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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2024
<br />NOTE 8 – LONG-TERM DEBT (Continued)
<br />CEC Loan
<br />On January 28, 2022, the City entered into a direct borrowing loan agreement with the California Energy
<br />Commission (CEC) in the total principal amount of $1,284,140, for the purpose of financing various
<br />energy savings projects. The loan will bear interest at 1.0%. As of June 30, 2024, the City has not drawn
<br />down or received any funds.
<br />B.Long-Term Debt of Business-Type and Proprietary Funds
<br />Summary of changes in long-term debt of business-type and proprietary funds for the year ended June 30,
<br />2024:
<br />Due Due in
<br />Balance Balance Within more than
<br />Direct Borrowings June 30, 2023 Retirements June 30, 2024 one year one year
<br />State Water Resources Control Board 30,181,703$ (1,981,140)$ 28,200,563$ 2,032,650$ 26,167,913$
<br />Marina Notes 88,860 (20,770)68,090 21,705 46,385
<br />Climatec Lease 6,733,617 (458,993) 6,274,624 468,123 5,806,501
<br />Total 37,004,180$ (2,460,903)$ 34,543,277$ 2,522,478$ 32,020,799$
<br />State Water Resources Control Board
<br />On August 4, 2011, the City entered into a direct borrowing Finance Agreement with the State Water
<br />Resources Control Board in the total principal amount of $43,000,000, for the purpose of financing the
<br />Wastewater System Expansion and Improvement Project. The loan bears an interest rate of 2.6%.
<br />Principal and interest payments are payable annually on July 1. The debt is secured by the WPCP
<br />Enterprise Fund operating revenues. The project was completed in fiscal year 2016-17.
<br />Pursuant to the agreement, the City is expected to obtain net revenues of the Water system to be equal to
<br />at least 1.20 times the total annual debt service in such fiscal year. In fiscal year 2023-24, net revenues
<br />amounted to $5,341,234 which represented coverage of 159% under the $3,358,790 in debt service.
<br />Future debt service is expected to average $3 million per year through fiscal year 2035-36 for a total of
<br />$41.5 million. The City is authorized under Prop 218 to increase up to 9.5% and in fiscal year 2023, the
<br />City requested a 7% increase. The City will evaluate its current financial situation and might propose
<br />another hike to meet the coverage expectation. Cash and investments are sufficient to meet any debt
<br />service requirement, until rates increased.
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