Brentwood City Council
December 10, 2024

8 2023/24 Annual Comprehensive Financial Report
Letter of Transmittal
On the expenditure side, City operational and infrastructure costs have increased significantly over the past several years, and while inflation appears to have abated, the higher cost structure is likely to persist.

The City is also facing longer-term labor cost uncertainty due to the June 30, 2024 expiration of Memoranda of Understanding with all of the City’s labor bargaining units. One successor contract has thus far been approved, with negotiations continuing with the unsettled bargaining groups. Increased costs are likely to be incurred once the successor contracts are approved.

The City also expects significant intermediate-term pension cost increases as California Public Employees’ Retirement System (CalPERS) requires increasing annual payments to be made to against the City’s unfunded pension obligation in addition to the amounts being paid for current benefit accruals. These cost increases would have a greater impact on the fiscal health of the City, if not for the current and historical proactive approach to actively paying down unfunded pension and retiree medical liabilities.

During FY 2018/19, the City Council approved a policy providing for annual pay downs of pension or retiree medical unfunded liabilities when certain levels of excess reserves are available. In the last six fiscal years, the City has made pension prepayments of $23.8 million against the City’s net pension liability, which will help mitigate the impacts of increases in funding requirements following CalPERS investment losses. Additionally, the City has taken steps to address funding required for retiree medical liabilities by making significant pre-funding contributions on an annual basis.

The City’s Water, Wastewater and Solid Waste Enterprise Funds were impacted by significant account delinquencies resulting from restrictions on collection-related service interruptions during the pandemic.

Delinquency rates, however, have returned to pre-pandemic levels and all three of the City’s enterprise funds met the 30% cash reserve policy goal in FY 2023/24. Going forward the City anticipates higher costs as a result of inflationary pressures and increasingly stringent operating requirements from the State of California.

During FY 2022/23, a five-year rate study was approved by City Council that set rates for Water, Wastewater and Solid Waste services through FY 2027/28. The rate studies incorporated updated assumptions to account for new organics regulations affecting both the Solid Waste and Wastewater Enterprises. All three studies included updated assumptions to account for changes in operating costs and capital outlay requirements. The rate study took effect July 1, 2023, with the most recent rate adjustment implemented as of July 1, 2024.

The City’s Strategic Plan continues to focus on economic development strategies to attract future sources of sales tax revenue and employment opportunities for the community. The Innovation Center @ Brentwood Infrastructure project will construct various infrastructure improvements within the project area including roadways, wet utilities and land acquisition, in order to ready this area for development.

The City envisions this location emerging as one of the primary future employment centers, offering individuals and businesses access and opportunities to create high-quality jobs across a diverse array of industries.

Although the City’s forecasts indicate that it can maintain its strong financial position, caution is warranted as fiscal conditions are evolving and more challenging conditions could be experienced in the future. The City continues to remain vigilant in maintaining its fiscal strength. As required by policy, the City has maintained an unassigned General Fund balance of at least 30% of the annual operating expenditures as a hedge against this economic uncertainty.

9 2023/24 Annual Comprehensive Financial Report
Letter of Transmittal
Balanced Budget
The City’s Budget and Fiscal Policy requires the City to maintain a balanced General Fund budget over the two-year Operating Budget period. Each fiscal year, current revenues must meet or exceed operating expenditures, including debt service. Use of fund balance commitments to offset non-operating expenditures may allow for current expenditures to exceed current revenues in a fiscal year. Pursuant to Council policy, City staff will present a General Fund budget for City Council consideration that maintains 30% of the annual operating appropriations and transfers in the unassigned fund balance. The City will also strive to maintain cash reserves in the Enterprise Funds of 30% of annual operating appropriations and transfers.

Long-Term Financial Planning
To help ensure the City remains financially healthy in the future, a General Fund Fiscal Model (“Fiscal Model”) is prepared as part of the Operating Budget process. The Fiscal Model provides detailed analysis and projections of the next ten years of revenues, expenses and fund balance of the General Fund. The Fiscal Model provides the City Council with a tool to help determine the financial feasibility of priorities and goals they may wish to adopt through the Strategic Planning process. The Fiscal Model can also alert management and the City Council of potential future financial changes and affords the time to develop practical solutions with minimal impacts to the services provided to the residents of Brentwood.

The Fiscal Model projects the City will achieve a balanced General Fund budget for each year of the model, although transfers in from the Pension/Other Post-Employment Benefits (OPEB) Obligation Fund are likely to be necessary. The Pension/OPEB Obligation Fund is comprised of accumulated General Fund savings from previous fiscal years and can be used for budget stabilization purposes, offsetting increasing pension and retiree medical costs in future years, and for Pension/OPEB prefunding purposes. Use of the fund allows the City to meet the goal of maintaining 30% of the annual operating appropriations and transfers in the General Fund’s unassigned fund balance throughout the ten-year period. Over the longer-term, the City is projecting pension and retiree medical costs to ease, reducing or eliminating the need for Pension/OPEB Obligation Fund transfers to balance the budget.

Along with the Fiscal Model, the City internally prepares ten-year projections for the Solid Waste, Water and Wastewater Enterprises. These projections serve a similar purpose as the Fiscal Model in providing tools for City staff to analyze the health of the Enterprises and identify potential future economic changes allowing sufficient time to develop solutions. Rate studies are conducted periodically to ensure the Enterprise rates are sufficient to cover: operating expenses; capital improvements; upgrades and costs associated with meeting both State and Federal guidelines and regulations. The ten-year projections provide the essential support needed to complete these rate studies.

Strategic Planning
The City of Brentwood Strategic Plan FY 2022/23 - FY 2023/24 (“Strategic Plan”), adopted in February 2022, is the most recent Strategic Plan and includes numerous initiatives and capital projects in support of the Council’s vision for the future of the City. The 2024/25 – 2025/26 Operating Budget includes the funding and appropriations necessary to complete several carryover initiatives from the Strategic Plan, including the Sand Creek Sports Complex and the Innovation Center @ Brentwood Infrastructure project with the goal of bringing a significant number of jobs to the City.

The Strategic Plan focuses on the City’s economic development, land use, infrastructure and parks and recreation programs and facilities. Through strong business growth and thoughtful land use and

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Letter of Transmittal
planning, the City will ensure that the quality of life enjoyed by Brentwood residents today will be enjoyed by future generations.

CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

ACKNOWLEDGEMENTS
A great deal of effort and attention to detail, representing many hours of work by staff members throughout the organization, is required to produce a report of this quality. We would like to express our appreciation to all of the City Departments who participated in the development of this year’s Annual Comprehensive Financial Report. Special recognition is given to the Finance and Information Systems Department and specifically the Business Services and Financial Services staff. We wish to thank and express our appreciation to the Mayor and the City Council for providing the policy direction used to prepare this Annual Comprehensive Financial Report and for their interest and support in planning and conducting the financial activities of the City in a responsible manner.

Respectfully submitted,

Tim Ogden Kerry Breen
City Manager City Treasurer
Director of Finance & Information Systems

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City Council as of June 30, 2024
Joel Bryant.............................................................................................................................................................. Mayor Susannah Meyer ........................................................................................................................................ Vice Mayor Jovita Mendoza ............................................................................................................................... Council Member Tony Oerlemans ............................................................................................................................ Council Member Pa’tanisha Pierson .......................................................................................................................... Council Member Executive Team as of June 30, 2024
Tim Ogden ............................................................................................................................................... City Manager Katherine Wisinski ................................................................................................................................. City Attorney Allen Baquilar ......................................................................................... Director of Engineering/City Engineer Sukari Beshears ........................................................................ Director of Human Resources/Risk Manager Kerry Breen ................................................. City Treasurer/Director of Finance and Information Systems Darin Gale ............................................................................................................................ Assistant City Manager Tim Herbert ........................................................................................................................................... Chief of Police Alexis Morris ............................................................................................ Director of Community Development Bruce Mulder ................................................................................................... Director of Parks and Recreation Casey Wichert ...................................................................................................................Director of Public Works

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City Organizational Chart

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Mission Statement
Bringing Brentwood’s Vision to Reality
Vision and Culture
We are an organization of dedicated professionals working together to make Brentwood the very best, preserving its rich heritage and keeping Brentwood in the hearts of the people.

CORE VALUES
Integrity
Passion
Accountability
Respect
Quality

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Awards
The City prides itself on providing quality services to the community. Following is a list of awards acknowledging these achievements in quality.

The City was recognized by the Arbor Day Foundation as a “Tree City USA Community” for 2023.

The City received the following 2023 Best of Brentwood Awards from ThePress.net:
 Place for Family Fun – Brentwood Family Aquatic Complex (Gold) and City Park (Bronze)
 Event Center – Brentwood Community Center (Gold) and Brentwood Senior Activity Center (Bronze)
 Family Community Event – Concerts in the Park (Bronze)  Place for Live Music – Concerts in the Park (Silver)
 Favorite Park – Creekside Park (Gold), Veterans Park (Silver) and City Park (Bronze)
The City received the following 2023 California Park and Recreation Society District 3 Awards:
 Outstanding Non-Profit Organization Partner – City of Brentwood and East Contra Costa Historical Society
 Outstanding Recreation Program or Outstanding Special Event – 75th Birthday Party
The City received the GFOA award for the following:
 “Certificate of Achievement for Excellence in Financial Reporting Fiscal Year 2022/23”
 “Distinguished Budget Presentation Award” for the two-year Operating Budget beginning July 1, 2022
The City received the CSMFO award for the following:
 “Capital Budget Excellence Award
Fiscal Year 2023/24”
 “Operating Budget Excellence Award
Fiscal Years 2022/23 & 2023/24”

INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and City Council
City of Brentwood, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Brentwood, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other required supplementary information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 18

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 21, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California
November 21, 2024
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20 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
This discussion and analysis of the City of Brentwood’s financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2024. Please read it in conjunction with the Letter of Transmittal, the Basic Financial Statements and the accompanying Notes to the Basic Financial Statements.

FINANCIAL HIGHLIGHTS
 The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $1,007.5 million. Of this amount, $141.8 million may be used to meet the City’s ongoing obligations to citizens and creditors.  The City’s total net position increased by $22.5 million in FY 2023/24, with an increase of $7.6 million attributable to governmental activities and an increase of $14.9 million attributable to businesstype activities.  The change in net position from governmental activities was due mainly to the following:
o An increase in net investment in capital assets of $7.6 million is comprised of additions and payments on related long-term liabilities totaling $23.9 million. This increase was offset by depreciation, amortization and disposals of $12.8 million; an increase in subscription liability of $1.1 million; and an increase of capital-related accounts payable of $2.4 million.

Total asset additions of $19.6 million included $1.6 million of development contributions. o An increase in net position of $1.5 million in the Landscape and Lighting Assessment Districts Special Revenue Fund from the accumulation of funds in support of future operational costs.
o A decrease in net position of $3.9 million in the accounts associated with pension obligations, comprised of an increase in Net Pension Liability of $3.9 million, offset by a decrease in Deferred Outflows Related to Pensions of $0.7 million and a decrease in Deferred Inflows Related to Pensions of $0.7 million.
 The change in net position for business-type activities was due mainly to the following:
o An increase in unrestricted net position of $16.4 million from user fee revenue exceeding expenditures in preparation of funding increased operational costs for new facilities and providing a source of funding for major future capital projects. o An increase in net investment in capital assets of $2.7 million. The increase in net investment was inclusive of asset additions of $21.5 million from large capital projects and contributions from development. This increase was offset by depreciation, amortization and disposals of $6.5 million; a decrease in State Water Resources (SWR) loan disbursements receivable of $4.4 million; a net increase in long-term liabilities related to capital assets of $4.3 million, consisting of an increase of $7.0 million in SWR Loans for Wastewater Fund capital projects, offset by $2.7 million in principal payments; and an increase of capital-related accounts payable of $3.3 million. o Decrease in net position restricted for capital projects of $4.2 million due to the funding of large business-type capital projects.
 At the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $135.4 million, a decrease of $5.5 million, or 3.9%, in comparison to the prior year balance.
 Enterprise Funds reported a net position of $384.7 million, an increase of $14.9 million, or 4.0%, from the prior fiscal year ending balance. The increase was primarily attributable to the Wastewater

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Management’s Discussion and Analysis
Fund ($6.8 million), Solid Waste Fund ($3.2 million) and Water Fund ($5.1 million) net position increases. These three Enterprise Funds had increases in operational income from rate adjustments.  The City’s total long-term obligations increased by $9.4 million from the prior fiscal year-end, mainly due to an increase in Net Pension Liability ($4.6 million), an increase in Net OPEB Liability ($5.8 million), a net increase in SWR loans for Wastewater Fund capital projects ($6.6 million), and a net increase in other long-term liabilities ($0.9 million). The increases were offset by other annual debt principal payments ($8.5 million).
 Internal Service Funds reported a net position of $78.4 million at year-end, which is an increase of $6.9 million from the prior year. This increase was attributable to amounts set aside for future replacement costs, increasing net position in the following funds: Vehicle and Equipment Replacement Fund, $1.4 million; Facilities Replacement Fund, $0.9 million; and Parks and Landscape and Lighting Assessment District (LLAD) Replacement Fund, $2.2 million. The Pension/OPEB Obligation Fund net position increased $1.2 million due to the transfer in of $2.7 million General Fund balance in excess of the required reserve of 30% of operating appropriations and transfers required by budget policy, offset by the funding of OPEB benefits and an additional discretionary payment against long-term pension liabilities. The additional discretionary payment made during the fiscal year was $3.1 million. Transfers in of $1.0 million from the Enterprise and Internal Service Funds were made in support of this additional discretionary payment.

OVERVIEW OF THE FINANCIAL STATEMENTS
The financial statements presented herein include all of the activities of the City and its component units using the blended approach as prescribed by government accounting standards. The City’s basic financial statements are comprised of three components: 1) Government-Wide Financial Statements, 2) Fund Financial Statements and 3) Notes to the Basic Financial Statements.

The Government-Wide Financial Statements present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting. They present governmental activities and business-type activities separately. These statements include all assets of the City, including infrastructure, as well as all liabilities, including long-term debt. Additionally, certain eliminations have occurred in regards to interfund activity, payables and receivables.

Most of the City’s basic services are reported in the Governmental Activities category including the General Government, Public Safety, Community Development, Engineering, Public Works, Community Services and Parks and Recreation. Property and sales taxes, user fees, interest income, franchise fees and state and federal grants finance these activities.

The City charges a fee to customers to cover all or most of the costs of certain services it provides. The City’s Wastewater, Solid Waste, Water, City Rentals and Housing activities are reported in the BusinessType Activities category.

The Statement of Net Position and the Statement of Activities and Changes in Net Position report information about the City as a whole. All of the current year’s revenues and expenses are taken into account, regardless of when cash is received or paid. In addition, these two statements report the City’s net position and changes in them. Over time, increases or decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. Other factors to consider are changes in the

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Management’s Discussion and Analysis
City’s property tax base and the condition of the City’s roads. The Government-Wide Financial Statements can be found on pages 35 – 36 of this report.

The Fund Financial Statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants or other money.

The City’s Fund Financial Statements are divided into three categories – Governmental Funds, Proprietary Funds and Fiduciary Funds. The Governmental Fund financials are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The Proprietary Fund financials are prepared using the economic resources measurement focus and the accrual basis of accounting. The City’s Fiduciary Funds include Custodial Funds, which have a measurement focus of operational results, Private-Purpose Trust Funds which, in addition to being custodial in nature, also include operational activities under which the principal and income benefit several specific local taxing entities, and an Other Employee Benefit Trust Fund - Variable Annuity Life Insurance Company (VALIC), which includes assets and activities of the City’s single-employer deferred compensation plan held by a third-party administrator. The Fund Financial Statements can be found on pages 37 – 45 of this report.

Most of the City’s basic services are reported in Governmental Funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. The Governmental Fund statements provide a detailed, short-term view of the City’s general government operations and the basic services it provides. Governmental Fund information helps determine whether there are more or fewer financial resources, which can be spent in the near future, to finance the City’s programs. The differences of results in the Governmental Fund Financial Statements, to those in the Government-Wide Financial Statements, are explained in a reconciliation following each Governmental Fund Financial Statement. The Governmental Fund Financial Statements can be found on pages 37 – 40 of this report.

When the City charges customers for services it provides, whether to outside customers or other units of the City, these monies are generally reported in Proprietary Funds. The City maintains two different types of Proprietary Funds – Enterprise Funds and Internal Service Funds. Enterprise Funds are used to report the same functions presented as business-type activities in the Government-Wide Financial Statements.

Examples of Enterprise Funds include the Water and Solid Waste Funds. Internal Service Funds are used to report activities, which provide supplies and services for the City’s other programs, and activities. Two examples are the Information Systems Replacement Fund and the Fleet Maintenance Services Fund. Internal Service Funds are reported with governmental activities in the Government-Wide Financial Statements, found on pages 35 – 36 of this report.

Proprietary Fund Financial Statements provide a more detailed version of the information provided in the Government-Wide Financial Statements. Cash flows for the Enterprise Funds and the Internal Service Funds are provided, as well as combining statements for the individual Internal Service Funds. The Proprietary Fund Financial Statements can be found on pages 41 – 43 of this report.

The City has monies held by trustees for certain amounts held on behalf of developers, property owners, governmental agencies, City employees and others. The City’s fiduciary activities are reported in a separate Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. These activities

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Management’s Discussion and Analysis
are excluded from the Government-Wide Financial Statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in the Fiduciary Funds are used for their intended purposes. The Fiduciary Fund Financial Statements can be found on pages 44 – 45 of this report.

The Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements. The Notes to the Basic Financial Statements can be found on pages 46 – 116 of this report.

In addition to the basic financial statements, and accompanying notes, this report also presents certain Required Supplementary Information concerning budgetary comparison schedules for the General Fund and other Major Funds and schedules related to the City’s net pension liability, net OPEB liability and contributions. Required Supplementary Information can be found on pages 117 – 125 of this report.

Combining and Individual Fund Statements and Schedules for the Non-Major Governmental Funds and Internal Service Funds can be found on pages 126 – 152 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
The net position for the City as a whole increased by $22.5 million, or 2.3%, from $985.0 million at June 30, 2023 to $1,007.5 million at June 30, 2024. The increase is summarized by the change in net position as recorded in the Statement of Activities, which flows through the Statement of Net Position. Net investment in capital assets and capacity rights increased $10.3 million to a balance of $717.4 million as of June 30, 2024. Although the City’s investment in capital assets and capacity rights is reported net of related debt, 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. Restricted net position of $148.2 million at June 30, 2024 decreased by $0.1 million from June 30, 2023, primarily due to a decrease in development-related restricted net position of $10.2 million. These funds are the source of funding for capital projects and use of the resources are subject to external restrictions. This decrease was offset by an increase of $8.3 million in amounts restricted for capital projects ($4.3 million) and the reclassification of the net position for the Citywide Park Assessment District from unrestricted to restricted ($4.0 million). The unrestricted net position balance of $141.8 million may be used to meet the City’s ongoing obligations to citizens and creditors.

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Management’s Discussion and Analysis
Governmental Activities
The City’s net position from governmental activities increased by $7.6 million, or 1.2%, from $615.1 million to $622.7 million. As discussed above, the increase in net position from governmental activities was due mainly to an increase in net investment in capital assets from spending on large capital projects and payments on capital project debt, and an increase in balances in the LLAD Special Revenue Fund for the accumulation of funds in support of future operating costs. These increases were offset by a decrease in net position from the balances associated with pension obligations.

The City issued 57 single-family building permits during the fiscal year. In comparing results to the prior year, the City received $0.5 million, or 2.7%, more in property taxes, reflective of annual taxable value increases and a more moderate level of property sales. Sales tax revenue decreased $29,000, or 0.3%, from the prior year. Sales tax revenue increases from the opening of new brick and mortar businesses was offset by a decline in revenue allocations for online sales from the County pool. Investment income was $6.9 million more than the prior year due to higher interest rates and a favorable fair market value adjustment.

Operating Grants and Contributions decreased by $5.5 million primarily due to a decrease of $6.9 million as one-time American Rescue Plan Act funding for Public Safety was realized in the prior year. Capital Grants and Contributions decreased by $3.4 million due to a $6.1 million decrease due primarily to reduced development-related contributions, offset by an increase of $2.7 million due to a contribution from the County for the Sand Creek Road Extension project.

Expenses increased by $3.5 million or 3.7% from the prior fiscal year. This increase was primarily due to an increase in Personnel costs from annual cost of living adjustments and benefit cost increases, in addition to increases in materials, supplies and services costs due to inflation.

Business-Type Activities
The City’s net position from Business-Type activities increased $14.9 million, or 4.0%. As discussed above, net investment in capital assets increased for capital asset additions from large capital projects and development contributions. This was offset by increases in related long-term liabilities for SWR loans used to fund major capital projects, net of payments on other related long-term debt, depreciation, amortization and disposals. Revenue from charges for services increased $3.4 million, or 5.5%, over the prior year, mainly 2024 2023 2024 2023 2024 2023
Current Assets 203,480,874 $ 199,409,399 $ 147,882,575 $ 141,460,743 $ 351,363,449 $ 340,870,142 $ Capital Assets 514,982,781 508,198,493 349,721,215 334,705,440 864,703,996 842,903,933 Other Non-Current Assets 18,126,052 19,393,684 747,338 771,314 18,873,390 20,164,998 Total Assets 727,001,576 736,589,707 498,351,128 476,937,497 1,234,940,835 1,203,939,073 Deferred Outflows of Resources 32,844,416 28,380,713 13,932,130 12,228,019 46,776,546 40,608,732 Total Deferred Outflows of Resources 28,380,713 32,844,416 13,932,130 12,228,019 46,776,546 40,608,732 Current Liabilities 18,790,169 15,040,318 11,938,729 10,050,754 30,728,898 25,091,072 Long-Term Liabilities Outstanding 118,903,670 115,878,342 113,401,285 107,044,208 232,304,955 222,922,550 Total Liabilities 130,918,660 137,693,839 125,340,014 117,094,962 263,033,853 248,013,622 Deferred Inflows of Resources 8,963,108 9,299,004 2,214,025 2,193,759 11,177,133 11,492,763 Total Deferred Inflows of Resources 9,299,004 8,963,108 2,214,025 2,193,759 11,177,133 11,492,763 Net Investment in Capital Assets
and Capacity Rights 458,294,923 450,695,117 259,130,097 256,399,994 717,425,020 707,095,111 Restricted 108,401,964 104,166,207 39,844,327 44,156,526 148,246,291 148,322,733 Unrestricted 56,080,289 60,303,301 85,754,795 69,320,275 141,835,084 129,623,576 Total Net Position $ 615,164,625 622,777,176 $ 384,729,219 $ 369,876,795 $ 1,007,506,395 $ 985,041,420 $ Governmental Activities Business-Type Activities Totals

25 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
due to annual utility rate increases in the Enterprise Funds. Investment income was $5.2 million more than the prior year from higher interest rates and a favorable fair market value adjustment. Expenses increased by $2.0 million, or 3.7%, from the prior fiscal year due to an increase in Personnel costs from annual cost of living adjustments and benefit costs, along with increases in materials, supplies and services costs due to inflation. Overall, the unrestricted net position was $85.8 million at the fiscal year-end.

2024 2023 2024 2023 2024 2023
Revenues:

Program Revenues:

Charges for Services 17,061,340 $ 16,649,594 $ 64,812,445 $ 61,433,270 $ 81,873,785 $ 78,082,864 $ Operating Grants and Contributions 28,903,481 34,425,385 431,354 239,312 29,334,835 34,664,697 Capital Grants and Contributions 8,474,201 11,875,300 1,944,270 3,609,350 10,418,471 15,484,650 General Revenues:

Taxes:

Property Taxes 20,169,793 19,631,984 - - 20,169,793 19,631,984 Sales Tax 11,162,609 11,191,139 - - 11,162,609 11,191,139 Franchise Fees 1,645,223 1,649,986 - - 1,645,223 1,649,986 Real Property Transfer Tax 460,558 464,723 - - 460,558 464,723 Transient Occupancy Tax 604,525 688,606 - - 604,525 688,606 Motor Vehicle Taxes 6,310,048 5,969,216 - - 6,310,048 5,969,216 Investment Earnings 8,806,561 1,887,705 6,367,600 1,174,233 15,174,161 3,061,938 Gain/Loss on Disposal of Real Property 196,343 267,927 - - 196,343 267,927 Miscellaneous 397,503 417,729 - - 397,503 417,729
Total Revenues 105,119,294 104,192,185 73,555,669 66,456,165 177,747,854 171,575,459 Expenses:

General Government 15,501,108 16,811,978 - - 15,501,108 16,811,978 Public Safety 32,577,720 31,823,344 - - 32,577,720 31,823,344 Community Development 6,715,451 6,142,789 - - 6,715,451 6,142,789 Engineering 3,762,120 3,314,324 - - 3,762,120 3,314,324 Public Works 9,410,141 8,734,183 - - 9,410,141 8,734,183 Parks and Recreation 18,967,380 17,326,837 - - 18,967,380 17,326,837 Community Services 8,967,495 8,161,482 - - 8,967,495 8,161,482 Interest on Long-Term Debt 1,717,740 1,828,523 - - 1,717,740 1,828,523 Wastewater - - 14,340,756 13,800,911 14,340,756 13,800,911 Solid Waste - - 16,125,176 14,670,911 16,125,176 14,670,911 Water - - 26,311,556 26,208,986 26,311,556 26,208,986
City Rentals - - - 102,045 - 102,045
Housing - - 886,236 845,819 886,236 845,819
Total Expenses 94,143,460 97,619,155 57,663,724 55,628,672 155,282,879 149,772,132 Change in Net Position Before Transfers 6,573,030 10,975,834 15,891,945 10,827,493 22,464,975 21,803,327 Transfers 1,039,521 (285,437) (1,039,521) 285,437 - -
Change in Net Position 7,612,551 10,690,397 14,852,424 11,112,930 22,464,975 21,803,327 Net Position 7/1 615,164,625 604,474,228 369,876,795 358,763,865 985,041,420 963,238,093 Net Position 6/30 622,777,176 $ 615,164,625 $ 384,729,219 $ 369,876,795 $ 1,007,506,395 $ 985,041,420 $ Governmental Activities Business-Type Activities Total Primary Government

26 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
Governmental Activities
The cost of all Governmental activities this year was $97.6 million. Net expenses, as shown in the Statement of Activities and Changes in Net Position found on page 36, were $43.2 million. A portion of the cost for these activities was paid either by those who directly benefited from the programs ($17.1 million), by other governments and organizations that subsidized certain programs with operating grants and contributions ($28.9 million), or capital grants and contributions ($8.4 million). Overall, the City’s governmental program revenues were $54.4 million.

