Calexico City Council
May 20, 2026

AGENDA
ITEM
7 OF CA
AGENDA
CALEXICO California ITEM

WHERE CALIFORNIA AND MEXICO MEET
7 CITY COUNCIL

AGENDA STAFF REPORT
DATE: May 20, 2026
TO: Mayor and City Council
APPROVED BY: Benjamin Martinez, City Manager Bon
PREPARED BY: Karla Chaparro, Finance Director ye
SUBJECT: Receive and File 2024-25 Audited Financial Statements =======================================
Recommendation:

This report transmits the City's 2024-25 audited financial statements. It is recommended that the City Council receive a presentation from the City's independent auditor with the results of their audit. This report is for information only.

Background:

Each year the City contracts with a Certified Public Accountant to conduct an independent audit of the City's financial statements. The Pun Group has conducted the 2024-25 audit. The audit is now complete and the financial statements have been published.

The City's annual financial statements meet the requirements of Muni Code Section 2.14.050 which requires the Finance Director to submit "a complete financial statement and report for the preceding year." City bond covenants and grant programs also require an annual independent audit of the City's financial statements. The City's financial report is prepared using generally accepted accounting principles established by the Government Accounting Standards Board.

Discussion & Analysis:

The City's auditors have issued the following reports which are included as attachments to this staff report:

1. Basic Financial Statements and Independent Auditor's Report, June 30, 2025 This report includes the City's financial position as of June 2025 and the results of 2024-25 operations for the General Fund and other individual City program funds. The report also includes City-wide financial statements which are presented on the full accrual basis of accounting and include long-term bond, pension, and retiree medical obligations.

2. Transportation Development Act Article 3 and 8e (Non-Transit), June 30, 2025 and 2024 This annual report is required by the State Transportation Development Act. This document reports on the status of the City's Article 3 (pedestrian and bicycle) and Article 8e (other street/non-transit) state grant programs.

3. Single Audit, June 2025
This report provides the information about the City's Federal grant expenditures and compliance with grant requirements. The City expended $966,085 million in federal grant funds during the 2024-25 fiscal year. The report identifies no new 2024-25 internal control or compliance findings.

4. Report to Those Charged with Governance
This report provides the auditor's annual communication with the City Council about the audit process, accounting policies, use of estimates, and reports issued. The auditors reported no significant difficulties, disagreements, or misstatements that needed correction.

5. Appropriations Limit Schedule
This report provides information about the annual spending limit calculation required by Article XIIIB of the State Constitution (the Gann Initiative).

Fiscal Impact
General Fund
The audited, combined General Fund/Measure H Fund Balance improved during 2024-25 to $5.0 million. This audited General Fund balance is consistent with the information previously presented to City Council during the 2025-26 2nd quarter budget report on March 4, 2026.

Other Significant Long-term Liabilities
The June 30, 2025 financial statements report the following balances for several significant long- term liabilities. These liabilities have arisen over time and are not short-term budget issues but can be expected to impact future year budgets as payments become due. Each of these obligations has an annual amortization schedule to pay down the debt over time. Continued City commitment to continue paying down the pension and retiree medical liabilities, in particular, when funds are available, will improve the City's financial position and increase the City's budget capacity to reinvest and support City services.

Obligations for Past Service/Operating Costs
$37.9 million Net Pension Liability-Unfunded portion of earned service credit $45.2 million Retiree Medical/OPEB-Unfunded portion of earned medical benefits Obligations for Capital-Related Long-Term Debt
$ 4.3 million Measure H Bond Principal (matures 2030)
$14.6 million Water Bond Principal (matures 2051)
$20.4 million Wastewater Bond Principal (matures 2051)
$12.3 million Successor Agency Bond Principal (matures 2033) 2 Attachments:

1. Basic Financial Statements and Independent Auditor's Report, June 30, 2025

2. Transportation Development Act Article 3 and 8e (Non-Transit), June 30, 2025 and 2024

3. Single Audit and Independent Auditor's Reports, June 30, 2025

4. Report to Those Charged with Governance, March 24, 2026

5. Appropriations Limit Schedule, June 30, 2026
ATTACHMENT NO. 1
City of Calexico
Calexico, California
Basic Financial Statements and
Independent Auditor's Reports
For the Year Ended June 30, 2025
THE

PUN GROUP

ACCOUNTANTS & ADVISORS

City of Calexico
Basic Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page

FINANCIAL SECTION
Independent Auditor's Report... .....1
Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position.. ...8
Statement of Activities. .. 10
Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet... .. 16
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position . 19
Statement of Revenues, Expenditures, and Changes in Fund Balances. • 20 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position.. ...22 Proprietary Fund Financial Statements:

Statement of Net Position.. ...24
Statement of Revenues, Expenses, and Changes in Net Position ...27 Statement of Cash Flows.. ...28
Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position. ... 33
Statement of Changes in Fiduciary Net Position 34
Notes to the Basic Financial Statements ... 41
Required Supplementary Information (Unaudited):

Notes to the Budgetary Information . 89
Budgetary Comparison Schedules:

General Fund.. ..91
Schedules of the City's Proportionate Share of the Net Pension Liability and Related Ratios 92 Schedule of Changes in the Net Pension Liability and Related Ratios. 95 Schedule of Plan Contributions - Pension.. 96
Schedule of Changes in Net OPEB Liability and Related Ratios .. 98 Schedule of Plan Contribution - OPEB 99
City of Calexico
Basic Financial Statements
For the Year Ended June 30, 2025
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet .....

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ... 112 Internal Service Funds:

Statement of Net Position... 120
Statement of Revenues, Expenses, and Changes in Net Position. 122 Statement of Cash Flows.... 124
Custodial Funds:

Combining Statement of Fiduciary Net Position.. . 131
Combining Statement of Changes in Fiduciary Net Position ... 132 ii
THE

PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Suite 100
San Diego, California 9212:
www.pungroup.cpa

INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and Members
of the City Council of the City of Calexico
Calexico, 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 Calexico, California (the "City"), as of and for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, 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 requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the 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.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LASVEGAS • PHOENIX To the Honorable Mayor and Members
of the City Council of the City of Calexico
Calexico, California

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 auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Budgetary Comparison Schedules, the Schedule of the City's Proportionate Share of Net Pension Liability and Related Ratios, the Schedule of Changes in Net Pension Liability and Related Ratios, the Schedule of Contributions, and the Schedule of Changes in Total OPEB Liability and Related Ratios, as listed in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board 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. 2 To the Honorable Mayor and Members
of the City Council of the City of Calexico
Calexico, California

Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 24, 2026, 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.

The Rur Group, Up
San Diego, California
March 24, 2026
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4 BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
7 City of Calexico
Statement of Net Position
June 30, 2025
Primary Government
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments $ 66,125,567 $ 43,185,381 $ 109,310,948 Receivables:

Accounts 1,064,992 3,825,151 4,890,143
Intergovernmental 4,952,696 145,316 5,098,012
Lease receivable - current 30,259 30,259
Inventories and prepaid items 74,524 27,999 102,523
Deposits 366,357 366,357
Total current assets 72,614,395 47,183,847 119,798,242
Noncurrent assets:

Cash and investments with fiscal agents 998,040 36,464,555 37,462,595 Lease receivable - noncurrent 141,410 141,410
Capital assets:

Non-depreciable assets 14,610,117 3,381,326 17,991,443
Depreciable assets, net 109,993,344 44,125,611 154,118,955 Total capital assets, net 124,603,461 47,506,937 172,110,398 Total noncurrent assets 125,742,911 83,971,492 209,714,403 Total assets 198,357,306 131,155,339 329,512,645

