.

Safety Members – Safety members hired after July 1, 1998 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012 may participate in the Tier I plan as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000.

Tier III

General Members – General members hired after September 30, 2012 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012 may participate in the Tier I plan as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000.

Safety Members – Safety members hired after September 30, 2012 may continue in the plan tier. Executive “A” Level management appointed prior to December 31, 2012

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may participate in the Tier I plan as per Amendment to County Board of Supervisor’s Resolution 94-89, effective July 1, 2000. Benefits Provided Members with ten years of service and who have attained the minimum age of 50 (age 55 for General Tier II and Tier III) are eligible to receive a lifetime monthly retirement benefit. A member with 30 years of service (20 years for Safety) regardless of age is eligible for lifetime monthly retirement benefits for Tiers I, II and III. Members who are at least 70 years of age are eligible to retire, regardless of years of service. Tier IV members are eligible for retirement with 5 years of service and a minimum age of 50 for Safety members and 52 for General members. The service retirement benefit is a percentage of monthly final average salary per year of service, depending on age at retirement and tier. For members integrated with Social Security, the benefit is reduced by 1/3 of the percentage multiplied by the first $350 of monthly final average salary, per year of service credited after January 1, 1956, which is not applicable to Tier IV members. The actual benefit paid will also be affected by the benefit payment option selected by the member. The County Board of Supervisors adopted Government Code Section 31676.17 of the County Employees Retirement Law of 1937 for all County General members, Tier I and Tier II, except the Merced Cemetery District members and any member who was deferred or in inactive reciprocity status prior to the dates of adoption, on March 15, 2005; Government Code Section 31664.1 for all Safety members, Tier I and Tier II, on July 1, 2005; Government Code Section 31676.17 for Superior Court of California and County of Merced members on November 4, 2005; Government Code Section 31676.1 for General members, Tier III, on October 1, 2012 and Government Code Section 31664 for all Safety members, Tier III, on October 1, 2012. The County adopted PEPRA Tier IV for all General and Safety members on January 1, 2013. Specific details for the retirement, disability or death benefit calculations and cost-of-living adjustments (COLA) maximums for each of the pension plan tiers are available in the MercedCERA Annual Comprehensive Financial Report (ACFR). The MercedCERA ACFR is available at the following location: 3199 “M” Street, Merced, California 95348. The web address is http://www.mercedcera.com/annual-reports-0. Contributions Per Article 16 of the Constitution of the State of California, contribution requirements of the active employees and the participating employers are established and may be amended by the MercedCERA Retirement Board. Depending upon the applicable plan, employees are required to contribute a certain percent of their annual pay. For each of the plans, the County’s contractually required contribution, which was formerly known as the actuarially required contribution (ARC), rate for the year ended June 30, 2021, was a specified percent of annual payroll, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year. Additional amounts required to finance any unfunded accrued liability are the responsibility of the plan sponsors. Contributions to the pension plan from the County were $60,949,016 for the year ended June 30, 2021. Active members are plan members who are currently accruing benefits and/or paying contributions into the applicable plan.

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Employer and employee contribution rates and active members for each plan are as follows:

Employer Contribution

Rates

Employee Contribution

Rates Active

Members Tier I

General Members 49.29% 6.58% - 16.51% 59 Safety Members 67.98% 7.69% - 18.67% 10

Tier II


Tier III


Tier IV

General Members 41.83% 6.91% 961 Safety Members 56.11% 10.65% 152

Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2021, the County reported a liability of $465,028,477 for its proportionate share of the net pension liability. The net pension liability was measured as June 30, 2020 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County’s proportion of the net pension liability was based on a projection of the County’s long-term share of contributions to the pension plan relative to the projected contributions of all Pension Plan participants, actuarially determined. At June 30, 2020, the County’s proportion was 94.6992%, which was a decrease of 0.2992% from its proportion measured as of June 30, 2019. For the year ended June 30, 2021, the County recognized pension expense of $71,884,641. Pension expense represents the change in the net pension liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, actuarial gain/loss, actuarial assumptions or method and plan benefits. At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actuarial experience $ 6,632,818 $ Changes in assumptions 18,491,173 Net difference between projected and actual earnings on retirement plan investments

2,027,527

Changes in proportion and differences between County contributions and proportionate share of contributions

335,383 1,315,283

County contributions subsequent to the measurement date 60,949,016 $ 88,435,917 $ 1,315,283

Deferred outflows of resources and deferred inflows of resources above represent the unamortized portion of changes to net pension liability to be recognized in future periods in a systematic and rational manner. $60,949,016 reported as deferred outflows of resources related to pensions resulting from County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ending June 30, Amount 2022 $ 6,767,246 2023 7,964,133 2024 10,817,435 2025 622,805 2026

Thereafter $ 26,171,619

Actuarial Assumptions The total pension liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions. Total pension liability represents the portion of the actuarial present value of projected benefit payments attributable to past periods of service for current and inactive employees.

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Inflation 2.50% Salary increases 2.75% plus merit component COLA increases 2.40% for Tier I members Investment rate of return 7.00%, net of investment expense Post-Retirement mortality SOA MP-2019 projection scale on a generational basis

from the base year of 2009 The actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2013 through June 30, 2019. Based upon the results of the 2019 actuarial experience study, there were no changes to the assumptions from the prior valuation. The long-term expected rate of return on pension plan investments (7.00%) was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Target

Allocation

Long-term Expected Real Rate of Return

US Equity 21.0% 4.9%* Investment Grade Bonds 18.0% -0.1% Private Equity 15.0% 6.7% Hedge Funds 10.0% 2.1% Developed Markets Equity 10.0% 5.6% Real Estate 8.0% 4.8% Emerging Markets Equity 8.0% 6.6% Real Assets

Natural Resources 2.5% 5.5% Infrastructure 2.5% 4.2%

Opportunistic Credit High Yield Bonds 2.5% 2.8% Bank Loans 2.5% 2.3%

100% * - US Equity is divided into US Large Cap (4.9%) and US Small Cap (5.4%). Utilized the lower rate of return for disclosure purposes.

Discount Rate The discount rate used to measure the total pension liability was 7.00 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made as the current contribution rate and that contributions from the County will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension fund’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. In theory, the discount rate may differ from the long-term expected rate of return discussed previously. However, based on the projected availability of the pension fund’s fiduciary net position, the discount rate is equal to the long-term expected rate of return on pension plan investments and was applied to all periods of projected benefit payments to determine the total pension liability.

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Sensitivity of the County’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the County’s proportionate share of the net pension liability calculated using the discount rate of 7.00 percent, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.00 percent) or 1-percentage point higher (8.00 percent) than the current rate:

1% Decrease 6.00%

Discount Rate 7.00%

1% Increase 8.00%

County’s proportionate share of the net pension plan liability

$ 629,920,344 $ 465,028,477 $ 327,865,821

Pension Fund Fiduciary Net Position Detailed information about the pension fund’s fiduciary net position is available in the separately issued MercedCERA Comprehensive Annual Financial Report. 13. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS Plan Description The County provides a post employment benefit plan (OPEB), an agency single employer benefit OPEB plan administered by Public Agency Retirement Services (PARS), that is the same medical and dental plan for its retirees as for its active employees, with certain modifications. Vision coverage is not extended to retirees. Once a retiree reaches age 65 and is Medicare eligible, he or she must join a County-approved individual Medicare Supplement plan in order to continue receiving County-paid benefits. Retirees and dependents under age 65 and on Medicare will be placed in the Anthem Blue Cross Medicare Supplement. The County's share of retiree premium depends on age, years of service, employment classification (Safety or Miscellaneous) and date of hire, as follows: Tier 1 employees must be at least age 50 and have at least 10 years of service or may be any age with at least 30 years of service (20 years for Safety members) at the time of retirement. Tier 1 employees include all miscellaneous employees hired prior to June 13, 1994 and all safety members employed in active law enforcement or as district attorney investigators, probation officers, or juvenile hall counselors. Tier 2 employees must be at least age 55 and have at least 10 years of service or may be any age with at least 30 years of service. Tier 2 employees include all miscellaneous employees hired on or after June 13, 1994. Employees having attained the required service may receive deferred benefits upon attainment of the applicable age requirement described above. Employees may also qualify for retiree health benefits through either Service-Connected or Non-Service-Connected Disability Retirements. Effective January 1, 2014, the following rules apply to retirees age 65 and over: If in an individually purchased, County-sponsored retiree Medicare Supplement plan by January 1, 2014, the County will provide a reimbursement at the following rates: Ages 65-69, $100/month; Ages 70-74, $125/month; Ages 75+ $150/month. For retirees joining an individually purchased, County-sponsored retiree Medicare Supplement plan on or after February 1, 2014, the County provides a reimbursement of $100/month. Dental coverage (retiree only) continues for the lifetime of an eligible retiree, and effective January 1, 2014 has been capped at $35/month. At age 65, retirees are moved to individual plans with United HealthCare (UHC). The County provides a Retiree Reimbursement Account with UHC depending on age and retirement date amounts of $100, $125, and $150. Funding of the post employment healthcare is on a pay as go basis with a blended rate as of June 30, 2021, with $67.0 million set aside in an IRS Section 401(h) trust. Plan Benefits The County maintains the same medical plans for under-65 retirees, and the same dental plan for all retirees with modifications. The maximum annual dental benefit is reduced from $2,000 to $1,000. Vision coverage is not extended to retirees. If an under-65 retiree is on Medicare, then the retiree is moved to the Anthem Medicare Supplement plan. Once a retiree reaches age 65, he or she is given information on how to enroll in Medicare Supplement plans with UHC. The County’s share of retiree premium depends on age, years of service, employment classification (Safety or Miscellaneous) and date of hire, as follows:

Tier 1 employees must be at least age 50 and have at least 10 years of service, or may be any age with at least 30 years of service (20 years for Safety members) at the time

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of retirement. Tier 1 employees include all employees hired prior to June 13, 1994, Safety members, other than Probation, hired prior to July 1998 and Executive “A” Level management appointed prior to 12/31/2012.

Tier 2 employees must be at least age 55 and have at least 10 years of service, or may be any age with at least 30 years of service and age 50 for Safety members or any age with at least 20 years of service. Tier 2 employees include both General and Probation Safety members hired on or after June 13, 1994 and before October 1, 2012, and all other Safety members hired after July 1, 1998 and before October 1, 2012.

Tier 3 employees must be at least age 55 for General members or any age with 30 years of service and age 50 for Safety members or any age with 20 years of service. Tier 3 employees include both General and Safety members hired between October 2012 and December 2012. Tier 4 employees must be at least age 52 for General members with 5 years of service and age 50 for Safety members with 5 years of service. Tier 4 employees include both General and Safety members hired after January 1, 2013. Employees having attained the required service may receive deferred benefits upon attainment of the applicable age requirement described above. Employees may also

qualify for retiree health benefits through either Service-connected or Non-service-connected Disability Retirements. Employees Covered by Benefit Terms At the OPEB Liability measurement date of June 30, 2020, the following employees were covered by the benefit terms:

Inactive plan employees or beneficiaries currently receiving benefit payments 1,950 Active plan employees 1,966 3,916

Contributions The County currently provides for funding the OPEB plan at 5.1% of Covered Payroll for the 401(h) trust. Employees are not required to contribute to the plan. Net OPEB Liability At June 30, 2021, the County reported a net OPEB liability of $32,290,681. The net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation as well as the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets (if any), consistent with the long-term perspective of the calculations. The total OPEB liability measured as of June 30, 2020 was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

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Actuarial cost method Entry Age, Level Percent of Pay Discount rate:

Accrued liability 6.00% per annum Return on assets 6.00% per annum Salary increases 2.75% per annum COLA increases 2.75% for Tier I members Investment rate of return 6.00%, net of investment expense General participants mortality SOA Pub-2010 using scale MP-2019 Public safety participants mortality SOA Pub-2010 using scale MP-2019 Surviving spouses mortality SOA Pub-2010 using scale MP-2019 Trend rate:

Medical/Rx 4.50% - 6.00% per annum Dental 4.00% per annum

Percent waiving coverage 15.00% (Does not apply to management retiree life insurance) Percent of retirees with spouses 20.00% (Based on actual spousal data) Maximum county contributions Assumed to remain constant for all future years

For the year ended June 30, 2021 the annual money-weighted rate of return on investments, net of investment expense, was 6.20%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested. The target allocation and best estimates of real rates of return for each major assets class are summarized in the following table:

Asset Class Target Allocation

Long-term Expected Real Rate of Return

Domestic equity – large cap 29.00% 6.80% Domestic equity – mid cap 5.00% 7.10% Domestic equity – small cap 10.00% 7.90% Domestic and global real estate 4.00% 6.70% International equity 9.00% 7.30% Domestic fixed income 31.00% 3.90% Alternatives 10.00% 4.50% Short term investments 2.00% 2.40% 100%

Discount Rate The discount rate used to measure the total OPEB liability was 6.00%. The projection of cash flows used to determine the discount rate assumed that contributions from the County will be made at 1.50%, actuarially determined. Based on those assumptions, the 401(h) trust’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. In theory, the discount rate may differ from the long-term expected rate of return discussed previously. However, based on the projected availability of the 401(h) trust’s fiduciary net position, the discount rate is equal to the long-term expected rate of return on pension plan investments and was applied to all periods of projected benefit payments to determine the total OPEB liability.

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Changes in the Net OPEB Liability The table below shows the changes in the total OPEB liability, the Plan Fiduciary Net Position, and the net OPEB liability during the measurement period ending on June 30, 2020 for the County’s proportionate share.

Increase (Decrease) Plan Fiduciary Net OPEB Total OPEB Liability Net Position Liability (a) (b) (a) - (b) Balances at 6/30/2020 $ 80,982,664 $ 48,274,622 $ 32,708,042 Changes for the year:

Service cost 2,514,316 - 2,514,316 Interest 4,818,073 - 4,818,073 Differences between expected and actual experience 1,886,884 - 1,886,884 Changes of assumptions - - - Benefit payments (6,485,997) (6,485,997) - Contributions – employer - 8,464,942 (8,464,942) Net investment income - 1,347,512 (1,347,512) Administrative expense - (175,820) 175,820

Net changes 2,733,276 3,150,637 (417,361) Balances at 6/30/2021 $ 83,715,940 $ 51,425,259 $ 32,290,681

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Health Care Trend Rates The following presents the net OPEB liability of the County, as well as what the County’s net OPEB liability would be if it were calculated using a discount rate that is 1–percentage lower (5.00%) or 1-percentage point higher (7.00%) than the current discount rate:

1% Decrease 5.00%

Discount Rate 6.00%

1% Increase 7.00%

Net OPEB liability (asset) $ 39,829,666 $ 32,290,681 $ 25,712,632 The following presents the net OPEB liability of the County, as well as what the County’s net OPEB liability would be if it were calculated using a health care trend rate that is 1–percentage lower (5.00%) or 1-percentage point higher (7.00%) than the current health care trend rate:

1% Decrease 5.00%

Health Care Rate 6.00%

1% Increase 7.00%

Net OPEB liability (asset) $ 28,290,244 $ 32,290,681 $ 36,933,520 OPEB Plan Fiduciary Net Position Detailed information about the OPEB plan’s fiduciary net position is available in the fiduciary statements on pages 43- 44 of the Basic Financial Statement section. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2021, the County recognized OPEB expense of $9,933,007. OPEB expense represents the change in the net OPEB liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, and actuarial assumptions or method. At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

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Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actuarial experience $ 4,405,717 $ 445,300 Changes in assumptions 2,874,439 944,518 Net difference between projected and actual earnings on retirement plan investments

757,677

County contributions subsequent to the measurement date 6,303,145 $ 14,340,978 $ 1,389,818

Deferred outflows of resources and deferred inflows of resources above represent the unamortized portion of changes to net OPEB liability to be recognized in future periods in a systematic and rational manner. $6,303,145 reported as deferred outflows of resources related to OPEB resulting from County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ending June 30, Amount 2022 $ 5,374,583 2023 742,167 2024 210,810 2025 320,455 2026

Thereafter $ 6,648,015

14. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES Pursuant to GASB Statement #63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement #65, Items Previously Reported as Assets and Liabilities, the County recognized deferred outflows of resources in the government-wide and proprietary fund statements. These items are a consumption of net position by the County that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. The County has two items that are reportable on the Government-Wide Statement of Net Position, which relates to the outflows from changes in the net pension liability and the net other post employment benefits liability. Deferred outflows of resources that are reported in the proprietary funds are included in the Government-Wide Statement of Net Position. Deferred outflows of resources balances for the year ended June 30, 2021 were as follows:

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Government-Wide Deferred OutflowsGovernmental Activities