Total resources available during the year to finance governmental operations were $720.3 million consisting of net position at July 1, 2023 of $615.1 million, program revenues of $54.4 million and general revenues and transfers of $50.8 million. Total governmental activities expenses during the year were $97.6 million, thus net position increased by $7.6 million to $622.7 million.

27 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
Business-Type Activities
The cost of all Business-Type activities this year was $57.7 million. As shown in the Statement of Activities and Changes in Net Position, found on page 36, the amounts paid by users of the services were $64.8 million. Capital grants and contributions totaled $1.9 million, operating grants and contributions were $0.4 million, and investment earnings were $6.4 million.

Total resources available during the year to finance Business-Type activities were $443.4 million, consisting of net position at July 1, 2023 of $369.9 million, charges for services of $64.8 million, contributions of $2.3 million, and investment earnings of $6.4 million. Total Business-Type activities and net transfers out during the year were $58.7 million, thus net position increased by $14.8 million to $384.7 million. (1) Revenues include contributions from development impact fees and developer dedicated infrastructure. (2) Loan principal payments are excluded from Wastewater and Water. (1)

28 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
The City’s General Fund had a year-end fund balance of $29.4 million, a decrease of $2.4 million compared to the prior year. The decrease in fund balance is after the effect of transfers to the Pension/OPEB Obligation fund of $2.7 million, representing the unassigned General Fund balance in excess of the 30% of annual operating appropriations and transfers out set by budget policy. Committed fund balance increased by $0.8 million due to a City Council action to increase funds committed for Future Capital Projects offset by the release of funds previously committed to Strategic Initiatives. The City’s two largest revenue sources, Property Tax and Sales Tax, increased 2.7% and decreased 0.3%, respectively, from the prior year. Property Tax revenues benefited from a 2% CPI increase on all classes of property which was combined with valuation increases from new development and the transfer of ownership of properties. Both property value increases and sales volumes slowed in comparison with the prior year. General Fund expenditures were up 6.5% from prior year due to personnel increases from annual cost of living and benefit cost increases, combined with inflationary increases in supplies and services.

The LLAD Fund, which is reported as a Special Revenue Fund, had an increase in fund balance of $1.5 million.

This increase was due to planned accumulation of funds in support of future operational costs.

The Roadway Improvements Fund, which is reported as a Capital Project Fund, had an increase in fund balance of $3.1 million. This increase was primarily due to project funding transfers in excess of expenditures for the Pavement Management Program and Lone Tree Way Roadway Improvements projects.

The Citywide Park Assessment District Fund, which is reported as a Special Revenue Fund, had an increase in fund balance of $0.9 million. This increase was due to assessment revenue, and transfers in from LLADs, exceeding expenditures to increase the reserve balance in the Fund.

The Roadway Development Impact Fee Fund, which is reported as a Special Revenue Fund, had a fund balance decrease of $9.2 million. This decrease was due to transfers out for funding of the Lone Tree Way Roadway Improvements and Sand Creek Road Extension projects.

The Parks and Trails Development Impact Fee Fund, which is reported as a Special Revenue Fund, had a fund balance decrease of $1.9 million. This decrease was primarily due to transfers out for funding of the Sand Creek Sports Complex project.

The Parks and Trails Improvements Fund, which is reported as a Capital Project Fund, had an increase in fund balance of $4.4 million. This increase was primarily due to transfers in funding the Sand Creek Sports Complex project.

The City Capital Improvement Financing Program Fund, which is reported as a Capital Project Fund, had a decrease in fund balance of $2.1 million due to transfers out for funding of the Sand Creek Sports Complex project.

The Wastewater Fund, which is reported as an Enterprise Fund, had an increase in net position of $6.8 million. This increase was due to increases in operational income from rate adjustments in anticipation of rising operational costs anticipated from the expansion of the treatment plant and from investment income of $3.0 million due to higher interest rates and a favorable fair market value adjustment.

29 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
The Solid Waste Fund, which is reported as an Enterprise Fund, had an increase in net position of $3.2 million. This increase was primarily due to increases in operational income from rate adjustments in anticipation of increasing costs arising from new organic waste disposal laws and from investment income of $0.9 million due to higher interest rates and a favorable fair market value adjustment.

The Water Fund, which is reported as an Enterprise Fund, had an increase in net position of $5.1 million.

This increase was primarily due to increases in operational income from rate adjustments in anticipation of rising operational costs of the water treatment plant, increases in conveyance costs, and from investment income of $2.2 million due to higher interest rates and a favorable fair market value adjustment.

GENERAL FUND BUDGETARY HIGHLIGHTS
Comparing the FY 2023/24 original budget (adopted June 2022) General Fund expenditures and transfers out in the amount of $74,057,008, to the final budget amount of $79,922,978, there was an increase in budgeted expenditures and transfers out of $5,865,970. The causes for these increases are summarized on the next page.

During the fiscal year, the total revenues, other financing sources and transfers in for the General Fund were $71,615,598, which was $742,971 more than budgeted. The total expenditures and transfers out for the General Fund were $73,989,939, which was $5,933,039 less than budgeted. The expenditures and transfer out figures include the year-end transfer of $2,667,652 to the Pension/OPEB Obligation Fund, which is the amount of General Fund resources above the 30% of operating appropriations and transfers reserve set by budget policy. From an operational standpoint, General Fund expenses and transfers out totaled $69,362,379, or $5,933,039 less than budgeted.

General Fund revenues and transfers exceeded budget by $0.7 million. This variance was a combination of a positive variance in Total Revenues of $1.4 million and a net unfavorable variance in Other Financing Sources of $0.7 million.

Total Revenues exceeded budget due to investment income and a positive year-end fair market value adjustment that was $1.0 million higher than expected; development revenue that was $0.5 million higher than budget due primarily to revenue from improvements to existing development; and citation and fine revenue $0.2 million higher than budget.

The Other Financing Sources unfavorable variance of $0.7 million was due to $1.8 million in expected transfers in to the General Fund that did not occur, mainly from the Pension/OPEB Obligation Fund ($1.4 million). The transfer in from the Pension/OPEB Fund was not required in the current fiscal year due to the $2.4 million General Fund surplus. This unfavorable variance was offset by $1.1 million of other financing revenue source for a material agreement recorded in accordance with the requirements of Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs).

On the expenditure side, operational costs were $5.9 million under budget, due mainly to personnel savings from increased vacancy rates. Supplies and services expenses were under budgetary pressure from supply chain issues and inflation, however the City continued to operate efficiently, reducing costs wherever possible resulting in some moderate budget savings.

30 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
Supplemental changes to the FY 2023/24 General Fund expenditures and transfers out budget were:
 Increase of $2,667,652 for transfers out to the Pension/OPEB Obligation fund for the unassigned General Fund balance in excess of the 30% of annual operating appropriations and transfers out set by budget policy
 Increase of $1,722,959 for project funding transfers to the Parks and Trails Improvements Capital Project Fund, primarily for the funding of the Sand Creek Sports Complex  A decrease in personnel costs of $1,096,176 due to lower than budgeted annual CalPERS lump sum payment, offset by an increase of $298,903 due to negotiated labor cost increases and authorization of additional staff
 Increase of $750,840 in Parks and Recreation expenditures for increases in program participation costs, utility costs and vehicle purchases budgeted in FY 2022/23, but not able to be procured  Increase of $698,822 for Strategic Initiative budgets carried over from fiscal year 2022/23  Decrease of $678,000 for project funding transfers to the Roadway Improvements Capital Project Fund
 Increase of $382,939 in Police Department and Dispatch for increased utility, insurance and contractual services costs and vehicle equipment purchases budgeted in FY 2022/23, but not able to be procured
 Increase of $270,531 in Public Works for contractual services, increased utility costs and vehicle purchases budgeted in FY 2022/23, but not able to be procured  Increase of $238,838 in transfers out for increased information systems and insurance costs  Increase of $200,000 in City Attorney Department costs for special counsel services  Increase of $129,202 in Community Development for contractual services  Increase of $100,557 in Human Resources Department for contractual and professional services and increase in diversity, equity and inclusion program costs  Increase of $96,470 in Non-Departmental costs for contractual services, increased utility costs and the City’s 75th Anniversary budget carried over from FY 2022/23  Increase of $93,938 in Community Services contributions for library information technology and increase utility costs and Family Justice Center payment timing, offset by a decrease of $41,505 for animal services
 Increase of $30,000 for project funding transfers to the Community Facilities Improvements Capital Project Fund

CAPITAL ASSETS AND LONG-TERM OBLIGATIONS
Capital Assets
The capital assets of the City are used in the performance of the City’s functions. At June 30, 2024, capital assets, net of accumulated amortization and depreciation, of the Governmental activities totaled $514.9 million. Capital assets, net of accumulated amortization and depreciation, of the Business-Type activities totaled $349.7 million. Depreciation and amortization on capital assets is recognized in the GovernmentWide financial statements. Refer to Note #5 of this report for detailed information regarding capital assets.

The City has elected to use the depreciation and amortization method for infrastructure reporting.

31 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
Long-Term Obligations
Debt, considered a liability of Governmental Activities, increased during the fiscal year by $3.3 million.

Included in this amount was an increase in net OPEB liability of $4.3 million, primarily due to actuarial changes in assumptions, and an increase in net pension liability of $3.9 million, primarily due to CalPERS’ lower than expected investment returns. Adding to the increase was a net increase in subscription liability of $0.8 million, resulting from the requirements of GASB Statement No. 96, SBITAs, and an increase in accumulated compensated absences of $0.2 million. These increases were offset by a $5.9 million decrease in outstanding bonds and notes payable from annual debt service payments. Debt, considered a liability of Business-Type Activities, increased by $6.5 million during the fiscal year. During the year, increases to notes payable totaled $7.0 million due to SWR loan draws for the Wastewater Treatment Plant Expansion – Phase II project. Additionally, net OPEB liability increased by $1.5 million and net pension liability increased by $0.7 million. This increase was offset by a $2.7 million decrease due to annual debt service payments on outstanding notes and bonds payable. Per capita debt outstanding (excluding pension, OPEB and accumulated compensated absences obligations) decreased from $2,230 to $2,367 compared to the prior fiscal year.

Detailed information regarding long-term obligation activity can be found in Note #6 in this report.

Accumulated
Original Depreciation Book
Cost and Amortization Value
Capital Assets – Governmental:

Intangible Assets $ 1,844,044 6,258,156 $ 4,414,112 $
Land 38,801,779 - 38,801,779
Buildings 72,197,665 17,097,820 55,099,845
Infrastructure 506,055,296 150,303,167 355,752,129
Machinery and Equipment 14,401,169 8,273,203 6,127,966
Vehicles 22,269,260 12,699,422 9,569,838
Land Improvements 35,801,124 9,981,852 25,819,272
Subscription Assets 1,134,501 113,450 1,021,051
Work in Progress – CIP and Infrastructure 18,376,789 - 18,376,789 Total Capital Assets – Governmental $ 200,312,958 715,295,739 $ 514,982,781 $ Capital Assets – Business-Type:

Intangible Assets $ 6,249,465 18,950,632 $ 12,701,167 $ Land 2,661,597 - 2,661,597
Buildings 30,763,464 10,693,861 20,069,603
Infrastructure 304,555,672 78,080,114 226,475,558
Machinery and Equipment 9,490,576 3,473,630 6,016,946
Land Improvements 11,046,659 4,158,460 6,888,199
Work in Progress – CIP and Infrastructure 74,908,145 - 74,908,145 Total Capital Assets – Business-Type $ 102,655,530 452,376,745 $ 349,721,215 $

32 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The key assumptions in the forecast of General Fund revenues for FY 2024/25 budget are as follows:
 A continuation of a slower pace in projected residential development activity, with 75 new singlefamily and zero multi-family building permits included in the budget, offset by an increase in commercial development.
 Property tax assessed valuations were projected to increase by 2.4%. The recently announced assessed valuation increase of 4.0% for FY 2024/25 will result in property tax revenues exceeding budget by approximately $370,000.
 Sales tax revenues were projected to be flat for FY 2024/25 as consumer spending shows signs of slowing in the face of persistently higher inflation. This assumption is supported by the City’s sales tax consultant projections.
 Short-term Interest rates have been forecast to decline from over 5% in FY 2023/24 to a more moderate rate of 3.5% in the coming year, reflecting expectations that the Federal Reserve will implement a series of rate cuts following recent high levels.

In the last decade, the City experienced robust property tax revenue growth as development activity regularly exceeded expectations. More recently, the housing market has been slowed by high interest rates and rapid price increases following the pandemic. Property tax revenues in next year’s budget are forecast to grow at a slower pace than has been realized in recent years. Sales tax growth is also projected to slow down in FY 2024/25, as price inflation dampens consumer demand. For conservatism, the current FY Balance Incurred or Satisfied or Balance
July 1, 2023 Issued Matured June 30, 2024
Governmental Activities:

Bonds Payable 57,503,376 $ 278,436 $ (1) $ 53,398,588 4,383,224 $ Notes Payable 4,331,214 - 1,826,938 2,504,276
Net OPEB Liability 20,016,894 4,377,104 33,364 24,360,634 (2) Net Pension Liability 39,172,015 6,415,187 2,563,877 43,023,325 Accumulated Compensated Absences 2,039,199 2,229,522 2,056,123 2,212,598 Subscription Liability - 1,134,501 249,293 885,208
Total Governmental Activities $ 14,434,750 123,062,698 $ 11,112,819 $ 126,384,629 $ Business-Type Activities:

Bonds Payable 36,156,387 $ - $ 2,302,093 $ 33,854,294 $ Notes Payable and Other 55,090,058 6,983,959 430,179 61,643,838 Net OPEB Liability 8,010,818 2,337,052 867,436 9,480,434 Net Pension Liability 10,014,931 2,642,951 1,905,013 10,752,869 Accumulated Compensated Absences 630,481 725,526 695,182 660,825 Total Business-Type Activities $ 12,689,488 109,902,675 $ 6,199,903 $ 116,392,260 $ (1) Includes accreted interest
(2) OPEB Liability and Pension Liability are typically liquidated by the General Fund, Citywide Park Assessment District Fund, Fleet Maintenance Fund and Information Services Fund

33 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
2024/25 budget excludes expected sales tax revenue from the projected opening of a new Costco location in spring of 2025, however, revenues are expected to increase significantly in FY 2025/26.

Population increases are expected to be less than 1% per year over the next several years with a slower pace of residential development, as the City nears buildout and increases in housing prices and mortgage rates also slow demand for new homes.

The following key budget factors were included in the FY 2024/25 expenditure budget:
 The budget includes the funding necessary to complete carryover initiatives adopted by the City Council in the 2022/23 – 2023/24 Strategic Plan.
 The City’s contracts with all of its labor bargaining units expired on June 30, 2024. One successor contract has thus far been approved, with negotiations continuing with the unsettled bargaining units. The budget includes a placeholder cost of living increase for personnel salaries of 3% per year, with a budgeted surplus available to offset increases above this amount.  Expenditures levels are budgeted to accommodate expected inflationary increases for the next fiscal year, which are forecast to return to a more typical rate of around 3%.  The budget includes continuation of the City’s pre-funding strategy for OPEB, in which the City is funding 85% of the Actuarial Determined Contribution (ADC) annually before converting to a level percentage of payroll funding to achieve 100% funding. Also included in the current budget were additional discretionary payments toward the City’s CalPERS unfunded pension obligations.  The budget maintains the required General Fund reserve of 30% of operating expenditures and transfers.

In the short-term, should labor negotiations result in cost of living increases above the placeholder amounts, budgets would need to increase and General Fund surpluses projected in the budget process would be reduced. In the long-term, as is the case with most governmental agencies, expenditures are expected to increase for personnel-related costs. The City has taken several measures to help mitigate future personnel cost increases, including multiple tier levels for pension and retiree medical benefits, a pension pay down policy and a policy to prefund OPEB. However, additional pension and OPEB contributions will be required in the intermediate-term.

The City’s Ten-Year General Fund Fiscal Model (“Fiscal Model”) reflects increases in required funding for labor costs and increases in pension and OPEB costs expected in the intermediate-term. Other future cost increases included in the City’s long-term forecast are short-term inflation impacts on supplies, services and capital outlay, increased replacement needs as the City’s facilities and infrastructure age and increased operational costs for planned future amenities. Also, included is funding for the operation of planned community amenities, including the opening of the Sand Creek Sports Complex.

Population growth in recent years combined with recent high inflation has placed increasing pressure on costs for service. The City has addressed demand for increased service levels by adding twenty-six new positions to the General Fund in the last six fiscal years. These new positions include six Police Officers, three Community Service Officers, two Police Dispatchers, a Police Public Information Officer, a Building Inspector, a Code Enforcement Officer and an Equity Analyst.

A long-predicted recession stemming from inflation and geopolitical issues has not yet occurred, however, uncertainty about the timing and depth of a future recession exists. Despite inflationary pressures cooling,

34 2023/24 Annual Comprehensive Financial Report
Management’s Discussion and Analysis
recent years’ high inflation rates have led to higher costs to provide services and build infrastructure. Due to the maintenance of the General Fund 30% reserve and the balances in the Pension/OPEB Obligation Fund to offset rising pension and retiree medical costs, the City is in a strong position to meet future fiscal challenges. This position is due to the fiscal policy established and leadership provided by the City Council who have made fiscal sustainability a priority. The City will continue to update the Fiscal Model as new information becomes available and report the results on a regular basis to the City Council.

REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it manages. If you have questions about this report, or need any additional financial information, contact the Finance and Information Systems Department, located at 150 City Park Way, Brentwood, California 94513, either by phone, (925) 516-5460, or e-mail [email protected].

Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:

Cash and Investments 192,320,140 $ 133,620,240 $ 325,940,380 $ Restricted Cash and Investments 4,025,485 2,129,904 6,155,389 Receivables, Net of Allowance for Doubtful Accounts 3,100,926 12,016,913 15,117,839 Leases Receivable 2,390,465 - 2,390,465
Inventories 93,674 - 93,674
Prepaids 1,130,184 115,518 1,245,702
Land Held for Resale 420,000 - 420,000
Total Current Assets 147,882,575 203,480,874 351,363,449 Non-Current Assets:

Long-Term Notes and Loans Receivable 18,126,052 747,338 18,873,390 Capital Assets:

Land and Work In Progress 57,178,568 77,569,742 134,748,310 Depreciable, Net of Accumulated
Depreciation and Amortization 457,804,213 272,151,473 729,955,686 Total Non-Current Assets 350,468,553 533,108,833 883,577,386 Total Assets 498,351,128 736,589,707 1,234,940,835

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding 4,953,121 - 4,953,121
Related to OPEB 9,167,793 3,101,737 12,269,530
Related to Pensions 23,676,623 5,877,272 29,553,895
Total Deferred Outflows of Resources 13,932,130 32,844,416 46,776,546

LIABILITIES
Current Liabilities:

Accounts Payable and Accrued Liabilities 7,526,527 8,824,892 16,351,419 Unearned Revenue 594,741 - 594,741
Deposits Held 3,187,942 122,862 3,310,804
Long-Term Liabilities Due Within One Year 7,480,959 2,990,975 10,471,934 Total Current Liabilities 11,938,729 18,790,169 30,728,898 Non-Current Liabilities Due in More Than One Year:

Bonds Payable 49,130,697 31,694,294 80,824,991
Notes Payable and Other 824,328 61,209,358 62,033,686
Net OPEB Liability 9,480,434 24,360,634 33,841,068
Net Pension Liability 10,752,869 43,023,325 53,776,194
Subscription Liability - 679,647 679,647
Compensated Absences Payable 885,039 264,330 1,149,369
Total Non-Current Liabilities 118,903,670 113,401,285 232,304,955 Total Liabilities 125,340,014 137,693,839 263,033,853

DEFERRED INFLOWS OF RESOURCES
Related to OPEB 5,381,670 1,902,545 7,284,215
Related to Pensions 1,388,543 311,480 1,700,023
Related to Leases 2,192,895 - 2,192,895
Total Deferred Inflows of Resources 2,214,025 8,963,108 11,177,133

NET POSITION
Net Investment in Capital Assets and Capacity Rights 458,294,923 259,130,097 717,425,020 Restricted for:

Nonexpendable - Riparian Site Mitigation Endowment 80,000 - 80,000 Expendable:

Capital Projects 52,955,930 30,099,131 83,055,061
Debt Service 19,869,615 5 19,869,620
Housing 436,310 6,120,796 6,557,106
Streets and Roadways 9,584,853 - 9,584,853
Landscape and Lighting Assessment Districts 10,293,673 - 10,293,673 Citywide Parks Assessment District 3,952,906 - 3,952,906 Agricultural/Farmland Mitigation 4,272,823 - 4,272,823
Public Art 4,069,475 - 4,069,475
Development Impact Fee Program 172,610 3,614,838 3,787,448 Other Restricted Purposes 2,713,769 9,557 2,723,326
Unrestricted 56,080,289 85,754,795 141,835,084
Total Net Position $ 384,729,219 622,777,176 $ 1,007,506,395 $

PRIMARY GOVERNMENT
June 30, 2024
Statement of Net Position
City of Brentwood
35 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 703 of 962 Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions Total
Governmental
Activities
Business-Type
Activities Total
Primary Government:

Governmental Activities
General Government 15,501,108 $ 10,390,253 $ 4,398,185 $ 1,884,477 $ 16,672,915 $ 1,171,807 $ - $ 1,171,807 $ Public Safety 32,577,720 508,599 4,431,425 287,664 5,227,688 (27,350,032) - (27,350,032) Community Development 6,715,451 2,219,221 - 773,858 2,993,079 (3,722,372) - (3,722,372) Engineering 3,762,120 2,194,614 - - 2,194,614 (1,567,506) - (1,567,506) Public Works 9,410,141 - 5,759,975 4,301,505 10,061,480 651,339 - 651,339 Parks and Recreation 18,967,380 1,748,653 3,750,654 1,226,697 6,726,004 (12,241,376) - (12,241,376) Community Services 8,967,495 - 10,563,242 - 10,563,242 1,595,747 - 1,595,747 Interest on Long-Term Debt 1,717,740 - - - - (1,717,740) - (1,717,740) Total Governmental Activities 17,061,340 97,619,155 28,903,481 8,474,201 54,439,022 (43,180,133) - (43,180,133) Business-Type Activities
Wastewater 16,315,416 14,340,756 58,440 147,862 16,521,718 - 2,180,962 2,180,962 Solid Waste 16,125,176 18,790,815 175,139 - 18,965,954 - 2,840,778 2,840,778 Water 29,345,008 26,311,556 92,614 1,796,408 31,234,030 - 4,922,474 4,922,474 City Rentals - - - - - - - -
Housing 886,236 361,206 105,161 - 466,367 - (419,869) (419,869) Total Business-Type Activities 64,812,445 57,663,724 431,354 1,944,270 67,188,069 - 9,524,345 9,524,345 Total Primary Government $ 81,873,785 155,282,879 $ 29,334,835 $ 10,418,471 $ 121,627,091 $ (43,180,133) $ 9,524,345 $ (33,655,788) $ General Revenues:

Taxes:

Property Taxes 20,169,793 $ $ - $ 20,169,793
Sales Tax 11,162,609 - 11,162,609
Franchise Fees 1,645,223 - 1,645,223
Real Property Transfer Tax 460,558 - 460,558
Transient Occupancy Tax 604,525 - 604,525
Motor Vehicle Taxes, In-Lieu, Unrestricted 6,310,048 - 6,310,048 Gain on Sale of Real Property - 196,343 196,343
Investment Earnings 8,806,561 6,367,600 15,174,161
Miscellaneous 397,503 - 397,503
Transfers 1,039,521 (1,039,521) -
Total General Revenues and Transfers 5,328,079 50,792,684 56,120,763 Change in Net Position 14,852,424 7,612,551 22,464,975
Net Position - Beginning of Year 369,876,795 615,164,625 985,041,420 Net Position - End of Year $ 384,729,219 622,777,176 $ 1,007,506,395 $ For Year Ended June 30, 2024
Statement of Activities and Changes in Net Position
City of Brentwood
Primary Government
Program Revenues Net Revenues (Expenses) and Changes in Net Position

36 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 704 of 962 Special Revenue Fund Capital Project Fund
Landscape Other Total
General and Lighting Roadway Governmental Governmental
Fund Assessment Districts Improvements Funds Funds
ASSETS
Current Assets:

Cash and Investments 32,299,913 $ 11,745,687 $ 18,795,763 $ 58,911,360 $ 121,752,723 $ Restricted Cash and Investments - - - 4,025,485 4,025,485 Receivables 4,254,882 2,886 - 18,439,798 22,697,566
Prepaids 104,408 - - 12,352 116,760
Leases Receivable 2,390,465 - - - 2,390,465
Due from Other Funds - - - 1,379,569 1,379,569
Land Held for Resale - - - 420,000 420,000
Total Assets $ 11,748,573 39,049,668 $ 18,795,763 $ 83,188,564 $ 152,782,568 $

LIABILITIES
Current Liabilities:

Accounts Payable and Accrued Liabilities 2, $ 876,919 188,646 $ 2,316,421 $ 882,694 $ 6,264,680 $ Due to Other Funds - - - 1,379,569 1,379,569
Unearned Revenue 594,707 - - 34 594,741
Deposits Held 3,187,942 - - - 3,187,942
Interfund Advance Payable - 72,248 - 281,838 354,086
Total Current Liabilities 949,167 5,971,295 2,316,421 2,544,135 11,781,018 Non-Current Liabilities Due in More Than One Year:

Interfund Advance Payable - 505,733 - 1,447,366 1,953,099 Total Non-Current Liabilities - 505,733 - 1,447,366 1,953,099 Total Liabilities 1,454,900 5,971,295 2,316,421 3,991,501 13,734,117

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Accounts Receivable 1,473,899 - - - 1,473,899 Related to Leases 2,192,895 - - - 2,192,895
Total Deferred Inflows of Resources - 3,666,794 - - 3,666,794

FUND BALANCES
Nonspendable 301,978 - - 92,352 394,330
Restricted 678,000 10,293,673 16,479,342 79,763,711 107,214,726 Committed 6,008,590 - - 2,133,847 8,142,437
Unassigned 22,423,011 - - (2,792,847) 19,630,164
Total Fund Balances 10,293,673 29,411,579 16,479,342 79,197,063 135,381,657 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 11,748,573 39,049,668 $ 18,795,763 $ 83,188,564 $ 152,782,568 $ City of Brentwood
Balance Sheet
June 30, 2024
Governmental Funds

37 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 705 of 962 Total Fund Balances - Total Governmental Funds $ 135,381,657 Amounts reported for Governmental Activities in the Statement of Net Position are different because:

Capital assets used in Governmental Activities are not current financial resources; therefore, they are not reported in the Governmental Funds Balance Sheet. 504,996,476
Internal Service Funds are used by management to charge costs of certain activities, such as data processing and fleet management, to individual funds. The assets and liabilities of the Internal Service Funds are included in Governmental Activities in the Government-Wide Statement of Net Position. 78,380,157 Governmental Funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities and Changes in Net Position. (3,989,197) Long-term liabilities and deferred outflows/inflows of resources are not due and payable in the current period; therefore, they are not reported in the Governmental Funds Balance Sheet.