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding, net 62,129 62,129
Pension-related deferred outflows of resources 8,613,671 1,778,015 10,391,686 OPEB-related deferred outflows of resources 11,004,058 3,752,456 14,756,514 Total deferred outflows of resources 19,617,729 5,592,600 25,210,329 See accompanying Notes to the Basic Financial Statements. 8 City of Calexico
Statement of Net Position (Continued)
June 30. 2025
Primary Government
Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 2,110,040 343,948 2,453,988
Accrued payroll 252,702 62,509 315,211
Interest payable 62,927 193,541 256,468
Compensated absences - due within one year 278,971 21,416 300,387 Claims payable - due within one year 850,000 850,000
Long-term debt - due within one year 883,492 874,857 1,758,349 Total current liabilities 15,738,057 1,496,271 17,234,328 Noncurrent liabilities:

Deposits payable 331,006 238,842 569,848
Compensated absences - due in more than one year 1,510,862 378,164 1,889,026 Claims payable - due in more than one year 2,127,000 2,127,000 Long-term debt - due in more than one year 3,992,744 37,016,954 41,009,698 Aggregate net OPEB liability 33,488,342 11,680,892 45,169,234 Aggregate net pension liability 31,229,509 6,643,765 37,873,274 -
Total noncurrent liabilities 72,679,463 55,958,617 128,638,080 Total liabilities 88,417,520 57,454,888 145,872,408

DEFERRED INFLOWS OF RESOURCES
Lease-related deferred outflows of resources 157,872 157,872 Pension-related deferred inflows of resources 285,749 172,629 458,378 OPEB-related deferred inflows of resources 3,251,386 1,158,375 4,409,761 Total deferred inflows of resources 3,695,007 1,331,004 5,026,011

NET POSITION
Net investment in capital assets 119,727,225 46,141,810 165,869,035 Restricted for:

Special projects 17,625,985 17,625,985
Debt service 996,693 ...| 996,693
Capital projects 26,730,393 26,730,393
Total restricted 45,353,071 45,353,071
Unrestricted (deficit) (39,217,788) 31,820,237 (7,397,551) Total net position 125,862,508 $ 77,962,047 $ 203,824,555 See accompanying Notes to the Basic Financial Statements. 9 City of Calexico
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
-
Charges Operating Capital Total
for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues Primary government:

Governmental activities:

General government $ 3,356,080 $ 298,127 842,294 $ 17,664 $ 1,158,085 Public safety 17,633,722 3,893,948 2,419,871 40,596 6,354,415 Public works 7,644,632 2,795,756 1,139,808 12,686,702 16,622,266 Culture and recreation 5,787,205 139,209 115,667 74,167 329,043 Planning and building 1,236,518 795,700 795,700
Housing 38,465 4,000 289,119 : 293,449
Interest and fiscal charges 192,336
Total governmental activities 35,888,958 7,926,740 4,807,089 12,819,129 25,552,958 Business-type activities:

Water 8,980,965 8,396,567 24,905 8,421,472
Wastewater 6,069,493 6,289,164 ..•| 19,376 6,308,540
Airport 850,963 291,286 10,000 301,286
Total business-type activities 15,901,421 14,977,017 54,281 15,031,298 Total primary government 51,790,379 $ 22,903,757 $ 4,807,089 $ 12,873,410 $ 40,584,256 See accompanying Notes to the Basic Financial Statements. 10 City of Calexico
Statement of Activities (Continued)
For the Year Ended June 30, 2025
Net (Expense) Revenue and
Changes in Net Position
Primary Government
Governmental Business-Type
Functions/Programs Activities Activities Total
Primary government:

Governmental activities:

General government (2,197,995) $ (2,197,995)
Public safety (11,279,307) : (111,279,307)
Public works 8,977,634 8,977,634
Culture and recreation (5,458,162) (5,458,162)
Planning and building (440,818) (440,818)
Housing 254,984 254,984
Interest and fiscal charges (192,336) (192,336)
Total governmental activities (10,336,000) (10,336,000) Business-type activities:

Water (559,493) (559,493)
Wastewater 239,047 239,047
Airport (549,677) (549,677)
Total business-type activities (870,123) (870,123)
Total primary government (10,336,000) (870,123) (11,206,123) General revenues:

Taxes:

Property taxes 7,273,277 7,273,277
Sales taxes 8,911,891 : 8,911,891
Transit occupancy taxes 364,884 364,884
Franchise fees 729,773 729,773
Non-regulatory business license tax 911,016 911,016
Other taxes 265,310 265,310
Total taxes 18,456,151 18,456,151
Investment income 2,819,362 1,489,002 4,308,364
Miscellaneous 14,245 14,245
Transfers (954,358) 951,358
Total general revenues 20,335,400 2,443,360 22,778,760
Changes in net position 9,999,400 1,573,237 11,572,637
115,863,108 76,388,810 192,251,918
Net portin - egining of year 77,962,047
$ 125,862,508 $ $ 203,824,555
See accompanying Notes to the Basic Financial Statements.

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12 FUND FINANCIAL STATEMENTS
13 This page intentionally left blank.
14 GOVERNMENTAL FUND

FINANCIAL STATEMENTS
General Fund - This is the primary operating fund of the City. It is used to account for all revenues and expenditures that are not required to be accounted for in another fund.

LTA Measure D Capital Projects Fund - This fund accounts for revenues from 0.5% retail and use tax used for transportation improvements to repair and rehabilitate existing roadways, reduce congestion and improve safety, and to provide for construction of needed facilities.

New River Grants Capital Projects Fund - This account for expenditures for the planning, design, and construction of capital facilities funded through various grants received by the City for the New River Project. 15 City of Calexico
Balance Sheet
Governmental Funds
June 30, 2025
Major Funds
LTA Measure D New River Grants
General Capital Projects Capital Projects
Fund Fund Fund
ASSETS
Cash and investments $ 2,515,631 $ 16,726,812 $ 9,848,077 Cash and investments with fiscal agents
Receivables:

Accounts 854,945
2,669,328 856,818
Intergovernmental
Lease 171,669
Deposits 70,183 :

Inventories and prepaid items
Total assets $ 6,282,056 $ 16,726,812 $ 10,704,895

LIABILITIES, DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 590,985 $ 7,337 $ 50,718 Accrued payroll 243,221
Due to other funds 80,000
Deposits payable 283,708
Unearned revenue 10,574,177
Total liabilities 1,117,914 7,337 10,704,895
Deferred Inflows of Resources:

Lease-related deferred inflows of resources 157,872 • = :

Unavailable revenue
Total deferred inflows of resources 157,872
Fund Balances:

Nonspendable 70,483
Restricted 16,719,475
Assigned ..2
4,935,787 :

Unassigned (deficit)
Total fund balances 5,006,270 16,719,475
Total liabilities, deferred inflows of resources, and fund balances $ 6,282,056 $ 16,726,812 $ 10,704,895 See accompanying Notes to the Basic Financial Statements.

City of Calexico
Balance Sheet (Continued)
Governmental Funds
June 30, 2025
Non-Major Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments $ 31,147,004 $ 60,237,524
Cash and investments with fiscal agents 998,040 998,040 Receivables:

Accounts 200,469 1,055,414
Intergovernmental 1,325,594 4,851,740
Lease 171,669
Deposits 137,900 137,900
Inventories and prepaid items 600 71,083
Total assets $ 33,809,607 $ 67,523,370

LIABILITIES, DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 684,313 $ 1,333,353 Accrued payroll 9,481 252,702
Due to other funds 341,377 421,377
Deposits payable 47,298 331,006
Unearned revenue 725,748 11,299,925
Total liabilities 1,808,217 13,638,363
Deferred Inflows of Resources:

Lease-related deferred inflows of resources 157,872
Unavailable revenue 43,676 43,676
Total deferred inflows of resources 43,676 201,548
Fund Balances:

Nonspendable 600 71,083
Restricted 28,633,596 45,353,071
Assigned 3,334,930 3,334,930
Unassigned (deficit) (11,412) 4,924,375
Total fund balances 31,957,714 53,683,459
Total liabilities, deferred inflows of resources, and fund balances $ 33,809,607 $ 67,523,370 See accompanying Notes to the Basic Financial Statements. 17 This page intentionally left blank.
18 City of Calexico
Reconciliation of the Goverumental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
Total Fund Balances - Total Governmental Funds 53,683,459 Amounts reported for governmental activities in the Statement of Net Position were different because:

Capital assets used in governmental activities were not current financial resources and therefore were not reported in the governmental funds.