Pensions 88,160,774$ Other post employment benefits 14,294,788

Total Governmental Activities 102,455,562

Business-type ActivitiesPensions 275,143 Other post employment benefits 46,190

Total Business-type Activities 321,333 Total Government-Wide Deferred Outflows 102,776,895$

Pursuant to GASB Statement #63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement #65, Items Previously Reported as Assets and Liabilities, the County recognized deferred inflows of resources in the government-wide and proprietary fund statements. These items are an acquisition of net position by the County that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. The County has two items that are reportable on the Government-Wide Statement of Net Position, which relates to the inflows from changes in the net pension liability and the net other post employment benefits liability. Deferred inflows of resources that are reported in the proprietary funds are included in the Government-Wide Statement of Net Position. Deferred inflows of resources balances for the year ended June 30, 2021 were as follows:

Government-Wide Deferred InflowsGovernmental Activities

Pensions 1,311,191$ Other post employment benefits 1,385,342

Total Governmental Activities 2,696,533

Business-type ActivitiesPensions 4,092 Other post employment benefits 4,476

Total Business-type Activities 8,568 Total Government-Wide Deferred Inflows 2,705,101$

15. INSURANCE POOL The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Effective July 1, 2000, the County established the Insurance Pool (an internal service fund) to account for and finance its uninsured risks of loss. In addition, the Insurance Pool also accounts for the other insurance activities of the County. The County, along with 55 other counties, established the California State Association of Counties Excess Insurance Authority (CSAC-EIA), a Joint Powers Authority, to pay excess liability claims against counties under a risk sharing liability coverage program. In 2020, CSAC-EIA changed its name to Public Risk Innovation, Solutions, and Management (PRISM). The County’s insurance coverage varies by program with limits up to $35 million. The County has several programs for which it is completely self-insured or for which it has a self-insured retention or deductible as follows:

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Workers' Compensation Excess Insurance Workers' Compensation benefits are paid by the County according to the State’s statutory requirements governing temporary or permanent disabilities, death benefits, medical expenses and rehabilitation for employees' occupational injuries or illness. The County's self-insured retention is $300,000 per claim. Excess coverage is purchased from PRISM with full statutory benefits per occurrence. The primary layer from $300,000 to $5,000,000 is pooled, and the coverage above that level is insured or reinsured by commercial insurance carriers. General, Automobile, and Public Officials Liability Insurance The County's self-insured retention is $100,000 per claim. Excess coverage up to $5,000,000 is purchased from a pool operated by PRISM, and an additional $20,000,000 in excess of $5,000,000 is purchased through PRISM from commercial carriers. There is optional excess catastrophic coverage of $10,000,000 in excess of $25,000,000, purchased from commercial carriers through PRISM. Medical Malpractice The County's health care functions are currently insured on a “claims made basis” through PRISM for medical malpractice losses up to $21,500,000 subject to a $25,000 deductible. The health and behavioral health functions make annual contributions to the Insurance Pool to cover insurance policy premiums. The health functions charge the annual contributions to expense and record no liability for unpaid claims asserted against them. Auto Physical Damage The County has a $10,000 deductible for vehicles up to $250,000 in value and $100,000 for vehicles valued at more than $250,000. Coverage up to the amount of actual damages is insured or reinsured from a commercial carrier(s) through PRISM. County Dental Plan The dental plan is totally administered by Delta Dental, as accessed through PRISM, and pays 80% of usual and customary dental costs for employees and enrolled dependents with a maximum payment of $2,100 in any calendar year to any one participant for the active employee program and a maximum payment of $1,500 in any calendar year to any one participant under the retiree program. Unemployment Insurance The County, in order to comply with State legislation extending unemployment insurance benefits to local government employees, established a fund to provide reimbursement to the State Unemployment Fund for benefits paid. Fiduciary Insurance Fiduciary liability exposure for the County has changed over the last several years due to court decisions extending fiduciary liability to public entities, under certain circumstances. As a part of the set-up of the OPEB Trust in June 2008, fiduciary liability insurance with limits of $10,000,000 was obtained with a $25,000 retention per claim. This policy was specifically designed to cover individuals that make recommendations or decisions on the Deferred Compensation Plan, the OPEB Trust, and the Post Employment Health Plan Trust (PEHP). There have been no settlements in excess of insurance coverage in any of the past three fiscal years and there has not been a significant reduction in insurance coverage from the prior year. Liabilities for self-insurance are reported in the Insurance Pool based on the requirements of GASB Statement #10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The following tables represent the estimated claims balances, claims incurred and claims paid, for the fiscal years ended June 30, 2021 and 2020, respectively:

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Estimated EstimatedClaim Balance Claims Claims Claim BalanceJuly 1, 2020 Incurred Paid June 30, 2021

Worker's Compensation $ 20,662,122 $ 2,318,012 $ 3,444,419 $ 19,535,715General and Auto Liability 1,538,928 9,087,793 8,732,822 1,893,899Auto-Physical Damage 10,724 87,371 97,626 469County Dental Plan 235,834 2,812,533 2,598,250 450,117Unemployment Insurance 326,019 400,269 688,406 37,882Totals $ 22,773,627 $ 14,705,978 $ 15,561,523 $ 21,918,082

Estimated EstimatedClaim Balance Claims Claims Claim BalanceJuly 1, 2019 Incurred Paid June 30, 2020

Worker's Compensation $ 21,970,837 $ 2,231,957 $ 3,540,672 $ 20,662,122General and Auto Liability 2,582,729 (343,094) 700,707 1,538,928Auto-Physical Damage 872 90,431 80,579 10,724County Dental Plan 536,798 2,119,923 2,420,887 235,834Unemployment Insurance 112,459 624,296 410,736 326,019Totals $ 25,203,695 $ 4,723,513 $ 7,153,581 $ 22,773,627

16. NET POSITION/FUND BALANCES A. Net Position The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as follows: Net Investment in Capital Assets This component of net position consists of capital assets, including infrastructure, net of accumulated depreciation and reduced by the outstanding balances of any

bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted Net Position This component consists of the net position whose use is restricted by constraints imposed by creditors, grantors, contributors, laws or regulations of other

governments, or those imposed by law through constitutional provisions or enabling legislation. Included in governmental activities restricted net position at June 30, 2021, is net position restricted by enabling legislation of $6,464,503.

Unrestricted Net Position This component represents those net positions which are neither net investment in capital assets, nor restricted. B. Fund Balances GASB Statement #54 enhances the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied, and it clarifies the existing governmental fund type definitions. It establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The definitions of the General Fund, special revenue fund type, capital projects fund type, debt service fund type and permanent fund type are also clarified by the provisions in this statement. These classifications are described in the schedule below.

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Fund balances are presented in the following categories: nonspendable, restricted, committed, assigned and unassigned (see Note 1 for a description of these categories). A detailed schedule of fund balances at June 30, 2021, is as follows:

General

COVID-19 Emergency Response Road

Tobacco Securi-tization

Other Govern-

mental Funds Total Govern-mental Funds

Nonspendable:Prepaid Items $ 456,263 $ $ $ $ 57,392 $ 513,655 Inventory 217,282 188,992 406,274 Permanent Fund 184,421 184,421

Total nonspendable fund balance 673,545 - 188,992 - 241,813 1,104,350 Restricted for:

Purpose of Fund 583 23,367,886 16,862,898 16,491,417 56,722,784 Allocated for Capital Outlay 21,327,395 21,327,395 Navigation Center 2,767,855 2,767,855 Debt Service 4,078,953 4,078,953 Sunset Pit Financial Assurance 96,163 96,163 Household Hazardous waste facility closure 66,968 66,968

Total restricted fund balance 2,834,823 583 23,464,049 16,862,898 41,897,765 85,060,118 Committed to:

Strategic Reserve 22,750,000 22,750,000 Purpose of Fund 25,345,197 25,345,197 County Payroll Reserve 7,645,000 7,645,000 Allocated for Capital Outlays 25,053 25,053 Litigation Reserve 675,000 675,000

Total committed fund balance 31,070,000 - - - 25,370,250 56,440,250 Assigned to:

Capital Improvement Program 9,503,686 9,503,686 Phase 11 Childs Road Project 1,712,596 1,712,596 Capital Project - Correctional Facility 1,586,291 1,586,291 Atwater Merced Expressway 1,094,105 1,094,105 Various Bridge Projects 639,580 639,580 SB 863 Project 606,450 606,450 Health Care Programs 542,526 542,526 Roads Department Equipment Replacement 539,613 539,613 Various Roads Projects 539,356 539,356 Measure V Projects 538,525 538,525 Human Services Programs 498,790 498,790 Water Resources 399,236 399,236 Animal Services 364,460 364,460 SB1 Transportation Projects 346,640 346,640 Office of Emergency Services Radio Upgrade 342,364 342,364

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General

COVID-19 Emergency Response Road

Tobacco Securi-tization

Other Govern-

mental Funds Total Govern-mental Funds

Assigned to:Public Works - Creek Projects $ 301,879 $ $ $ $ $ 301,879 First Five Programs 273,820 273,820 Parks and Recreation Projects 217,571 217,571 Black Rascal Creek Project 196,844 196,844 Coroner 130,700 130,700 Legal Counsel 125,323 125,323 Building Division Maintenance 121,444 121,444 Auditor Systems Maintenance and Development 89,834 89,834 Law Enforcement Activities 89,120 89,120 Correctional Facility Maintenance 82,118 82,118 Affordable Housing Program 74,236 74,236 Public Assistance Programs 69,191 69,191 Probation Programs 37,070 37,070 Sheriff Cal ID 36,003 36,003 Behavioral Health Programs 22,302 22,302 Sheriff Inmate Welfare 8,065 8,065 UC Cooperative Extension 6,224 6,224 Administrative Services Mail Room Equipment 2,289 2,289 Spring Fair 1,243 1,243 District Attorney 1,143 1,143 Purpose of Fund 1,014 1,014 Planning and Community Development 645 645

Total assigned fund balance 13,444,848 - 5,410,415 - 2,287,033 21,142,296 Unassigned fund balance: 87,084,208 - - - - 87,084,208 Total fund balance: $ 135,107,424 $ 583 $ 29,063,456 $ 16,862,898 $ 69,796,861 $ 250,831,222

17. DETAIL OF RESTRICTED ASSETS Of the $13,818,071 in restricted assets noted for governmental activities, $96,163 is recorded in the Road Fund to cover the costs associated with potential pit claims, and $2,834,823 is recorded in the General Fund. Of this amount, $76,543 is to cover the claims after the authorized household hazardous waste disposal site close down, $2,758,280 is to cover the costs incurred for homeless project and dorm-style living facility with case management connected services. $6,859,457 is recorded in the internal service funds. Of this amount, $3,799,533 is to cover the replacement costs of the vehicles in the Fleet Service Management Fund, and $3,059,924 is to cover the replacement costs of computer and equipment in the Administrative Services Department. The remaining $4,027,628 is recorded in the various Debt Service Funds. Of this amount, $3,199,477 is recorded in the Merced County Tobacco Funding Corporation Debt Service Fund as a condition of the debt issuance, the remaining amount is recorded in the Courthouse Construction COP Fund ($828,151) to establish a debt service reserve required as a condition of the debt issuance.

The $99,557 noted for business-type activities is recorded in the Castle Airport Development Center Fund. Of this amount, $81,797 represents Castle Airport

Development Center tenants’ security deposits which can only be used for the reimbursement of the damages caused by the tenants upon the expiration of the lease agreement, the balance is subject to being returned to the tenants; $11,425 represents the sale of capital assets and insurance proceeds which can only be used for the improvements to the

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88

infrastructure and facilities at the Castle Airport Development Center; and $6,335 represents fees collected from tenants which can only be used to maintain and/or expand publicly-owned infrastructure or for the creation of jobs, pursuant to applicable grant agreements. 18. HOSPITAL AFFILIATION In November of 1996, the County of Merced entered into a lease agreement which provided for Sutter Health/California Healthcare System (Sutter) to lease the land and buildings used in the operation of the hospital for a base term of twenty years with four separate ten-year renewal options exercisable by Sutter. Sutter was to make monthly rent payments to the County in the amount of $10,000 plus a percentage of hospital profits, as defined in the agreement. Sutter was to be responsible for all taxes, operating expenses, maintenance, repairs, and insurance costs arising during the term of the lease. The agreement also required Sutter to make certain community contributions and capital improvements, as defined in the agreement.

An operating agreement provided for Sutter to assume the day-to-day operations of the hospital, known as Sutter Merced Medical Center, and defined the minimum services which were to be provided during the term of the lease. The agreement required Sutter to continue to provide charity care and care to the medically indigent in full compliance with state laws and regulations. In return, the County made certain reimbursements to Sutter for providing indigent care.

Effective November 21, 2000, the lease and operating agreements between the County and Sutter were assigned to Mercy Hospital/Catholic Healthcare West (Mercy) for the remainder of the base term. A major provision of this assignment states that Mercy would continue to operate the facility until completion of a new North Merced facility. The new facility was completed and opened for patients in May 2010. Upon its completion, Mercy closed and returned the County hospital facility to the County. Mercy continues to maintain an outpatient facility in South Merced through leasing a much smaller portion of the former hospital facility. Another major provision of the assignment states that Mercy will continue to provide all indigent care until December 2031 and will receive 22% of the County’s health realignment funds. 19. CONTINGENCIES Grant/Public Assistance Programs

The County participates in a number of state and federally assisted grant and public assistance programs. The programs are subject to program compliance audits by the grantors or their representatives. The audits of these programs for the year ended June 30, 2021, have not yet been conducted. Accordingly, the County's compliance with applicable program requirements will be established at some future date. The amount, if any, of expenditures which may be disallowed by the program agencies cannot be determined at this time although the County expects such amounts, if any, to be immaterial. Litigation

There are various lawsuits and claims filed against the County which, in the opinion of the County Counsel, will be resolved with no material adverse effect on the County's financial condition at June 30, 2021. 20. EXCESS/DEFICIT OF EXPENDITURES/INTRAFUND AND INTERFUND TRANSFERS OVER/UNDER BUDGET IN INDIVIDUAL FUNDS

The following budgetary units had a deficit of intrafund and interfund transfers within the service department and thereby less cost is transferred to the user department. As such, the departmental budget as a whole is unaffected:

COUNTY OF MERCED NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2021

89

Capital Improvement Program $ 6,002,655 Health 3,822,321 Admin Services-Support Services 619,923 Department of Workforce Investment 538,634 DPW - Building Services Division 483,664 Homeless Resources 393,008 Sheriff's Correctional Facilities 313,917 County Counsel 157,832 Area Agency on Aging 144,112 First Five Merced County 95,091 DPW - Admin 86,024 Human Resources 62,499 County Library 40,267 Tax Collector 21,428 In Home Supprot Services (IHSS) Public Authority 9,206 Agricultural Extension 6,925 Special Auditing 720

The Capital Improvement Program had expenditures on services and supplies which exceeded their budgeted amount by $1,005,046 due to the reclassification of expenditures on various capital assets. The Medical Assistance Program had expenditures on services and supplies which exceeded their budgeted amount by $78,770 due to the unexpected other revenues and associated expenses. The Sheriff’s Correctional Facility had expenditures on salaries and employee benefits which exceeded its budgeted amount by $493,115, due to more overtime pay than expected. The Housing Loan Program had expenditures on other charges which exceeded its budgeted amount by $977,598, due to the reclassification of new loans funded to various home buyers. The Juvenile Hall 2013 COP had expenditures on debt services - administration which exceeded its budgeted amount by $2,713, due to recognized amortization of debt insurance expenses. The above disclosure is based on appropriations as of June 30, 2021. Intrafund and interfund transfers are utilized to record transactions between departments based on costs incurred. If a department incurred less than anticipated expenditures which would ultimately mean a lower amount billable to other departments and did not adjust its appropriation accordingly, the positive effect on the departmental budget would not be reflected in the above. Likewise, if a department received unanticipated revenue during the fiscal year and did not increase estimated revenue and appropriations, the positive effect on the departmental budget would not be reflected in the above. 21. RESTATEMENT OF BEGINNING NET POSITION AND FUND BALANCE A prior period adjustment of $838,290 was made to increase the governmental activities’ beginning net position. The adjustment made to correct a prior period overstatement of the long-term self-insurance debt related to the Self-Insurance Pool. A summary of the restatement as of June 30, 2020 is as follows:

COUNTY OF MERCED NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2021

90

Governmental Activities

Insurance Pool Fund

Net Position, as of June 30, 2020, as previously reported 216,603,016$ 21,628,138$

Overstated long-term self-insurance debt 838,290 838,290

Net Position, as of June 30, 2020, as restated 217,441,306$ 22,466,428$

22. SUBSEQUENT EVENTS Management has evaluated subsequent events through February 18, 2022, the date which the financial statements were available to be issued and it has been determined that there are no subsequent events which are required to be disclosed in accordance with accounting standards.