Bonds (49,409,391)
Notes Payable (2,504,276)
Net OPEB Liabilities (21,401,962)
Deferred Outflows of Resources Related to OPEB 8,307,699 Deferred Inflows of Resources Related to OPEB (4,842,435) Net Pension Liabilities (39,881,611)
Deferred Outflows of Resources Related to Pensions 21,955,677 Deferred Inflows of Resources Related to Pensions (1,297,536) Subscription Liabilities (885,208)
Compensated Absences (1,971,550)
Accrued Liabilities (61,324)
Total Net Position of Governmental Activities $ 622,777,176 City of Brentwood
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
38 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 706 of 962 Special Revenue Fund Capital Project Fund
Landscape Other Total
General and Lighting Roadway Governmental Governmental
Fund Assessment Districts Improvements Funds Funds

REVENUES
Taxes 31,625,295 $ - $ - $ 9,080,193 $ 40,705,488 $
Licenses 779,320 - - 194,830 974,150
Permits and Fines 4,888,377 - - - 4,888,377
Uses of Money and Property 2,098,556 542,211 - 3,203,908 5,844,675 Intergovernmental 6,531,222 - 2,733,630 6,470,386 15,735,238 Franchises 1,645,223 - - - 1,645,223
Charges for Other Services 231,294 - - - 231,294
Charges to Other Funds 8,910,637 - - - 8,910,637
Fees and Other Revenues 2,377,337 10,563,242 - 7,198,018 20,138,597 Total Revenues 11,105,453 59,087,261 2,733,630 26,147,335 99,073,679

EXPENDITURES
Current:

General Government 9,191,710 - 1,270,758 1,605,131 12,067,599 Public Safety 29,768,532 - - 275,202 30,043,734
Community Development 6,410,195 - - 347,950 6,758,145
Engineering 3,785,289 - - - 3,785,289
Public Works 4,413,425 - - - 4,413,425
Parks and Recreation 8,335,866 - - 7,398,535 15,734,401 Community Services 1,113,828 7,864,030 - 31,055 9,008,913 Capital Outlay 1,134,501 - 10,352,986 1,955,454 13,442,941 Debt Service:

Principal 2,076,231 - - 4,133,899 6,210,130
Interest and Fiscal Charges - - - 1,688,629 1,688,629
Total Expenditures 7,864,030 66,229,577 11,623,744 17,435,855 103,153,206 REVENUES OVER (UNDER) EXPENDITURES 3,241,423 (7,142,316) (8,890,114) 8,711,480 (4,079,527)

OTHER FINANCING SOURCES (USES)
Issuance of Subscription Liability 1,134,501 - - - 1,134,501 Transfers In 11,393,836 1,877,776 12,043,838 16,080,966 41,396,416 Transfers Out (7,760,362) (3,575,451) (66,427) (32,590,983) (43,993,223) Total Other Financing Sources (Uses) (1,697,675) 4,767,975 11,977,411 (16,510,017) (1,462,306) NET CHANGE IN FUND BALANCES 1,543,748 (2,374,341) 3,087,297 (7,798,537) (5,541,833) Fund Balance, Beginning of Year, as previously reported 8,749,925 31,785,920 - 100,387,645 140,923,490 Adjustment - change from nonmajor fund to major fund - - 13,392,045 (13,392,045) - Fund Balance, Beginning of Year, as adjusted 8,749,925 31,785,920 13,392,045 86,995,600 140,923,490 Fund Balance, End of Year $ 10,293,673 29,411,579 $ 16,479,342 $ 79,197,063 $ 135,381,657 $ City of Brentwood
For Year Ended June 30, 2024
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds

39 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 707 of 962 Net Change in Fund Balances - Total Governmental Funds $ (5,541,833) Amounts reported for governmental activities in the Statement of Activities and Changes in Net Position are different because:

Governmental Funds report capital outlay as expenditures. However, in the Government-Wide Statement of Activities and Changes in Net Position, the cost of those assets is allocated over their estimated useful lives as depreciation expense. The amount shown represents the capital assets recorded in the current period. 12,308,440 Depreciation expense on capital assets is reported in the Government-Wide Statement of Activities and Changes in Net Position, but they do not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in Governmental Funds. (10,643,982)
The net effect of various miscellaneous transactions involving Capital Assets (e.g. sales, trade-ins and contributions) is to increase net position. 2,205,606
To record the net change in compensated absences in the Statement of Activities and Changes in Net Position. (126,088) Bond proceeds provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal and other long-term liabilities is an expenditure in Governmental Funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

This amount represents long-term debt principal repayments 5,711,544 This amount represents the decrease in accrued liabilities 246,732 This amount represents the increase in Net OPEB Liability (3,936,224) This amount represents the increase in Deferred Outflows related to OPEB 4,722,991 This amount represents the increase in Deferred Inflows related to OPEB (467,564) This amount represents the increase in Net Pension Liability (3,487,689) This amount represents the decrease in Deferred Outflows related to Pensions (901,817) This amount represents the decrease in Deferred Inflows related to Pensions 639,631 This amount represents accreted interest (278,436)
This amount represents amortized bond premiums 249,325
Internal Service Funds are used by management to charge the costs of certain activities, such as data processing and fleet management, to individual funds. The net revenue of the Internal Service Funds is reported with Governmental Activities. 6,911,915 Change in Net Position of Governmental Activities $ 7,612,551 City of Brentwood
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities Changes in Net Position For Year Ended June 30, 2024

40 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 708 of 962 Governmental
Activities - Internal
Wastewater Solid Waste Water City Rentals Housing Totals Service Funds ASSETS
Current Assets:

Cash and Investments 58,829,187 $ 20,186,897 $ 47,270,094 $ - $ 7,334,062 $ 133,620,240 $ 70,567,417 $ Restricted Cash and Investments 2,129,899 - 5 - - 2,129,904 - Receivables, Net of Allowance for Doubtful Accounts 5,623,856 2,500,602 3,855,293 - 37,162 12,016,913 3,311 Inventories - - - - - - 93,674
Prepaids 31,749 34,502 43,241 - 6,026 115,518 1,013,424 Interfund Advance Receivable - - - - - - 354,086
Total Current Assets 66,614,691 22,722,001 51,168,633 - 7,377,250 147,882,575 72,031,912 Non-Current Assets:

Long-Term Notes Receivable - - - - 747,338 747,338 -
Interfund Advance Receivable - - - - - - 1,953,099
Capital Assets:

Land and Work In Progress 65,236,677 1,020,103 9,443,966 - 1,868,996 77,569,742 - Depreciable 132,970,081 15,793,727 223,691,524 - 2,351,671 374,807,003 25,345,639 Less: Accumulated Depreciation and Amortization (35,108,165) (3,280,783) (63,570,081) - (696,501) (102,655,530) (15,359,334) Total Capital Assets, Net of Accumulated
Depreciation and Amortization 13,533,047 163,098,593 169,565,409 - 3,524,166 349,721,215 9,986,305 Total Non-Current Assets 163,098,593 13,533,047 169,565,409 - 4,271,504 350,468,553 11,939,404 Total Assets 36,255,048 229,713,284 220,734,042 - 11,648,754 498,351,128 83,971,316

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding - - 4,953,121 - - 4,953,121 - Related to OPEB 906,718 1,060,087 1,064,995 - 69,937 3,101,737 860,094 Related to Pensions 1,710,990 1,975,211 1,981,202 - 209,869 5,877,272 1,720,946 Total Deferred Outflows of Resources 3,035,298 2,617,708 7,999,318 - 279,806 13,932,130 2,581,040

LIABILITIES
Current Liabilities:

Accounts Payable and Accrued Liabilities 3,352,621 1,173,440 4,290,901 - 7,930 8,824,892 1,200,523 Deposits Held - 9,557 77,500 - 35,805 122,862 -
Long-Term Debt Due Within One Year 434,480 - 2,160,000 - - 2,594,480 - Compensated Absences Payable 116,764 127,724 136,872 - 15,135 396,495 144,629 Total Current Liabilities 3,903,865 1,310,721 6,665,273 - 58,870 11,938,729 1,345,152 Non-Current Liabilities Due in More Than One Year:

Bonds Payable - - 31,694,294 - - 31,694,294 -
Notes Payable and Other 61,209,358 - - - - 61,209,358 - Net OPEB Liability 2,475,123 3,328,414 3,426,895 - 250,002 9,480,434 2,958,672 Net Pension Liability 3,096,881 3,662,459 3,603,832 - 389,697 10,752,869 3,141,714 Compensated Absences Payable 77,843 85,149 91,248 - 10,090 264,330 96,419 Total Non-Current Liabilities 66,859,205 7,076,022 38,816,269 - 649,789 113,401,285 6,196,805 Total Liabilities 8,386,743 70,763,070 45,481,542 - 708,659 125,340,014 7,541,957

DEFERRED INFLOWS OF RESOURCES
Related to OPEB 551,294 657,111 654,239 - 39,901 1,902,545 539,235 Related to Pensions 89,708 106,091 104,393 - 11,288 311,480 91,007 Total Deferred Inflows of Resources 763,202 641,002 758,632 - 51,189 2,214,025 630,242

NET POSITION
Net Investment in Capital Assets and Capacity Rights 101,818,774 13,313,465 140,473,692 - 3,524,166 259,130,097 9,986,305 Restricted for:

Capital Projects 17,963,969 - 12,135,162 - - 30,099,131 - Debt Service - - 5 - - 5 -
Special Projects and Programs 3,614,838 9,557 - - 6,120,796 9,745,191 - Unrestricted 37,529,339 16,817,379 29,884,327 - 1,523,750 85,754,795 68,393,852 Total Net Position $ 30,140,401 160,926,920 $ 182,493,186 $ - $ 11,168,712 $ 384,729,219 $ 78,380,157 $ Business-Type Activities - Enterprise Funds
City of Brentwood
Statement of Net Position
Proprietary Funds
June 30, 2024

41 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 709 of 962 Governmental
Activities - Internal
Wastewater Solid Waste Water City Rentals Housing Totals Service Funds Operating Revenues:

Charges for Services 16,238,110 $ 18,756,112 $ 29,261,553 $ - $ 361,206 $ 64,616,981 $ 21,539,050 $ Other Income 77,306 34,703 83,455 - - 195,464 58,234
Total Operating Revenues 18,790,815 16,315,416 29,345,008 - 361,206 64,812,445 21,597,284 Operating Expenses:

Personnel Services 4,206,125 5,340,355 4,891,250 - 503,295 14,941,025 10,409,789 Repairs and Maintenance 271,120 1,410,785 832,399 - 65,842 2,580,146 1,167,189 Materials, Supplies and Services 7,010,552 9,087,463 15,053,308 - 270,066 31,421,389 7,698,639 Depreciation and Amortization 2,201,201 286,573 4,074,749 - 47,033 6,609,556 1,900,746 Total Operating Expenses 16,125,176 13,688,998 24,851,706 - 886,236 55,552,116 21,176,363 Operating Income (Loss) 2,665,639 2,626,418 4,493,302 - (525,030) 9,260,329 420,921 Non-Operating Revenues (Expenses):

Interest Income 2,969,123 885,892 2,152,591 - 359,994 6,367,600 3,221,454 Developer Fees and Credits - - - - 105,161 105,161 -
Interest Expense (651,758) - (1,459,850) - - (2,111,608) - Gain or (Loss) on Disposal of Capital Assets - - - - - - 196,343 Total Non-Operating Revenues (Expenses) 885,892 2,317,365 692,741 - 465,155 4,361,153 3,417,797 Income (Loss) Before Contributions and Transfers 3,551,531 4,943,783 5,186,043 - (59,875) 13,621,482 3,838,718 Contributions - Impact Fees and Credits 78,572 - 1,753,268 - - 1,831,840 - Intergovernmental 58,440 175,139 92,614 - - 326,193 -
Capital Asset Contributions 69,290 - 43,140 - - 112,430 - Capital Assets Contributed from (to) Governmental Activities - - - - - - (563,131) Transfers In 1,992,473 240,000 2,213 - - 2,234,686 4,808,055 Transfers Out (311,110) (737,131) (1,990,681) (235,285) - (3,274,207) (1,171,727) Change in Net Position 6,831,448 3,229,539 5,086,597 (235,285) (59,875) 14,852,424 6,911,915 Net Position, Beginning of Year 26,910,862 154,095,472 177,406,589 235,285 11,228,587 369,876,795 71,468,242 Net Position, End of Year $ 30,140,401 160,926,920 $ 182,493,186 $ - $ 11,168,712 $ 384,729,219 $ 78,380,157 $ Business-Type Activities - Enterprise Funds
City of Brentwood
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For Year Ended June 30, 2024

42 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 710 of 962 Governmental
Activities - Internal
Wastewater Solid Waste Water City Rentals Housing Totals Service Funds Cash Flows from Operating Activities
Cash Received from Customers/Other Funds 16,099,463 $ 18,608,025 $ 28,448,775 $ - $ 384,175 $ 63,540,438 $ 21,247,077 $ Cash Payments to Suppliers of Goods and Services (6,257,151) (7,686,550) (13,109,251) (113) (243,980) (27,297,045) (7,655,253) Cash Payments to Employees for Services (4,281,449) (5,134,757) (4,841,837) - (491,896) (14,749,939) (10,242,211) Cash Payments for Interfund Services (1,125,965) (2,547,715) (1,224,498) - (89,120) (4,987,298) (693,604) Other Receipts 77,306 34,703 83,455 - - 195,464 58,234
Net Cash Provided By (Used for) Operating Activities 3,273,706 4,512,204 9,356,644 (113) (440,821) 16,701,620 2,714,243 Cash Flows from Non-Capital Financing Activities
Transfers Received 1,992,473 240,000 2,213 - - 2,234,686 4,808,055 Transfers Paid (311,111) (545,710) (1,990,681) (235,285) - (3,082,787) (1,171,727) Interfund Advance Receivable - - - - - - (1,656,956)
Developer Fees and Credits - - - - 105,161 105,161 -
Contributions from Other Agencies 58,440 - 92,614 - - 151,054 - Net Cash Provided By (Used for) Non-Capital
Financing Activities (305,710) 1,739,802 (1,895,854) (235,285) 105,161 (591,886) 1,979,372 Cash Flows from Capital and Related Financing Activities Proceeds from Notes Payable 11,341,478 - - - - 11,341,478 - Contributions - Impact Fees and Credits 78,572 - 1,753,268 - - 1,831,840 - Capital Grants - 175,139 - - - 175,139 -
Interest Paid on Debt (651,758) - (1,459,850) - - (2,111,608) - Principal Paid on Debt (430,179) - (2,050,000) - - (2,480,179) - Capital Assets Purchased and Contributed to Governmental Funds - - - - - - (563,131)
Proceeds from Sale of Capital Assets - - - - - - 196,343 Acquisition and Construction of Capital Assets (15,939,647) (1,086,343) (4,552,488) - - (21,578,478) (3,623,735) Net Cash Provided By (Used for) Capital and
Related Financing Activities (911,204) (5,601,534) (6,309,070) - - (12,821,808) (3,990,523) Cash Flows from Investing Activities
Interest on Investments 887,803 2,976,097 2,158,002 40 360,903 6,382,845 3,229,711 Net Cash Provided By Investing Activities 887,803 2,976,097 2,158,002 40 360,903 6,382,845 3,229,711 Net Increase (Decrease) in Cash and Cash Equivalents 3,626,569 2,944,595 3,309,722 (235,358) 25,243 9,670,771 3,932,803 Cash and Cash Equivalents - Beginning of Year 17,242,302 57,332,517 43,960,377 235,358 7,308,819 126,079,373 66,634,614 Cash and Cash Equivalents - End of Year $ 20,186,897 60,959,086 $ 47,270,099 $ - $ 7,334,062 $ 135,750,144 $ 70,567,417 $ Reconciliation of Operating Income to Net Cash
Provided By (Used for) Operating Activities:

Operating Income (Loss) 2,626,418 $ 2,665,639 $ 4,493,302 $ - $ (525,030) $ 9,260,329 $ 420,921 $ Adjustments to Reconcile Operating Income to Net Cash
Provided By (Used for) Operating Activities:

Depreciation and Amortization 286,573 2,177,062 4,074,749 - 47,033 6,585,417 1,900,746 Change in Assets, Liabilities and Deferred
Outflows/Inflows of Resources:

Receivables (130,858) (126,683) (806,105) - 23,975 (1,039,671) 8,489 Prepaid Items (17,144) (12,216) (6,643) - (6,840) (42,843) (319,010) Accounts Payable and Other Payables 273,978 (76,769) 1,556,957 (113) (928) 1,753,125 516,971 Net OPEB Liability and Deferred
Outflows/Inflows of Resources related to OPEB (40,730) (34,839) (40,920) - (2,688) (119,177) (33,048) Net Pension Liability and Deferred
Outflows/Inflows of Resources related to Pensions 237,742 (34,240) 68,166 - 17,424 289,092 171,863 Compensated Absences Payable (6,529) 8,502 22,138 - 6,233 30,344 47,311 Deposits - (9,996) (5,000) - - (14,996) -
Net Cash Provided By (Used for) Operating Activities $ 3,273,706 4,512,204 $ 9,356,644 $ (113) $ (440,821) $ 16,701,620 $ 2,714,243 $ Noncash Capital Activities:

Capital Asset Contributions 69,290 $ - $ 43,140 $ - $ - $ 112,430 $ - $ Business-Type Activities - Enterprise Funds
City of Brentwood
Statement of Cash Flows
Proprietary Funds
For Year Ended June 30, 2024

43 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 711 of 962 Other Employee
Benefit Trust Fund -
VALIC
Private-Purpose
Trust Fund -
Successor Agency Custodial Funds
ASSETS
Current Assets:

Cash and Investments - $ 2,361,685 $ 12,337,42 $ 0
Restricted Cash and Investments - - 3,609,42 4
Restricted Investments - Mutual Funds 9,111,535 - -
Interest Receivable - 266 2,421
Total Current Assets 9,111,535 2,361,951 15,949,265
Non-Current Assets:

Nondepreciable Capital Assets - 1,327,129 -
Total Non-Current Assets - 1,327,129 -
Total Assets 3,689,08 9,111,535 15,949,265 0

LIABILITIES
Current Liabilities:

Accounts Payable and Accrued Liabilities - - 4,180
Due to Local Governments - - 689,630
Long-Term Liabilities Due Within One Year 1,324,73 - - 7 Total Current Liabilities - 1,324,73 693,810 7
Non-Current Liabilities Due in More Than One Year:

Long-Term Liabilities - 16,801,315 -
Total Non-Current Liabilities - 16,801,315 -
Total Liabilities 18,126,052 - 693,810

NET POSITION (DEFICIT)
Restricted for:

Employee Benefits 9,111,535 - -
Individuals and Organizations - - 14,544,125
Other Governments - (14,436,972) 711,330
Total Net Position (Deficit) $ (14,436,972) 9,111,535 $ 15,255,455 $ June 30, 2024
Fiduciary Funds
Statement of Fiduciary Net Position
City of Brentwood
44 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 712 of 962 Other Employee
Benefit Trust Fund -
VALIC
Private-Purpose
Trust Fund -
Successor Agency Custodial Funds

ADDITIONS
Contributions:

Property Taxes - $ 2,647,53 $ - 8 $
Assessments - - 12,967,392
Private Contributions - - 4,022,981
Employer Contributions 37,930 - -
Employee Contributions 260,970 - -
Other 73,078 - -
Total Contributions 2,720,61 298,900 16,990,373 6
Net Investment Earnings 1,045,19 63,279 6 566,045
Total Additions 2,783,895 1,344,096 17,556,418

DEDUCTIONS
Administrative Expenses 8,221 255,000 307,451
Payments to Bondholders - 1,178,292 12,536,26 4
Other Employee Benefit Payments 1,036,305 - -
Recipient Payments - - 3,313,079
Total Deductions 1,433,292 1,044,526 16,156,794
Net Increase (Decrease) in Fiduciary Net Position 299,570 1,350,603 1,399,62 4 Net Position (Deficit) - Beginning of Year (15,787,575) 8,811,965 13,855,831 Net Position (Deficit) - End of Year $ (14,436,972) 9,111,535 $ 15,255,455 $ For Year Ended June 30, 2024
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
City of Brentwood
45 See Accompanying Notes to the Basic Financial Statements 2023/24 Annual Comprehensive Financial Report Page 713 of 962

46 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements

INDEX OF NOTES TO THE BASIC FINANCIAL STATEMENTS

Note #1 – Summary of Significant Accounting Policies ........................................................................................................ 49 A. Description of the Reporting Entity .......................................................................................................................... 49 B. Government-Wide and Fund Financial Statements ............................................................................................ 50 C. Measurement Focus/Basis of Accounting .............................................................................................................. 50 D. Assets, Liabilities, Deferred Inflows/Outflows and Net Position or Fund Balance .................................. 57 i. Use of Restricted/Unrestricted Net Position ............................................................................................. 57 ii. Cash and Investments ........................................................................................................................................ 57 iii. Cash and Cash Equivalents .............................................................................................................................. 57 iv. Prepaid Items and Land Held for Resale .................................................................................................... 57 v. Capital Assets ........................................................................................................................................................ 57 vi. Compensated Absences Payable ................................................................................................................... 58 vii. Property Tax ........................................................................................................................................................... 58 viii. Motor Vehicle Taxes ........................................................................................................................................... 59 ix. New Funds, Closed Funds and Renamed Funds ..................................................................................... 59 x. Deferred Outflows/Inflows of Resources .................................................................................................... 59 xi. OPEB and Pensions ............................................................................................................................................. 60 xii. Fair Value Measurements ................................................................................................................................. 60 xiii. Use of Estimates ................................................................................................................................................... 61 xiv. Leases ......................................................................................................................................................................... 61 xv. Subscription-Based Information Technology Arrangements (SBITAs) ........................................... 62 xvi. New Governmental Accounting Standards Board (GASB) Pronouncements ............................... 63 Note #2 – Stewardship, Compliance and Accountability ...................................................................................................... 64 A. Budgetary Information ................................................................................................................................................... 64 B. Deficit Fund Balance or Net Position ........................................................................................................................ 65 C. Interfund Receivables, Payables and Transfers ..................................................................................................... 65 D. Minimum Fund Balance Policies ................................................................................................................................. 67 E. Fund Balances .................................................................................................................................................................... 67 Note #3 – Cash and Investments .................................................................................................................................................... 69 A. Cash and Deposits ........................................................................................................................................................... 69 B. Investments ......................................................................................................................................................................... 69 C. Investment in Pools ......................................................................................................................................................... 74 D. Cash and Investments with Fiscal Agent ................................................................................................................. 75 Note #4 – Accounts, Lease, Notes and Loans Receivable ..................................................................................................... 76 Note #5 – Capital Assets .................................................................................................................................................................... 81 Note #6 – Long-Term Obligations ................................................................................................................................................. 83 A. Governmental Activities ................................................................................................................................................. 83 i. Bonds ........................................................................................................................................................................ 84 ii. Private Placement and Direct Purchase ...................................................................................................... 85 iii. Notes Payable ....................................................................................................................................................... 87 iv. Net OPEB Liability and Net Pension Liability ............................................................................................ 88 v. Accumulated Compensated Absences ........................................................................................................ 88 vi. Subscription Liability ............................................................................................................................................ 88 B. Business-Type Activities ................................................................................................................................................. 89 i. Bonds ........................................................................................................................................................................ 89

47 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
ii. Notes Payable (Direct Placement) and Other ........................................................................................... 90 Note #7 – Special Assessment Districts (No City Liability) ................................................................................................... 92 Note #8 – Classification of Net Position ...................................................................................................................................... 93 Note #9 – Post-Retirement Health Care Benefits ..................................................................................................................... 93 A. General Information About the City’s Retiree Healthcare Plan ...................................................................... 93 B. Net OPEB Liability ............................................................................................................................................................. 95 C. Changes in Net OPEB Liability ..................................................................................................................................... 97 D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates ...................................................................................................................................................................................... 97 E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB ...................................... 98 Note #10 – Defined Benefit Pension Plans ................................................................................................................................. 99 A. Plan Descriptions .............................................................................................................................................................. 99 B. Miscellaneous Plan .......................................................................................................................................................... 99 i. General Information About the Miscellaneous Plan .............................................................................. 99 a. Benefits Provided ..................................................................................................................................... 99 b. Employees Covered ............................................................................................................................. 100 c. Contributions ......................................................................................................................................... 100 ii. Net Pension Liability ........................................................................................................................................ 100 iii. Changes in Net Pension Liability ................................................................................................................ 101 a. Sensitivity of the Net Pension Liability to Changes in the Discount Rate ...................... 101 b. Pension Plan Fiduciary Net Position ............................................................................................. 101 iv. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions ......... 102 v. Payable to the Miscellaneous Plan ............................................................................................................ 102 C. Safety Plan ........................................................................................................................................................................ 103 i. General Information About the Safety Plan ........................................................................................... 103 a. Benefits Provided .................................................................................................................................. 103 b. Contributions ......................................................................................................................................... 104 ii. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions ................................................................................................................................................................ 104 a. Sensitivity of the Net Pension Liability to Changes in the Discount Rate ...................... 105 b. Pension Plan Fiduciary Net Position ............................................................................................. 106 iii. Payable to the Safety Plan ............................................................................................................................. 106 D. Information Common to Both the Miscellaneous and Safety Plans ......................................................... 106 i. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions ................................................................................................................................................................ 106 ii. Actuarial Assumptions .................................................................................................................................... 107 iii. Miscellaneous and Safety Plans Discount Rate ..................................................................................... 107 Note #11 – Defined Contribution Pension and Other Post-Employment Benefit Plans ......................................... 108 Note #12 – Risk Management ...................................................................................................................................................... 110 Note #13 – Brentwood Redevelopment Agency Dissolution and Successor Agency Activities ......................... 111 A. Redevelopment Agency Dissolution ...................................................................................................................... 111 B. Capital Assets .................................................................................................................................................................. 112 C. Long-Term Obligations ............................................................................................................................................... 112 i. Bonds ..................................................................................................................................................................... 112 D. Pledged Revenues ......................................................................................................................................................... 113 E. Commitments and Contingencies .......................................................................................................................... 114 i. State Approval of Enforceable Obligations ............................................................................................ 114

48 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
ii. State Asset Transfer Review .......................................................................................................................... 114 Note #14 – Contingent Liabilities ................................................................................................................................................ 114 A. Litigation ........................................................................................................................................................................... 114 B. State and Federal Grants ............................................................................................................................................ 114 C. Developer Impact Fee Credits .................................................................................................................................. 115 D. Construction Commitments ....................................................................................................................................... 115 E. Solar Power Purchase Agreements ........................................................................................................................ 115

49 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. DESCRIPTION OF THE REPORTING ENTITY
The City of Brentwood is governed by a five member City Council, under the Council-Manager form of government. The accompanying financial statements present the City of Brentwood, the primary government, and its component units, entities for which the primary government is considered financially accountable. The City is considered to be financially accountable for an organization if: 1) the City appoints a voting majority of said organization or 2) there is a potential for the organization to either provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if the organization is fiscally dependent (i.e. unable to adopt a budget, levy taxes, set rates or charges or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete.