REQUIRED SUPPLEMENTARY INFORMATION

Merced County Employees' Retirement Association (MercedCERA) - Net Pension Liability

MercedCERA - Schedule of the County's Proportionate Share of the Net Pension Liability

Last 10 Fiscal Years*

FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 FY 2013County's proportion of the net pension liability (asset) 94.6992% 94.9984% 95.1298% 94.9445% 94.7445% 94.8118% 94.9263% 94.7709%County's proportionate share of the net pension liability (asset) $ 465,028 $ 452,131 $ 451,010 $ 462,622 $ 475,046 $ 439,885 $ 427,554 $ 476,013County's covered payroll 126,706 124,457 120,211 113,292 108,126 104,212 104,482 103,458County's proportionate share of the net pension liability (asset)as a percentage of its covered payroll 367.01% 363.28% 375.18% 408.34% 439.34% 422.11% 409.21% 460.10%Plan fiduciary net position as a percentage of the total pension liability 65.20% 64.50% 63.60% 60.70% 57.20% 59.20% 59.34% 52.85%

*Amounts presented above were determined as of 6/30. Additional years will be presented as they become available.

MercedCERA - Schedule of the County's Contributions

Last 10 Fiscal Years*

FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014Actuarially determined contribution $ 63,915 $ 63,649 $ 63,346 $ 61,679 $ 57,393 $ 53,676 $ 49,307 $ 45,595Contributions in relation to the actuarially determined contribution 63,915 63,649 63,346 61,679 57,393 53,676 48,806 45,652Contribution deficiency (excess) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 501 $ (57)

County's covered payroll $ 128,012 $ 126,706 $ 124,457 $ 120,211 $ 113,292 $ 108,126 $ 104,212 $ 104,482Contributions as a percentage of its covered payroll 49.93% 50.23% 50.90% 51.31% 50.66% 49.64% 46.83% 43.69%


REQUIRED SUPPLEMENTARY INFORMATIONFor the Fiscal Year Ended June 30, 2021

(Dollars in Thousands)

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91

Merced County Other Post Employment Benefits (OPEB) Plan -Schedule of Changes in the County's Net OPEB Liability and Related Ratios

Last 10 Fiscal Years*FY 2021 FY 2020 FY 2019 FY 2018

Total OPEB liability Service cost 2,514,316$ 2,613,069$ 2,135,419$ 2,073,222$ Interest 4,818,073 4,350,264 3,677,087 3,490,239 Changes of benefit terms - - - - Differences between expected and actual experience 1,886,884 9,443,382 11,497,753 - Changes of assumptions - (2,833,554) (1,781,203) - Benefit payments (6,485,997) (4,963,642) (4,610,553) (4,493,481) Net change in total OPEB liability 2,733,276 8,609,519 10,918,503 1,069,980 Total OPEB liability - beginning 80,982,664 72,373,145 61,454,642 60,384,662 Total OPEB liability - ending (a) 83,715,940$ 80,982,664$ 72,373,145$ 61,454,642$

Plan fiduciary net position Contributions - employer 8,464,942$ 6,968,393$ 10,151,083$ 6,957,579$ Net investment income 1,347,512 3,197,533 2,755,017 3,296,890 Benefit payments (6,485,997) (4,963,642) (4,610,553) (4,493,481) Administrative expense (175,820) (161,258) (149,709) (118,210) Net change in plan fiduciary net position 3,150,637 5,041,026 8,145,838 5,642,778 Plan fiduciary net position - beginning 48,274,622 43,233,596 35,087,758 29,444,980 Plan fiduciary net position - ending (b) 51,425,259$ 48,274,622$ 43,233,596$ 35,087,758$ County's net OPEB liability - ending (a) - (b) 32,290,681$ 32,708,042$ 29,139,549$ 26,366,884$

Plan fiduciary net position as a percentage of the total OPEB liability 61.43% 59.61% 59.74% 57.10%

Covered payroll 128,012,421$ 124,457,019$ 120,210,967$ 114,092,828$

County's net OPEB liability as a percentage of covered payroll 25.22% 26.28% 24.24% 23.11%

Measurement date 6/30/2019 6/30/2019 6/30/2018 6/30/2017



COUNTY OF MERCEDREQUIRED SUPPLEMENTARY INFORMATION

92

Schedule of OPEB Contributions Last Ten Fiscal Years*

2021 2020 2019 2018Fiscal Year Ended June 30

Actuarially Determined Contribution (ADC) $ 6,485,997 $ 6,634,877 $ 4,610,553 $ 3,873,031 Contributions in relation to the ADC (8,464,942) (6,968,393) (2,004,751) (5,540,529)

Contribution deficiency (excess) $ (1,978,945) $ (333,516) $ 2,605,802 $ (1,667,498)

Covered payroll $ 128,012,421 $ 124,457,019 $ 120,210,967 $ 114,092,828

Contributions as a percentage of covered payroll 5.07% 5.33% 3.84% 3.39%

*Amounts presented above were determined as of 6/30.Additional years will be presented as they become available.

Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021 were from theJune 30, 2019 actuarial valuation. Methods and assumptionscan be found in the notes to the financial statements onpages 78-82.

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93

COMBINING AND INDIVIDUAL FUND

STATEMENTS AND SCHEDULES

NONMAJOR GOVERNMENTAL FUNDS

PermanentFund Total

Special Debt Capital Perpetual NonmajorRevenue Service Projects Conservation Governmental

Funds Funds Fund Easement FundsASSETS & DEFERRED OUTFLOWS OF RESOURCESAssets:

Equity in pooled cash and investments $ 44,396,981 $ 51,325 $ 23,656,257 $ 184,421 $ 68,288,984Receivables, net

Accounts 3,785,134 1,419,884 5,205,018Notes 6,740,249 6,740,249Taxes and assessments 874,076 874,076

Due from other funds 834,217 8,907 222,783 1,065,907Prepaid items 57,392 57,392Restricted assets 4,027,628 4,027,628

Total assets 56,630,657 5,565,136 23,879,040 184,421 86,259,254

Total assets & deferred outflows of resources $ 56,630,657 $ 5,565,136 $ 23,879,040 $ 184,421 $ 86,259,254

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCESLiabilities:

Accrued liabilities $ 6,699,942 $ 8,907 $ 257,903 $ $ 6,966,752Due to other funds 440,070 682,398 1,122,468Advances from grantors & third parties 6,953,289 1,419,884 8,373,173

Total liabilities 14,093,301 1,428,791 940,301 16,462,393

Fund balances:Nonspendable 57,392 184,421 241,813Restricted 16,491,417 4,078,953 21,327,395 41,897,765Committed 25,345,197 25,053 25,370,250Assigned 700,742 1,586,291 2,287,033

Total fund balances 42,537,356 4,136,345 22,938,739 184,421 69,796,861Total liabilities, deferred inflows of resourcesand fund balances $ 56,630,657 $ 5,565,136 $ 23,879,040 $ 184,421 $ 86,259,254

COUNTY OF MERCEDCOMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDSJune 30, 2021

94

PermanentFund Total

Special Debt Capital Perpetual NonmajorRevenue Service Projects Conservation Governmental

Funds Funds Fund Easement FundsREVENUES

Taxes and assessments $ 20,231,805 $ $ $ $ 20,231,805Licenses, permits and franchise fees 6,019 6,019Fines, forfeitures and penalties 340,529 663,377 1,003,906Revenue from use of money and property 374,619 6,873,763 78,976 7,327,358Aid from other governmental agencies 16,927,431 3,002,195 19,929,626Charges for current services 1,738,503 1,738,503Other revenues 800,178 800,178

Total revenues 40,419,084 10,539,335 78,976 51,037,395


General government 330,761 330,761Public protection 31,869,906 107,523 681 31,978,110Health and sanitation 3,209,260 3,209,260Public assistance 4,669,916 4,669,916

Debt service:Principal 33,541,883 33,541,883Interest 2,832,145 2,832,145Administration 889,808 889,808

Capital outlay 209,260 209,260Total expenditures 40,079,843 37,263,836 316,783 681 77,661,143

Excess (deficiency) of revenues over (under) 339,241 (26,724,501) (237,807) (681) (26,623,748)expenditures

OTHER FINANCING SOURCES (USES)Transfers in 2,793,031 2,349,761 15,154,857 20,297,649Transfers out (471,628) (11,766,518) (1,678,056) (13,916,202)Long-term debt proceeds 35,645,000 35,645,000

Total other financing sources (uses) 2,321,403 26,228,243 13,476,801 42,026,447

Net change in fund balances 2,660,644 (496,258) 13,238,994 (681) 15,402,699

Fund balances - beginning 39,876,712 4,632,603 9,699,745 185,102 54,394,162Fund balances - ending $ 42,537,356 $ 4,136,345 $ 22,938,739 $ 184,421 $ 69,796,861

COUNTY OF MERCEDCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDSFor the Fiscal Year Ended June 30, 2021

95

SPECIAL REVENUE FUNDS Special Revenue Funds are established to finance particular governmental activities and are financed by receipts of specific taxes or other earmarked revenues. Such funds are authorized by statutory or charter provisions to pay for certain activities of a continuing nature. The County reports the following Special Revenue Funds: MAJOR FUNDS Tobacco Securitization Fund - This fund is used to account for the proceeds received when the County securitized its future tobacco settlement funds. The proceeds are held by a third-party trustee and interest earned on these funds is periodically transferred to the General Fund. Road Fund - This fund provides for planning, design, construction, maintenance and administration of County roads. Revenues consist primarily of the County's share of State highway use taxes and are supplemented by Federal grants. COVID-19 Emergency Response Fund - This fund was established to account for the activities of the various costs incurred in responding to the COVID-19 pandemic. Revenues are derived from the Federal Coronavirus Aid, Relief and Economic Security (CARES) Act and the American Rescue Plan (ARP) Act, passed through from the State of California. The use of program income is restricted, depending on the terms and conditions of the CARES Act, the ARP Act and the State of California. NONMAJOR FUNDS Fire Fund - This fund accounts for fire prevention, suppression and rescue operations; emergency medical responses; and public service education activities for the entire County with the exception of the cities of Merced and Atwater. Revenue is primarily from County taxes. First Five Merced County Fund - This fund accounts for the receipt and disbursement of Proposition 10 monies received from the State. Use of these funds is restricted to programs and services related to early childhood development. Child Support Services Agency Fund - This fund was created on February 26, 2002, by resolution of the Board of Supervisors and became effective July 1, 2002. The fund accounts for those activities associated with the establishment, collection and distribution of child support obligations. It receives all of its funding from the State and the Federal government. Sheriff-Inmate Welfare Fund - This fund accounts for those activities authorized under Section 4025 of the California Penal Code. It is funded by inmate commissary sales and telephone commissions paid by the provider of an automated collect inmate calling system at each of Merced County’s two adult correctional facilities. Expenditures are restricted to those items which are for the benefit, education, and welfare of the inmates confined within these facilities. Any funds not needed for the welfare of the inmates may be expended for the maintenance of the facilities themselves. Light and Drainage Districts Funds - These funds account for light and drainage districts governed by the Board of Supervisors. These districts are located in specific geographic areas of the County and are supported by property taxes and property owner assessments within each service area. Medical Assistance Program Fund - This fund is used to account for the County's contract with the State Department of Health Services to provide medical assistance to the indigent population. It receives most of its funds from the State.

96

SPECIAL REVENUE FUNDS Workforce Investment Act Fund - Formerly known as the Job Training Partnership Act Fund, this fund is used to account for the Merced County Workforce Investment Act Program. The County serves as the grant recipient and administrator. The program is funded by the federal government through the state for the purposes of providing employment and training services to youth and adults who are unskilled, economically disadvantaged, unemployed or underemployed. Spring Fair Fund - This fund is used to account for the County owned fair in Los Banos. It is funded through fair proceeds, State apportionments from the California State Fair Board and from rental fees. Fish and Game Fund - This fund was established to receive the County's share of fines levied for violations of fish and game laws within its boundaries. Expenditures are made from time to time for purposes of improving the habitat for wildlife propagation and for incidental administrative matters. Dairy Loan Program Fund - This fund is used 1) to record drawdowns of funds received from the State Water Resources Control Board, 2) to record the disbursements of those proceeds to participants in the program, and 3) to accumulate resources for the payment of principal and interest on each of the loans. Housing Loan Program Fund - This fund was established to account for the activities of the various housing loan programs administered by the Planning and Community Development Department. Revenues are derived from State and Federal grants and from program income generated when loans are repaid. The use of program income is restricted, depending on the terms and conditions of the granting agency. Business Loan Program Fund - This fund was established to account for the activities of the various business loan programs administered by the Business Economic Opportunity Department. Revenues are derived from State and Federal grants and from income generated when loans are repaid. The use of program income is restricted, depending on the terms and conditions of the granting agency.

97

COUNTY OF MERCED Page 1 of 2COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDSJune 30, 2021

ChildFirst Five Support Sheriff - Light and MedicalMerced Services Inmate Drainage Assistance

Fire County Agency Welfare Districts ProgramASSETS & DEFERRED OUTFLOWSOF RESOURCESAssets:

Equity in pooled cash and investments $ 17,231,962 $ 14,262,563 $ 167,580 $ 2,161,245 $ 6,491,270 $ 434,970Receivables, net

Accounts 974,875 628,140 55,143 19,283 97,259NotesTaxes and assessments 874,076

Due from other funds 495,057 91,037 172,446Total assets 19,575,970 14,981,740 340,026 2,216,388 6,510,553 532,229

Total assets & deferred outflows ofresources $ 19,575,970 $ 14,981,740 $ 340,026 $ 2,216,388 $ 6,510,553 $ 532,229


Accrued liabilities $ 3,908,046 $ 494,191 $ 229,512 $ 31,603 $ 45,725 $ 97,238Due to other funds 23,848 74,929 41,959 1,697 325 190,566Advances from grantors & third parties 213,040

Total liabilities 4,144,934 569,120 271,471 33,300 46,050 287,804

Fund balances:Restricted 8,153,706 1,982,249 31,249 433,581 2,232,982Committed 6,934,966 12,156,551 37,306 1,741,442 4,230,507 244,425Assigned 342,364 273,820 8,065 1,014

Total fund balances 15,431,036 14,412,620 68,555 2,183,088 6,464,503 244,425Total liabilities, deferred inflows of resourcesand fund balances $ 19,575,970 $ 14,981,740 $ 340,026 $ 2,216,388 $ 6,510,553 $ 532,229

98

ASSETS & DEFERRED OUTFLOWSOF RESOURCESAssets:

Equity in pooled cash and investmentsReceivables, net

AccountsNotesTaxes and assessments

Due from other fundsTotal assets

Total assets & deferred outflows ofresources


Accrued liabilitiesDue to other fundsAdvances from grantors & third parties

Total liabilities

Fund balances:RestrictedCommittedAssigned

Total fund balancesTotal liabilities, deferred inflows of resourcesand fund balances

COUNTY OF MERCED Page 2 of 2COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDSJune 30, 2021

Workforce Dairy Housing BusinessInvestment Spring Fish and Loan Loan Loan

Act Fair Game Program Program Program Total

$ $ 56,798 $ 43,978 $ 1,350,784 $ 1,174,083 $ 1,021,748 $ 44,396,981

1,163,633 3,402 440 842,959 3,785,13414,557 6,611,130 114,562 6,740,249

874,07675,000 677 834,217

1,163,633 135,200 44,418 1,365,341 8,628,172 1,136,987 56,630,657

$ 1,163,633 $ 135,200 $ 44,418 $ 1,365,341 $ 8,628,172 $ 1,136,987 $ 56,630,657

$ 1,057,601 $ 37,967 $ $ $ 798,059 $ $ 6,699,942106,032 714 440,070

14,557 6,611,130 114,562 6,953,2891,163,633 38,681 14,557 7,409,189 114,562 14,093,301

95,276 44,418 1,350,784 1,144,747 1,022,425 16,491,41725,345,197

1,243 74,236 700,74296,519 44,418 1,350,784 1,218,983 1,022,425 42,537,356

$ 1,163,633 $ 135,200 $ 44,418 $ 1,365,341 $ 8,628,172 $ 1,136,987 $ 56,630,657

99

COUNTY OF MERCED Page 1 of 2COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NONMAJOR SPECIAL REVENUE FUNDSFor the Fiscal Year Ended June 30, 2021

ChildFirst Five Support Sheriff - Light and MedicalMerced Services Inmate Drainage Assistance