In addition to reporting directly for the City’s operations, the Brentwood Infrastructure Financing Authority, a component unit, has been included in the primary reporting entity and is treated as a blended component unit. The City also started the process to establish two additional Financing Authorities in FY 2021/22 that are included in the primary reporting entity, however, the process to form the Financing Authorities was halted in FY 2023/24.

Brentwood Infrastructure Financing Authority
The Brentwood Infrastructure Financing Authority (the “Authority”), formed on March 14, 1995, is a joint powers authority organized under Section 6500 et seq. of the California Government Code between the City and the Authority for the purpose of acting as a vehicle for various financing activities of the City and the Authority. The Board of Directors is the Brentwood City Council. The primary purpose of the Authority is to render financial assistance to the City and the Authority by issuing debt and financing the construction of public facilities. Separate financial statements are not required for the Authority and therefore, are not issued.

Public Financing Authorities
In September 2021, the City established the Public Financing Authority (PFA) of the Brentwood Innovation Center Enhanced Infrastructure Financing District (EIFD) and the PFA of the Brentwood Boulevard-Downtown EIFD under section 53398 et seq. of the California Government Code. The City adopted Resolutions of Intent to establish the two EIFDs, however, the process to form the EIFD’s was suspended by the City Council in FY 2023/24 and there is no intent to complete formation of the EFID’s in the near-term. If formed in the future, each PFA would serve as the governing board of the respective EIFDs and the PFAs’ Board of Directors would be comprised initially of three members of the City Council appointed by the City Council, and up to four members of the public selected by the City Council. If formed, the PFAs will be responsible for implementing the Infrastructure Financing Plan (IFP) for each EIFD and separate financial statements are not required for the PFAs and therefore are not issued.

50 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. The Statement of Activities and Changes in Net Position demonstrates the degree to which direct and indirect expenses, for a given function or segment, are offset by program revenues. Direct expenses are clearly identifiable with a specific function or segment. Indirect expenses are expenses which are allocated based on the City’s annual Cost Allocation Plan and Schedule of City Fees. 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, 2) operating grants and contributions, including special assessments and 3) capital grants and contributions. Taxes and other items not included among program revenue are reported as general revenues.

Summaries of governmental activities, which are supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges. Fiduciary activities of the City are not included in these statements.

Separate financial statements are provided for Governmental Funds, Proprietary Funds and Fiduciary Funds even though the latter are excluded from the Government-Wide Financial Statements. Major individual Governmental Funds and major individual Enterprise Funds are reported as separate columns in the Fund Financial Statements section.

Certain eliminations have been made related to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities. These are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, Internal Service Fund transactions have been eliminated, except for interfund services provided and used. However, the transactions between governmental and business-type activities, which are presented as transfers, have not been eliminated from the Statement of Activities.

C. MEASUREMENT FOCUS/BASIS OF ACCOUNTING
The Government-Wide Financial Statements, Proprietary Fund Financial Statements and Fiduciary Fund Financial Statements are reported using an economic resources focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred, regardless of the timing of the related cash flows.

The Governmental Fund Financial Statements are reported using a current financial resources measurement focus called the modified accrual basis of accounting. Accordingly, only current assets, current liabilities and current deferred inflows/outflows are included on the Balance Sheets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become measurable and available to finance expenditures of the current period. Accordingly, revenues are recorded when received in cash, except for revenues subject to accrual (generally 60 days after year-end) which are recognized when due.

51 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Expenditures are recorded in the accounting period in which the related fund liability is incurred.

However, debt service expenditures, lease liabilities, as well as expenditures related to compensated absences and claims and judgments, are recorded only when the payment is due. General capital asset acquisitions, including entering into contracts giving the City the right to use leased assets and the right to use subscription assets, are reported as expenditures in governmental funds. Proceeds from long-term debt and financing through leases are reported as other financing sources. Taxes, including property and sales taxes, special assessments and inter-governmental revenue associated with the current fiscal period are all considered susceptible to accrual. Only the portion of the special assessments receivable due within the current fiscal period is considered susceptible to accrual as revenue of the current period. All other revenue items are considered measurable and available only when cash is received by the City.

For Proprietary Funds, all assets, liabilities and deferred inflows/outflows, whether current or noncurrent, are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Operating revenues in the Proprietary Funds are those revenues generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Proprietary Fund types include Enterprise Funds and Internal Service Funds.

The City’s Fiduciary Funds include Other Employee Benefit Trust Funds, Private-Purpose Trust Funds and Custodial Funds. Custodial Funds are purely custodial in nature and do not involve a measurement of operational results. Other Employee Benefit Trust Funds and Private-Purpose Trust Funds, in addition to being custodial in nature, also include operational activities under which the principal and income benefit employees or retirees and specific local taxing entities, respectively.

Fund Types
A Major Fund is a fund whose revenues, expenditures/expenses, assets combined with deferred outflows of resources, or liabilities combined with deferred inflows of resources (excluding extraordinary items), are at least 10% of corresponding totals for all Governmental or Enterprise funds and at least 5% of the aggregate amount for all Governmental and Enterprise funds for the same item.

The General Fund is always considered a major fund. Any other Governmental or Enterprise fund may be reported as a major fund if the government’s officials believe the fund is particularly important to financial statement users.

In FY 2023/24, the General Fund, Landscape and Lighting Assessment Districts (LLAD), a Special Revenue fund, and Roadway Improvements, a Capital Project Fund, are major governmental funds.

Specific descriptions of the City’s funds are as follows:

The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

52 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Special Revenue Funds account for specific revenues legally restricted to expenditures for particular purposes. Specific descriptions of the Special Revenue Funds are as follows:
 Gas Tax – These funds account for monies received from the State of California under Street and Highways Code Sections 2103, 2105, 2106, 2107, 2107.5 and 2032. The allocations must be spent for street maintenance, construction and a limited amount for engineering.  Disability Access and Education – This fund accounts for the monies received due to Senate Bill 1186 (SB1186), which requires cities to collect a $4 fee for new and renewed business licenses for purposes of increasing compliance with state disability laws.  Police Grants – This fund accounts for all Police, Federal, State and County grants requiring segregated fund accounting.
 Other Grants – This fund accounts for miscellaneous Federal, State and County grants requiring segregated fund accounting.
 Economic Development Grant – This fund accounts for the set aside of 20% of business license tax collected. The monies are used to award grants to promote economic activity.  Citywide Park Assessment District – This fund accounts for special benefit assessments levied on property owners for citywide park maintenance.
 Community Facilities Districts – These funds account for special taxes levied for a variety of allowable uses, including but not limited to public safety services, joint use school facilities and library facilities. The allowable uses of the funds are governed by the formation documents of each individual District.
 Roadway Development Impact Fee – This fund accounts for development fees collected for the design and construction of roadways within the City.
 Parks and Trails Development Impact Fee – This fund accounts for development fees collected for the design and construction of parks within the City.  Community Facilities Development Impact Fee – This fund accounts for development fees collected for the design and construction of public facilities within the City.  Development Impact Fee Administration – This fund accounts for development fees collected for the administration of the Development Impact Fee Program.  Agriculture Land Administration – This fund accounts for 20% of the Agriculture Preservation fees collected from development. Monies are to be used for administrative purposes associated with establishing, monitoring and managing farmland conservation easements.  Agriculture Land Acquisition – This fund accounts for 80% of the Agriculture Preservation fees collected from development. The monies are used for farmland mitigation purposes.  Public Art Administration – This fund accounts for 20% of the Public Art fees collected from development for the administration of the Public Art Program.

53 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  Public Art Acquisition – This fund accounts for 80% of the Public Art fees collected from development for the acquisition and construction of Public Art.  Parking In-Lieu – This fund accounts for development fees collected for off-street parking facilities located within the Downtown area.
 Asset Forfeiture – This fund accounts for property or funds seized by the Police Department.

After a case has been tried, and a guilty verdict is returned, the funds are considered forfeited.

Federal funds must be used for narcotic enforcement and crime suppression. State funds must be used for areas related to drug prevention.
 Abandoned Vehicle Abatement – This fund accounts for monies, which can only be used for the abatement, removal and disposal, as public nuisances, of any abandoned, wrecked, dismantled or inoperative vehicles, or parts thereof, from private or public property.  PEG Media – This fund accounts for public, educational and governmental access fees collected from cable operators established per the Municipal Code and franchise agreements.  Measure J – This fund accounts for the local jurisdiction portions of the Local Street Maintenance and Improvements Fund allocation. The monies can only be spent on local streets and roads, transit operations, growth management planning and compliance, bicycle and pedestrian trails and parking facilities.
 City Low Income Housing – This fund accounts for the activities related to the assets assumed by the City of Brentwood as Housing Successor for the housing activities of the former Brentwood Redevelopment Agency.
 Landscape and Lighting Assessment Districts – These funds account for special benefit assessments levied on property owners for landscape and street lighting maintenance. In FY 2023/24, the LLAD Fund is a major governmental fund.

Permanent Funds account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs for the benefit of the City and its citizens. The City has one permanent fund, as follows:
 Riparian Mitigation Site Maintenance – This fund accounts for a stewardship endowment for maintenance of a riparian mitigation site.

Debt Service Funds account for the accumulation of resources for, and the payment of, long-term debt principal, interest and related costs. Specific descriptions of the Debt Service Funds are as follows:
 Capital Improvement Revenue Refunding Bonds Series 2021 A & B – This fund accounts for debt service transactions related to the refinance of the 2012 Capital Improvement Revenue Refunding Bonds, which were issued to: 1) finance the refunding of the 2001 Capital Improvement Bonds under a facilities lease and 2) refund a series of tax allocation bonds issued by the Brentwood Redevelopment Agency.

54 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  General Obligation Bonds Series 2002 – This fund accounts for tax levies from which general obligation debt service transactions are made on the General Obligation Bonds Series 2002.

This bond was used to finance the Police Station.
 2019 Civic Center Project Lease Revenue Refunding Bonds – This fund accounts for debt service transactions relating to the refinance of the 2009 Civic Center Project Lease Revenue Bonds.  2015 Lease Financing – This fund accounts for debt service transactions relating to the 2015 Lease Financing. The bond proceeds were used mainly to finance construction of the new Library and Municipal Service Center.

Capital Project Funds account for the acquisition and construction of major capital facilities and infrastructure not financed by Proprietary Funds. Specific descriptions of the Capital Project Funds are as follows:
 Roadway Improvements – This fund accounts for transactions related to proceeds from assessment bonds and other resources along with their use to acquire and construct certain roadway improvements. In FY 2023/24, the Roadway Improvements Fund is a major governmental fund.
 Community Facilities Improvements – This fund accounts for various community facilities improvement projects associated with either the construction or improvement of the City’s community facilities.
 Parks and Trails Improvements – This fund accounts for various park and trail improvement projects associated with either the construction or improvement of the City’s parks.  Capital Improvement Financing Program 2006-1 – This fund accounts for transactions related to proceeds from assessment bonds and other resources along with their use to acquire and construct certain capital facilities and infrastructure.  Capital Improvement Financing Program 2005-1 – This fund accounts for transactions related to proceeds from assessment bonds and other resources along with their use to acquire and construct certain capital facilities and infrastructure.  2015 Lease Financing Acquisition – This fund accounts for transactions related to proceeds from the 2015 Lease Financing and their use to acquire and construct certain capital facilities and infrastructure. This fund was closed in FY 2023/24.  Civic Center Capital Improvement Financing Program – This fund accounts for savings from refinanced City Capital Improvement Financing Program (CIFP) bonds and their use to finance a portion of the Civic Center project.
 City Capital Improvement Financing Program – This fund accounts for savings from refinanced bonds and their use to acquire and construct certain capital facilities and infrastructure.  Capital Infrastructure – This fund accounts for funds to be used for non-residential development related infrastructure projects with a focus on projects that may promote economic development.

55 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  Vineyards Projects – This fund accounts for transactions related to proceeds from assessment bonds and other resources along with their use to finance infrastructure improvements within the Vineyards development area.

Enterprise Funds account for operations financed and operated in a manner similar to private business enterprises. The intent of the City Council is for the costs of providing certain goods or services to the public be financed or recovered primarily through user charges. The City reports the following Business-Type Activities - Enterprise Funds, all of which are reported as major funds:
 Wastewater – Accounts for the operation, maintenance and capital improvement projects of the wastewater system. These activities are funded by user charges and impact fees.  Solid Waste – Accounts for the operation, maintenance and capital improvement projects of the solid waste system. These activities are funded by user charges.  Water – Accounts for the operation, maintenance and capital improvement projects of the water system. These activities are funded by user charges and impact fees.  City Rentals – Accounts for all City facilities rented and maintained through this fund. This fund was closed in FY 2023/24.
 Housing – Accounts for the administrative and operational expenses for the Housing programs which include the Housing rental units and the Affordable Housing and First-Time Homebuyer programs.

Additionally, the City reports for the following fund types:

Internal Service Funds account for the financing of either goods or services provided by one department to other departments of the City on a cost reimbursement basis. Specific descriptions of these funds are as follows:
 Information Services – To provide a source of funding for the development and coordination of the City’s information systems’ needs.
 Vehicle and Equipment Replacement – To provide a source of funding for vehicle and equipment replacement.
 Information Systems Replacement – To provide a source of funding for the replacement of information systems such as computers and the phone system.  Facilities Replacement – To provide a source of funding for repairs or the replacement of City facilities.
 Tuition – To provide a source of funding for expenditures related to continuing education.  Fleet Maintenance Services – To provide a source of funding for the maintenance of all City vehicles, except for Police Department vehicles.
 Facilities Maintenance Services – To provide a source of funding for maintenance and repairs of City facilities.
 Parks and LLAD Replacement – To provide a source of funding for the replacement of landscaping, equipment and facilities in the citywide parks and LLAD.

56 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  Insurance – To provide a source of funding for future insurance costs and unforeseen expenses due to legal matters or lawsuits.
 Pension/Other Post-Employment Benefits (OPEB) Obligation – To provide an intermediateterm funding source for OPEB and pension expenses.

Fiduciary Funds account for Other Employee Benefit Trust Funds, Private-Purpose Trust Funds and Custodial Funds. The financial activities of these funds are excluded from the Government-Wide Financial Statements, but are presented in separate Fiduciary Fund Financial Statements. The Other Employee Benefit Trust Funds, Private-Purpose Trust Funds and Custodial Funds consist of:
 Other Employee Benefit Trust Fund - VALIC – Fund used to report the activities of the City’s single-employer deferred compensation plan held by a third-party administrator.  Private-Purpose Trust Fund - Successor Agency – Special funds used to report the activities and financial position of the Successor Agency to the Brentwood Redevelopment Agency. These funds are held in a trust arrangement for the benefit of local taxing entities, including the City of Brentwood.
 Special Assessment Districts – Special obligations payable from and secured by specific revenue sources. The City acts as custodian of these funds which are not for the benefit of the City.
 Asset Seizure – Special funds to be used exclusively to support law enforcement and prosecutorial efforts. The City acts as custodian of these funds which are not for the benefit of the City.
 Pass-Through Funds – Special funds used for the collection and distribution of development fees collected on behalf of other agencies.

57 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. ASSETS, LIABILITIES, DEFERRED INFLOWS/OUTFLOWS AND NET POSITION OR FUND BALANCE i. Use of Restricted/Unrestricted Net Position
When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first. ii. Cash and Investments
The City pools idle cash from all funds with the purpose of increasing income through investment activities and the City’s investments are stated at fair value. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. For additional information, refer to Note #1D xii. The City generally holds all investments until either maturity or fair value equals or exceeds cost. Therefore, the reported value of securities in the investment pool does not reflect unrealized gains or losses but rather the fair value of those investments as of June 30, 2024.
iii. Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the City considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. All cash and investments of the Proprietary Fund types are pooled with the City’s pooled cash and investments. iv. Prepaid Items and Land Held for Resale
Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items. In governmental funds, prepaid items are accounted for using the consumption method. A portion of fund balance equal to the prepaid items is reported as nonspendable to indicate that the funds are not available for appropriation. Land held for resale is valued at the lower of cost or estimated net realizable value.
v. Capital Assets
The City’s assets are capitalized using either historical cost or estimated historical cost, except for intangible right to use lease assets, the measurement of which is discussed in Note #1D xiv, and intangible right to use subscription assets, the measurement of which is discussed in Note #1D xv.

City policy has set the capitalization threshold for capital assets at $10,000 or more. Gifts or contributions of capital assets are valued at their estimated acquisition value and/or at the contracted developer rate on the date contributed. Depreciation is recorded on a straight-line basis over the useful lives of the assets, as follows:

Land Improvements 20 - 65 years
Buildings and Structures 50 years
Machinery and Equipment 3 - 20 years
Vehicles 4 - 12 years
Infrastructure 65 years
Intangible Assets 40 - 65 years
Subscription Assets 3 – 5 years

58 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City defines infrastructure as long-lived capital assets that are normally stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets.

These assets include the street system, water purification and distribution system, sewer collection and treatment system, park and recreation lands and improvement system, storm water conveyance system and buildings, combined with the site amenities such as parking and landscaped areas, which are used by the City in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems are not delineated in the Basic Financial Statements. The appropriate operating department maintains information regarding the subsystems.
vi. Compensated Absences Payable
The following totals may be accumulated by employees each year:
 A total of 11 to 31 vacation days
 Up to 100 hours of compensatory time off, depending on employee’s classification  Up to 96 hours of personal holiday time off, depending on employee’s classification  12 days of sick leave
Sick leave is not paid at termination, but can be used for additional service credits towards retirement. Half of an employee’s accrued sick leave, up to $8,000, may be cashed in when the employee retires from the City of Brentwood. Under certain restrictive circumstances, limited amounts of sick leave can be converted to vacation time. Vacation time is only allowed to accumulate up to one and one-half years’ worth of vacation earnings.

All employees may elect to receive a lump sum payment of up to 40 hours of accumulated vacation each March with Mid-Managers, Department Directors, the City Attorney and the City Manager eligible to elect payment of up to 80 hours. Additionally, each October employees with three years of service may elect to receive a lump sum payment of up to 40 hours of accumulated vacation with Mid-Managers, Department Directors, the City Attorney and the City Manager eligible to elect payment of up to 80 hours.

Liabilities for compensated absences are included as a liability in the Government-Wide Financial Statements and are paid by the fund that has recorded the liability. The long-term portion of compensated absences in Governmental-Type activities is typically liquidated by the General Fund, Citywide Park Assessment District Fund, Fleet Maintenance Fund, Facilities Maintenance Fund and Information Services Fund.
vii. Property Tax
Property tax valuations, liens and levies for secured and unsecured property are valued on March 1 of each year. Fifty percent of secured taxes are due on November 1 and February 1 of each fiscal year and are delinquent on December 10 and April 10, respectively. Unsecured property taxes are

59 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) due on July 1 and delinquent on August 31. Contra Costa County bills and collects the City's property taxes and remits them to the City. The City accounts for the remittance in the General Fund. City property tax revenues are recognized when levied, to the extent that they result in current receivables. The City receives its full assessment of property tax and the County retains all delinquent charges.
viii. Motor Vehicle Taxes
Motor vehicle taxes are collected by the State and remitted to the City. They are not restricted. ix. New Funds, Closed Funds and Renamed Funds
In FY 2023/24, the 2015 Lease Financing Acquisition Fund was reopened and then closed and the City Rentals Fund was closed.

For internal consistency, minor changes may be made to the names of certain funds; however, the purpose of these funds remains unchanged.
x. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position and balance sheet will sometimes report a separate section for Deferred Outflows of Resources. This separate financial statement element represents a consumption of net assets that applies to a future period(s). The outflow of resources (expense/expenditure) is recognized, therefore, in the applicable future period(s). The City has three items that qualify for reporting in this category, Deferred Outflows of Resources Related to OPEB, Deferred Outflows of Resources Related to Pensions and Deferred Amount on Refunding. The elements of Deferred Outflows of Resources Related to OPEB are deferred and amortized and will be recognized as a component of OPEB expense in subsequent fiscal years. The elements of Deferred Outflows of Resources Related to Pensions are deferred and amortized and will be recognized as a component of pension expense in subsequent fiscal years. The deferred amount on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

In addition to liabilities, the statement of net position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net assets that applies to future period(s) and the inflow of resources (revenue) will be recognized in the applicable future period(s). The City has three types of items reported on the Government-Wide Statement of Net Position, which qualify for reporting in this category, Deferred Inflows of Resources Related to OPEB, Deferred Inflows of Resources Related to Pensions and Deferred Inflows of Resources Related to Leases. The elements of Deferred Inflows of Resources Related to Leases are deferred and amortized and will be recognized as a component of lease revenue in subsequent fiscal years. The elements of Deferred Inflows of Resources Related to OPEB are deferred and amortized and will be recognized as a component of OPEB expense in subsequent fiscal years. The elements of Deferred Inflows of Resources Related to Pensions are deferred and amortized and will be recognized as a component of pension expense in subsequent fiscal years.

60 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City has one item, Unavailable Revenue - Accounts Receivable, that is reported only in the Governmental Funds balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. xi. OPEB and Pensions
For purposes of measuring Net OPEB Liability, deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by California Employers' Retiree Benefit Trust (CERBT) Fund. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

For purposes of measuring the net pension liability, deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s CalPERS plans (Pension Plans) and additions to/deductions from the Pension Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The Net Pension Liability and related costs are allocated to each fund based on the proportionate share of the fund’s total current year pension contributions. xii. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by GAAP. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is based on the lowest priority level input that is significant to the entire measurement.

61 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) xiii. Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. xiv. Leases
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment.

Lessee – The City would recognize a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide financial statements. The City recognizes lease liabilities when an individual liability’s net present value exceeds 1% of fund assets.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term and (3) lease payments as follows:
 The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the noncancellable period of the lease.  Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

The City will monitor changes in circumstances that require remeasurement of a lease adjust the lease asset and liability if changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

Lessor – The City recognizes leases receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements. The City recognizes a lease receivable when an individual receivable’s net present value exceeds 1% of fund assets.

62 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term and (3) lease receipts as follows:
 The City uses its estimated incremental borrowing rate as the discount rate for leases. The estimated incremental borrowing rate is the US Treasury yield rate in effect at lease commencement, for the term that most closely matches the term of the lease, plus a 1% spread.
 The lease term includes the noncancellable period of the lease.  Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. xv. Subscription-Based Information Technology Arrangements (SBITAs) A SBITA is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchangelike transaction.

The City would recognize a subscription liability and a right-to-use subscription asset in the government-wide financial statements. The City recognizes subscription liabilities when an individual liability’s net present value exceeds $250,000.

At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over shorter of the subscription term or the useful life of the underlying IT assets.

Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments as follows:

63 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  The City uses the interest rate charged by the IT vendor as the discount rate. When the interest rate charged by the IT vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscription liabilities.  The subscription term includes the noncancellable period of the subscription.  Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

The City monitors changes in circumstances that would require a remeasurement of its subscription and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Subscription assets are reported with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position.
xvi. New Governmental Accounting Standards Board (GASB) Pronouncements In June 2022, GASB issued GASB Statement No. 100, Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62. The requirements of this Statement are effective for fiscal years beginning after June 15, 2023. The City implemented GASB Statement No. 100 for the presentation of the FY 2023/24 financial statements.

In June 2022, GASB issued GASB Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. The City is in the process of determining the impact GASB Statement No. 101 will have on its financial statements.

In December 2023, GASB issued GASB Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.

The requirements of this Statement are effective for fiscal years beginning after June 15, 2024, and all reporting periods thereafter. The City is in the process of determining the impact GASB Statement No. 102 will have on its financial statements.

In April 2024, GASB issued GASB Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter. The City is in the process of determining the impact GASB Statement No. 103 will have on its financial statements.