Fire County Agency Welfare Districts ProgramREVENUES

Taxes and assessments $ 20,176,245 $ $ $ $ 55,560 $Licenses, permits and franchise fees 6,019 Fines, forfeitures and penalties 336,296Revenue from use of money and property 256,639 20,643Aid from other governmental agencies 1,118,357 3,226,875 8,142,255Charges for current services 784,919 600 945,220Other revenues 87,538 22,071 14 468,246 47,871

Total revenues 22,173,078 3,248,946 8,142,269 725,485 1,048,651 356,939


General governmentPublic protection 22,297,323 8,406,584 403,358 762,464Health and sanitation 2,028,898 1,180,362Public assistance

Total expenditures 22,297,323 2,028,898 8,406,584 403,358 762,464 1,180,362

Excess (deficiency) of revenues over (under) (124,245) 1,220,048 (264,315) 322,127 286,187 (823,423)expenditures

OTHER FINANCING SOURCES (USES)Transfers in 2,536,830 173,001Transfers out (271,000) (62,674) (137,932)

Total other financing sources (uses) 2,265,830 (62,674) 173,001 (137,932)

Net change in fund balances 2,141,585 1,157,374 (91,314) 322,127 148,255 (823,423)

Fund balances - beginning 13,289,451 13,255,246 159,869 1,860,961 6,316,248 1,067,848Fund balances - ending $ 15,431,036 $ 14,412,620 $ 68,555 $ 2,183,088 $ 6,464,503 $ 244,425

100

REVENUESTaxes and assessmentsLicenses, permits and franchise feesFines, forfeitures and penaltiesRevenue from use of money and propertyAid from other governmental agenciesCharges for current servicesOther revenues

Total revenues


General governmentPublic protectionHealth and sanitationPublic assistance

Total expenditures

Excess (deficiency) of revenues over (under)expenditures

OTHER FINANCING SOURCES (USES)Transfers inTransfers out

Total other financing sources (uses)

Net change in fund balances

Fund balances - beginningFund balances - ending

COUNTY OF MERCED Page 2 of 2COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NONMAJOR SPECIAL REVENUE FUNDSFor the Fiscal Year Ended June 30, 2021

Workforce Dairy Housing BusinessInvestment Spring Fish and Loan Loan Loan

Act Fair Game Program Program Program Total

$ $ $ $ $ $ $ 20,231,8056,019

4,233 340,52997,337 374,619

3,496,891 97,350 845,703 16,927,4317,764 1,738,503

132,519 22,459 19,460 800,1783,496,891 327,206 4,233 22,459 865,163 7,764 40,419,084

330,761 330,761177 31,869,906

3,209,2603,496,891 3,387 1,164,743 4,895 4,669,9163,496,891 330,761 177 3,387 1,164,743 4,895 40,079,843

(3,555) 4,056 19,072 (299,580) 2,869 339,241

83,200 2,793,031(22) (471,628)

83,200 (22) 2,321,403

79,645 4,056 19,072 (299,602) 2,869 2,660,644

16,874 40,362 1,331,712 1,518,585 1,019,556 39,876,712$ $ 96,519 $ 44,418 $ 1,350,784 $ 1,218,983 $ 1,022,425 $ 42,537,356

101

REVENUESTaxes and assessments $ 17,824,489 $ 17,824,489 $ 20,176,245 $ 2,351,756Licenses, permits and franchise fees 5,000 5,000 6,019 1,019Revenue from use of money and property 250,000 250,000 (250,000)Aid from other governmental agencies 1,451,894 1,663,387 1,118,357 (545,030)Charges for current services 695,474 825,474 784,919 (40,555)Other revenues 92,500 132,500 87,538 (44,962)

Total revenues 20,319,357 20,700,850 22,173,078 1,472,228

EXPENDITURESPublic protection

Salaries and employee benefits 1,642,426 1,642,426 1,405,626 236,800Services and supplies 22,967,869 24,455,742 19,817,714 4,638,028Contingencies 907,455 907,455 907,455Capital outlay 278,102 1,727,144 1,073,983 653,161



OTHER FINANCING SOURCES (USES)Transfers in 596,000 3,119,842 2,536,830 (583,012)Transfers out (323,410) (291,830) (271,000) 20,830

Total other financing sources (uses) 272,590 2,828,012 2,265,830 (562,182)


Fund balance - beginning 12,139,086 12,139,086 13,289,451 1,150,365Fund balance - ending $ 6,935,181 $ 6,935,181 $ 15,431,036 $ 8,495,855

Variance with

For the Fiscal Year Ended June 30, 2021FIRE

COUNTY OF MERCEDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

Budgeted Amounts ActualFinal BudgetOriginal Final Amounts

102

REVENUESRevenue from use of money and property $ 200,000 $ 200,000 $ $ (200,000)Aid from other governmental agencies 3,379,880 3,379,880 3,226,875 (153,005)Other revenues 22,071 22,071

Total revenues 3,579,880 3,579,880 3,248,946 (330,934)

EXPENDITURESHealth and sanitation

Salaries and employee benefits 878,115 878,115 606,043 272,072Services and supplies 3,493,289 3,427,243 1,422,855 2,004,388Intrafund and interfund transfers (95,091) (95,091) (95,091)


Excess (deficiency) of revenues over (under) (696,433) (630,387) 1,220,048 1,850,435expenditures

OTHER FINANCING SOURCES (USES)Transfers out 1,000 67,046 (62,674) (129,720)

Total other financing sources (uses) 1,000 67,046 (62,674) (129,720)

Net change in fund balance (695,433) (563,341) 1,157,374 1,720,715


OriginalActual

Final Amounts



SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCEBUDGET AND ACTUAL

FIRST FIVE MERCED COUNTY

COUNTY OF MERCED

103

REVENUESRevenue from use of money and property $ 5,000 $ 5,000 $ $ (5,000)Aid from other governmental agencies 9,459,851 9,459,851 8,142,255 (1,317,596)Other revenues 14 14

Total revenues 9,464,851 9,464,851 8,142,269 (1,322,582)


Salaries and employee benefits 7,958,457 7,950,723 7,007,739 942,984Services and supplies 1,478,177 1,485,911 1,398,845 87,066Capital outlay 144,728 144,728 144,728


Excess (deficiency) of revenues over (under) (116,511) (116,511) (264,315) (147,804)expenditures

OTHER FINANCING SOURCESTransfers in 1,000 1,000 173,001 172,001

Total other financing sources 1,000 1,000 173,001 172,001

Net change in fund balance (115,511) (115,511) (91,314) 24,197

Fund balance - beginning 152,827 152,827 159,869 7,042Fund balance - ending $ 37,316 $ 37,316 $ 68,555 $ 31,239

Budgeted Amounts ActualFinal Budget


Variance withOriginal Final Amounts


CHILD SUPPORT SERVICES AGENCY

COUNTY OF MERCED

104

REVENUESRevenue from use of money and property $ 190,000 $ 190,000 $ 256,639 $ 66,639Charges for current services 500 500 600 100Other revenues 250,000 250,000 468,246 218,246

Total revenues 440,500 440,500 725,485 284,985



Total expenditures 526,728 526,728 403,358 123,370

Excess (deficiency) of revenues over (under) (86,228) (86,228) 322,127 408,355expenditures

Net change in fund balance (86,228) (86,228) 322,127 408,355

Fund balance - beginning 1,828,707 1,828,707 1,860,961 32,254Fund balance - ending $ 1,742,479 $ 1,742,479 $ 2,183,088 $ 440,609

Original Final Amounts Final Budget

SHERIFF - INMATE WELFAREFor the Fiscal Year Ended June 30, 2021

ActualBudgeted Amounts Variance with


BUDGET AND ACTUAL

105

REVENUESTaxes and assessments $ $ $ 55,560 $ 55,560Revenue from use of money and property 134,347 134,347 (134,347)Charges for current services 993,300 993,300 945,220 (48,080)Other revenues 10,000 10,000 47,871 37,871

Total revenues 1,137,647 1,137,647 1,048,651 (88,996)


Services and supplies 1,764,522 1,786,369 762,464 1,023,905Contingencies 1,142,611 1,120,761 1,120,761

Total expenditures 2,907,133 2,907,130 762,464 2,144,666

Excess (deficiency) of revenues over (under) (1,769,486) (1,769,483) 286,187 2,055,670expenditures

OTHER FINANCING SOURCES (USES)Transfers out (137,948) (137,951) (137,932) 19

Total other financing sources (uses) (137,948) (137,951) (137,932) 19

Net change in fund balance (1,907,434) (1,907,434) 148,255 2,055,689


Variance withActualFinal BudgetAmounts

Budgeted Amounts


LIGHT AND DRAINAGE DISTRICTSFor the Fiscal Year Ended June 30, 2021

Original Final

COUNTY OF MERCED

106

REVENUESFines, forfeitures and penalties $ 1,000,592 $ 1,000,592 $ 336,296 $ (664,296)Revenue from use of money and property 1,000 1,000 20,643 19,643Aid from other governmental agencies 100,000 100,000 (100,000)

Total revenues 1,101,592 1,101,592 356,939 (744,653)

EXPENDITURESHealth and sanitation

Services and supplies 1,101,592 1,101,592 1,180,362 (78,770)Total expenditures 1,101,592 1,101,592 1,180,362 (78,770)

Excess (deficiency) of revenues over (under) (823,423) (823,423)expenditures

Net change in fund balance (823,423) (823,423)

Fund balance - beginning 1,048,934 1,048,934 1,067,848 18,914Fund balance - ending $ 1,048,934 $ 1,048,934 $ 244,425 $ (804,509)

Original Final AmountsBudgeted Amounts

BUDGET AND ACTUALMEDICAL ASSISTANCE PROGRAM


Variance withActualFinal Budget


107

REVENUESAid from other governmental agencies $ 4,160,891 $ 4,160,891 $ 3,496,891 $ (664,000)

Total revenues 4,160,891 4,160,891 3,496,891 (664,000)

EXPENDITURESPublic assistance

Services and supplies 4,167,169 4,167,169 3,496,891 670,278Other charges 4,500 4,500 4,500

Total expenditures 4,171,669 4,171,669 3,496,891 674,778

Excess (deficiency) of revenues over (under) (10,778) (10,778) 10,778expenditures

Net change in fund balance (10,778) (10,778) 10,778

Fund balance - beginning 39,090 39,090 (39,090)Fund balance - ending $ 28,312 $ 28,312 $ $ (28,312)


Variance withBudgeted Amounts ActualFinal BudgetOriginal Final Amounts


WORKFORCE INVESTMENT ACT

COUNTY OF MERCED

108

REVENUESRevenue from use of money and property $ 699,944 $ 579,944 $ 97,337 $ (482,607)Aid from other governmental agencies 97,349 97,349 97,350 1Other revenues 1,163,600 1,163,600 132,519 (1,031,081)

Total revenues 1,960,893 1,840,893 327,206 (1,513,687)

EXPENDITURESGeneral government

Salaries and employee benefits 596,648 596,648 196,841 399,807Services and supplies 1,355,247 1,355,247 133,920 1,221,327Other charges 2,000 2,000 2,000Capital outlay 20,928 20,928 20,928


Excess (deficiency) of revenues over (under) (13,930) (133,930) (3,555) 130,375expenditures

OTHER FINANCING SOURCES (USES)Transfers in 120,000 83,200 (36,800)

Total other financing sources (uses) 120,000 83,200 (36,800)


Fund balance - beginning 14,230 14,230 16,874 2,644Fund balance - ending $ 300 $ 300 $ 96,519 $ 96,219

SPRING FAIRFor the Fiscal Year Ended June 30, 2021

Original FinalVariance withBudgeted Amounts ActualFinal Budget

BUDGET AND ACTUAL

Amounts

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCECOUNTY OF MERCED

109

REVENUESFines, forfeitures and penalties $ 6,000 $ 6,000 $ 4,233 $ (1,767)Revenue from use of money and property 700 700 (700)

Total revenues 6,700 6,700 4,233 (2,467)


Services and supplies 46,278 46,278 177 46,101Total expenditures 46,278 46,278 177 46,101

Excess (deficiency) of revenues over (under) (39,578) (39,578) 4,056 43,634expenditures


Fund balance - beginning 39,578 39,578 40,362 784Fund balance - ending $ $ $ 44,418 $ 44,418

FISH AND GAME

OriginalVariance withBudgeted Amounts ActualFinal BudgetFinal



Amounts

COUNTY OF MERCED

110

REVENUESRevenue from use of money and property $ 36,000 $ 36,000 $ $ (36,000)Other revenues 75,000 75,000 22,459 (52,541)

Total revenues 111,000 111,000 22,459 (88,541)

EXPENDITURESPublic assistance 3,387 (3,387)

Total expenditures 3,387 (3,387)

Excess (deficiency) of revenues over (under) 111,000 111,000 19,072 (91,928)expenditures

Net change in fund balance 111,000 111,000 19,072 (91,928)

Fund balance - beginning 955,172 955,172 1,331,712 376,540Prior period adjustment

Fund balances - beginning, as restated 955,172 955,172 1,331,712 376,540

Fund balance - ending $ 1,066,172 $ 1,066,172 $ 1,350,784 $ 284,612

Variance withBudgeted Amounts ActualFinal BudgetOriginal



BUDGET AND ACTUALDAIRY LOAN PROGRAM

Final Amounts

111

REVENUESRevenue from use of money and property $ 3,105 $ 3,105 $ $ (3,105)Aid from other governmental agencies 7,767 577,767 845,703 267,936Charges for current servicesOther revenues 800,000 800,000 19,460 (780,540)

Total revenues 810,872 1,380,872 865,163 (515,709)

EXPENDITURESPublic assistance

Services and supplies 896,212 1,466,212 187,145 1,279,067Other charges 977,598 (977,598)

Total expenditures 896,212 1,466,212 1,164,743 301,469


OTHER FINANCING SOURCESTransfers out (22) (22)

Total other financing sources (22) (22)

Net change in fund balance (85,340) (85,340) (299,602) (214,262)

Fund balance - beginning 436,286 436,286 1,518,585 1,082,299Fund balance - ending $ 350,946 $ 350,946 $ 1,218,983 $ 868,037

Budgeted Amounts Variance with

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

AmountsFinalOriginal Final BudgetActual

COUNTY OF MERCED

For the Fiscal Year Ended June 30, 2021HOUSING LOAN PROGRAM

BUDGET AND ACTUAL

112

DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. The County reports the following Debt Service Funds: NONMAJOR FUNDS Juvenile Hall 2013 COP Fund - This fund is used to accumulate resources for the payment of principal and interest on the 2013 Certificates of Participation (COP) issued to refinance the 2002 Certificates of Participation. The 2002 Certificates of Participation were utilized in the construction of the juvenile justice correctional facility. Pacific Gas & Electric (PG&E) Retrofit Loan Fund - This fund is used to accumulate resources for the payment of principal on the interest free loan through Pacific Gas & Electric to assist in financing the street light retrofitting. Energy Retrofit Bond Fund - This fund is used to accumulate resources for the payment of principal and interest on the Bond issued to assist in financing the facilities efficient energy retrofitting. Courthouse Construction COP Fund - This fund is used to accumulate resources for the payment of principal and interest on the Certificates of Participation issued to assist in financing the construction of a new courthouse facility. Mental Health Facility Bond Fund - This fund is used to accumulate resources for the payment of principal and interest on the Bond issued to assist in financing the construction of a new mental health facility. Solar Array Bond Fund - This fund is used to accumulate resources for the payment of principal and interest on the Bond issued to assist in financing the facilities clean energy solar project. Merced County Tobacco Funding Corporation Fund - This fund is used to accumulate resources for the payment of principal and interest on Tobacco Bonds issued during the 2020/2021 fiscal year.