64 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
General Budget Policies
The City operates on a two-year budget cycle. Budgets are legally enacted through adoption of a resolution prior to July 1. The City Council periodically reviews the budgets and adopts supplemental appropriations (amendments) at the fund level when required. The level of budgetary control is established at the fund level and expenditures may not exceed budgeted appropriations at the fund level without City Council approval. In the financial statements, the final budget amounts include amendments to the original budget. Individual amendments were not material in relation to original appropriations.

Budget Basis of Accounting
Budgetary comparisons are presented for the General, Special Revenue and certain Capital Project funds. The following funds are not legally required to adopt budgets as their appropriations are either established by: 1) the related bond documentation, 2) other legal agreements or 3) are multi-year projects whose budget cycle exceeds one FY.

Capital Project Funds
Roadway Improvements
Community Facilities Improvements
Parks and Trails Improvements
Capital Improvement Financing Program 2006-1
Capital Improvement Financing Program 2005-1
Debt Service Funds
Capital Improvement Revenue Refunding Bonds Series 2021 A & B General Obligation Bonds Series 2002
2019 Civic Center Project Lease Revenue Refunding Bonds 2015 Lease Financing

65 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) B. DEFICIT FUND BALANCE OR NET POSITION
Following is a list of funds that have either a deficit fund balance or net position balance as of June 30, 2024.

The deficit in the Parks and Trails Development Impact Fee Fund and Community Facilities Development Impact Fee Fund are due to pre-funding of capital projects in advance of receiving funding from development. Development impact fees generated from future development will be deposited into these funds. The deficit in the City Capital Improvement Financing Program Fund is due to an interfund advance provided to fund a specific capital project. The deficit is expected to be cured as existing bond refinance savings are realized over several future fiscal years. The fund will continue to maintain a positive cash balance. The deficit in the Internal Service Fund is related to OPEB and Pension liability accruals. In response to increasing Net OPEB Liabilities, the City has implemented a long-term OPEB pre-funding strategy that requires 85% of the Actuarial Determined Contribution (ADC) to be funded annually. Once the 85% funded ratio is reached, contributions, as a percentage of payroll will be maintained until 100% funded ratio is attained. The Internal Service Fund will continue to maintain a positive cash balance.

C. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of the Due To/From Other Funds balance on the Governmental Funds Balance Sheet, as of June 30, 2024, is shown below. The Due To Other Funds balance in the Community Facilities Development Impact Fee Fund and Parks and Trails Development Impact Fee Fund are due to prefunding of capital projects in advance of receiving funding from development. Development impact fees generated from future development will be deposited into these funds.

Special Revenue Funds:

Parks and Trails Development Impact Fee 1,243,717 $
Community Facilities Development Impact Fee 135,546
Capital Project Fund:

City Capital Improvement Financing Program 1,413,584 $
Internal Service Funds:

Information Services 2,600 $
Receivable Fund Payable Fund Amount
Community Facilities Improvements
Capital Project Fund
Community Facilities Development Impact Fee
Special Revenue Fund $ 135,546
Parks and Trails Improvements
Capital Project Fund
Parks and Trails Development Impact Fee
Special Revenue Fund 1,244,023
Total $ 1,379,569

66 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) The interfund advance payable from the Landscape and Lighting Assessment Districts Fund is due to a ten-year interfund loan established by City Council in January 2022 between LLAD 21-1 Deer Ridge Landscape Improvements and the Parks and LLAD Replacement Fund for the construction of landscape improvements within the district. LLAD 21-1 was established for this purpose and future assessments will be used to repay the loan and maintain the improvements.

The interfund advance between the City Capital Improvement Financing Fund and Pension/Other PostEmployment Benefits Obligation Fund was authorized by City Council in June 2022. The seven-year interfund loan, beginning in FY 23/24, was used to fund a portion of the Sand Creek Sports Complex CIP project and will be repaid over the seven-year term from annual existing bond refinance savings.

Transfers are indicative of funding for: 1) capital projects or debt service, 2) subsidies of various City operations or 3) reallocations of special revenues. The schedule on the following page briefly summarizes the City’s significant, unusual or inconsistent fund-type transfer activity:

Receivable Fund Payable Fund Amount
Parks and LLAD Replacement
Internal Service Fund
Landscape and Lighting Assessment Districts
Special Revenue Fund
$ 577,981
Pension/Other Post-Employment Benefits Obligation
Internal Service Fund
City Capital Improvement Finacing Program
Capital Projects Fund 1,729,204
Total $ 2,307,185
Interfund Advance
Fund Description General Fund
Landscape and
Lighting
Assessment
Districts
Roadway
Improvements
Non-Major
Governmental
Funds
Internal
Service Funds
Wastewater
Enterprise
Solid Waste
Enterprise
Water
Enterprise
City Rentals
Enterprise
Total
Transfers In
General Fund - $ - $ - $ 11,158,551 $ - $ - $ - $ - $ 235,285 $ 11,393,836 $ Landscape and Lighting 1,485,849 - - 1,300 390,627 - - - - 1,877,776 Assessment Districts
Roadway Improvements 910,596 - - 11,133,242 - - - - - 12,043,838 Non-Major Governmental Funds 1,752,959 3,556,077 66,427 9,592,553 781,100 71,110 71,111 189,629 - 16,080,966 Internal Service Funds 3,610,958 19,374 - 703,124 - - 474,599 - - 4,808,055 Wastewater Enterprise - - - - - - 191,421 1,801,052 - 1,992,473 Solid Waste Enterprise - - - - - 240,000 - - - 240,000
Water Enterprise - - - 2,213 - - - - - 2,213
Total Transfers Out $ 3,575,451 7,760,362 $ 66,427 $ 32,590,983 $ 1,171,727 $ 311,110 $ 737,131 $ 1,990,681 $ 235,285 $ 48,439,157 $ Interfund Transfers

67 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) D. MINIMUM FUND BALANCE POLICIES
Staff presents a General Fund budget for City Council consideration that maintains an unassigned fund balance of 30% of the annual operating appropriations and operating transfers. The City will strive to maintain cash reserves in the Enterprise Funds of 30% of annual operating appropriations and operating transfers. This is considered the minimum level necessary to maintain the City’s credit worthiness and adequately provide for contingencies for unseen operating or capital needs or cash flow requirements.

E. FUND BALANCES
The City’s fund balances are classified based on spending constraints imposed on the use of resources.

Nonspendable fund balances are not expected to convert to cash and are comprised of prepaid items.

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations or enabling legislation that requires these resources be used only for a specific purpose.

Committed fund balances have constraints imposed by a City Council resolution that may be modified or rescinded only through a subsequent City Council resolution. Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City and may be changed at the discretion of the City Council.

Unassigned fund balance represents amounts that have not been restricted, committed or assigned.

The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount.

However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

The City considers restricted amounts to have been spent, prior to unrestricted amounts, when expenditure is incurred for purposes for which both are available. Committed, assigned and unassigned amounts, in this order, are considered spent when expenditure is incurred for purposes for which either is available. Detailed classifications of the City’s Governmental Fund Balances, as of June 30, 2024, are on the following page:

Transfer To Amount Purpose
General Fund $ 7,969,262 Provide a subsidy to cover a portion of the costs for Public Safety Services Capital Project $ 6,875,000 Provide funding to cover a portion of the costs for the Sand Creek Road Extension project Capital Project $ 6,226,378 Provide funding to cover a portion of the costs for the Sand Creek Sports Complex project General Fund $ 3,003,874 Gas Tax and Measure J revenue to subsidize the Street Maintenance Division Internal Service $ 2,667,652 Transfer of unassigned General Fund balance in excess of reserve requirement Capital Project $ 2,100,836 Provide funding to cover a portion of the costs for the Lone Tree Way Road Improvements project Capital Project $ 557,406 Provide funding to cover a portion of the costs for the Brentwood Various Streets and Roads Preservation project Capital Project $ 545,000 Provide funding to cover a portion of the costs for the Citywide Access Control System Upgrade project Capital Project $ 388,930 Return prior year funding for the Aquatic Complex Mechanical Room project

68 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)

Special Revenue Fund Capital Project Fund
Landscape Other
General and Lighting Roadway Governmental
Fund Assessment Districts Improvements Funds Total
Fund Balances:

Nonspendable:

Prepaids $ - 104,408 $ - $ 12,352 $ 116,760 $
Leases - 197,570 - - 197,570
Riparian Site Mitigation Endowment - - - 80,000 80,000
Total Nonspendable Fund Balances - 301,978 - 92,352 394,330 Restricted for:

Debt Service - - - 19,869,615 19,869,615
Community Facilities Projects - - - 11,955,865 11,955,865 Parks and Trails Projects - - - 18,694,088 18,694,088
Low Income Housing - - - 436,310 436,310
Vineyards Development Projects - - - 152,673 152,673
Infrastructure Projects - - - 2,190,606 2,190,606
Streets and Roadways - 678,000 16,479,342 4,728,595 21,885,937 CIFP Projects - - - 2,492,878 2,492,878
Landscape and Lighting Assessment Districts 10,293,673 - - - 10,293,673 Off Street Parking Facilities in Downtown - - - 445 445 Agricultural/Farmland Mitigation - - - 4,272,823 4,272,823 Public Art - - - 4,069,475 4,069,475
Development Impact Fee Program - - - 5,028,868 5,028,868 Drug Prevention Programs - - - 14,922 14,922
Public Safety - - - 348,826 348,826
Disability Access and Education - - - 150,548 150,548
Abandoned Vehicle Abatement - - - 139,573 139,573
Grants - - - 641,593 641,593
PEG Media - - - 619,934 619,934
Parks Maintenance - - - 3,952,906 3,952,906
Riparian Mitigation Site Maintenance - - - 3,168 3,168
Total Restricted Fund Balances 10,293,673 678,000 16,479,342 79,763,711 107,214,726 Committed to:

Public Safety - - - 2,133,847 2,133,847
Successor Agency Payment Plan - 2,087,999 - - 2,087,999 Future Strategic Initiatives - 2,737,891 - - 2,737,891
General Plan Update - 282,700 - - 282,700
Future Capital Projects - 800,000 - - 800,000
City Council Redistricting - 100,000 - - 100,000
Total Committed Fund Balances - 6,008,590 - 2,133,847 8,142,437 Unassigned:

General Fund - 22,423,011 - - 22,423,011
Other Fund Deficit - - - (2,792,847) (2,792,847)
Total Unassigned Fund Balances - 22,423,011 - (2,792,847) 19,630,164 Total Fund Balances $ 10,293,673 29,411,579 $ 16,479,342 $ 79,197,063 $ 135,381,657 $

69 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS
A. CASH AND DEPOSITS
The City of Brentwood maintains a cash investment pool that is available for all funds. The City follows the practice of pooling cash and investments of all funds, except for funds required held by outside fiscal agents under the provisions of bond indentures or other trust agreements. Each fund type balance in the pool is reflected on the balance sheet as Cash and Investments.

The carrying amounts of the City’s cash deposits were $951,339 at June 30, 2024. The bank balance, before reconciling items, was $2,035,642. The bank balance is insured for up to $250,000 and the remaining balance is collateralized for up to 105%, with the collateral being held by a pledging financial institution in the City’s name. The fair value of the pledged securities must equal from 105% to 110% of the bank balance less the insured amount as required by California Government Code Section 53651, but the City may waive collateral requirements for cash deposits that are insured by the Federal Deposit Insurance Corporation. The City’s cash and investment balances are as follows:

B. INVESTMENTS
The City apportions interest earnings to all funds based on their monthly cash balance. The table on the following page identifies the investment types authorized for the City by the City’s investment policy, which is more restrictive than California Government Code 53601. The table also identifies certain provisions of the City’s investment policy that address interest rate risk, credit risk and concentration of risk.

Pooled Deposits:

Demand Deposits 951,339 $
Petty Cash 12,550
Investments 341,805,495
342,769,384
Held by Trustee:

Investments 7,634,914
Trust Deposits:

Investments 9,111,535
Total Cash and Investments $ 359,515,833

70 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
This table includes permitted investments for the management of the City’s cash. In addition, these guidelines are used for the investments of debt proceeds held by bond trustees, which are governed by the provision of the City’s debt agreements.

Credit Risk
The City’s portfolio is comprised of the highest quality government and corporate securities.

Consistent with City policy, 82.58% of the rated portfolio consists of investments with Standard and Poor’s two highest ratings. This percentage does not include U.S. Treasury Bonds/Bills/Notes, Local Agency Investment Fund (LAIF), Asset Backed Securities, or Money Market Funds, which are all exempt or unrated. Investments at June 30, 2024, held on behalf of the City, are presented on the following page and categorized separately to give an indication of the level of risk associated with each investment. Investments are reported at fair value.

Minimum Maximum Maximum
Authorized Credit Maximum Percentage of Investment in
Investment Type Quality Maturity Portfolio (1) One Issuer Asset-Backed Securities AA 5 years 20% 5%
Bankers' Acceptances Top Rating Category 180 days 40% 5% Local Government Investment Pools None N/A N/A N/A
California State, Local Agency and Other State Obligations A 5 years 30% None Commercial Paper Top Rating Category 270 days 40% 5% (2) Insured Savings Account None N/A N/A N/A
State of California's Local Agency Investment Fund None N/A $75M/Account $75M/Account Medium-Term Notes A 5 years 30% 5% (2)
Money Market Funds Top Rating Category N/A 15% 5%
Mutual Funds (5) None None None None
Negotiable Certificates of Deposit A 5 years 30% 5%
Repurchase Agreements None 90 days None 5%
Reverse Repurchase Agreements None 92 days 20% 5%
Supranationals (3) AA 5 years 30% 5%
Time Deposits None 5 years 25% 5%
U.S. Agency Obligations None 5 years None None
U.S. Agency Mortgage Pass-Through Securities AA 5 years 20% None U.S. Treasuries None 5 years None None
U.S. Government Guaranteed Obligations (4) None None None None (1) Excluding amounts held by bond trustee not subject to California Government code restrictions. (2) Limited to 10% of the outstanding commercial paper and medium-term notes of a single issuer. (4) Allowed under the Capital Improvement Revenue Refunding Bonds, Series 2012, Indenture of Trust (5) Allowed under the VALIC Deferred Compensation Plan
(3) Only those obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC) and Inter-American Development Bank (IADB).

71 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
Concentration of Credit Risk
The City’s investment policy limits the amount the City may invest in any one non-government issuer, except investment pools, to no more than 5%. Investments in any one issuer, other than U.S. Treasury securities, mutual funds or external investment pools, which represent 5% or more of the City’s total investments, are on the following page:

Fair Credit % of Rated
Value Rating Portfolio
Medium-Term Notes 7,475,890 $ A 3.42
Medium-Term Notes 7,465,659 A- 3.41
Medium-Term Notes 16,752,332 A+ 7.66
Medium-Term Notes 3,050,501 AA- 1.39
Medium-Term Notes 4,682,177 AA 2.14
Medium-Term Notes 1,515,644 AAA 0.69
Medium-Term Notes 1,446,796 BBB+ (1) 0.66
U.S. Agency Notes 33,438,058 AA+ 15.28
California State, Local Agency and Other State Obligations 517,137 AA- 0.24 California State, Local Agency and Other State Obligations 2,167,609 AA 0.99 California State, Local Agency and Other State Obligations 651,952 AAA 0.30 Negotiable Certificates of Deposit 2,575,527 A+ 1.18
Negotiable Certificates of Deposit 2,383,583 A 1.09
U.S. Agency Collateralized Mortgage Obligations 1,124,957 AA+ 0.51 Asset-Backed Securities 12,516,444 AAA 5.72
Supranationals 3,361,571 AAA 1.54
California Asset Management Program 55,033,885 AAAm 25.16 California Cooperative Liquid Assets Securities System 56,132,446 AAAm 25.66 Money Market Funds 6,472,892 AAAm 2.96
Total Rated Investments 218,765,060 100.00
U.S. Treasury Notes 123,373,990 Exempt
U. S. Government Guaranteed Obligations 1,389,966 Aaa
Local Agency Investment Fund 2,167,755 Not Rated
Money Market Funds 2,158,049 Not Rated
Asset-Backed Securities 1,585,589 Not Rated (2)
Mutual Funds (VALIC) 9,111,535 Not Rated
Total Unrated Investments 139,786,884
Total Investments $ 358,551,944
(1) Credit ratings listed above are based on ratings provided by Standard & Poor's (S&P). Medium-Term Notes listed above as BBB+, are rated as "A2" per Moody's.
(2) Credit ratings listed above are based on ratings provided by Standard & Poor's (S&P). Asset-Backed Securities listed as "Not Rated" above have no rating per S&P, but are rated as "Aaa" per Moody's.

72 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
Interest Rate Risk
The City’s investment policy limits the investment portfolio to maturities of less than five years as a means of limiting exposure to fair value losses arising from interest rates. Currently, 72.58% of the investment portfolio is concentrated in the zero to two-year maturity range.

Custodial Credit Risk for Investments
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in possession of another party. The California Government Code does not contain legal or policy requirements limiting the exposure to custodial credit risk. The City’s investment policy requires the assets of the City be secured through the third party custody and safekeeping procedures. Bearer instruments shall be held only through third party institutions.

Collateralized securities, such as repurchase agreements, shall be purchased using the delivery vs. payment procedure.

Issuers(1) and Investment Type Fair Value % of Portfolio Federal National Mortgage Association - U.S. Agency Notes 26,664,609 $ 7.44% (1) Excludes U. S. Treasury Securities, LAIF, CAMP, CLASS and Money Market Mutual Funds.

Fair Value(1) 0-6 months 6-12 months 1-2 years 2-3 years 3-5 years % of
Portfolio
U.S. Treasury Notes $ 3,641,613 123,373,990 $ 9,473,871 $ 49,620,674 $ 39,856,394 $ 20,781,438 $ 34.41 Medium-Term Notes(2) 3,856,566 42,388,999 10,782,877 6,189,132 16,840,211 4,720,213 11.82 U.S. Agency Notes(2)
- 33,438,058 20,391,175 13,046,883 - - 9.33
U. S. Government Guaranteed Obligations 1,389,966 1,389,966 - - - - 0.39 California State, Local Agency and
Other State Obligations 1,169,089 3,336,698 622,025 1,545,584 - - 0.93 Supranationals 3,361,571 3,361,571 - - - - 0.94
Negotiable Certificates of Deposit 4,959,110 2,383,583 - - 2,575,527 - 1.38 Local Agency Investment Fund 2,167,755 2,167,755 - - - - 0.60 Asset-Backed Securities 14,102,033 - 143,580 403,937 9,240,820 4,313,696 3.93 U.S. Agency Collateralized Mortgage Obligations 1,124,957 1,124,957 - - - - 0.31 California Asset Management Program 55,033,885 55,033,885 - - - - 15.35 California Cooperative Liquid Assets Securities System 56,132,446 56,132,446 - - - - 15.66 Money Market Funds 8,630,941 8,630,941 - - - - 2.41
Mutual Funds (VALIC) 9,111,535 9,111,535 - - - - 2.54
Totals 358,551,944 $ 148,003,907 $ 41,413,528 $ 70,806,210 $ 68,512,952 $ 29,815,347 $ % of Portfolio 41.27 11.55 19.75 19.11 8.32 100.00
(1) Fair Value includes accrued interest.
(2) Any callable securities are reported at either 0-6 months or the earliest call date.

Investment Maturities

73 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
Fair Value Hierarchy
The City categorizes fair value measurements within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.

The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2024:

Investments classified in Level 1 of the fair value hierarchy of $123,373,990 are valued using unadjusted quoted prices in an active market for identical assets at the measurement date. Level 2 investments totaling $113,212,927 are valued using inputs other than quoted prices that are observable for the asset either directly or indirectly on the measurement date. Examples of Level 2 inputs include matrix pricing, market corroborated pricing and inputs such as yield curves and indices. These prices are obtained from various pricing sources by our custodian bank or fiscal agent. There are no securities classified in Level 3. Fair value is defined as the quoted fair value on the last trading day of the period.

Level 1 Level 2 Total
Investments Measured by Fair Value Level:

U.S. Treasury Notes $ - 123,373,990 $ 123,373,990 $
Medium-Term Notes 42,388,999 - 42,388,999
U.S. Agency Notes 33,438,058 - 33,438,058
U.S. Government Guaranteed Obligations 1,389,966 - 1,389,966 California State, Local Agency and Other State Obligations 3,336,698 - 3,336,698 Supranationals 3,361,571 - 3,361,571
Negotiable Certificates of Deposit 4,959,110 - 4,959,110 Asset-Backed Securities 14,102,033 - 14,102,033
U.S. Agency Collateralized Mortgage Obligations 1,124,957 - 1,124,957 Mutual Funds (VALIC) 9,111,535 - 9,111,535
Subtotal $ 113,212,927 123,373,990 $ 236,586,917
Investments Measured at Net Asset Value per Share:

California Cooperative Liquid Assets Securities System 56,132,446 Investments Measured at Amortized Cost:

Held by Trustee:

Money Market Funds 8,630,941
Investments Measured at Fair Value, But Not Subject to Fair Value Hierarchy:

California Asset Management Program 55,033,885
Local Agency Investment Fund 2,167,755
Total Investments $ 358,551,944

74 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
C. INVESTMENT IN POOLS
State Treasurer’s Pool
LAIF is an external investment program sponsored by the State of California and authorized under Sections 16429.1, 2 and 3 of the California Government code. It is part of the State’s Pooled Money Investment Account (PMIA) managed by the Investment Division of the State Treasurer’s Office. LAIF is a voluntary program, created by statute, as an investment alternative for California local governments and special districts. The City is a voluntary participant in this investment pool. The management of PMIA has indicated to the City that, as of June 30, 2024, the amortized cost of the pool was $178,914,245,370 and the fair value was $179,046,993,600. The City deposits excess cash in LAIF and is not required to be categorized. The fair value for these deposits was provided by the pool sponsor.

Each regular LAIF account is permitted to have up to 15 transactions per month, with a minimum transaction amount of $5,000, a maximum transaction amount of $75 million and at least 24 hours advance notice for withdrawals of $10 million or more. Bond proceeds accounts are subject to a onetime deposit with no cap and are set up with a monthly draw down schedule.

California Cooperative Liquid Assets Securities System
The City is a participant in the Prime Fund of the California Cooperative Liquid Assets Securities System (California CLASS), a joint powers authority and public agency established by its members under the provisions of Section 6509.7 of the California Government Code. Members and participants are limited to California public agencies and certain nonprofit corporations whose membership is limited to public agencies or public officials. California CLASS is governed by a Board of Trustees of eligible participants of the program. The City reports investment in California CLASS at fair value amount provided by California CLASS, which is the same as the value of the pool shares. The balance in the Prime Fund is available for withdrawal on demand, and is based on the accounting records maintained by California CLASS. Included in the California CLASS investment portfolio are investments such as: United States Treasury Notes, Bills, Bonds or Certificates of Indebtedness; registered state warrants or treasury notes or bonds; California local agency bonds, notes, warrants or other indebtedness; federal agency or United States government sponsored enterprise obligations; bankers acceptances; commercial paper; negotiable certificates of deposit; repurchase agreements; medium-term notes; money market mutual funds; notes, bonds or other obligation secured by a first priority security interest in securities authorized under Government Code Section 53651; and mortgage pass through securities, collateralized mortgage obligations, and other asset–backed securities.

The California CLASS Prime Fund has a target portfolio duration of less than 60 days. On June 30, 2024, these investments matured in an average of 27 days. The investment in California CLASS is valued based on the fair value factor provided by the California CLASS, which is calculated as the average cost to net asset value per share of the Prime Fund. At June 30, 2024, the fair value approximated the City’s cost.

75 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #3 – CASH AND INVESTMENTS (Continued)
California Asset Management Program
The City is a participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds. CAMP’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The City reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share in accordance with GASB 79 requirements. At June 30, 2024, the fair value approximated the City’s cost. At June 30, 2024, these investments have an average maturity of 38 days or less.

The City, as a CAMP shareholder, may withdraw all or any portion of the funds in each CAMP account at any time by redeeming shares. The CAMP Declaration of Trust permits the CAMP trustee to suspend the right of withdrawal from CAMP or to postpone the date of payment of redemption proceeds if the New York Stock Exchange is closed other than for customary weekend and holiday closings, if trading on the New York Stock Exchange is restricted, or if, in the opinion of the CAMP trustees, an emergency exists such that disposal of the CAMP pool securities or determination of its net asset value is not reasonably practicable. If the right of withdrawal is suspended, the City may either withdraw its request for that withdrawal or receive payment based on the net asset value of the CAMP pool next determined after termination of the suspension of the right of withdrawal.

D. CASH AND INVESTMENTS WITH FISCAL AGENT
The City has monies held by trustees, or fiscal agents, pledged to the payment or security of certain bonds and lease obligations, plus monies held by a third party administrator of the City’s Housing Rental Program. The City has also set up escrow bank accounts to hold retention payments due to certain contractors. These monies appear on the financial statements as Restricted Cash and Investments. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds, certificates or leases, may be invested by trustees or fiscal agents in accordance with the ordinances, resolutions or indentures specifying the types of investments allowed.

Cash and investments of the City’s single-employer deferred compensation plan, VALIC, are not the City’s property and are not subject to claims by general creditors of the City. These monies are reported in the Fiduciary Fund financial statements as Restricted Cash and Investments.

76 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE
Receivables at June 30, 2024 were comprised of the following:

Leases Receivable
The City leases a portion of the Police Department building and parking lot to a third party. The twenty year noncancellable lease term commenced in September 2019 and includes the option to renew the lease for two additional 5 year terms. The City receives monthly payments of $2,000 for the first ten years with subsequent rent increases occurring every five years thereafter.

The City has also entered into four site license agreements with telecommunication companies for portions of City property or ground space as follows:
 A 5-year noncancellable agreement that commenced in November 2017 and includes the option to renew the lease for four additional 5 year terms; monthly payments of $2,666 as of June 2024 with annual increases of 4.0%.
 A 5-year noncancellable agreement that commenced in January 2015 and includes the option to renew the lease for three additional 5 year terms; monthly payments of $3,407 as of June 2024 with annual increases of 3.5%.
 A 5-year noncancellable agreement that commenced in April 2021 and includes the option to renew the lease for two additional 5 year terms; monthly payments of $2,732 as of June 2024 with annual increases of 3.5%.
 A 5-year noncancellable agreement that commenced in November 2011 and includes the option to renew the lease for three additional 5 year terms; monthly payments of $4,723 as of June 2024 with annual increases of 4.0%.

Inter- Notes Total
Taxes Accounts Governmental Interest Utilities Leases and Loans Receivables Governmental Activities:

General Fund 1,919,036 $ 2,206,453 $ 127,253 $ 2,140 $ - $ 2,390,465 $ - $ 6,645,347 $ Landscape and Lighting
Assessment Districts
Non-Major Funds:

Internal Service - - - 3,311 - - - 3,311
Special Revenue - - 306,743 2,965 - - - 309,708
Permanent Fund - - - 19 - - - 19
Debt Service - - - 130 - - 18,126,052 (1) 18,126,182
Capital Projects - - - 3,889 - - - 3,889
Subtotal Governmental Activities 1,919,036 2,206,453 433,996 15,340 - 2,390,465 18,126,052 25,091,342 Less: Allowance - (1,473,899) (2) - - - - - (1,473,899) Total Governmental Activities $ 732,554 1,919,036 $ 433,996 $ 15,340 $ - $ 2,390,465 $ 18,126,052 $ 23,617,443 $ Business-Type Activities:

Wastewater - $ 37,555 $ 3,276,564 $ 2,904 $ 2,306,833 $ - $ - $ 5,623,856 $ Solid Waste - - - 964 2,499,638 - - 2,500,602
Water - 49,044 - 2,217 3,804,032 - - 3,855,293
Housing - 36,813 - 349 - - 747,338 (3) 784,500
Total Business-Type Activities $ 123,412 - $ 3,276,564 $ 6,434 $ 8,610,503 $ - $ 747,338 $ 12,764,251 $ (1) The City has recorded receivables for the Successor Agency's portion of long-term debt. Note #13 discusses the dissolution of the Redevelopment Agency and the Successor Agency activities. (2) Accounts receivable for citation revenues are unavailable and the revenue is not recognized until received. (3) Net of reservation for loans expected to be forgiven. These loans are discussed on the following pages. - - - - 2,886 - - 2,886

77 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE (Continued) The City recognized $174,036 in lease revenue and $66,873 in interest revenue during FY 2023/24 related to leases. As of June 30, 2024, the leases receivable balance was $2,390,465 and the deferred inflows of resources to be recognized over future lease terms was $2,192,895.

At June 30, 2024, the City does not have any lease liabilities that met the threshold recognition of 1% of fund assets.

Notes and Loans Receivable
Notes and Loans Receivable at June 30, 2024 were comprised of the following:

Down Payment Assistance and Gap Assistance Program Loans In FY 2005/06, the City established a first-time homebuyer Down Payment Assistance Program (DAP) for the benefit of first-time homebuyers in the City of Brentwood who earn up to 120% of the area median income. The loans are either due in 30 years or upon a change in ownership of the property.

The loans may be prepaid at any time without penalty. The interest rate is dependent upon the length of time the loan exists. Loans held less than three years accrue interest at 7%, loans held between three and ten years accrue interest at 5% and loans held longer than 10 years accrue interest at 3%.

The City also established a first-time homebuyer Gap Assistance Program (GAP) to facilitate the purchase of below market rate units from the City’s Affordable Housing Program for first-time homebuyers. The maximum GAP loan amount is $35,000. The GAP loans are either due in 30 years or upon a change in ownership of the property. The interest rate is set at 3%, simple interest. As of June 30, 2024 the City is owed $747,338, including interest, under the DAP and GAP loan programs.

Governmental Activities:

Amounts Due from Successor Agency 18,126,052 $
Loans under City Low Income Housing (including interest) 5,190,818 Subtotal Governmental Funds 23,316,870
Less: Reservation for Loans Expected to be Forgiven (5,190,818) Notes and Loans Receivable, Net $ 18,126,052
Business-Type Activities:

Down Payment Assistance and Gap Assistance Program Loans 747,338 $ Loans under Affordable Housing (including interest) 7,699,870 Subtotal Business-Type Activities 8,447,208
Less: Reservation for Loans Expected to be Forgiven (7,699,870) Notes and Loans Receivable, Net $ 747,338

78 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE (Continued) Amounts Due from Successor Agency
The Successor Agency to the former Brentwood Redevelopment Agency (see discussion of the Brentwood Redevelopment Agency Dissolution in Note #13) has long-term obligations for the funding of its portion of the Capital Improvement Revenue Refunding Bonds Series 2012 and the 2019 Civic Center Project Lease Revenue Bonds. The Successor Agency has pledged future tax revenues for the repayment of its portion of the bonds and the California State Department of Finance (“DOF”) has deemed the pledge an enforceable obligation of the Successor Agency. The City has recorded a receivable for the debt obligations due from the Successor Agency. The balance of the receivables at June 30, 2024 was $18,126,052. The long-term debt obligations are discussed in further detail in both Note #6 and Note #13.

Loans Under the Former Brentwood Redevelopment Agency and the City’s Affordable Housing Programs
The City and the former Brentwood Redevelopment Agency entered into loan programs to improve the quality and availability of affordable housing. Loans under the programs provide for the eventual forgiveness of the loan balances if the borrower complies with all the terms of the loan over its full term. The loans, accounted for as conditional grants in the Government-Wide financial statements, include a reserve for their eventual forgiveness. However, with the dissolution of the Brentwood Redevelopment Agency, the City agreed to become the successor to the Brentwood Redevelopment Agency’s housing activities. Therefore, as of February 1, 2012, the City Low Income Housing Fund assumed the loans receivable of the former Brentwood Redevelopment Agency’s Low and Moderate Income Housing Fund as discussed in Note #13. At June 30, 2024, the City’s Low Income Housing and Affordable Housing loans were comprised of the amounts shown below:

Governmental Activities:

Brentwood/202 Senior Housing 314,550 $
Christian Church Homes/Sycamore II 1,225,077
Eden Housing 157,125
Mercy Housing 2,135,000
Brentwood Senior Commons 400,000
Brentwood Green Valley 959,066
Subtotal Loans under City Low Income Housing 5,190,818
Less: Reservation for Loans Expected to be Forgiven (5,190,818) Net Notes and Loans Receivable $ -
Business-Type Activities:

Eden Housing 1,408,000 $
Mercy Housing 915,000
Meta Housing 5,376,870
Subtotal Loans under Affordable Housing 7,699,870
Less: Reservation for Loans Expected to be Forgiven (7,699,870) Net Notes and Loans Receivable $ -

79 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE (Continued) Brentwood/202 Senior Housing
In April 1996, the Brentwood Redevelopment Agency loaned Brentwood/202 Senior Housing, Inc., a California non-profit public benefit corporation, $314,550 to assist in the financing of the construction of a 40-unit senior housing project. The principal sum of the note does not bear interest. The outstanding principal due under this note is due and payable in full, either forty years from the date of recording the Deed of Trust or upon an event of default. In the event there has been no event of default that has not been cured, the Housing Successor shall forgive the outstanding principal balance due on the maturity date. The balance at June 30, 2024 was $314,550.

Christian Church Homes/Sycamore II
In June 2003, the Brentwood Redevelopment Agency entered into a note with Christian Church Homes of Northern California for $530,722, to construct 40 units of very low-income senior rental housing.

The note is a 3% per annum simple interest, 55-year loan. In July 2004, a note was executed with Sycamore Place II Senior Housing Corporation that amended, superseded and replaced in its entirety the original note of $530,722. This note for $755,722 is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing. The principal sum of this note bears 3% per annum, simple interest. All principal, and all accrued and unpaid interest, shall be due and payable in full no later than either June 27, 2058 or upon default. As of June 30, 2024, principal and accrued interest total $1,225,077. There is a reasonable expectation this note will be forgiven upon successful completion of the terms and conditions of the note and, as such, a reservation for forgiveness of the note has been included in these financial statements.

Eden Housing
In January 2005, the City and the Brentwood Redevelopment Agency entered into two notes with Eden Housing, Inc., in the amounts of $900,000 and $100,000 for the development of Brentwood City Commons, an 80-unit very low-income and extremely low-income senior apartment project. The notes are secured by Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing. The notes are 3% simple interest per annum, 55-year loans unless event of default occurs. As of June 30, 2024, principal and accrued interest for both notes total $1,565,125. There is a reasonable expectation these notes will be forgiven upon successful completion of the terms and conditions of the notes and, as such, a reservation for forgiveness of the notes has been included in these financial statements.

Mercy Housing
In May 2006, the City and the Brentwood Redevelopment Agency entered into two notes with Mercy Housing, Inc., in the amounts of $600,000 and $1,400,000, in order to develop 94 affordable apartments for extremely low-income or very low-income households at an affordable rent as set forth in the Affordable Housing Covenant. So long as Mercy Housing, Inc. owns and operates the project in compliance with the Affordable Housing Covenant, and the agreement is not in default under these notes, no payments shall be due. The entire outstanding unpaid principal and interest of the notes shall be due and payable in full upon either the earlier of the 55-years after the closing of the notes or December 31, 2063. The notes bear interest at 3% per annum from the date of disbursement. As of June 30, 2024, the principal and accrued interest due for both notes total $3,050,000. There is a reasonable expectation these notes will be forgiven upon successful completion of the terms and conditions of the notes and, as such, a reservation for forgiveness of the notes has been included in these financial statements.

80 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE (Continued) Brentwood Senior Commons
In November 2010, the Brentwood Redevelopment Agency entered into a Loan Agreement with Brentwood Senior Commons, L.P. for $400,000 to provide funding for a portion of elevator improvements within the Brentwood Senior Commons project. This note shall bear 0% interest unless there is a default in the conditions of the note. So long as Brentwood Senior Commons owns and operates the project in compliance with the Affordable Housing Covenant, no payments shall be due and the entire outstanding principal and interest, if any due to default, shall be due and payable in full on January 25, 2060. On the maturity date, at its discretion, the City, as Housing Successor may forgive the repayment of all or part of the Loan. As of June 30, 2024, the principal due totaled $400,000. There is a reasonable expectation this note will be forgiven upon successful completion of the terms and conditions of the note and, as such, a reservation for forgiveness of the note has been included in these financial statements.

Brentwood Green Valley
In January 2011, the Brentwood Redevelopment Agency entered into a Loan Agreement with Brentwood Green Valley Associates for $1,258,886, to provide funds to repair and rehabilitate Green Valley Apartments, a 28-unit, extremely low-income and very low-income, multi-family project. The loan was disbursed in two payments in accordance with the loan agreement. This note bears simple interest at a rate of 3% per annum from the date of disbursement. So long as Brentwood Green Valley owns and operates the project in compliance with the Affordable Housing Covenant, and the agreement is not in default under the note, the City as Housing Successor shall forgive the annual interest and the outstanding principal balance in an amount equal to 1.82% of the original principal amount over a 55-year period.

In addition, all accrued but unpaid interest is forgiven so long as the note is not in default. As of June 30, 2024, the principal due for the note, before the forgiveness, totaled $981,977. Per the terms of the note, $22,911 of the principal balance was forgiven at June 30, 2024. The remaining principal balance at June 30, 2024 totaled $959,066. There is a reasonable expectation this note will be forgiven upon successful completion of the terms and conditions of the note and, as such, a reservation for forgiveness of the note has been included in these financial statements.

Meta Housing
In January 2012, the Brentwood Redevelopment Agency entered into a Loan Agreement with Meta Housing Corporation for $3,950,000, to provide funding for the development of The Grove at Sunset Court, a 54-unit family apartment project. Due to State legislation, redevelopment agencies dissolved as of February 1, 2012. At that time, cities were given the option of becoming a successor agency and the City of Brentwood adopted a resolution to serve as the Successor Agency to the Brentwood Redevelopment Agency. The loan agreement with Meta Housing provided it would be automatically assigned to the Successor Agency upon the dissolution date.

In June 2012, the promissory note between the City of Brentwood and Meta Housing Corporation was signed and the loan was funded. As the loan had not been funded at the time of the redevelopment dissolution, and subsequently not approved as an enforceable obligation by the DOF, the City assumed the rights and obligations under the loan agreement and funded the loan from the Affordable Housing component of the Housing Enterprise Fund. The note is a 3% per annum simple interest, 55-year loan.

81 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #4 – ACCOUNTS, LEASES, NOTES AND LOANS RECEIVABLE (Continued) So long as Meta Housing owns and operates the project in compliance with the Affordable Housing Covenant, no payments shall be due and the entire outstanding unpaid principal and interest shall be due and payable on June 20, 2067. As of June 30, 2024, principal and accrued interest total $5,376,870.

There is a reasonable expectation this note will be forgiven upon successful completion of the terms and conditions of the note and, as such, a reservation for forgiveness of the note has been included in these financial statements.

NOTE #5 – CAPITAL ASSETS
The City reports all capital assets, including infrastructure, in the Government-Wide Statement of Net Position. Capital assets of the primary government, as of June 30, 2024, are as follows:

Balance Balance
July 1, 2023 Increases Decreases Transfers June 30, 2024 Governmental Activities:

Capital Assets, Not Being Depreciated or Amortized:

Land 38,801,779 $ - $ - $ - $ 38,801,779 $
Work in Progress - CIP 7,295,577 12,308,440 - (1,227,228) 18,376,789 Total Capital Assets, Not Being Depreciated or Amortized 46,097,356 12,308,440 - (1,227,228) 57,178,568 Capital Assets, Being Depreciated and Amortized:

Intangible Assets 6,258,156 - - - 6,258,156
Buildings 72,197,665 - - - 72,197,665
Infrastructure 504,464,160 1,059,476 - 531,660 506,055,296 Machinery and Equipment 13,915,104 636,370 (150,305) - 14,401,169 Vehicles 19,635,043 3,834,129 (1,199,912) - 22,269,260
Land Improvements 34,522,556 583,000 - 695,568 35,801,124 Subscription Assets - 1,134,501 - - 1,134,501
Total Capital Assets Being Depreciated and Amortized 650,992,684 7,247,476 (1,350,217) 1,227,228 658,117,171 Less Accumulated Depreciation and Amortization for:

Intangible Assets 1,747,764 96,280 - - 1,844,044
Buildings 15,710,816 1,387,004 - - 17,097,820
Infrastructure 142,548,453 7,754,714 - - 150,303,167
Machinery and Equipment 7,486,235 937,273 (150,305) - 8,273,203 Vehicles 12,171,754 1,727,580 (1,199,912) - 12,699,422
Land Improvements 9,226,525 755,327 - - 9,981,852
Subscription Assets - 113,450 - - 113,450
Total Accumulated Depreciation and Amortization 188,891,547 12,771,628 (1,350,217) - 200,312,958 Total Capital Assets, Being Depreciated and Amortized, Net 462,101,137 (5,524,152) - 1,227,228 457,804,213 Governmental Activities Capital Assets, Net 508,198,493 $ 6,784,288 $ - $ - $ 514,982,781 $ Balance Balance
July 1, 2023 Increases Decreases Transfers June 30, 2024 Business-Type Activities:

Capital Assets, Not Being Depreciated or Amortized:

Land 2,661,597 $ - $ - $ - $ 2,661,597 $
Work in Progress - CIP 55,992,311 20,419,834 - (1,504,000) 74,908,145 Total Capital Assets, Not Being Depreciated or Amortized 58,653,908 20,419,834 - (1,504,000) 77,569,742 Capital Assets, Being Depreciated and Amortized:

Intangible Assets 18,950,632 - - - 18,950,632
Buildings 30,763,464 - - - 30,763,464
Infrastructure 302,688,444 363,228 - 1,504,000 304,555,672 Machinery and Equipment 8,774,148 740,567 (24,139) - 9,490,576 Land Improvements 11,046,659 - - - 11,046,659
Total Capital Assets Being Depreciated and Amortized 372,223,347 1,103,795 (24,139) 1,504,000 374,807,003 Less: Accumulated Depreciation and Amortization for:

Intangible Assets 5,861,763 387,702 - - 6,249,465
Buildings 10,075,731 618,130 - - 10,693,861
Infrastructure 73,374,861 4,705,253 - - 78,080,114
Machinery and Equipment 2,901,561 596,208 (24,139) - 3,473,630 Land Improvements 3,957,899 200,561 - - 4,158,460
Total Accumulated Depreciation and Amortization 96,171,815 6,507,854 (24,139) - 102,655,530 Total Capital Assets, Being Depreciated and Amortized, Net 276,051,532 (5,404,059) - 1,504,000 272,151,473 Business-Type Activities Capital Assets, Net 334,705,440 $ 15,015,775 $ - $ - $ 349,721,215 $

82 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #5 – CAPITAL ASSETS (Continued)
For the year ending June 30, 2024, depreciation and amortization expense on capital assets was charged as follows:

Intangible Assets
 Water Rights
In an agreement between the City of Brentwood and the Contra Costa Water District (CCWD), dated February 29, 2000, the City is obligated to reimburse CCWD $597,532 as a buy-down cost per acre-foot of water. The City capitalized this expense as of June 30, 2001 and is amortizing the expense over 65 years. In an amendatory agreement between Brentwood and CCWD, dated September 24, 2003, the City purchased the treatment capacity right of up to 3,200 acre-feet of water per year, from the Randall-Bold Water Treatment Plant, for $10,000,000. The City capitalized this expense as of June 30, 2004 and is amortizing the expense over 40 years. The capacity right does not confer title or ownership of the facility, but merely reserves capacity in the facility. The City entered into a Third Amendatory Agreement with CCWD, dated February 4, 2015, to purchase capacity rights in the Rock Slough conveyance facilities. The City capitalized the total buy-in amount of $8,353,100 as of June 30, 2016 and is amortizing the expense over 65 years.

Governmental Activities:

General Government $ 3,546,376
Public Safety 528,070
Community Development 1,740
Public Works 5,116,653
Parks and Recreation 1,678,043
Internal Service 1,900,746
Total Depreciation and Amortization Expense - Governmental Activities $ 12,771,628 Business-Type Activities:

Wastewater $ 2,201,201
Solid Waste 286,573
Water 3,973,047
Housing 47,033
Total Depreciation and Amortization Expense - Business-Type Activities $ 6,507,854

83 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #5 – CAPITAL ASSETS (Continued)
 Joint Use Facilities
The governing bodies of the City, Liberty Union High School District (LUHSD) and Brentwood Union School District (BUSD) have recognized the public need for additional facilities. As a result of these cooperative efforts, the City has made contributions to these school districts relating to the joint use of these facilities. The City has capitalized these expenditures and is amortizing the expense over 65 years.
 As of June 30, 1993, $513,156 for the BUSD Gym located at Bristow Middle School  As of June 30, 2002, $1,000,000 for the BUSD Gym located at Edna Hill Middle School  As of June 30, 2003, $650,000 for the LUHSD Gym located at Liberty High School  As of June 30, 2005, $95,000 for the LUHSD Ball Fields located at Heritage High School  As of June 30, 2005, $2,500,000 for the LUHSD Community Pool and Gym located at Heritage High School
 As of June 30, 2009, $1,500,000 for the BUSD Gym located at Adams Middle School NOTE #6 – LONG-TERM OBLIGATIONS
The following summarizes changes in long-term obligations during the year:

A. GOVERNMENTAL ACTIVITIES

Balance Payments/ Balance Amounts Due
July 1, 2023 Additions Adjustments June 30, 2024 Within One Year Bonds
General Obligation Bonds Series 2002 $ 278,436 4,849,028 $ (1) $ 4,472,464 (655,000) $ 690,000 $ 2019 Civic Center Project Lease Revenue Refunding Bonds - 27,155,000 (1,405,000) 25,750,000 1,475,000 Bond Premium - 4,238,522 (249,325) 3,989,197 -
Private Placement Bonds
2015 Lease Financing - 8,345,000 (525,000) 7,820,000 545,000 Direct Purchase Bonds
Capital Improvement Revenue Refunding Bonds Series 2021 A & B - 12,915,826 (1,548,899) 11,366,927 1,557,891 Total Bonds 278,436 57,503,376 (4,383,224) 53,398,588 4,267,891 Notes Payable
Successor Agency Payment Plan - 4,331,214 (1,826,938) 2,504,276 1,679,948 Total Notes Payable - 4,331,214 (1,826,938) 2,504,276 1,679,948 Other
Net OPEB Liability 4,377,104 20,016,894 (33,364) (2) - 24,360,634 Net Pension Liability 6,415,187 39,172,015 (2,563,877) (2) - 43,023,325 Accumulated Compensated Absences 2,229,522 2,039,199 (2,056,123) 2,212,598 1,327,559 Subscription Liability 1,134,501 - (249,293) 885,208 205,561 Total Other 14,156,314 61,228,108 (4,902,657) 70,481,765 1,533,120 Total Governmental Activities Long-Term Obligations $ 14,434,750 123,062,698 $ (11,112,819) $ 126,384,629 $ 7,480,959 $ (1) Accreted Interest
Fund and Information Services Fund
(2) OPEB Liability and Pension Liability are typically liquidated by the General Fund, Citywide Park Assessment District Fund, Fleet Maintenance Fund, Facilities Maintenance

84 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
i. Bonds
General Obligation Bonds Series 2002
On February 28, 2002, the City issued $5,999,976 in General Obligation Bonds Series 2002 to finance the construction, acquisition and improvement of a new police station. Total annual debt service payments, including interest at 3.625% to 5.68%, range from $208,666 to $925,000. The General Obligation Bonds Series 2002 shall accrete in value by the accumulation of earned interest from its initial denominational (principal) amount with such interest compounded semiannually on January 1 and July 1.
2019 Civic Center Project Lease Revenue Refunding Bonds On April 2, 2019, the Authority issued $32,210,000 in Civic Center Project Lease Revenue Refunding Bonds, Series 2019, to refinance the 2009 Civic Center Project Lease Revenue Bonds. The City’s Civic Center is pledged as collateral for this debt issuance. Annual debt service payments, including interest at 4.00% to 5.00%, range from $852,800 to $2,715,650. The refunding resulted in overall debt service savings of $17,856,031. The net present value of the debt service savings is called an economic gain and amounted to $8,988,082. If an event of default occurs, as defined in the indenture of trust, the bond trustee, or not less than a majority of owners of the bonds outstanding at that time, are entitled to declare the principal and accrued interest for all bonds outstanding to be due and payable immediately.

The 2009 Civic Center Project Lease Revenue Bonds were issued to finance the construction of a new city hall, community center and senior center, plus library improvements and other public capital improvements.

The Civic Center Project Lease Revenue Refunding Bonds, Series 2019, are secured by a lien on, and pledge of, revenues under a Trust Agreement. “Revenues” means all amounts received by the Trustee, U.S. Bank, as payment on principal and interest. The City’s revenue sources, as described in the Official Statement, are pledged payments from the Brentwood Redevelopment Agency (now Successor Agency) pursuant to the reimbursement agreement, pledged payments from the Community Facilities Districts (CFD) local obligations and pledged payments from the CIFP revenues.

Year Ending
June 30 Principal Total
2025 690,000 $ 690,000 $
2026 725,000 725,000
2027 760,000 760,000
2028 800,000 800,000
2029 840,000 840,000
2030-2031 1,805,000 1,805,000
Subtotal 5,620,000 5,620,000 $
Future Accretion (1,147,536)
Total $ 4,472,464

85 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
As mentioned previously, the Successor Agency to the Brentwood Redevelopment Agency has pledged future tax revenues for the repayment of a portion of the bonds. Following the dissolution of the Brentwood Redevelopment Agency, the Successor Agency is allocated funds for payment of obligations listed on the Successor Agency’s ROPS and approved by the DOF. As of June 30, 2024, the Successor Agency listed this debt obligation on its ROPS and the DOF has approved its inclusion for each applicable ROPS period through June 30, 2025.

The City has recorded a receivable for the debt obligations of the Successor Agency, as detailed in Note #4, and the Successor Agency has recorded a liability for these obligations, as discussed in Note #13. However, should these revenue sources not be sufficient to cover the principal and interest payments due in any year, the City is obligated, under the facilities lease, to pay the shortfall from the General Fund.
ii. Private Placement and Direct Purchase
2015 Lease Financing
On December 17, 2015, the Authority issued $11,515,000 in a private placement with Capital One Public Funding, LLC to finance the acquisition and construction of a new Library and a Municipal Service Center, along with other public capital improvements. The City’s Police Department building is pledged as collateral for this debt issuance. Annual debt service payments, including interest at 3.25%, range from $108,113 to $792,031.

Year Ending
June 30 Principal Interest Total
2025 1,475,000 $ 1,192,275 $ 2,667,275 $
2026 1,550,000 1,116,650 2,666,650
2027 1,630,000 1,037,150 2,667,150
2028 1,715,000 953,525 2,668,525
2029 1,805,000 865,525 2,670,525
2030-2034 8,745,000 2,993,625 11,738,625
2035-2039 8,010,000 1,023,125 9,033,125
2040 820,000 16,400 836,400
Total $ 9,198,275 25,750,000 $ 34,948,275 $
Year Ending
June 30 Principal Interest Total
2025 $ 245,294 545,000 $ 790,294 $
2026 227,338 560,000 787,338
2027 208,813 580,000 788,813
2028 189,638 600,000 789,638
2029 169,894 615,000 784,894
2030‐2034 530,399 3,400,000 3,930,399
2035‐2036 49,725 1,520,000 1,569,725
Total $ 1,621,101 7,820,000 $ 9,441,101 $

86 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
Capital Improvement Revenue Refunding Bonds Series 2021 A & B On November 2, 2021, the Authority issued $14,450,491 in Capital Improvement Revenue Refunding Bonds Series 2021A (tax exempt) and 2021B (taxable) in a direct purchase with City National Bank to finance the refunding of the 2012 Capital Improvement Revenue Refunding Bonds. The refunded 2012 bonds were issued to: 1) finance the refund of the 2001 CIP Bonds under a facilities lease and 2) refund a series of tax allocation bonds issued by the Brentwood Redevelopment Agency. The Brentwood Family Aquatic Complex is pledged as collateral for the 2021 bonds and the interest rates on these bonds range from 0.63% to 1.35%. The refunding resulted in overall debt service savings of $2,661,492 and an economic gain of $2,470,903, the difference between the present value of the old and new debt service payments.