113

Juvenile PG&E Energy Courthouse Mental Solar Merced CountyHall Retrofit Retrofit Construction Health Facility Array Tobacco Funding

2013 COP Loan Bond COP Bond Bond Corporation TotalASSETS & DEFERRED OUTFLOWSOF RESOURCESAssets:

Equity in pooled cash and investments $ 120 $ $ 51,205 $ $ $ $ $ 51,325Receivables, net

Accounts 1,419,884 1,419,884Due from other funds 8,907 8,907Prepaid items 57,392 57,392Restricted assets 828,151 3,199,477 4,027,628

Total assets 57,512 8,907 51,205 828,151 4,619,361 5,565,136

Total assets & deferred outflows ofresources $ 57,512 $ 8,907 $ 51,205 $ 828,151 $ $ $ 4,619,361 $ 5,565,136

LIABILITIES, DEFERRED INFLOWSOF RESOURCES AND FUND BALANCES Liabilities:

Accrued liabilities $ $ 8,907 $ $ $ $ $ $ 8,907Advances from grantors & third parties 1,419,884 1,419,884

Total liabilities 8,907 1,419,884 1,428,791

Fund balances:Nonspendable 57,392 57,392Restricted 120 51,205 828,151 3,199,477 4,078,953

Total fund balances 57,512 51,205 828,151 3,199,477 4,136,345Total liabilities, deferred inflows of

resources and fund balances $ 57,512 $ 8,907 $ 51,205 $ 828,151 $ $ 4,619,361 $ 5,565,136

COUNTY OF MERCEDCOMBINING BALANCE SHEET

NONMAJOR DEBT SERVICE FUNDSJune 30, 2021

114

Juvenile PG&E Energy Courthouse Mental Solar Merced CountyHall Retrofit Retrofit Construction Health Facility Array Tobacco Funding

2013 COP Loan Bond COP Bond Bond Corporation TotalREVENUES

Fines, forfeitures and penalties $ $ $ $ 663,377 $ $ $ $ 663,377Revenue from use of money and property 180 6,873,583 6,873,763Aid from other governmental agencies 162,428 2,839,767 3,002,195

Total revenues 180 663,377 162,428 9,713,350 10,539,335


Public protectionDebt service:

Principal 550,000 106,881 226,590 435,000 505,000 303,412 31,415,000 33,541,883Interest 278,600 118,484 226,230 176,000 245,483 1,787,348 2,832,145Administration 7,713 2,262 58 879,775 889,808Total expenditures 836,313 106,881 345,074 663,492 681,000 548,953 34,082,123 37,263,836

Excess (deficiency) of revenues over (836,133) (106,881) (345,074) (115) (681,000) (386,525) (24,368,773) (26,724,501)(under) expenditures

OTHER FINANCING SOURCES (USES)Transfers in 830,281 106,881 345,074 681,000 386,525 2,349,761Transfers out (11,766,518) (11,766,518)Long-term debt proceeds 35,645,000 35,645,000

Total other financing sources (uses) 830,281 106,881 345,074 681,000 386,525 23,878,482 26,228,243

Net change in fund balances (5,852) (115) (490,291) (496,258)

Fund balances - beginning 63,364 51,205 828,266 3,689,768 4,632,603Fund balances - ending $ 57,512 $ $ 51,205 $ 828,151 $ $ $ 3,199,477 $ 4,136,345

COUNTY OF MERCEDCOMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NONMAJOR DEBT SERVICE FUNDSFor the Fiscal Year Ended June 30, 2021

115

REVENUESRevenue from use of money and property $ $ $ 180 $ 180

Total revenues 180 180

EXPENDITURESPublic protectionDebt service

Principal 550,000 550,000 550,000Interest 278,601 278,601 278,600 1Administration 5,000 5,000 7,713 (2,713)

Total expenditures 833,601 833,601 836,313 (2,712)


OTHER FINANCING SOURCES (USES)Transfers in 833,601 833,601 830,281 (3,320)

Total other financing sources (uses) 833,601 833,601 830,281 (3,320)

Net change in fund balance (5,852) (5,852)

Fund balance - beginning 229 229 63,364 63,135Fund balance - ending $ 229 $ 229 $ 57,512 $ 57,283

JUVENILE HALL 2013 COP

Budgeted Amounts ActualFinal BudgetOriginal Final AmountsVariance with



BUDGET AND ACTUAL

116

EXPENDITURESDebt service

Principal $ 106,881 $ 106,881 $ 106,881 $Total expenditures 106,881 106,881 106,881

Excess (deficiency) of revenues over (under) (106,881) (106,881) (106,881)expenditures

OTHER FINANCING SOURCES (USES)Transfers in 106,881 106,881 106,881

Total other financing sources (uses) 106,881 106,881 106,881

Net change in fund balance

Fund balance - beginningFund balance - ending $ $ $ $


BUDGET AND ACTUALPG&E RETROFIT LOAN

ActualAmountsFinal


Variance withFinal BudgetOriginal

Budgeted Amounts

117


Principal $ 226,590 $ 226,590 $ 226,590 $Interest 118,485 118,485 118,484 1Administration 250 250 250

Total expenditures 345,325 345,325 345,074 251

Excess (deficiency) of revenues over (under) (345,325) (345,325) (345,074) 251expenditures

OTHER FINANCING SOURCES (USES)Transfers in 345,325 345,325 345,074 (251)

Total other financing sources (uses) 345,325 345,325 345,074 (251)


Fund balance - beginning 51,205 51,205Fund balance - ending $ $ $ 51,205 $ 51,205

Actual

COUNTY OF MERCED



Final BudgetOriginal Final AmountsVariance withBudgeted Amounts

ENERGY RETROFIT BOND

118

REVENUESFines, forfeitures and penalties $ 667,628 $ 667,628 $ 663,377 $ (4,251)

Total revenues 667,628 667,628 663,377 (4,251)


Principal 435,000 435,000 435,000Interest 227,628 227,628 226,230 1,398Administration 5,000 5,000 2,262 2,738


Excess (deficiency) of revenues over (under) (115) (115)expenditures

Net change in fund balance (115) (115)

Fund balance - beginning 828,266 828,266Fund balance - ending $ $ $ 828,151 $ 828,151


BUDGET AND ACTUALCOURTHOUSE CONSTRUCTION COP

Original Final Amounts


Variance withBudgeted Amounts ActualFinal Budget

119


Principal $ 505,000 $ 505,000 $ 505,000 $Interest 176,000 176,000 176,000Administration 5,000 5,000 5,000


Excess (deficiency) of revenues over (under) (686,000) (686,000) (681,000) 5,000expenditures

OTHER FINANCING SOURCES (USES)Transfers in 686,000 686,000 681,000 (5,000)

Total other financing sources (uses) 686,000 686,000 681,000 (5,000)



MENTAL HEALTH FACILITY BONDFor the Fiscal Year Ended June 30, 2021

Budgeted Amounts Actual Variance withOriginal Final Amounts Final Budget


BUDGET AND ACTUAL

120

REVENUESAid from other governmental agencies $ 164,875 $ 164,875 $ 162,428 $ (2,447)

Total revenues 164,875 164,875 162,428 (2,447)


Principal 303,412 303,412 303,412Interest 245,484 245,484 245,483 1Administration 250 250 58 192

Total expenditures 549,146 549,146 548,953 193


OTHER FINANCING SOURCES (USES)Transfers in 384,271 384,271 386,525 2,254

Total other financing sources (uses) 384,271 384,271 386,525 2,254



Final BudgetOriginal Final AmountsVariance withBudgeted Amounts Actual

SOLAR ARRAY BONDFor the Fiscal Year Ended June 30, 2021


BUDGET AND ACTUAL

121

CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. The County has chosen to report all such activities in one Capital Projects Fund.

122

REVENUESRevenue from use of money and property $ 101,500 $ 101,500 $ 78,976 $ (22,524)Aid from other governmental agencies 6,000,000 6,000,000 (6,000,000)

Total revenues 6,101,500 6,101,500 78,976 (6,022,524)

EXPENDITURESPublic protectionServices and supplies 2,150,153 1,231,403 107,523 1,123,880Capital outlay 27,041,452 28,009,872 209,260 27,800,612



OTHER FINANCING SOURCES (USES)Transfers in 17,275,035 19,593,455 15,154,857 (4,438,598)Transfers out (3,723,562) (5,992,312) (1,678,056) 4,314,256

Total other financing sources (uses) 13,551,473 13,601,143 13,476,801 (124,342)


Fund balance - beginning 9,563,685 9,563,685 9,699,745 136,060Fund balance - ending $ 25,053 $ 25,053 $ 22,938,739 $ 22,913,686



BUDGET AND ACTUALCAPITAL PROJECTS FUND

Variance withFinal Budget

Budgeted AmountsOriginal Final

ActualAmounts

123

ENTERPRISE FUNDS Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or where the governing body has decided that periodic determination of revenues earned, expenses incurred, and net position is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The County reports the following Enterprise Funds: MAJOR FUNDS Castle Airport Development Center - This fund accounts for the operation of activities associated with the civilian re-use of the former Castle Air Force Base. NONMAJOR FUNDS Medical Facility Lease Operations - Accounted for within this fund are hospital lease activities. Castle Water and Sewer - Accounted for within this fund is the cost to provide a community water system for commercial and residential use.

124

COUNTY OF MERCEDCOMBINING STATEMENT OF FUND NET POSITION

NONMAJOR ENTERPRISE FUNDSJune 30, 2021

Medical Facility Castle WaterLease and

Operations Sewer TotalASSETSCurrent assets:

Equity in pooled cash and investments $ 2,745,578 $ 146,123 $ 2,891,701Receivables, net 19,346 19,346Due from other funds 1,275 1,275

Total current assets 2,745,578 166,744 2,912,322

Noncurrent assets:Capital assets:

Equipment 19,495 19,495Less accumulated depreciation and

amortization (19,495) (19,495)Total noncurrent assets - - -

Total assets 2,745,578 166,744 2,912,322


Accrued liabilities 27,789 27,789Due to other funds 61,350 61,350

Total current liabilities - 89,139 89,139Total liabilities - 89,139 89,139

NET POSITIONUnrestricted 2,745,578 77,605 2,823,183Total net position $ 2,745,578 $ 77,605 $ 2,823,183

125

COUNTY OF MERCEDCOMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

NONMAJOR ENTERPRISE FUNDSFor the Fiscal Year Ended June 30, 2021


Operations Sewer TotalOperating revenues:

Charges for services $ $ 301,059 $ 301,059Total operating revenues - 301,059 301,059

Operating expenses:Professional and specialized services 126,873 126,873Special departmental expense 185 185General and administrative 103,091 103,091Repairs and maintenance 8,298 8,298Depreciation and amortization 211 211

Total operating expenses - 238,658 238,658Operating income - 62,401 62,401

Non-operating revenues (expenses):Interest income 110 110Net investment loss (201,455) (201,455)(Loss) on disposition of capital assets (6,799) (6,799)

Total non-operating revenues (expenses) (201,455) (6,689) (208,144)

Net income (loss) before capital (201,455) 55,712 (145,743)contributions and transfers

Transfers out (10,615,525) (10,615,525)Change in net position (10,816,980) 55,712 (10,761,268)

Total net position - beginning 13,562,558 21,893 13,584,451Total net position - ending $ 2,745,578 $ 77,605 $ 2,823,183

126


Operations Sewer TotalCASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers $ $ 228,561 $ 228,561Payments to suppliers (149,308) (149,308)

Net cash provided by operating activities - 79,253 79,253

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfers out (10,615,525) (10,615,525)

Net cash (used in) noncapital financing activities (10,615,525) - (10,615,525)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received on investments (201,455) 110 (201,345)

Net cash provided by (used in) investing activities (201,455) 110 (201,345)

Net increase (decrease) in cash and cash equivalents (10,816,980) 79,363 (10,737,617)

Cash and cash equivalents - beginning of the year 13,562,558 66,760 13,629,318Cash and cash equivalents - end of the year $ 2,745,578 $ 146,123 $ 2,891,701

Reconciliation to Statement of Fund Net Position:Equity in pooled cash and investments $ 2,745,578 $ 146,123 $ 2,891,701

Total cash and cash equivalents $ 2,745,578 $ 146,123 $ 2,891,701

COUNTY OF MERCEDCOMBINING STATEMENT OF CASH FLOWS

For the Fiscal Year Ended June 30, 2021NONMAJOR ENTERPRISE FUNDS

127 (continued)


NONMAJOR ENTERPRISE FUNDSFor the Fiscal Year Ended June 30, 2021


Operations Sewer TotalReconciliation of operating income to net cash

provided by operating activities:Operating income $ - $ 62,401 $ 62,401Adjustments to reconcile operating income to net cash

provided by operating activities:Depreciation and amortization - 211 211

Decrease (increase) in:Receivables (15,449) (15,449)Due from other funds 1,268 1,268

Increase (decrease) in:Accrued liabilites (30,528) (30,528)Due to other funds 61,350 61,350

Net cash provided by operating activities $ - $ 79,253 $ 79,253

128

INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies of the County, or to other Governments, on a cost reimbursement basis. The County reports the following Internal Service Funds: Fleet Service Management - This fund provides for fuel and maintenance, except major engine and transmission overhauls, to the County automobiles and light trucks. Ownership of vehicles purchased after July 1, 1982, is placed with the fleet service management fund, with the exception of those purchased with subvented funds. Administrative Services - Accounted for in this fund are the electronic data processing functions and, beginning on July 1, 2005, the communication services provided to County departments. Insurance Pool - Accounted for in this fund are the both the self-insurance and other insurance activities of the County.

129

FleetService Administrative Insurance

Management Services Pool TotalASSETSCurrent assets:

Equity in pooled cash and investments $ 803,316 $ 2,709,555 $ 45,418,258 $ 48,931,129Receivables, net 17,790 1,782,308 1,800,098Due from other funds 308,219 1,187,442 17,925 1,513,586Inventories 111,077 45,115 156,192Restricted assets 3,799,533 3,059,924 6,859,457

Total current assets 5,022,145 7,019,826 47,218,491 59,260,462Noncurrent assets:

Capital assets:Buildings and improvements 932,563 930,274 1,862,837Infrastructure 219,279 219,279Equipment 10,145,437 4,535,086 14,680,523Construction in progress 289,518 289,518

Other capital assets:Software 964,077 964,077

Less accumulated depreciation and amortization (7,180,447) (5,329,403) (12,509,850)Total noncurrent assets 3,897,553 1,608,831 5,506,384

Total assets 8,919,698 8,628,657 47,218,491 64,766,846

DEFERRED OUTFLOWS OF RESOURCESDeferred pensions 253,834 2,222,965 2,476,799Deferred other post employment benefits 42,749 378,252 421,001

Total deferred outflows of resources 296,583 2,601,217 2,897,800


Accrued liabilities 60,123 333,244 85,648 479,015Due to other funds 17,108 48,871 173,413 239,392Compensated absences 15,611 114,026 129,637Unearned revenue 80,000 80,000Liability for self-insurance 4,945,675 4,945,675

Total current liabilities 92,842 576,141 5,204,736 5,873,719Noncurrent liabilities:

Compensated absences 64,770 344,388 409,158Long-term self-insurance debt 16,972,407 16,972,407Other post employment benefits (OPEB) liability 96,254 851,687 947,941Net pension liability 1,334,750 11,689,166 13,023,916

Total noncurrent liabilities 1,495,774 12,885,241 16,972,407 31,353,422Total liabilities 1,588,616 13,461,382 22,177,143 37,227,141

DEFERRED INFLOWS OF RESOURCESDeferred pensions 3,775 33,062 36,837Deferred other post employment benefits 4,143 36,657 40,800

Total deferred inflows of resources 7,918 69,719 77,637

NET POSITIONNet investment in capital assets 3,897,553 1,608,831 5,506,384Restricted 3,799,533 3,059,924 6,859,457Unrestricted (77,339) (6,969,982) 25,041,348 17,994,027Total net position $ 7,619,747 $ (2,301,227) $ 25,041,348 $ 30,359,868

COUNTY OF MERCEDCOMBINING STATEMENT OF FUND NET POSITION

INTERNAL SERVICE FUNDSJune 30, 2021

130

FleetService Administrative Insurance

Management Services Pool TotalOperating revenues:

Charges for services $ 3,395,788 $ 11,341,713 $ 66,206,989 $ 80,944,490Total operating revenues 3,395,788 11,341,713 66,206,989 80,944,490

Operating expenses:Salaries and benefits 800,130 7,126,026 7,926,156Materials and supplies 1,175,290 1,175,290Insurance 203,591 32,604 45,829,282 46,065,477Professional and specialized services 147,814 123,922 2,181,850 2,453,586Special departmental expense 111,048 1,577,158 769,022 2,457,228General and administrative 34,585 2,407,582 812 2,442,979Repairs and maintenance 17,873 848,446 87,371 953,690Rents and leases 384 53,142 53,526Depreciation and amortization 914,769 291,874 1,206,643Claims 14,618,607 14,618,607

Total operating expenses 3,405,484 12,460,754 63,486,944 79,353,182Operating income (loss) (9,696) (1,119,041) 2,720,045 1,591,308

Non-operating revenues (expenses):Gain (loss) on disposition of capital assets (2,798) 2,183 (615)Net investment loss (21,186) (54,336) (145,125) (220,647)

Total non-operating revenues (expenses) (23,984) (52,153) (145,125) (221,262)

Income (loss) before capital (33,680) (1,171,194) 2,574,920 1,370,046contributions and transfers