The Successor Agency to the Brentwood Redevelopment Agency has pledged future tax revenues for the repayment of a portion of the bonds. The Successor Agency pledge of future tax revenues was not affected by the refunding of the 2012 Capital Improvement Revenue Refunding Bonds. Following the dissolution of the Brentwood Redevelopment Agency, the Successor Agency is allocated funds for payment of obligations listed on the Successor Agency’s ROPS and approved by the DOF. This pledge ends upon repayment of the Successor Agency’s $10,799,625 remaining share of debt service on the bonds, as of June 30, 2024, which is scheduled to occur in 2032. For FY 2023/24, gross tax revenue available to be distributed to the Successor Agency totaled $10,516,075, which represented coverage of 7.75 times $1,357,500 of the Successor Agency’s debt service. The remaining portion of the bonds is repayable from any source of the City’s available funds and will primarily be funded from the Roadway Development Impact Fee Fund and prior bond refinance savings.

Year Ending
June 30 Principal Interest Total
2025 $ 142,938 1,557,891 $ 1,700,829 $
2026 121,746 1,581,671 1,703,417
2027 100,207 1,609,209 1,709,416
2028 80,645 1,288,904 1,369,549
2029 63,121 1,307,305 1,370,426
2030‐2032 81,903 4,021,947 4,103,850
Total $ 590,560 11,366,927 $ 11,957,487 $

87 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
iii. Notes Payable
Successor Agency Payment Plan
In an effort to balance its budget, the State of California adopted ABx1 26 on June 28, 2011, amended by Assembly Bill 1484 (AB 1484) on June 27, 2012. This legislation suspended all new redevelopment activities and dissolved redevelopment agencies as of February 1, 2012. The City of Brentwood elected to become the Successor Agency to the former Brentwood Redevelopment Agency on January 10, 2012.

Section 34179.5 of AB 1484 required all successor agencies to hire a licensed accountant, approved by the County Auditor-Controller, to conduct two Due Diligence Reviews (DDRs) to determine the balances available to be redistributed to other taxing entities. The two DDRs were focused on 1) the Low and Moderate Income Housing Fund, and 2) Other Funds and Accounts.

The Low and Moderate Income Housing Fund DDR determined that an unobligated balance of $4,072,553 was available for redistribution and the Successor Agency remitted this amount to the Contra Costa County Auditor Controller in February 2013. The Other Funds and Accounts DDR determined that the unobligated balance was $0, and the Successor Agency filed the DDR report with the DOF. The DOF, during their review of the DDR, determined that transfers made pursuant to pre-existing contracts and construction commitments were invalid and adjusted the DDR accordingly, issuing a DDR demand of $14,955,931.

In response to the $14,955,931 DDR demand, the City and Successor Agency filed suit against the DOF claiming, among other things, that 1) the DOF’s DDR determination violated Proposition 22, which added Article XIII, Sections 24(b) and 25(a)(7) to the California Constitution and prohibits the Legislature from reallocating tax increment; 2) at the time the transfers were made by the former Redevelopment Agency the transfers were legally valid and made pursuant to enforceable obligations and third party contracts; 3) the transfers were for the payment of goods and services which were broadly exempted from reversal as defined in California Health and Safety Code Section 34179.5(b)(3); and 4) the DOF’s enforcement of its final determination was unconstitutional. The City and Successor Agency’s legal challenge was ultimately unsuccessful and legal remedies were exhausted when the California Supreme Court declined to hear the case on September 16, 2015.

On December 9, 2015, the City, as Successor Agency, entered into a ten-year interest free payment plan with the DOF for the City to pay the DDR demand of $14,955,931. The annual payments range from $357,796 to $1,826,938.

Year Ending
June 30 Principal Interest Total
2025 1,679,948 $ - $ 1,679,948 $
2026 824,328 - 824,328
Total $ - 2,504,276 $ 2,504,276 $

88 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
iv. Net OPEB Liability and Net Pension Liability
Individual governmental funds that provide for employee personnel costs, primarily the General Fund, will be responsible for liquidating their respective shares of the Net OPEB Liability and Net Pension Liability. Details regarding the City’s Net OPEB Liability and Net Pension Liability can be found in Note #9 and Note #10, respectively.
v. Accumulated Compensated Absences
The long-term compensated absences balances as of June 30, 2024 were:

Governmental $ 885,039
Business-Type $ 264,330
vi. Subscription Liability
In December 2023, the City entered into a five-year SBITA for the use of cloud services related to body-worn cameras, tasers, fleet video systems, interview room video, unmanned aircraft systems (drones), and digital evidence storage. An initial subscription liability was recorded in the amount of $1,134,501 during the current fiscal year. As of June 30, 2024, the balance of the subscription liability was $885,208 and interest payable was $17,966. The City is required to make annual principal and interest payments of $249,294. The software has a five-year estimated useful life. The value of the right-to-use asset as of the end of the current fiscal year was $1,134,501 and had accumulated amortization of $113,450.

The future principal and interest subscription liability payments as of June 30, 2024, were as follows:

Year Ending
June 30 Principal Interest Total
2025 205,561 $ 43,733 $ 249,294 $
2026 215,716 33,578 249,294
2027 226,374 22,920 249,294
2028 237,557 11,736 249,293
Total $ 111,967 885,208 $ 997,175 $

89 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
B. BUSINESS-TYPE ACTIVITIES
i. Bonds
Water Revenue Refunding Bonds Series 2014
On December 4, 2014, the Authority issued $42,810,000 in Water Revenue Refunding Bonds Series 2014 (“2014 Water Bonds”) to 1) refund a portion of the Authority’s Water Revenue Bonds Series 2008 and 2) pay costs of issuance incurred in connection with the issuance, sale and delivery of the 2014 Water Bonds. The refunding reduced the total debt service payments over 24 years by $9,249,078 and resulted in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $7,404,766. Total annual debt service payments, including interest at rates from 3.0% to 5.0%, range from $1,966,100 to $3,517,350. If an event of default occurs, as defined in the indenture of trust, the bond trustee, or not less than a majority of owners of the bonds outstanding at that time, are entitled to declare the principal and accrued interest for all bonds outstanding to be due and payable immediately. Future payments for these bonds are as follows:

Balance Payments Balance Amounts Due
July 1, 2023 Additions Adjustments June 30, 2024 Within One Year Bonds
Water Revenue Refunding Bonds Series 2014 32,375,000 $ - $ (2,050,000) $ 30,325,000 $ 2,160,000 $ Net Bond Premium 3,781,387 - (252,093) 3,529,294 -
Total Bonds 36,156,387 - (2,302,093) 33,854,294 2,160,000 Notes Payable (Direct Placement)
State Water Resources Loan (Recycled Water Projects) 14,389,629 - (430,179) 13,959,450 434,480 State Water Resources Loan (WWTP Expansion Ph. II) 40,700,429 6,983,959 - 47,684,388 - Total Notes Payable 55,090,058 6,983,959 (430,179) 61,643,838 434,480 Other
Net OPEB Liability 8,010,818 2,337,052 (867,436) 9,480,434 - Net Pension Liability 10,014,931 2,642,951 (1,905,013) 10,752,869 - Accumulated Compensated Absences 630,481 725,526 (695,182) 660,825 396,495 Total Other 18,656,230 5,705,529 (3,467,631) 20,894,128 396,495 Total Business-Type Activities Long-Term Obligations $ 12,689,488 109,902,675 $ (6,199,903) $ 116,392,260 $ 2,990,975 $ Year Ending
June 30 Principal Interest Total
2025 2,160,000 $ 1,357,350 $ 3,517,350 $
2026 2,260,000 1,249,350 3,509,350
2027 1,715,000 1,136,350 2,851,350
2028 1,800,000 1,050,600 2,850,600
2029 1,855,000 996,600 2,851,600
2030-2034 10,435,000 3,809,200 14,244,200
2035-2038 10,100,000 1,293,000 11,393,000
Total $ 10,892,450 30,325,000 $ 41,217,450 $

90 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
The Authority has pledged future, water customer revenues, net of specified operating expenses, through 2038 to repay the 2014 Water Bonds. The bond coverage requirement is 1) the Adjusted Annual Net Water Revenues equal at least 125% of the annual principal and interest payments on the bonds or 2) the Net Operating Revenues equal at least 100% of the annual principal and interest payments on the bonds, whichever is higher. Adjusted Annual Net Water Revenues is defined as Water income and revenue less maintenance and operation costs adjusted by any transfers to or from the Rate Stabilization Fund. Net Operating Revenues is defined as the Adjusted Annual Net Water Revenues less net impact fees and credits received. In FY 2023/24, the Water Fund’s principal and interest paid was $3,509,850, Net Operating Revenues were $9,445,105 and Adjusted Annual Net Water Revenues were $11,198,373 meeting bond covenant debt-coverage requirements. ii. Notes Payable (Direct Placement) and Other
State Water Resources Loan (Recycled Water Projects)
In July 2017, the City entered into a loan and grant agreement with the State of California’s State Water Resources Control Board for a not-to-exceed amount of $20,802,000 to fund the City’s Water Recycling Projects, which consists of two City projects: the Non-Potable Storage Facility, and Citywide Non-Potable Water Distribution System. Project financing consists of a State Revolving Fund loan and grant funding in the amounts of $14,596,500 and $6,205,500, respectively.

Certain terms of the agreement were amended in September 2018, under which the City was to start construction no later than June 25, 2018, and amended again in March 2021, under which the construction was to be completed by June 30, 2022 and final disbursement request completed by December 30, 2022. Construction on the project began December, 2017 and final disbursements were received during FY 2022/23. The loan bears annual interest of 1.0%, which begins accruing with each financing disbursement. During FY 2022/23 accrued construction period interest, in the amount of $235,434, was recorded as principal, resulting in total principal due to the State of $14,831,934. Upon violation of any material provision of the loan agreement, the State Water Resources Control Board has the option to demand immediate repayment of the current loan balance plus accrued interest and penalties. As of June 30, 2024, the City’s gross repayment obligation was $13,959,450. During FY 2023/24, the Wastewater Fund’s principal and interest paid on this loan was $574,075.

Year Ending
June 30 Principal Interest Total
2025 434,480 $ 139,595 $ 574,075 $
2026 438,825 135,250 574,075
2027 443,213 130,862 574,075
2028 447,645 126,430 574,075
2029 452,122 121,953 574,075
2030-2034 2,329,337 541,035 2,870,372
2035-2039 2,448,158 422,216 2,870,374
2040-2044 2,573,038 297,335 2,870,373
2045-2049 2,704,288 166,083 2,870,371
2050-2052 1,688,344 33,879 1,722,223
Total $ 2,114,638 13,959,450 $ 16,074,088 $

91 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #6 – LONG-TERM OBLIGATIONS (Continued)
State Water Resources Loan (Wastewater Treatment Plant Expansion – Phase II Project) In December 2019, the City entered into a loan agreement with the State of California’s State Water Resources Control Board for a not-to-exceed amount of $65,102,000 to fund the City’s Wastewater Treatment Plant Expansion – Phase II Project. Project financing will consist of a State Revolving Fund loan of a not-to-exceed amount of $61,246,000 and a principal forgiveness component of $3,856,000. Certain terms of the agreement were amended in April 2021, under which the City was to have construction completed by December 30, 2024. Construction on the project began in September 2020. The loan bears annual interest of 1.3%, which begins accruing with each financing disbursement. Beginning one year after completion of construction, repayment of the loan principal plus interest will be made annually according to the final payment schedule provided by the state. Upon violation of any material provision of the loan agreement, the State Water Resources Control Board has the option to demand immediate repayment of the current loan balance plus accrued interest and penalties.

As of June 30, 2024, the City has incurred $50,625,736 of eligible project costs and financing disbursement requests have been submitted to the State. Through June 30, 2024 accrued construction period interest, in the amount of $916,652, was recorded as principal, resulting in total principal due to the State of $51,540,388. Of this amount, $3,856,000 was allocated by the State as loan forgiveness in FY 2020/21, and the net amount of the note payable is $47,684,388. iii. Subsequent Event – Water Bond Refinance
On October 16, 2024, the Authority issued $26,855,000 in Water Revenue Refunding Bonds, Series 2024 (“2024 Water Bonds”) to 1) refund the Authority’s Water Revenue Refunding Bonds Series 2014 and 2) pay costs of issuance incurred in connection with the issuance, sale and delivery of the 2024 Water Bonds. The refunding reduced the total debt service payments over 14 years by $4,185,085 and resulted in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $3,546,868. Total annual debt service payments, at a

5.0% rate, range from $3,221,115 to $2,546,250.

92 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #7 – SPECIAL ASSESSMENT DISTRICTS (No City Liability) The following issues of Special Assessment District Bonds, issued pursuant to the Municipal Improvement Act of 1915, are not reported in long-term debt. These are special obligations payable from, and secured by, specific revenue sources described in the bond resolutions and official statements of the respective issues. The City is the collecting and paying agent for the debt issued by these districts, but neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof is pledged for the payment of these bonds. Debt service for the special assessment district bonds is reported in the Custodial funds of the Fiduciary funds section.

Special Assessment District Bonds
Assessment
District Debt
$ 545,000
$ 5,910,000
$ 41,375,000
$ 26,435,000
Total Assessment District Debt $ 74,265,000
City of Brentwood - Limited Obligation Improvement Bonds, Randy Way Sewer Line • Dated August 7, 2007
• Annual debt service payments, including interest at 3.95 % to 5.20 %, range from $53,123 to $58,060 • Final payment due September 2037
Brentwood Infrastructure Financing Authority - Infrastructure Revenue Refunding Bonds, Series 2012 A (Refinancing of CIFP's 96-1, 98-1 and 99-1)
• Dated June 7, 2012
• Annual debt service payments, including interest at 2.00 % to 4.23 %, range from $572,000 to $2,530,569. • Final payment due September 2029
Brentwood Infrastructure Financing Authority - Infrastructure Revenue Refunding Bonds, Series 2014 A&B (Refinancing of CIFP's 94-1, 2000-1, 2005-1 and 2006-1) • Dated September 24, 2014
• Annual debt service payments, including interest at 2.00 % to 5.00 %, range from $1,081,500 to $6,417,040 • Final payment due September 2036
Brentwood Infrastructure Financing Authority - Infrastructure Revenue Refunding Bonds, Series 2018A (Refinancing of CIFP's 2002-1, 2003-1 and 2004-1)
• Dated February 6, 2018
• Annual debt service payments, including interest at 2.19 % to 4.15 %, range from $1,228,923 to $3,271,266 • Final payment due September 2034

93 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #8 – CLASSIFICATION OF NET POSITION
In the Government-Wide Financial Statements, net position is classified in the following categories:
 Net Investment in Capital Assets and Capacity Rights – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation, and the outstanding balances of debt which are attributable to the acquisition, construction or improvement of these assets, reduce this category.
 Restricted – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments.  Unrestricted – This category represents the net position of the City, which is not restricted for any project or other purpose.

NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS
A. GENERAL INFORMATION ABOUT THE CITY’S RETIREE HEALTHCARE PLAN Plan Benefits and Benefits Provided
In addition to the pension benefits described in Note #10, the City provides certain post-retirement health care benefits. The City’s Retiree Healthcare Plan (“Plan”) is a defined benefit healthcare plan administered by the City. Benefit provisions are established and may be amended through agreements and memorandums of understanding between the City and its employees. The City provides retiree medical benefits through the CalPERS healthcare program, Public Employees’ Medical and Hospital Care Act (PEMHCA). During FY 2009/10, the City Council passed a resolution to participate in the CERBT program, an irrevocable trust established to fund OPEB. CERBT is an agent multiple-employer defined benefit other postemployment benefits plan administrated by CalPERS, and is managed by an appointed board not under the control of the City Council. CERBT consists of participating employers of the State of California and public agencies. Individual employers may establish more than one plan.

CERBT was established by Chapter 331 of the 1988 California Statutes, and employers elect to participate in the CERBT to pre-fund health, dental, and other non-pension postemployment benefits for their retirees and survivors, if applicable. CERBT has pooled administrative and investment functions, while separate employer accounts are maintained to prefund and pay for health care or other postemployment benefits in accordance with the terms of the participating employers’ plans.

There are three CalPERS Board approved investment strategies for employers to choose from depending on their expected levels of return and volatility. Benefit provisions are established by participating employers.

94 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS (Continued) The City covers premiums, subject to caps dependent on hire date for eligible retirees, with service or disability retirement directly from the City under CalPERS. Coverage extends to dependents and surviving spouses. No dental, vision or life insurance benefits are provided. The City has two benefit tier levels as follows:

Employees Covered by Benefit Terms
Membership in the plan consisted of the following at the measurement date of June 30, 2023:

Eligibility Retire directly from the City under CalPERS (Age 50 (1) with 5 years CalPERS service, or disability) Medical City paid premium, subject to caps:

Misc Safety Misc Safety Misc Safety
2023 1,326.63 1,500.00
2024 (2)+ 1,326.63 (3) 1,500.00 (3)
Surviving Spouse 100% of retiree benefit continues to surviving spouse if retiree elects CalPERS survivor annuity Other No dental, vision, life, or Medicare Part B reimbursement (1) Age 52 for Miscellaneous PEPRA employees.
(2) Based on Basic (non-Medicare) premiums.
(3) Not less than Kaiser single premium.
(4) PEMHCA Minimum is $157 in 2024.

Kaiser Dual PEMHCA Minimum (4)
Hired < 7/1/12
Retire < 7/1/12 Retire ≥ 7/1/12
1,827.48 151.00
Hired ≥ 7/1/12
Number of
Covered
Participants
Active employees 313
Inactive employees or beneficiaries currently receiving benefits 174 Inactive participants entitled to, but not yet receiving benefit payments 33 Total 520

95 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS (Continued) B. NET OPEB LIABILITY
Actuarial Methods and Assumptions
The City’s Net OPEB Liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the Net OPEB Liability was determined by an actuarial valuation dated June 30, 2023, based on the following actuarial methods and assumptions:

The underlying mortality improvement assumptions were based using 80% of on the Scale MP-2020 and all other actuarial assumptions used in the June 30, 2023 valuation were based on the results of a CalPERS experience study.

The long-term expected rate of return on OPEB plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of OPEB 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 on the following page:

Actuarial Assumption June 30, 2023 Measurement Date
Actuarial Valuation Date June 30, 2023
Contribution Policy
- City contributes 85% of ADC
- Once 85% funded ratio is reached, contributions (as a percentage of payroll) maintained until 100% funded ratio attained

6.00% at June 30, 2023

6.25% at June 30, 2022
Expected Long-Term Rate of
Return on Investments
Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust
General Inflation 2.50% annually
Mortality, Retirement,
Disability, Termination CalPERS 2021 Experience Study
Mortality Improvement Projected fully generationally using 80% of Scale MP-2020 Salary Increases Aggregate - 2.80% anually
Merit - CalPERS 2021 Experience Study
Non-Medicare - 7.00% for 2024, decreasing to an ultimate rate of 3.94% in 2075 Medicare - 5.84% for 2024, decreasing to an ultimate rate of 4.00% in 2075 PEMHCA minimum increases 3.97% increase from 2023 to 2024 followed by 3.50% annually Hired < 7/1/12: 100%
Hired > 7/1/12: 60%
Discount
Rate
Healthcare participation
Medical Trend

96 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS (Continued) Discount Rate
The discount rate used to measure the total OPEB liability was 6.0%. The projection of cash flows used to determine the discount rate assumed that City contributions are made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Changes in Assumptions
The changes in assumptions are based on the OPEB valuation of June 30, 2023. There were three assumptions updated since the prior valuation. First, the single Equivalent Discount Rate (SEDR) has decreased from 6.25% as of June 30, 2022 to 6.00% as of June 30, 2023 based on updated expected long-term rate of return of the Trust, which caused an increase in the liability. Second, payroll growth, mortality, disability, termination, and retirement rates have been updated from CalPERS Experience Study and Review of Actuarial Assumptions published in December 2017 to the most recent study published in November 2021. The net impact of these changes is a net decrease in the liability. Third, health care trend rates have been updated from an initial rate of 6.75% (non-Medicare) / 4.89% Actives (Medicare) / 5.21% Retirees (Medicare) in 2021 that decreases gradually to an ultimate rate of 3.75% to Getzen 2023 table that reflects actual premium increases from 2023 to 2024 followed by 7.00% (nonMedicare) / 5.84% (Medicare) in 2024 that decreases gradually to an ultimate rate of 3.94% (nonMedicare) / 4.00% (Medicare). The net impact of these changes is an increase in the liability.

Target
Allocation
Expected Real
Rate of Return
Asset Class Component
Global Equity 49% 4.30%
Fixed Income 23% 1.20%
Real Estate Investment Trusts (REITs) 20% 3.50%
Treasury Inflation-Protected Securities (TIPS) 5% 0.30% Commodities 3% 0.09%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 6.00%
The expected long-term real rates of return are compound returns (time-weighed and net of all fees), adjusted for inflation.

97 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS (Continued) C. CHANGES IN NET OPEB LIABILITY
The following summarizes the changes in the Net OPEB Liability:

Detailed information about the OPEB plan’s fiduciary net position is available in the separately issued plan financial report that may be obtained from CERBT, an agent multiple-employer plan administered by CalPERS, consisting of an aggregation of single-employer plans. CERBT issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained from the California Public Employers’ Retiree Benefit Trust, at P.O. Box 942703, Sacramento, CA 94229-2703.

D. SENSITIVITY OF THE NET OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE AND HEALTHCARE COST TREND RATES
The following presents the Net OPEB Liability of the City, as well as what the City's Net OPEB Liability would be, if it were calculated using a discount rate that is 1 percentage-point lower (5.00%) or 1 percentage-point higher (7.00%) than the current discount rate:

Total OPEB
Liability
Fiduciary Net
Position
Net OPEB
Liability
Balances at June 30, 2023 (Measurement date June 30, 2022) $ 23,343,176 51,370,888 $ 28,027,712 $ Changes for the year:

Service Cost 1,533,022 - 1,533,022
Interest 3,234,999 - 3,234,999
Changes of benefit terms - - -
Difference between actual and expected experience (2,369,845) - (2,369,845) Assumption changes 8,331,169 - 8,331,169
Contributions - employer - 3,423,711 (3,423,711)
Contributions - employee - - -
Net investment income - 1,499,060 (1,499,060)
Benefit payments and refunds (*) (2,323,071) (2,323,071) - Administrative Expenses - (6,782) 6,782
Net Changes 2,592,918 8,406,274 5,813,356
Balances at June 30, 2024 (Measurement date June 30, 2023) $ 25,936,094 59,777,162 $ 33,841,068 $ (*) Based on explicit benefit payment of $1,927,071 and estimated implicit subsidy payment of $396,000.

5.00%
(1% Decrease)

6.00%
(Current Rate)

7.00%
(1% Increase)
Net OPEB Liability $ 33,841,068 41,919,718 $ 27,189,215 $ Discount Rate

98 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #9 – POST-RETIREMENT HEALTH CARE BENEFITS (Continued) The following presents the Net OPEB Liability of the City, as well as what the City's Net OPEB Liability would be, if calculated using healthcare cost trend rates that are 1 percentage-point lower or 1 percentage-point higher than the current healthcare cost trend rates:

OPEB EXPENSE AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED TO OPEB For the year ended June 30, 2024, the City recognized OPEB expense of $3,070,473. At June 30, 2024, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:

For the year ended June 30, 2024, the City reported $3,451,901 as deferred outflows of resources related to contributions subsequent to the measurement date that will be recognized as a reduction of the Net OPEB Liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:
1% Decrease Current Rate 1% Increase
Net OPEB Liability $ 33,841,068 26,814,345 $ 42,559,38 $ 4 Healthcare Cost Trend Rate
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual experience $ - $ (6,141,569) Changes of assumptions 7,203,812 (1,142,646)
Net difference between projected and actual earning on plan investments 1,523,817 - Employer contributions made subsequent to the measurement date * 3,541,901 - Total $ (7,284,215) 12,269,530 $
* Based on benefit payments of $2,659,613 (including estimated implicit subsidy credit) plus $882,288 contribution to the Trust.

June 30, 2024
Year ended
June 30
Annual
Amortization
2025 $ (233,909)
2026 (332,441)
2027 488,479
2028 21,779
2029 378,226
Thereafter 1,121,280

99 2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS
A. PLAN DESCRIPTIONS
The City has two defined benefit pension plans, a Miscellaneous Plan and a Safety Plan. The Miscellaneous Plan is an Agent Multiple-Employer Plan and the Safety Plan is a Cost-Sharing MultipleEmployer Plan. All qualified permanent and probationary employees are eligible to participate in either the City’s Safety (Sworn) or Miscellaneous (Non-sworn) Plans, administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers.

Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

B. MISCELLANEOUS PLAN
i. General Information About the Miscellaneous Plan
a. Benefits Provided
CalPERS provides service retirement and disability benefits, annual Cost of Living Adjustments (COLA) and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits.

All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The COLA for each plan are applied as specified by the California Public Employees’ Retirement Law (PERL).

The Miscellaneous Plan’s provisions and benefits in effect at June 30, 2024 are summarized below:

Unfunded Accrued Liability Annual Payment for the Miscellaneous Plan is $1,338,889.

Tier 1 Tier 2 Tier 3
Hire Date
Prior to
October 1, 2010
After
September 30, 2010
After
December 31, 2012
Benefit Formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 - 55 50 - 63 52 - 67
Monthly Benefits, as a % of Eligible Compensation 2.000-2.700% 1.092-2.418% 1.000-2.500% Required Employee Contribution Rates 8.000% 7.000% 7.50% Required Employer Contribution Rates (Normal Cost) 12.100% 12.100% 12.100% Maximum COLA 5.00% 2.00% 2.00%
Final Average Compensation Period One Year Three Years Three Years Miscellaneous Plan

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
b. Employees Covered
At the June 30, 2023 measurement date, the most recent valuation available, the following plan participants were covered by the benefit terms:
c. Contributions
Section 20814(c) of California PERL requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Miscellaneous Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

For the year ended June 30, 2024, the contributions to the Miscellaneous Plan were $7,191,438 for the employer paid contributions.
ii. Net Pension Liability
The City’s Net Pension Liability for the Miscellaneous Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The Net Pension Liability of the Miscellaneous Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022, rolled forward using standard update procedures. A summary of principal assumptions and methods used to determine the Net Pension Liability is shown in Note #10D.

Tier 1 Tier 2 Tier 3 Total
Active Employees 74 45 135 254
Miscellaneous Plan
Inactive Employees or Beneficiaries Currently Receiving Benefits 223 Inactive Employees Entitled to but not yet Receiving Benefits 184 Total 407

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
iii. Changes in Net Pension Liability
The table below shows the changes in Net Pension Liability recognized over the measurement period.
a. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The table below presents the Net Pension Liability, calculated using the discount rate of

6.90%, as well as what the Net Pension Liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate.
b. Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2022 $ 148,880,740 180,236,190 $ 31,355,450 $ Changes recognized for the measurement period
Service Cost 4,920,885 $ - $ 4,920,885 $
Interest on the Total Pension Liability 12,550,956 - 12,550,956 Changes in Assumptions - - -
Differences Between Actual and Expected Experience 2,522,123 - 2,522,123 Changes in Benefit Terms 126,031 - 126,031
Net Plan to Plan Resource Movement - - -
Contribution - Employer - 5,968,325 (5,968,325)
Contribution - Employees - 1,899,177 (1,899,177)
Net Investment Income - 9,230,992 (9,230,992)
Benefit Payments, Including Refunds of Employee Contributions (6,893,749) (6,893,749) - Other Misc Income/(Expense) - - -
Administrative Expense - (109,480) 109,480
Net Changes 10,095,265 13,226,246 3,130,981
Balance at June 30, 2023 $ 158,976,005 193,462,436 $ 34,486,431 $ Increase (Decrease)
Miscellaneous Plan

5.90%
(1% Decrease)

6.90%
(Current Rate)

7.90%
(1% Increase)
Net Pension Liability $ 34,486,431 62,821,679 $ 11,254,512 $ Miscellaneous Plan

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
iv. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense for the Miscellaneous Plan of $8,557,316. At June 30, 2024, the Miscellaneous Plan has Deferred Outflows and Deferred Inflows of Resources related to the pension plan as follows:

Deferred Outflows of Resources related to contributions subsequent to the measurement date of $7,191,438 will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2025. Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized as pension expense below:
v. Payable to the Miscellaneous Plan
The City reported a payable of $224,109 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date 7,191,438 $ - $ Differences Between Actual and Expected Experience 2,114,154 (998,972) Changes in Assumptions 2,212,418 -
Net Differences Between Projected and Actual Earnings
on Plan Investments 7,272,724 -
Total $ (998,972) 18,790,734 $
Miscellaneous Plan
Fiscal Year
Ended June 30
Annual
Amortization
2025 $ 2,511,819
2026 1,914,819
2027 5,680,230
2028 493,456
Miscellaneous Plan

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
C. SAFETY PLAN
i. General Information About the Safety Plan
The City’s Safety Plan is part of the public agency cost-sharing multiple-employer defined benefit pension plan (PERF C), which is administered by CalPERS. PERF C consists of a miscellaneous pool and a safety pool (referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost-sharing multipleemployer defined benefit pension plan regardless of the number of rate plans the employer sponsors. The City sponsors three rate plans within the safety risk pool. a. Benefits Provided
CalPERS provides service retirement and disability benefits, annual COLA and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits.

All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The COLA for each plan are applied as specified by the California PERL.

The Safety Plan’s provisions and benefits in effect at June 30, 2024, are summarized below:

Tier 1 Tier 2 Tier 3
Hire Date
Prior to
September 1, 2012
After
August 31, 2012
After
December 31, 2012
Benefit Formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 50 - 55 50 - 57
Monthly Benefits, as a % of Eligible Compensation 3% 2.4-3.0% 2.0-2.7% Required Employee Contribution Rates 9.00% 9.00% 13.75% Required Employer Contribution Rates 28.30% 22.83% 13.54% COLA 5.00% 2.00% 2.00%
Final Average Compensation Period One Year Three Years Three Years Unfunded Accrued Liability Annual Payment $ - 848,028 $ 22,753 $ Safety Plan

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
Beginning in FY 2015/16, CalPERS collects employer contributions for the cost-sharing plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund. The dollar amounts are billed on a monthly basis. In-lieu of making monthly payments, an annual lump-sum prepayment option is also available. The City’s required lump-sum contribution for the unfunded liability and side fund was $870,781 in FY 2023/24. b. Contributions
Section 20814(c) of the California PERL requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Safety Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

For the year ended June 30, 2024, the contributions to the Safety Plan were $3,365,976 for the employer paid contributions.
ii. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2024, the City reported a Net Pension Liability for its proportionate share of the Net Pension Liability of the Safety Plan of $19,289,763.

The City’s Net Pension Liability for the Safety Plan is measured as the proportionate share of the Net Pension liability. The Net Pension Liability of the Safety Plan is measured as of June 30, 2023, and the total pension liability for the Safety Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City’s proportion of the Net Pension Liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the Net Pension Liability for the Safety Plan as of June 30, 2022 and 2023 was as follows:

Proportionate Share of
Net Pension Liability Safety Plan
Proportion - June 30, 2022 0.25950%
Proportion - June 30, 2023 0.25806%
Change - Increase (Decrease) (0.00144%)

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2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
For the year ended June 30, 2024, the City recognized pension expense of $6,210,927 for the Safety Plan. At June 30, 2024, the Safety Plan reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows of resources related to contributions subsequent to the measurement date of $3,365,976 will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2025. Other amounts, reported as Deferred outflows/inflows of resources related to pensions, will be recognized as pension expense, as summarized as follows:
a. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following table presents the City’s proportionate share of the Net Pension Liability for the Safety Plan, calculated using the discount rate of 6.90%, and what the City’s proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate.

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date 3,365,976 $ - $ Differences Between Actual and Expected Experience 1,416,224 (121,244) Changes in Assumptions 1,125,776 -
Change in the Employer's Proportion and Differences Between the Employer's Contributions and the Employer's
Proportionate Share of Contributions 2,215,386 (579,807) Net Differences Between Projected and Actual Earnings
on Plan Investments 2,639,799 -
Total $ (701,051) 10,763,161 $
Safety Plan
Fiscal Year
Ended June 30
Annual
Amortization
2025 $ 2,596,977
2026 1,747,303
2027 2,278,174
2028 73,680
Safety Plan

5.90%
(1% Decrease)

6.90%
(Current Rate)

7.90%
(1% Increase)
Net Pension Liability $ 19,289,763 33,848,689 $ 7,386,804 $ Safety Plan

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
b. Pension Plan Fiduciary Net Position
The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Comprehensive Annual Financial Report closing and final reconciled reserves.
iii. Payable to the Safety Plan
The City reported a payable of $124,965 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

D. INFORMATION COMMON TO BOTH THE MISCELLANEOUS AND SAFETY PLANS The following information applies to both the Miscellaneous and Safety Plans:
i. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2024, the City reported Net Pension Liabilities for the Miscellaneous and Safety Plans combined of $53,776,194 and recognized combined pension expenses for the Miscellaneous and Safety Plans of $14,768,243.

At June 30, 2024, the Miscellaneous and Safety Plans reported combined Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension Contributions Subsequent to Measurement Date 10,557,414 $ - $ Differences Between Actual and Expected Experience 3,530,378 (1,120,216) Changes in Assumptions 3,338,194 -
Change in the Employer's Proportion and Differences Between the Employer's Contributions and the Employer's
Proportionate Share of Contributions 2,215,386 (579,807) Net Differences Between Projected and Actual Earnings
on Plan Investments 9,912,523 -
Total $ (1,700,023) 29,553,895 $
Miscellaneous and Safety Plans

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Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
ii. Actuarial Assumptions
The June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:

The underlying mortality and other actuarial assumptions used in current valuation were based on the results of CalPERS November 2021 actuarial Experience Study. Further details of the Experience Study can be found on CalPERS website under Forms and Publications. iii. Miscellaneous and Safety Plans Discount Rate
The discount rate used to measure the total pension liability for each Plan was 6.90%. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) are made at the current member contribution rates and that contributions from employers are made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.

Miscellaneous and Safety Plans
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Projected Salary Increase Varies depending on age, service and type of employment Payroll Growth 2.80%
Investment Rate of Return (1) 6.90%
Mortality Rate Table (2) Derived using CalPERS Membership Data for all Funds Post Retirement Benefit Increase Contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies
(1) Net of pension plan investment expenses, including inflation. (2) The mortality table used was developed based on CalPERS-specific data. The table includes generational mortality improvements using Society of Actuaries Scale 80% of scale MP 2020. For more details on this table, please refer to the November 2021 experience study report (based on CalPERS demographic data from 2001 to 2019) that can be found on the CalPERS website.

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2023/24 Annual Comprehensive Financial Report
Notes to the Basic Financial Statements
NOTE #10 – DEFINED BENEFIT PENSION PLANS (Continued)
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long term projected portfolio return.

The following table reflects expected real rates of return by asset class for both the Miscellaneous and Safety Plans.

NOTE #11 – DEFINED CONTRIBUTION PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS Deferred Compensation Plans
City employees may defer a portion of their compensation under one of three City sponsored Deferred Compensation Plans created in accordance with Internal Revenue Code Section 457. Under the Plans, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, and death or in an emergency as defined by the Plans.

Two of the Plans are part of public agency agent multiple-employer defined contribution plans that are administered by Mission Square Retirement (formerly ICMA RC) and CalPERS. The third Plan is a singleemployer plan that is administered by VALIC. Benefit provisions under the Plans are established by City resolution.

Asset Class
Assumed Asset
Allocation Real Return (1,2)
Global Equity: Cap-Weighted 30.0% 4.54%
Global Equity: Non-Cap-Weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-Backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5% -1%
Total 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures based on the 2021-22 Asset Liability Management Study.

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Notes to the Basic Financial Statements
NOTE #11 – DEFINED CONTRIBUTION PENSION AND OTHER POST-EMPLOYMENT BENEFIT PLANS (Continued)
The City has no liability for any losses incurred by the Plans and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has contracts with each of the three administrators to manage and invest the assets of the respective Plans. The administrators of the Mission Square Retirement and CalPERS Plans pool the assets of the respective Plans with those of other participants and does not make separate investments for the City. The administrator of the VALIC Plan are held solely for the Plan participants and are not pooled with any other public agency plans. The assets in each Plan are the sole property of the participants or their beneficiaries. Since the assets held under the Mission Square Retirement and CalPERS Plans are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements.

Since the assets of the VALIC Plan are held in a single-employer Plan, but are not the City’s property and are not subject to claims by general creditors of the City, they are reported in the Fiduciary Fund financial statements, Other Employee Benefit Trust Fund - VALIC. The Plan requires investments to be stated at fair value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.

The City contributes amounts to the deferred compensation plans for employees in certain bargaining units. These employer contributions include amounts of up to $1,320 per year as a match of employee contributions and additional contributions of 2%-4% of annual employee salary, depending on bargaining unit. The total amount contributed by the City to the three Plans for FY 2023/24 was $338,543. At June 30, 2024, the City reported a payable of $21,135 for the outstanding contributions due to the Plans.

Retiree Health Savings Plans
The City contributes amounts to individual retiree health savings accounts for employees in all bargaining units hired on or after 7/1/2012. Depending on the bargaining unit and date of hire, contributions of up to $600 to $2,400 per eligible employee per year are made to a third-party retiree health savings account administrator. The total amount contributed by the City to the retiree health savings account plan for FY 2023/24 was $294,925. At June 30, 2024, the City does not have a payable due for outstanding contributions to the retiree health savings plan.

The assets in the retiree health savings account plan are not available to the City’s general creditors. Assets and liabilities held by the retiree health savings account plan administrator are held in an agent multipleemployer defined contribution plan and are not reported in the accompanying financial statements.

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Notes to the Basic Financial Statements
NOTE #12 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; natural disaster; errors and omissions; injuries to employees and unemployment claims. The City, along with other Contra Costa County cities, belongs to the Municipal Pooling Authority of Northern California (MPA). MPA is a public entity risk pool currently operating as a common risk management and insurance program for the members. The City pays an annual premium to MPA for the following: Liability ($34.5 million coverage, $10,000 deductible); Employer’s Resource Management Association (ERMA) ($2 million coverage, $50,000 deductible on employment claims); All Risk Fire and Property ($1 billion coverage, $25,000 deductible for all risk, $5,000 for fine arts, $150,000 deductible for water claims); Flood ($25 million coverage, $100,000 to $250,000 minimum deductible per occurrence); Auto ($250,000 coverage, Police $3,000 deductible, all others $2,000); Cyber ($3 million coverage, deductible of $50,000, $100,000 or $250,000 based on total insured values of up to $250 million, up to $750 million or greater than $750 million, respectively, determined at time of loss); Government Crime ($5 million coverage, $2,500 deductible); Public Entity Pollution ($2 million coverage, $250,000 deductible); Boiler and Machinery ($100 million coverage, $10,000 deductible) and Workers Compensation (coverage in excess of the statutory limit, $0 deductible). The agreement provides that MPA will be self-sustaining through member premiums and assessments. MPA purchases commercial insurance in excess of those amounts covered by its selfinsurance pool. MPA was formed in June of 1977, under a “joint exercise of power agreement”, to provide general liability, workers' compensation, property and employee benefits insurance coverage. It is governed by a Board of Directors composed of one appointed official from each City. Members as of June 30, 2024 were the cities of Antioch; Brentwood; Clayton; El Cerrito; Gilroy; Hercules; Lafayette; Manteca; Martinez; Oakley; Orinda; Pacifica; Pinole; Pittsburg; Pleasant Hill; San Pablo; San Ramon and Walnut Creek and the towns of Danville and Moraga. Audited financial information can be obtained from MPA located at 1911 San Miguel Drive #200, Walnut Creek, CA 94596, as well as on the agency’s website at www.mpanc.com.

Settled claims have not exceeded coverage for these risks in any of the last three fiscal years. Outstanding claims payable at year-end, including the Incurred But Not Reported (IBNR) amount, was calculated to be immaterial for presentation purposes.

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Notes to the Basic Financial Statements
NOTE #13 – BRENTWOOD REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY

ACTIVITIES
A. REDEVELOPMENT AGENCY DISSOLUTION
Effective February 1, 2012, the Brentwood Redevelopment Agency was dissolved and certain assets of the Brentwood Redevelopment Agency Low and Moderate Income Housing Fund were distributed to a Housing Successor, and all remaining Brentwood Redevelopment Agency assets and liabilities were distributed to a Successor Agency. Under the provisions of AB 1484, the City elected to become the Housing Successor and retain the housing assets. The City also elected to become the Successor Agency to the Brentwood Redevelopment Agency and on February 1, 2012, the Brentwood Redevelopment Agency’s remaining assets were distributed to, and liabilities were assumed by, the Successor Agency.

ABX1 26 required the establishment of an Oversight Board to oversee the activities of the Successor Agency. The Brentwood Oversight Board served in this capacity from April 11, 2012 until June 30, 2018.

Effective July 1, 2018, a new Countywide Oversight Board was established pursuant to the dissolution law.

The activities of the Successor Agency are subject to review and approval of the Oversight Board.

The activities of the Housing Successor are reported in the City Low Income Housing Special Revenue Fund as the City has control of those assets, which may be used in accordance with the low and moderate-income housing provisions of California Redevelopment Law. The activities of the Successor Agency are reported in the Successor Agency to the Brentwood Redevelopment Agency Private-Purpose Trust Fund as the activities are under the control of the Oversight Board. The City is providing administrative services to the Successor Agency to wind down the affairs of the former Brentwood Redevelopment Agency.

Section 34179.5 of AB 1484 required all successor agencies to hire a licensed accountant, approved by the County Auditor-Controller, to conduct two Due Diligence Reviews (DDRs) to determine the balances available to be redistributed to other taxing entities. The two DDRs were focused on 1) the Low and Moderate Income Housing Fund, and 2) Other Funds and Accounts. The Low and Moderate Income Housing Fund DDR determined that an unobligated balance of $4,072,553 was available for redistribution, and the Successor Agency remitted this amount to the Contra Costa County Auditor Controller in February 2013. The Other Funds and Accounts DDR determined that the unobligated balance was $0, and the Successor Agency filed the DDR report with the DOF. The DOF, during their review of the DDR, determined that transfers made pursuant to pre-existing contracts and construction commitments were invalid and adjusted the DDR accordingly, issuing a DDR demand of $14,955,931.

On December 9, 2015, the City, as Successor Agency, entered into a ten-year interest free payment plan with the DOF to pay the DDR demand of $14,955,931, as discussed in Note #6, Long-Term Obligations.

By entering into the Payment Plan with the DOF, the Successor Agency has completed its statutory requirements of the DDR process and the DOF has provided the Successor Agency a Finding of Completion.

As of June 30, 2024, cash and investments of the Successor Agency were pooled with the City’s cash and investments. Details of the nature of the Successor Agency’s cash and investments are presented in Note #3. Information presented in the following sections of Note #13 represents other assets and liabilities of the Successor Agency as of June 30, 2024.

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Notes to the Basic Financial Statements
NOTE #13 – BRENTWOOD REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)
B. CAPITAL ASSETS
Capital assets of the Successor Agency, as of June 30, 2024, were comprised of land with a carrying value of $1,327,129 and there were no additions or retirements during the fiscal year.

C. LONG-TERM OBLIGATIONS
The Successor Agency assumed the long-term obligations of the former Brentwood Redevelopment Agency as of February 1, 2012. The following summarizes the long-term obligations of the Successor Agency as of June 30, 2024.
i. Bonds
Capital Improvement Revenue Refunding Bonds Series 2012 The Brentwood Redevelopment Agency issued 2001 Capital Improvement Tax Allocation Bonds, dated October 1, 2001, to finance certain Redevelopment projects. The Brentwood Redevelopment Agency pledged future tax increment revenues, less amounts required to be set aside in the Redevelopment Agency Low Income Housing Fund, for the repayment of the Tax Allocation Bonds.

On January 11, 2012, the Authority issued $24,060,000 in Capital Improvement Revenue Refunding Bonds Series 2012 to: 1) finance the refunding of the 2001 CIP Bonds under a facilities lease and 2) refund a series of tax allocation bonds issued by the Brentwood Redevelopment Agency, as discussed in Note #6. Total annual debt service payments, including interest at 4.25% to 5.375%, range from $1,342,750 to $1,368,688.

The Successor Agency to the Brentwood Redevelopment Agency has pledged future tax revenues for the repayment of a portion of the bonds. Following the dissolution of the Brentwood Redevelopment Agency, the Successor Agency is allocated funds for payment of obligations listed on the Successor Agency’s ROPS and approved by the DOF. The Successor Agency listed this debt obligation on its ROPS and the DOF has approved its inclusion for each applicable ROPS period through June 30, 2024. The City has recorded a receivable for the debt obligations of the Successor Agency, as detailed in Note #4. The pledge of future Successor Agency tax revenues ends upon repayment of the Successor Agency’s $10,799,625 remaining share of debt service on the bonds, which is scheduled to occur in 2032.

Balance Payments Balance Amounts Due
July 1, 2023 Adjustments June 30, 2024 Within One Year
Capital Improvement Revenue Refunding Bonds Series 2012 $ (890,000) 9,795,000 $ 8,905,000 $ 930,000 $ 2009 Civic Center Project Lease Revenue Bonds (377,632) 9,598,684 9,221,052 394,737 Total $ (1,267,632) 19,393,684 $ 18,126,052 $ 1,324,737 $

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Notes to the Basic Financial Statements
NOTE #13 – BRENTWOOD REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)
2009 Civic Center Project Lease Revenue Bonds
On October 16, 2009, the Authority issued $48,000,000 in Civic Center Project Lease Revenue Bonds, Series 2009A, $4,055,000, and Taxable Series 2009B, $43,945,000, to finance the construction of a new city hall, community center, senior center, plus library improvements and other public capital improvements, as discussed in Note #6. The Brentwood Redevelopment Agency entered into a reimbursement agreement with the Authority that indicates the Brentwood Redevelopment Agency will pay a proportionate amount of the City’s base rental payments for specific and allowable projects the Brentwood Redevelopment Agency has agreed to fund. The 2009 Civic Center Project Lease Revenue Bonds generated $12,631,578 for allowable Brentwood Redevelopment Agency projects.

The Successor Agency to the Brentwood Redevelopment Agency has pledged future tax revenues for the repayment of a portion of the bonds. Following the dissolution of the Brentwood Redevelopment Agency, the Successor Agency is allocated funds for payment of obligations listed on the Successor Agency’s ROPS and approved by the DOF. The Successor Agency listed this debt obligation on its ROPS and the DOF has approved its inclusion for each applicable ROPS period through June 30, 2024. The City has recorded a receivable for the debt obligations of the Successor Agency, as detailed in Note #4. The pledge of future tax revenues end upon repayment of the Successor Agency’s $15,556,520 remaining share of debt service on the bonds. The repayment of the debt is scheduled to occur in 2040.

Total debt service requirements for the Successor Agency’s two bond payment obligations are summarized as follows:

D. PLEDGED REVENUES
As discussed above, the Successor Agency has pledged all future tax-increment revenues for the repayment of its share of the Capital Improvement Revenue Refunding Bonds Series 2012 and the 2009 Civic Center Project Lease Revenue Bonds. The pledge of all future tax-increment revenues ends upon repayment of $26,356,145 remaining debt service on the bonds, which is scheduled to occur in 2040. With the dissolution of the Brentwood Redevelopment Agency discussed above, tax increment is no longer distributed. Instead, the Successor Agency receives payments from Contra Costa County’s Redevelopment Property Tax Trust Fund that are to be used to fund debt service on the bonds, with no Year Ending
June 30 Principal Interest Total
2025 $ 1,106,300 1,324,737 $ 2,431,037 $
2026 1,029,572 1,391,842 2,421,414
2027 947,707 1,461,579 2,409,286
2028 861,812 1,532,632 2,394,444
2029 771,665 1,610,000 2,381,665
2030-2034 2,478,176 6,497,367 8,975,543
2035-2039 1,003,971 3,500,000 4,503,971
2040 30,890 807,895 838,785
Total Payments Due $ 8,230,093 18,126,052 $ 26,356,145 $

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NOTE #13 – BRENTWOOD REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)
distinction between housing and non-housing revenues. For FY 2023/24, gross tax increment available to be distributed to the Successor Agency was $10,516,075, which represents coverage of 430% of the FY 2023/24 debt service requirements.

E. COMMITMENTS AND CONTINGENCIES
i. State Approval of Enforceable Obligations
The Successor Agency prepares a ROPS annually containing all proposed expenditures for the subsequent twelve-month period. The ROPS is subject to the review and approval of the Oversight Board as well as the DOF. Although the DOF may elect not to question items included on the ROPS in one period, they may question the same items in a future period and disallow associated activities.

The amount, if any, of current obligations that may be denied by the DOF cannot be determined at this time.
ii. State Asset Transfer Review
In addition to the DDR process discussed in Note #13A, ABx1 26 and AB 1484 direct the State Controller to review the activities of all redevelopment agencies and successor agencies to determine whether an asset transfer between an agency and any public agency occurred on or after January 1, 2011. On July 10, 2015, the State Controller’s Office determined that $14,992,790 of cash and revenue and $1,327,129 of land/building assets, transferred between January 1, 2011 and January 31, 2012, were unallowable and ordered these assets to be returned to the Successor Agency. As discussed in Note #13A and Note #6, the City entered into a repayment plan with the Department of Finance for $14,955,931. In addition, the City complied with the State Controller’s order to return the land/building assets to the Successor Agency. These transfers were conveyed to the Successor Agency by grant deeds recorded in the Official Records of Contra Costa County on March 21, 2018. Following the initial communication in July 2015, the State Controller’s Office has made no further demands for the return of assets to the Successor Agency.

NOTE #14 – CONTINGENT LIABILITIES
A. LITIGATION
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney, there is no filed litigation, as of June 30, 2024, which is likely to have a material adverse effect on the financial position of the City.

B. STATE AND FEDERAL GRANTS
The City has received State and Federal funds for specific purposes that are subject to review by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grants, it is believed any required reimbursements will not be material.

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NOTE #14 – CONTINGENT LIABILITIES (Continued)
C. DEVELOPER IMPACT FEE CREDITS
The City entered into several agreements with various developers and merchant builders who are developing residential and commercial projects throughout the City. The City agreed to grant the developers impact fee credits since they will construct certain improvements beyond what was needed to serve their specific projects. The value of these credits does not increase for inflation, nor do they accrue interest.

Any unused credits may be used by the developers on other projects located elsewhere in the City.

The value of the credits, as of June 30, 2024, was $1,232,978, after a total of $684,979 was used as credits or expired and an additional $625,192 was added by agreements during FY 2023/24. The accounting for the amounts due are not recorded as indebtedness since the payments (use of the credits) are contingent upon the collection of development fees from building growth which has not yet occurred.

D. CONSTRUCTION COMMITMENTS
As of June 30, 2024, the City had several commitments with respect to unfinished capital projects.

Outstanding commitments with respect to unfinished major capital projects are as follows:

E. SOLAR POWER PURCHASE AGREEMENTS
On December 9, 2014, the City executed three Solar Power Purchase agreements with SolarCity Corporation. The terms of the agreements required SolarCity to construct solar power systems, to be owned and maintained by SolarCity, at three City sites, the Police Department, Wastewater Treatment Plant and Brentwood Family Aquatic Complex. These systems are expected to generate approximately

2.14 million kilowatt hours (kWh) of power per year. The terms of the agreements require the City to Outstanding
Project Name Commitments
Homecoming Park Playground Replacement 315,740 $
Housing Element Update and Safety Element Update 177,000 Innovation Center @ Brentwood Infrastructure 243,419
Lone Tree Way Roadway Improvements 2,347,267
Pavement Management Program - 2024 557,354
Sand Creek Road Extension 2,140,153
Sand Creek Sports Complex 992,211
Sensus AMR System Upgrade 800,715
Solid Waste Organics Diversion 277,857
Vineyards at Marsh Creek - Event Center/Amphitheater 170,671 Wastewater Treatment Plant Expansion - Phase II 21,929,287 Water and Wastewater Laboratory 330,980
Water and Wastewater SCADA System Upgrade 793,977
Total $ 31,076,631