Capital contributions 7,345 7,345Transfers in 98,649 98,649Transfers out (15,627) (247,362) (262,989)

Change in net position (41,962) (1,319,907) 2,574,920 1,213,051

Total net position (deficit) - beginning 7,661,709 (981,320) 21,628,138 28,308,527Prior period adjustment 838,290 838,290

Total net position (deficit) - beginning, as restated 7,661,709 (981,320) 22,466,428 29,146,817

Total net position (deficit) - ending $ 7,619,747 $ (2,301,227) $ 25,041,348 $ 30,359,868

COUNTY OF MERCEDCOMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

INTERNAL SERVICE FUNDSFor the Fiscal Year Ended June 30, 2021

131

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from interfund services provided $ 3,610,827 $ 10,893,258 $ 65,748,551 $ 80,252,636Payments to suppliers (1,775,681) (4,963,300) (48,704,018) (55,442,999)Payments to employees (732,262) (6,137,682) (6,869,944)Claims paid (15,919,304) (15,919,304)Other receipts (payments) 135 383,598 383,733

Net cash provided by operating activities 1,103,019 175,874 1,125,229 2,404,122

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfers in 1,402,068 98,649 1,500,717Transfers out (1,402,068) (247,362) (1,649,430)

Net cash (used in) noncapital financing activities (148,713) (148,713)

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPurchase of capital assets (1,368,583) (252,404) (1,620,987)Proceeds from sale of capital assets 91,757 2,183 93,940

Net cash (used in) capital and relatedfinancing activities (1,276,826) (250,221) (1,527,047)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received on investments (21,186) (54,336) (145,125) (220,647)

Net cash (used in) investing activities (21,186) (54,336) (145,125) (220,647)

Net increase (decrease) in cash and cash equivalents (194,993) (277,396) 980,104 507,715

Cash and cash equivalents - beginning of the year 4,797,842 6,046,875 44,438,154 55,282,871Cash and cash equivalents - end of the year $ 4,602,849 $ 5,769,479 $ 45,418,258 $ 55,790,586

Reconciliation to Statement of Fund Net Position:Equity in pooled cash and investments $ 803,316 $ 2,709,555 $ 45,418,258 $ 48,931,129Restricted assets 3,799,533 3,059,924 6,859,457

Total cash and cash equivalents $ 4,602,849 $ 5,769,479 $ 45,418,258 $ 55,790,586


ManagementAdministrative

Services


InsurancePool Total

FleetService

132 (continued)

Reconciliation of operating income (loss) to net cashprovided by operating activities:

Operating income (loss) $ (9,696) $ (1,119,041) $ 2,720,045 $ 1,591,308Adjustments to reconcile operating income (loss) to net cash

provided by operating activities:Depreciation and amortization 914,769 291,874 1,206,643

Decrease (increase) in:Receivables 92,087 1,497 (463,342) (369,758)Due from other funds 188,677 (35,711) 4,904 157,870Inventories (23,826) 2,099 (21,727)Deferred outflows of resources - pensions (11,213) (173,360) (184,573)Deferred outflows of resources - other post employment benefits (1,965) (32,870) (34,835)

Increase (decrease) in:Accrued liabilities (127,065) 14,420 (34,904) (147,549)Due to other funds 3,606 46,990 (245,929) (195,333)Accrued interest payableCompensated absences 5,575 98,451 104,026Unearned revenue 20,000 20,000Liability for self-insurance (855,545) (855,545)Other post employment benefits liability 1,131 46,122 47,253Net pension liability 80,322 1,092,051 1,172,373Deferred inflows of resources - pensions (3,315) (26,832) (30,147)Deferred inflows of resources - other post employment benefits (6,068) (49,816) (55,884)

Net cash provided by operating activities $ 1,103,019 $ 175,874 $ 1,125,229 $ 2,404,122

Noncash investing, capital, and financing activities:Capital contributions $ 7,345 $ $ $ 7,345Disposal of capital assets 69,883 69,883

Total noncash investing, capital, and financing activities $ 77,228 $ $ $ 77,228

TotalService

ManagementAdministrative

ServicesInsurance

Pool

Fleet



133

FIDUCIARY FUNDS TRUST FUNDS MercedCERA Pension Trust - This fund is used to account for the County contributory retirement plan covering past and present permanent employees. PARS Other Post Employment Benefits (OPEB) Trust - This fund is used to account for the County plan for post employment benefits other than pensions. Investment Trust - This fund accounts for the assets of those legally separate entities which deposit cash with the County Treasurer who acts as the investment manager. CUSTODIAL FUNDS External Investment Pool - This fund accounts for the assets of those legally separate entities which deposit cash with the County Treasurer. Property Tax Collection Fund - To account for the property taxes collected for all taxing jurisdictions, including the schools and special districts within the County. Trial Courts - To account for Trial Court funds held by the County in a fiduciary capacity. Local Agency Formation Commission (LAFCO) - To account for LAFCO funds held by the County in a fiduciary capacity. Public Guardian/Administrator/Conservator - To account for all of the Public Guardian/Administrator/Conservator’s monies held by the County in a fiduciary capacity.

134

ASSETSEquity in pooled cash and investments $ 33,687,648 $ 362 $ 29,098 $ 4,775,928 $ 38,493,036 Receivables (net):

Accounts - - 24,887 - 24,887 Taxes 11,893,919 11,893,919

Total assets 45,581,567 362 53,985 4,775,928 50,411,842

LIABILITIESAccounts payable 24,880,070 - 16,059 - 24,896,129

Total liabilities 24,880,070 - 16,059 - 24,896,129

NET POSITIONRestricted for:

Individuals, organizations & other governments 20,701,497 362 37,926 4,775,928 25,515,713 Total net position $ 20,701,497 $ 362 $ 37,926 $ 4,775,928 $ 25,515,713

COUNTY OF MERCEDCOMBINING STATEMENT OF FIDUCIARY NET POSITION

OTHER CUSTODIAL FUNDSJune 30, 2021

Property Local Agency PublicTax


Collection Courts Commission Conservator TotalTrial Formation Guardian

135

ADDITIONSContributions

Contributions to investment pool $ 352,528,631 $ - $ 44,541 $ 5,383,723 $ 357,956,895 Total contributions 352,528,631 - 44,541 5,383,723 357,956,895

Total additions 352,528,631 - 44,541 5,383,723 357,956,895

DEDUCTIONSDistributions from investment pool 372,774,943 5 103,089 5,027,341 377,905,378

Total deductions 372,774,943 5 103,089 5,027,341 377,905,378

Change in net position (20,246,312) (5) (58,548) 356,382 (19,948,483)

Net position - beginning of the year 40,947,809 367 96,474 4,419,546 45,464,196

Net position - end of the year $ 20,701,497 $ 362 $ 37,926 $ 4,775,928 $ 25,515,713

COUNTY OF MERCEDCOMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

OTHER CUSTODIAL FUNDSFor the Fiscal Year Ended June 30, 2021

Property PublicLocal Agency


Tax Trial Formation GuardianCollection Courts Commission Conservator Total

136

STATISTICAL SECTION

This part of the County’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the County’s overall financial health.

CONTENTS Financial Trends Pages This segment contains trend information to help the reader understand how the County’s financial performance and condition have changed over time. 137 - 143 Revenue Capacity This segment contains information to help the reader assess the County’s most significant local revenue source, property taxes. 144 - 147 Debt Capacity This segment contains information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future. 148 - 151 Demographic and Economic Information This segment contains demographic and economic indicators to help the reader understand the environment within which the County’s financial activities take place. 152 - 153 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs. 154 - 157 Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.

COUNTY OF MERCED

2013 2018 2019 2020 2021

Governmental activities

Net investment in capital assets $ 311,333,561 $ 334,137,124 $ 343,869,904 $ 344,021,929 $ 351,410,112 $ 361,199,719 $ 379,249,824 $ 416,524,014 $ 402,666,265 $ 432,173,158

Restricted 47,893,405 43,835,354 48,798,839 38,731,421 39,447,742 44,558,464 47,903,121 65,559,141 73,863,756 76,088,869

Unrestricted 15,049,701 (5,700,362) 9,797,620 (373,928,170) (325,042,084) (305,869,526) (285,353,575) (269,119,082) (259,927,005) (228,010,917)

Total governmental activities net position $ 374,276,667 $ 372,272,116 $ 402,466,363 $ 8,825,180 $ 65,815,770 $ 99,888,657 $ 141,799,370 $ 212,964,073 $ 216,603,016 $ 280,251,110

Business-type activities


Restricted 84,527 79,439 218,207 268,738 557,411 1,048,988 791,294 497,961 508,747 99,557

Unrestricted 13,497,190 12,777,500 12,970,749 11,474,251 12,359,902 13,187,485 14,320,520 15,231,360 15,336,701 5,978,210

Total business-type activities net position $ 149,178,093 $ 142,217,107 $ 136,889,218 $ 130,093,811 $ 125,783,313 $ 119,489,288 $ 112,832,764 $ 107,293,704 $ 99,455,061 $ 83,592,432

Primary government


Restricted 47,977,932 43,914,793 49,017,046 39,000,159 40,005,153 45,607,452 48,694,415 66,057,102 74,372,503 76,188,426

Unrestricted 28,546,891 7,727,326 22,768,369 (362,453,919) (312,682,182) (292,682,041) (271,033,055) (253,887,722) (244,590,304) (222,032,707)

Total primary government net position $ 523,454,760 $ 515,139,411 $ 539,355,581 $ 138,918,991 $ 191,599,083 $ 219,377,945 $ 254,632,134 $ 320,257,777 $ 316,058,077 $ 363,843,542

COUNTY OF MERCED

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS

(Accrual basis of accounting)

2016 2017

Fiscal Year Ending June 30,

2012 2014 2015

137

2013 2018 2019 2020 2021

Expenses

Governmental activities:

General government $ 36,273,963 $ 31,403,707 $ 30,891,693 $ 30,675,489 $ 29,696,757 $ 31,141,604 $ 31,933,572 $ 33,265,052 $ 40,252,030 $ 43,409,004

Public protection 119,342,431 114,776,068 115,836,569 115,413,015 120,019,155 130,120,935 139,211,067 142,125,127 151,720,962 158,571,124

Public w ays and facilities 22,765,096 21,614,446 22,209,375 21,493,430 19,803,192 18,559,914 19,614,276 20,891,389 77,227,187 27,448,593

Health and sanitation 52,397,777 52,697,318 53,862,698 56,004,315 61,569,056 66,016,337 68,396,642 71,390,410 88,479,626 98,673,629

Public assistance 143,000,892 147,570,494 152,691,574 155,942,493 154,865,659 164,991,656 165,150,983 172,022,450 183,731,513 189,053,894

Education 2,873,434 2,478,600 2,454,648 2,573,481 2,934,193 3,125,165 3,089,305 3,655,255 3,981,735 3,775,061

Recreation and cultural services 2,014,859 2,041,973 1,836,800 1,768,035 1,858,781 2,216,697 2,203,132 2,775,925 2,852,857 2,650,730

Interest on long-term debt 6,157,458 5,305,114 4,330,600 3,812,452 3,269,802 2,936,310 3,135,244 2,925,137 2,833,915 3,462,400

Total governmental activities expenses 384,825,910 377,887,720 384,113,957 387,682,710 394,016,595 419,108,618 432,734,221 449,050,745 551,079,825 527,044,435

Business-type activities:

Medical Facilities Lease Operations 429,800 444,262 313,216 254,973 154,379 151,483 142,544 118,152 1,914,474 201,455

Castle Airport Development Center 9,060,282 8,364,699 8,249,039 7,858,109 7,605,707 8,652,924 9,708,126 8,467,693 8,065,774 10,956,916

Castle Water and Sew er 284,428 277,245 320,129 264,085 241,631 225,876 342,386 214,311 266,047 245,457

Total business-type activities expenses 9,774,510 9,086,206 8,882,384 8,377,167 8,001,717 9,030,283 10,193,056 8,800,156 10,246,295 11,403,828

Total primary government expenses $ 394,600,420 $ 386,973,926 $ 392,996,341 $ 396,059,877 $ 402,018,312 $ 428,138,901 $ 442,927,277 457,850,901 $ 561,326,120 $ 538,448,263

Program revenues


Charges for services

General government $ 17,163,746 $ 18,508,027 $ 16,961,963 $ 17,673,096 $ 15,720,542 $ 23,374,189 $ 19,300,829 $ 18,151,217 $ 16,415,949 $ 22,288,233

Public protection 17,231,284 16,497,116 16,066,172 16,682,534 15,252,521 16,330,567 17,401,106 16,629,919 16,427,425 16,589,436

Public w ays and facilities 3,745,223 4,451,184 4,395,594 3,527,281 1,909,411 924,037 1,254,787 758,427 2,795,141 850,942

Health and sanitation 8,435,482 5,958,507 5,475,011 5,981,082 7,059,855 6,105,602 6,390,839 5,218,524 7,905,190 8,208,069

Public assistance 447,241 766,541 534,315 234,471 131,331 102,255 127,708 91,267 92,859 93,718

Education 70,489 69,871 73,298 64,137 77,107 56,242 53,458 56,237 124,489 15,768

Recreation and cultural services 1,181,794 1,091,147 1,081,283 1,001,082 1,022,498 1,062,511 1,105,684 1,085,823 953,028 1,006,881

Operating grants and contributions 235,749,446 238,404,695 272,498,960 273,006,826 294,876,234 295,653,640 311,014,508 310,811,625 341,208,893 365,439,815

Capital grants and contributions 4,698,652 5,603,565 5,198,678 2,127,726 3,054,935 5,121,558 5,983,366 39,984,334 35,730,205 24,984,304

Total governmental activities program revenues $ 288,723,357 $ 291,350,653 $ 322,285,274 $ 320,298,235 $ 339,104,434 $ 348,730,601 $ 362,632,285 $ 392,787,373 $ 421,653,179 $ 439,477,166

2015 2016



COUNTY OF MERCED

CHANGES IN NET POSITION


20172012 2014

138

2013 2018 2019 2020 2021

Program revenues (con't)


Charges for services

Medical facilities lease operations $ 839 $ 6,936 $ 9,868 $ 4,800 $ 4,000 $ - $ - $ - $ - $ -

Castle airport development 1,761,862 1,748,277 2,061,340 2,062,853 2,650,668 2,243,911 2,981,099 2,552,274 2,391,311 2,723,156

Castle Water and Sew er 245,926 271,848 311,230 268,023 337,723 214,442 289,766 205,441 212,894 301,059

Operating grants and contributions 265,536 - 933,609 1,069,993 600,107 263,087 248,702 103,947 104,212 3,338,292

Capital grants and contributions - - - - - - 122,514 - - -

Total business-type activities program revenues 2,274,163 2,027,061 3,316,047 3,405,669 3,592,498 2,721,440 3,642,081 2,861,662 2,708,417 6,362,507

Total primary government program revenues $ 290,997,520 $ 293,377,714 $ 325,601,321 $ 323,703,904 $ 342,696,932 $ 351,452,041 $ 366,274,366 $ 395,649,035 $ 424,361,596 $ 445,839,673

Net revenue/(expense)

Governmental activities $ (96,102,553) $ (86,537,067) $ (61,828,683) $ (67,384,475) $ (54,912,161) $ (70,378,017) $ (70,101,936) $ (56,263,372) $ (129,426,646) $ (87,567,269)

Business-type activities (7,500,347) (6,978,986) (5,566,337) (4,971,498) (4,409,219) (6,308,843) (6,550,975) (5,938,494) (7,537,878) (5,041,321)

Total primary government net revenue/(expense) $ (103,602,900) $ (93,516,053) $ (67,395,020) $ (72,355,973) $ (59,321,380) $ (76,686,860) $ (76,652,911) $ (62,201,866) $ (136,964,524) $ (92,608,590)

General revenues and other changes in net position


Taxes

Property taxes $ 63,364,518 $ 66,259,112 $ 73,250,554 $ 81,429,875 $ 86,367,758 $ 89,451,108 $ 94,428,427 $ 99,549,819 $ 104,833,079 $ 110,699,743

Sales and use taxes 5,376,938 5,671,642 6,367,322 7,474,698 7,663,552 8,059,699 15,144,825 16,339,479 15,134,693 18,110,963

Other taxes 1,381,364 1,045,535 1,084,285 1,476,235 1,271,667 2,511,155 2,562,507 2,876,203 2,289,978 2,659,205

Unrestricted investment earnings 4,325,799 1,108,793 2,468,975 2,047,915 2,841,838 3,435,694 2,773,346 7,939,955 7,883,997 7,485,368

Other 7,363,927 12,230,817 8,951,593 9,729,538 7,682,948 993,248 578,267 214,008 905,055 583,710

Transfers in/(out) 978,399 (18,000) (99,799) - - - 119,687 - 1,379,001 16,666

Gain on sale of capital assets - - - - - - - 17,856 639,786 10,821,418

Total governmental activities 82,790,945 86,297,899 92,022,930 102,158,261 105,827,763 104,450,904 115,607,059 126,937,320 133,065,589 150,377,073


Unrestricted investment earnings 175,410 - 138,649 122,226 98,721 14,818 29,018 399,434 339,021 110

Other 347,581 - - - - - - - - -

Transfers in/(out) (24,292,058) 18,000 99,799 - - - - - (639,786) (10,821,418)

Total business-type activities (23,769,067) 18,000 238,448 122,226 98,721 14,818 29,018 399,434 (300,765) (10,821,308)

Total primary government $ 59,021,878 $ 86,315,899 $ 92,261,378 $ 102,280,487 $ 105,926,484 $ 104,465,722 $ 115,636,077 $ 127,336,754 $ 132,764,824 $ 139,555,765

Change in net position

Governmental activities $ (13,311,608) $ (239,168) $ 30,194,247 $ 34,773,786 $ 50,915,602 $ 34,072,887 $ 45,505,123 $ 70,673,948 $ 3,638,943 $ 62,809,804

Business-type activities (31,269,414) (6,960,986) (5,327,889) (4,849,272) (4,310,498) (6,294,025) (6,641,644) (5,539,060) (7,838,643) (15,862,629)

Total primary government $ (44,581,022) $ (7,200,154) $ 24,866,358 $ 29,924,514 $ 46,605,104 $ 27,778,862 $ 38,863,479 $ 65,134,888 $ (4,199,700) $ 46,947,175

CHANGES IN NET POSITION




COUNTY OF MERCED

2012 2014 2015 2016 2017

139

of 2

General fund

Nonspendable $ 1,550,405 $ 1,381,742 $ 1,444,328 $ 1,411,251 1,393,277

Restricted 60,215 59,812 60,448 60,992 61,760

Committed 37,450,274 16,359,865 19,570,000 17,383,818 18,570,000

Assigned - 17,120,982 15,677,659 16,432,635 16,921,258

Unassigned 37,990,653 38,919,011 43,904,499 43,182,056 54,757,257

Total general fund 77,051,547 73,841,412 80,656,934 78,470,752 91,703,552

All other governmental funds

Nonspendable 2,111,464 1,377,084 908,514 417,001 504,241

Restricted 66,829,040 49,356,559 52,116,166 53,696,496 51,590,699

Committed 5,005,948 12,895,082 14,556,003 17,926,953 18,633,220

Assigned - 1,350,335 2,942,483 4,380,590 3,872,001

Unassigned (73,754) (651,783) - (819,963) -

Total all other governmental funds 73,872,698 64,327,277 70,523,166 75,601,077 74,600,161

Total all governmental funds $ 150,924,245 $ 138,168,689 $ 151,180,100 $ 154,071,829 166,303,713


20142013

COUNTY OF MERCED

20152012 2016

(Modified accrual basis of accounting)

FUND BALANCES OF GOVERNMENTAL FUNDS


140

of 2

2021

General fund

Nonspendable $ 1,399,426 $ 1,359,061 $ 481,379 $ 782,332 $ 673,545

Restricted 62,160 2,563,052 7,722,924 7,058,540 2,834,823

Committed 23,570,000 30,070,000 31,070,000 31,070,000 31,070,000

Assigned 14,635,090 15,299,853 13,133,240 12,754,392 13,444,848

Unassigned 65,960,646 61,984,186 59,198,205 64,645,051 87,084,208

Total general fund 105,627,322 111,276,152 111,605,748 116,310,315 135,107,424

All other governmental funds

Nonspendable 474,839 445,813 459,856 433,198 430,805

Restricted 51,191,901 37,816,954 44,046,132 54,548,257 82,225,295

Committed 19,863,418 19,019,722 21,859,415 23,300,322 25,370,250

Assigned 3,244,760 8,179,405 14,944,671 10,984,621 7,697,448

Unassigned - 48,593 (35,366) - -

Total all other governmental funds 74,774,918 65,510,487 81,274,708 89,266,398 115,723,798

Total all governmental funds $ 180,402,240 $ 176,786,639 $ 192,880,456 $ 205,576,713 $ 250,831,222


COUNTY OF MERCED

2017

FUND BALANCES OF GOVERNMENTAL FUNDS


20192018 2020


141

of 2

Revenues

Taxes and assessments $ 69,463,610 $ 72,307,162 $ 80,059,865 $ 89,774,188 $ 94,864,940

Licenses, permits and franchise fees 4,326,564 4,426,688 5,090,245 5,675,349 5,396,820

Fines, forfeitures and penalties 6,996,000 7,205,022 7,050,453 7,286,717 6,384,434

Revenues from use of money and property 5,311,837 2,399,172 3,748,120 3,210,404 4,295,593

Aid from other governmental agencies 236,325,851 238,626,613 267,726,811 263,222,209 284,749,019

Charges for current services 32,711,096 32,237,383 35,643,498 38,716,590 36,860,585

Other revenues 15,503,699 16,780,322 15,854,890 14,940,121 12,859,457

Total revenues 370,638,657 373,982,362 415,173,882 422,825,578 445,410,848

Expenditures

General 33,625,747 29,019,999 29,126,916 29,665,867 32,322,936

Public protection 116,563,941 110,692,518 116,009,102 118,532,764 128,214,810

Public ways and facilities 15,693,096 27,076,693 32,413,874 31,822,362 25,011,912

Health and sanitation 51,018,634 51,136,447 53,946,200 58,451,086 65,743,396

Public assistance 140,845,038 145,777,884 152,979,166 163,149,391 161,235,858

Education 2,946,752 2,456,429 2,433,962 2,689,119 3,128,541

Recreation and cultural services 1,879,403 1,918,084 1,895,733 1,792,395 1,943,796

Debt service

Principal 7,012,297 21,103,905 8,049,282 8,771,364 9,814,019

Interest 5,524,302 5,141,653 4,405,215 3,942,767 3,422,466

Administration 99,410 661,841 84,534 61,640 82,213

Capital outlay 2,897,339 1,981,260 615,783 731,197 1,990,381

Total expenditures 378,105,959 396,966,713 401,959,767 419,609,952 432,910,328

Excess/(deficiency) of revenues over/(under) expenditures (7,467,302) (22,984,351) 13,214,115 3,215,626 12,500,520

Other financing sources (uses)

Transfers in 7,989,002 17,611,138 1,545,170 3,527,319 4,341,126

Transfers (out) (8,038,852) (17,678,824) (1,767,104) (3,865,476) (4,733,232)

Resources from capital leases 37,124 61,669 19,230 14,260 123,470

Long-term debt proceeds - 10,885,000 - - -

Transfer to other governments 1,008,249 - - - -

Total other financing sources and uses 995,523 10,878,983 (202,704) (323,897) (268,636)

Net changes in fund balances $ (6,471,779) $ (12,105,368) $ 13,011,411 $ 2,891,729 $ 12,231,884

Debt service as a percentage 3.46% 7.06% 3.32% 3.25% 3.24%

of noncapital expenditures

2012 2013 2014 20162015

COUNTY OF MERCED

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS




142

Revenues

Taxes and assessments

Licenses, permits and franchise fees

Fines, forfeitures and penalties

Revenues from use of money and property

Aid from other governmental agencies

Charges for current services

Other revenues

Total revenues

Expenditures

General

Public protection

Public ways and facilities

Health and sanitation

Public assistance

Education

Recreation and cultural services

Debt service

Principal

Interest

Administration

Capital outlay

Total expenditures

Excess/(deficiency) of revenues over/(under) expenditures

Other financing sources (uses)

Transfers in

Transfers (out)

Resources from capital leases

Long-term debt proceeds

Transfer to other governments

Total other financing sources and uses

Net changes in fund balances

Debt service as a percentage

of noncapital expenditures

Page 2 of 2

2021

$ 100,030,915 $ 111,589,569 $ 118,512,894 $ 124,996,086 $ 133,205,117

5,500,347 5,370,107 5,057,599 4,886,043 5,514,948

13,726,140 8,698,708 6,462,003 6,129,744 9,397,148

4,541,465 3,782,815 7,673,369 7,088,855 8,239,317

285,931,894 304,645,011 335,868,321 350,531,404 369,342,995

37,126,388 35,943,363 36,176,851 44,728,299 44,887,110

5,683,356 7,915,707 8,539,704 13,068,757 8,049,506

452,540,505 477,945,280 518,290,741 551,429,188 578,636,141

33,641,783 37,929,850 39,746,179 39,313,567 46,016,931

133,793,669 144,026,360 147,670,871 152,331,183 153,151,885

16,775,386 20,446,515 52,096,287 58,803,021 51,671,691

67,245,570 71,354,482 74,588,587 86,413,744 94,548,817

164,237,391 170,507,199 175,828,648 187,067,286 190,908,383

3,139,159 3,249,816 3,515,430 3,766,357 3,590,515

2,110,405 2,259,588 3,001,841 3,391,876 2,626,930

11,437,264 5,239,153 2,949,233 4,912,957 33,541,883

2,969,780 3,062,223 2,909,299 2,814,992 2,832,145

260,757 158,884 36,249 31,780 913,950

21,842,665 23,512,013 770,160 566,519 209,260

457,453,829 481,746,083 503,112,784 539,413,282 580,012,390

(4,913,324) (3,800,803) 15,177,957 12,015,906 (1,376,249)

16,583,604 30,746,665 7,732,729 19,355,723 52,950,010

(16,938,213) (30,626,978) (7,732,729) (18,712,339) (41,964,252)

19,366,460 65,515 497,245 36,967 -

- - 418,615 - 35,645,000

- - - - -

19,011,851 185,202 915,860 680,351 46,630,758

$ 14,098,527 $ (3,615,601) $ 16,093,817 $ 12,696,257 $ 45,254,509

3.41% 1.90% 1.31% 1.60% 5.76%

20202018 20192017

COUNTY OF MERCED

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS




143

Fiscal (1) (2) (3) (4) Total Taxable (5) Total Direct

Year Secured Unsecured Unitary Exempt Assessed Value Tax Rate

2011-12 $ 15,369,771,704 $ 1,268,886,030 $ 509,109,681 $ 803,406,454 $ 16,344,360,961 1.00%

2012-13 15,525,112,557 1,257,346,806 512,308,376 815,802,947 16,478,964,792 1.00%

2013-14 16,530,562,146 1,357,660,084 499,521,434 857,896,793 17,529,846,871 1.00%

2014-15 18,097,459,259 1,445,344,675 526,009,741 882,002,781 19,186,810,894 1.00%

2015-16 19,594,870,287 1,533,439,064 577,739,780 878,965,724 20,827,083,407 1.00%

2016-17 20,604,773,226 1,623,280,237 596,113,924 950,528,443 21,873,638,944 1.00%

2017-18 21,801,501,692 1,696,082,588 634,799,553 964,349,033 23,168,034,800 1.00%

2018-19 23,170,719,142 1,761,539,515 675,391,251 1,026,881,255 24,580,768,653 1.00%

2019-20 24,872,454,223 1,825,924,026 647,939,889 1,053,234,188 26,293,083,950 1.00%

2020-21 26,352,359,478 1,872,715,456 661,828,922 1,091,126,372 27,795,777,484 1.00%

Notes:

(1) Secured property is generally real property defined as land, mines, minerals, timber, and improvements such as buildings,

structures, crops, trees, and vines.

(2) Unsecured property is generally personal property, including machinery, equipment, office tools, and supplies.

(3) Unitary properties are railroads and utilities crossing the County and are assessed by the State Board of Equalization.

(4) Exempt properties include numerous full and partial exclusions/exemptions provided by the State Constitution and

the legislature that relieve certain taxpayers from the burden of paying property taxes.

(5) Due to the 1978 passage of the property tax initiative Proposition 13, the County does not track the estimated actual

value of all County properties. Under Proposition 13, property is assessed at the 1978 market value with an annual increase

limited to the lesser of 2% or the Consumer Price Index on properties not involved in a change of ownership or properties

that did not undergo new construction. Newly acquired property is assessed at its new market value (the purchase price)

and the value of any new construction is added to the existing base value of a parcel. As a result, similar properties

can have substantially different assessed values based on the date of purchase. Proposition 13 limits the property

tax rate to 1% of assessed value plus the rate necessary to fund local voter-approved bonds and special assessments.

COUNTY OF MERCED

ASSESSED VALUE OF TAXABLE PROPERTY


144

General Total

Fiscal Basic Obligation Direct County School Special

Year Rate Debt Service Rate County Fire Cities Districts Districts Total

11-12 $1.00 $0.7325 $1.7325 16.12 7.07 13.44 59.78 3.59 100%

12-13 $1.00 $0.7891 $1.7891 16.24 7.17 12.90 60.11 3.58 100%

13-14 $1.00 $0.6784 $1.6784 16.39 7.25 12.42 60.36 3.58 100%

14-15 $1.00 $0.6930 $1.6930 16.41 7.20 12.79 60.05 3.55 100%

15-16 $1.00 $0.8178 $1.8178 16.45 7.19 12.70 60.08 3.58 100%

16-17 $1.00 $0.8195 $1.8195 16.45 7.27 12.66 60.07 3.55 100%

17-18 $1.00 $0.7363 $1.7363 16.43 7.25 12.80 59.99 3.53 100%

18-19 $1.00 $0.7429 $1.7429 16.38 7.21 13.03 59.85 3.53 100%

19-20 $1.00 $0.8505 $1.8505 16.36 7.17 13.05 59.84 3.58 100%

20-21 $1.00 $0.7845 $1.7845 16.75 7.15 13.14 59.40 3.56 100%

Notes: The basic property tax rate may be increased only by a majority vote of the residents.

Rates for debt service are set based on each year's requirements.

Property Tax Rate Among Overlapping Governments

COUNTY OF MERCED

DIRECT AND OVERLAPPING PROPERTY TAX RATES


145

Percentage Percentage

of Total of Total

Type of County County

Taxpayer Business Rank Tax Levey Rank Tax Levee

Pacific Gas and Electric Company Utility $ 9,696,729 1 2.92% $ 4,440,824 1 2.24%

Gallo Winery E & J Agricultural 5,334,821 2 1.60% 1,451,599 3 0.73%

Foster Poultry Farms Agricultural 2,816,620 3 0.85% 897,403 5 0.45%

Liberty Packing Co., LLC Agricultural 2,073,129 4 0.62% 1,553,074 2 0.78%

Fresno Farming LLC Agricultural 1,739,749 5 0.52%

Pacific Bell Utility 1,268,620 6 0.38% 779,812 6 0.39%

HCC Properties LTD A Partnership Commercial 1,066,741 7 0.32%

Gallo Vineyards, Inc. Agricultural 1,040,175 8 0.31% 562,042 8 0.28%

Dole Packaged Foods LLC Agricultural 982,864 9 0.30%

Ingomar Packing Company LLC Agricultural 903,549 10 0.27% 606,832 7 0.31%

World Color LLC Industrial 1,069,475 4 0.54%

Morning Star Packing Co LP Agricultural 544,688 9 0.27%

Morning Star Foods LLC Agricultural 460,284 10 0.23%

$ 26,922,997 8.09% $ 12,366,033 6.22%

Source: Auditor's Property Tax Roll

Property

Taxes

Levied

Property

Taxes

Levied

2021 2012

COUNTY OF MERCED

PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

146

Taxes Levied Collections

Fiscal for the Percentage in Subsequent

Year Fiscal Year Amount of Levy Years *

11-12 $ 198,111,579 $ 189,557,824 95.68% $ 8,553,755

12-13 199,494,595 192,427,553 96.46% 7,067,042

13-14 208,534,218 202,790,500 97.25% 5,743,718

14-15 228,111,696 223,315,970 97.90% 4,145,726

15-16 244,989,151 239,650,497 97.82% 5,338,654

16-17 260,555,235 254,898,812 97.83% 5,656,422

17-18 275,594,654 269,607,038 97.83% 5,987,616

18-19 286,704,177 280,207,731 97.73% 6,496,446

19-20 313,228,855 305,805,760 97.63% 7,423,095

20-21 332,459,038 325,680,476 97.96% 6,778,562

* Collections in subsequent years are the uncollected amounts for that one year

that will be collected in subsequent years.

Delinquent collections by year of levy are not available.

Source: Merced County Auditor-Controller

COUNTY OF MERCED

PROPERTY TAX LEVIES AND COLLECTIONS


Collected Within the

Fiscal Year of the Levy

147

of 2

2012 2013 2014 2015 2016


Pension Obligation Bonds $ 35,780,000 $ 30,230,000 $ 23,935,000 $ 16,825,000 $ 8,835,000

Tobacco Settlement Asset- 36,629,835 34,929,727 34,851,619 34,897,511 34,833,403

Backed Bonds

Juvenile Justice 12,357,974 10,885,000 10,440,000 9,995,000 9,535,000

Courthouse Construction 8,205,987 7,880,932 7,545,877 7,199,178 6,840,767 Term Loans Payable

Dairy Loan Program 6,923,342 6,095,581 5,246,299 4,374,935 3,480,916

Energy Retrofit Loan 191,144 - - - -

Energy Retrofit Loan II - - - - -

PG & E Retrofit Loan - - - - -

Solar Array Project - - - - -

Mental Health Facility Bond - - - - -

Capital Lease Obligations 277,184 258,954 193,231 115,171 165,715

Total governmental activities 100,365,466 90,280,194 82,212,026 73,406,795 63,690,801

Business-Type Activities

Capital Lease Obligations - - 57,663 46,430 34,844

Total business-type activities - - 57,663 46,430 34,844

Total Primary Government $ 100,365,466 $ 90,280,194 $ 82,269,689 $ 73,453,225 $ 63,725,645

Percentage of Personal Income 1.42% 1.12% 0.97% 0.82% 0.65%

Per Capita 388 344 311 276 235

COUNTY OF MERCED

RATIOS OF OUTSTANDING DEBT BY TYPE


Fiscal Year Ended June 30,

148


Pension Obligation Bonds

Tobacco Settlement Asset-

Backed Bonds

Juvenile Justice

Courthouse ConstructionTerm Loans Payable

Dairy Loan Program

Energy Retrofit Loan

Energy Retrofit Loan II

PG & E Retrofit Loan

Solar Array Project

Mental Health Facility Bond

Capital Lease Obligations

Total governmental activities

Business-Type Activities

Capital Lease Obligations

Total business-type activities

Total Primary Government

Percentage of Personal Income

Per Capita

Page 2 of 2

2017 2018 2019 2020 2021

$ - $ - $ - $ - $ -

34,359,295 31,965,187 32,001,079 29,856,971 34,500,000

9,060,000 8,570,000 8,065,000 7,535,000 6,985,000

6,470,712 6,085,657 5,684,398 5,270,547 4,835,492

2,563,652 1,622,539 656,958 - -

- - - - -

4,525,046 4,317,986 4,104,611 3,884,728 3,658,138

- - 338,455 231,575 124,694

6,681,414 6,370,434 6,075,317 5,776,081 5,472,669

7,840,000 7,375,000 6,895,000 6,400,000 5,895,000

115,090 137,046 572,790 516,396 424,358

71,615,209 66,443,849 64,393,608 59,471,298 61,895,351

22,894 10,568 - - -

22,894 10,568 - - -

$ 71,638,103 $ 66,454,417 $ 64,393,608 $ 59,471,298 $ 61,895,351

0.71% 0.61% 0.59% 0.51% 0.49%

261 237 228 210 217

COUNTY OF MERCED

RATIOS OF OUTSTANDING DEBT BY TYPE


Fiscal Year Ended June 30,

149

ASSESSED VALUATION $ 68,910,104,957

Percentage Estimated Share

Net Bonded Debt Applicable of Direct and

Overlapping Tax and Assessment Debt Outstanding to Merced County Overlapping Debt

Atwater Elementary School $ 17,289,326 100.00% $ 17,289,326

Ballico/Cressey School District 4,585,000 100.00% 4,585,000

Gustine Unified School District 12,570,000 100.00% 12,570,000

Planada Elementary School District 3,789,939 100.00% 3,789,939

Delhi Unified School District 16,508,528 100.00% 16,508,528

Dos Palos Oro Loma Joint Unified 1,044,204 56.53% 590,289

El Nido Elementary 3,400,000 100.00% 3,400,000

Le Grand Union High School 5,057,411 100.00% 5,057,411

Livingston School District 7,340,000 100.00% 7,340,000

Los Banos Unified School District 64,768,713 100.00% 64,768,713

Merced Union High School District 135,775,308 100.00% 135,775,308

Merced River Elementary School District 1,735,000 100.00% 1,735,000

Merced City School District 55,609,043 100.00% 55,609,043

Weaver Union Elem School District 20,403,127 100.00% 20,403,127

Hilmar Unified School District 5,340,531 100.00% 5,340,531

Merced Community College SFID #1 27,195,000 89.75% 24,407,513

Merced Community College SFID #2 5,775,000 96.69% 5,583,848

TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 388,186,130 $ 384,753,576

Net Bonded Debt Percentage Applicable

Direct and Overlapping General Fund Obligation Debt Outstanding to Merced County

Merced County 1915 Act Bonds $ 3,440,000 100.00% $ 3,440,000

TOTAL DIRECT AND OVERLAPPING

GENERAL FUND OBLIGATION DEBT $ 3,440,000

GROSS COMBINED TOTAL DEBT $ 388,193,576

RATIO OF 2020-2021 ASSESSED VALUATION

TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 0.5633%

RATIO TO ADJUSTED ASSESSED VALUATION

GROSS COMBINED TOTAL DEBT 0.5633%

Notes:

(1) Excludes tax and revenue anticipation notes

(2) Debt as of June 30, 2021

Source: Merced County Auditor-Controller

COUNTY OF MERCED

SCHEDULE OF DIRECT AND OVERLAPPING DEBT

FISCAL YEAR 2020-21

150

Assessed Legal Debt Debt Applicable Legal Debt Legal Debt

Fiscal Year Value Limit To Limit Margin Margin/Debt Limit

2011-2012 $ 37,038,259,982 $ 491,802,461 $ 212,149,884 $ 279,652,577 57%

2012-2013 37,348,473,776 506,251,090 205,077,402 301,173,688 59%

2013-2014 39,826,625,471 541,768,427 215,382,185 326,386,242 60%

2014-2015 43,613,054,978 591,228,255 237,830,649 353,397,606 60%

2015-2016 48,370,252,730 649,826,335 273,161,404 376,664,931 58%

2016-2017 51,211,572,929 658,093,289 317,081,437 341,011,852 52%

2017-2018 57,523,164,743 797,188,341 298,192,296 498,996,045 63%

2018-2019 61,670,816,729 817,109,716 357,816,402 459,293,314 56%

2019-2020 65,321,122,220 875,414,085 367,670,352 507,743,733 58%

2020-2021 68,910,104,957 920,853,999 388,186,130 532,667,869 58%

Notes:

(1) Reliable data is available only for the last ten fiscal years.

(2) Assessed Value does not include tax exempt property. Property value data can be found in the

"Assessed Value of Taxable Property" schedule.

(3) The legal debt limit is 1.25% or 2.5% of Full Cash Value.

(4) The legal debt margin is the County's available borrowing authority under State finance

statutes and is calculated by subtracting the debt applicable to the legal debt from

the legal debt limit.

Sources: Merced County Auditor-Controller

COUNTY OF MERCED, CALIFORNIA

COMPUTATION OF LEGAL DEBT MARGIN


151

School Unemployment

Year Population Enrollment Rate *

2012 258,736 $ 7,070,996 $ 27,329 56,158 17.7%

2013 262,478 8,039,701 30,630 56,349 14.1%

2014 264,922 8,460,284 31,935 56,461 12.2%

2015 266,134 9,012,628 33,865 57,011 10.4%

2016 271,579 9,827,086 36,185 57,477 10.4%

2017 274,665 10,108,771 36,804 58,271 9.3%

2018 279,977 10,839,590 38,716 58,812 8.6%

2019 282,928 10,898,104 38,519 59,161 8.1%

2020 283,521 11,646,192 41,077 59,531 15.6%

2021 284,795 12,506,488 43,914 58,665 10.8%

Sources:

* Based on most recent data available and prior years restated for updates.

COUNTY OF MERCED

DEMOGRAPHIC AND ECONOMIC STATISTICS


PerPersonal

Income

Population information is obtained from the State Department of Finance. Per capita income

information is obtained from the U.S. Department of Commerce - Bureau of Economic Analysis.

School enrollment data is obtained from the State Department of Education. Unemployment rate

figures were obtained from the Labor Market Information Division of the State Employment

Development Department.

Capita

Personal

Income *

(thousands

of dollars)

152

2012

Percentage Percentage

of Total of Total

County County

Employer Employees Rank Employment Employees Rank Employment

UC Merced 2,251 1 1.93% 1,607 3 1.80%

County of Merced 2,087 2 1.79% 1,748 2 1.96%

Foster Farm Inc. 1,992 3 1.71% 3,844 1 4.31%

Mercy Medical Center 1,346 4 1.16% 1,300 5 1.46%

Merced County Office of Education 1,287 5 1.11% 1,300 4 1.46%

Merced City School District 1,266 6 1.09% 1,052 6 1.18%

Merced Union High School District 994 7 0.85% 817 9 0.92%

Merced College 802 8 0.69% 971 8 1.09%

Dole Packaged Foods LLC 751 9 0.65% 987 7 1.11%

Liberty Packing Company LLC 650 10 0.56%

Hilmar Cheese Company Inc. 700 10 0.78%

13,426 11.54% 14,326 16.07%

Sources: State Employment Development Department

2021

COUNTY OF MERCED

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO

153

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

General government

Legislative and administrative 18 18 19 19 19 20 21 21 22 22

Finance 96 94 92 92 83 90 92 92 92 88

Counsel 13 13 13 13 13 13 16 16 16 16

Personnel 9 8 8 9 9 10 10 10 14 14

Elections 6 6 6 6 6 7 7 8 8 9

Property management 14 14 15 15 15 15 15 16 17 17

Promotion 10 9 9 9 8 8 8 8 8 7

Other general 18 18 17 17 17 18 20 22 22 18

Public protection

Judicial 86 84 85 85 84 98 106 106 106 105

Police protection 134 141 140 141 146 147 148 146 146 141

Detention and correction 216 237 241 252 259 269 278 279 281 280

Fire protection 6 6 7 7 7 8 8 8 8 8

Protective inspection 38 37 36 38 37 38 39 30 30 29

Other protection 43 43 44 44 45 46 44 40 39 39

Public ways and facilities 64 65 66 63 63 57 58 58 58 63


Health 116 117 121 121 127 129 132 131 134 143

Mental health 157 192 198 224 239 248 264 275 293 299

Hospital care 10 10 2 1 0 0 0 0 0 0

Public assistance

Administration 559 559 601 596 650 688 708 714 719 663

Other assistance 32 38 37 36 36 30 31 31 32 19

Education

Library services 24 22 21 22 21 21 24 24 24 24

Agricultural extension 3 3 3 3 3 3 4 4 4 4

Recreation and cultural services 13 14 14 14 14 15 16 16 16 16

Internal service departments

Fleet service management 7 6 6 6 6 7 7 6 6 6

Administrative services 43 41 41 40 40 42 44 44 45 48

Enterprise fund departments

Castle airport development 13 13 11 9 9 9 9 9 9 9

Total 1,748 1,808 1,853 1,882 1,956 2,036 2,109 2,114 2,149 2,087

Source: County Budget Book

Function/Program

COUNTY OF MERCED

COUNTY EMPLOYEES BY FUNCTION


Full-time Equivalent Employees as of June 30,

154

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

General government

Legislative and administrative

Elections

Registered voters 92,759 95,362 95,453 85,979 95,270 90,556 96,056 101,762 116,137 122,494

Public protection

Judicial

Referrals/reviews 11,234 7,106 10,497 9,605 9,366 9,752 10,544 11,959 11,229 9,693

Felony filings 2,799 2,550 2,853 2,059 1,746 1,765 1,561 1,572 1,607 1,703

Misdemeanor filings 4,132 3,701 4,662 4,317 5,772 4,914 6,518 6,672 6,018 5,077

Juvenile filings 1,154 745 387 303 287 262 241 261 217 162

Police protection

Calls for service 42,004 42,055 40,102 42,209 51,145 57,949 66,061 68,848 64,627 56,450

Arrests 1,879 1,997 1,908 1,925 2,079 2,609 2,835 3,013 2,531 3,842

Citations 639 664 727 805 667 1,471 1,571 2,048 1,704 1,660

Detention and correction

Bookings 10,798 10,179 9,826 9,665 9,215 9,113 8,981 8,860 7,241 5,467

Fire protection

Total number of incidents 8,538 12,097 11,559 13,153 13,294 15,221 16,835 15,892 12,205 13,563


Centerline miles of road maintained 1,761 1,756 1,756 1,756 1,756 1,754 1,766 1,761 1,756 1,754


Health

TB clinic visits 2,837 3,480 3,375 2,111 2,627 2,366 2,286 2,291 1,916 693

Flu immunization 2,002 1,748 1,915 2,289 2,048 2,056 793 748 453 246

Mental health

IMD (Institution Mental Disease) bed days 1,909 1,330 3,036 17,015 18,242 17,971 17,511 17,296 25,564 18,149

Acute inpatient days 2,118 2,162 2,462 3,818 4,084 4,038 3,778 4,299 4,668 3,542

Public assistance

Administration

CalWorks cases 8,298 8,236 8,192 8,180 7,691 7,047 6,741 6,306 6,093 5,470

Food Stamps cases 21,850 22,987 23,650 25,013 25,386 24,243 23,510 22,789 19,990 18,762

Medi-Cal cases 28,086 29,244 33,632 52,815 54,456 55,681 54,729 53,608 54,303 58,393

Child Welfare/Foster Care/AAP cases 2,844 3,024 3,138 2,919 2,529 3,154 3,175 3,166 3,153 3,120

IHSS/Adult Services 3,141 2,700 2,560 2,991 3,186 3,235 3,397 3,531 3,821 5,564

Education

Library services

Volumes in collection 336,131 340,668 328,545 312,235 283,964 273,551 256,816 232,687 226,106 225,256

Library materials borrowed 274,841 264,427 239,159 228,594 226,943 270,797 238,475 247,301 187,349 88,812

Registered library borrowers 45,668 45,800 44,793 42,608 40,816 38,543 35,864 36,801 35,197 30,086


County park maintenance (acres) 228 229 229 229 229 225 225 225 225 225


Castle airport development

Based aricraft 69 73 71 79 73 73 64 84 68 71

Aircraft flight operations 67,756 96,710 108,911 101,349 67,825 35,413 20,794 49,366 51,733 10,737

Source: County Budget Book and various County Departments

Function

COUNTY OF MERCED

OPERATING INDICATORS BY FUNCTION


155

Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

General government

Administration Building

Legislative and administrative 1 1 1 1 1 1 1 1 1 1

Public protection

Judicial

District Attorney facilities 2 2 2 2 2 2 3 3 3 2

Police protection

Stations 3 3 3 3 3 3 3 3 3 3

Patrol Units 50 50 50 50 50 50 44 45 45 45

Detention and correction

Correction facility capacities

Main facility 189 189 189 189 189 189 189 189 189 189

Sandy Mush facility 564 564 564 564 564 564 564 564 564 564

Juvenile Hall facility 120 120 120 120 120 120 120 120 120 120

Fire protection

Number of County fire stations 20 20 20 20 20 20 20 20 20 20


Centerline miles of County roads 1,761 1,756 1,756 1,756 1,756 1,754 1,766 1,761 1,756 1,754

Pavement miles of County roads 1,601 1,601 1,601 1,601 1,593 1,591 1,603 1,598 1,595 1,593

Bridges 404 404 404 404 404 404 401 401 401 401


Health

Public Health service locations 4 4 4 4 4 4 4 4 4 4

Other Health service locations 1 1 1 1 1 0 0 0 0 0

Source: County Budget Book and various County departments

COUNTY OF MERCED

CAPITAL ASSETS STATISTICS BY FUNCTION


156 (continued)

Function (continued) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Mental health

Mental health treatment facilities 6 6 6 6 6 6 5 5 5 5

Alcohol & Drugs treatment facilities 4 4 4 4 4 4 4 4 4 4

Hospital care

Lease out facility 0 0 0 0 0 0 0 0 0 0

Public assistance

Administration

Public assistance service locations 10 10 10 10 8 8 8 6 6 9

Other assistance

Service locations 1 1 1 1 1 1 1 3 3 3

Education

Library services

Number of County libraries 16 16 12 13 13 13 13 13 13 13


Number of County parks 19 19 19 19 19 19 19 19 19 19

County park (acres) 228 229 229 229 229 225 225 225 225 225


Castle airport development

Number of runways 1 1 1 1 1 1 1 1 1 1

COUNTY OF MERCED

CAPITAL ASSETS STATISTICS BY FUNCTION


157

FINANCIAL REPORT - Merced County

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