Nondepreciable 14,610,116
Depreciable, net of accumulated depreciation 109,993,344 Total capital assets 124,603,460
Long-term liabilities were not due and payable in the current period and therefore were not reported in the governmental funds.

Compensated absences - due within one year (278,971)
Compensated absences - due in more than one year (1,510,862) Long-term liabilities - due within one year (883,492)
Long-term liabilities - due in more than one year (3,992,744) Aggregate net OPEB liability (33,488,342)
Aggregate net pension liability (31,229,509)
Total reported in Government-Wide Statement of Net Position (71,383,920) Pension-related deferred outflows/inflows of resources in the governmental activities were not current financial resources (uses) and therefore were not reported in the Governmental Funds Balance Sheet.

Pension-related deferred outflows of resources 8,613,671 Pension-related deferred inflows of resources (285,749) OPEB-related deferred outflows/inflows of resources in the governmental activities were not current financial resources (uses) and therefore were not reported in the Governmental Funds Balance Sheet.

OPEB-related deferred outflows of resources 11,004,058
OPEB-related deferred inflows of resources (3,251,386)
Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (62,927) Unavailable revenues reported on the Governmental Fund Financial Statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 43,676 Internal service funds were used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds were included in governmental activities in the Government-Wide Statement of Net Position. 2,898,166
Net Position of Governmental Activities $ 125,862,508
See accompanying Notes to the Basic Financial Statements. 19 City of Calexico
atement of Revenues, Expendinental Fu Changes in Fund Balanees For the Year Ended June 30, 2025
Major Funds
LTA Measure D New River Grants
General Capital Projects Capital Projects
Fund Fund Fund
REVENUES:

Property taxes $ 3,518,290 $
Other taxes 10,115,128 :

Licenses and permits 1,684,812
3,964,800 2,182436 8359,805
Intergovernmental
Charges for services 4,262,873
Fines and forfeitures 165,430 : :

Investment income 715,234 652,046
Other revenues 3,370
Total revenues 24,429,937 2,834,482 8,359,805
EXPENDITURES:

Current:

General government 3,742,951 :

Public safety 14,241,312 150,000
Public works 1,786,294
Culture and recreation 1,398,546
Planning and building 908,186 :

Housing
Contribution to CFD 2013-1 264,031
480,522 1,340,409 8,286,695
Capital outlay
Debt service:

Principal 201,673 : -
Interest and fiscal charges 10,864
Total expenditures 23,034,379 1,490,409 8,286,695

REVENUES OVER (UNDER)
EXPENDITURES 1,395,558 1,344,073 73,110
OTHER FINANCING SOURCES (USES):

Transfers in
Transfers out (1098,117 (73,110)
Total other financing sources (uses) (1,098,447) (73,110) NET CHANGE IN FUND BALANCES 297,111 1,344,073 -
FUND BALANCES:

Beginning of year 4,709,159 15,375,402
End of year 5,006,270 16,719,475
See accompanying Notes to the Basic Financial Statements. 20 City of Calexico
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2025
Non-Major Total
Governmental Governmental
Funds Funds
REVENUES:

Property taxes $ 3,518,290
Other taxes 10,115,128
Licenses and permits - 1,684,812
Intergovernmental 7,823,091 22,330,132
Charges for services 3,198,669 7,461,542
Fines and forfeitures 165,430
Investment income 1,307,106 2,674,386
Other revenues 14,508 17,878
Total revenues 12,343,374 47,967,598
EXPENDITURES:

Current:

General government 105,688 3,848,639
Public safety 876,082 15,267,394
Public works 3,946,616 5,732,910
Culture and recreation 189,765 1,588,311
Planning and building 908,186
60,174 60,174
Housing
Contribution to CFD 2013-1 264,031
6,341,046 16,448,672
Capital outlay
Debt service:

Principal 745,000 946,673
Interest and fiscal charges 253,000 263,864
Total expenditures 12,517,371 45,328,854

REVENUES OVER (UNDER)
EXPENDITURES (173,997) 2,638,744
OTHER FINANCING SOURCES (USES):

Transfers in 2,392,298 2,392,298
Transfers out (1,318,741) (2,490,298)
Total other financing sources (uses) 1,073,557 (98,000) NET CHANGE IN FUND BALANCES 899,560 2,540,744
FUND BALANCES:

Beginning of year 31,058,154 51,142,715
End of year 31,957.714 53,683,459
See accompanying Notes to the Basic Financial Statements. 21 City of Calexico
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2025
Net Change in Fund Balances - Total Governmental Funds $ 2,540,744 Amounts reported for governmental activities in the Statement of Activities were different because:

Governmental funds reported capital outlay as expenditures. Capital outlay expenditures were included in the Statement of Revenues, Expenditures, and Changes in Fund Balances throughout various departments. However, in the Government- Wide Statement of Activities, the cost of those assets was allocated over the estimated useful lives as depreciation expense ($656,769 of the governmental fund capital outlay balance were for repairs and maintenance expenditures) 15,808,427 Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, depreciation expense was not reported as an expenditure in governmental funds. (4,960,150)
Certain pension expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in pension-related deferred outflows of resources (3,357,098) Changes in net pension liabilities 129,267
Changes in pension-related deferred inflows of resources 634,560 Certain OPEB expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in OPEB-related deferred outflows of resources 4,834,836 Changes in total net OPEB liabilities (7,680,889)
Changes in OPEB-related deferred inflows of resources 778,004 Long-term compensated absences were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, the change in long-term compensated absences was not reported as an expenditure in governmental funds. (96,406)
Repayment of bond principal was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Bond payment 745,000
Finance purchase agreement payment 201,673
Amortization expenses were reported in the Government-Wide Statement of Activities and Changes in Net Position, but they did not require the use of current financial resources. Therefore, amortization expenses were not reported as expenditures in the Governmental Funds.

Bond premiums 60,663
Revenues in the Government-Wide Statement of Activities that do not provide current financial resources and are not reported as revenue in the governmental funds.

Earned but unavailable grants (1,405,250)
Interest expense on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. The following amount represents the change in accrued interest from the prior year. 10,865 Internal service funds were used by management to charge the costs of certain activities to individual funds. The net revenue of internal service funds was reported with governmental activities. 1,755,154 Change in Net Position of Governmental Activities $ 9,999,400 See accompanying Notes to the Basic Financial Statements. 22 PROPRIETARY FUND

FINANCIAL STATEMENTS
Water Enterprise Fund - This fund accounts for the operation, maintenance, debt service, and capital improvements of the City's water distribution system.

Wastewater Enterprise Fund - This fund accounts for the operation, maintenance, debt service, and capital improvements of the City's wastewater collection system, the wastewater treatment facility, and the recycled water disposal system.

Airport Enterprise Fund - The fund is used to account for the operation, maintenance, and capital improvements of the City's airport.
23 City of Calexico
Statement of Net Position
Proprietary Funds
June 30, 2025
Non-Major Internal
Fund Service
Water Major Fun ascewater Funds
Airpor Total
ASSETS
Current assets:

Cash and investments $ 12,344;793 $ 30,805,795 34,793 $ 43,185,381 $ 5,888,043 Accounts receivable, net 3,825,151 3,825,151 9,578
Intergovernmental receivables 42,740 102,576 : 145,316 100,956 Due from other funds - 421,377
Deposits : 228,457
Inventories and prepaid items 27,999 27,999 3,441
Total current assets 16,212,684 30,908,371 62,792 47,183,847. 6,651,852 Noncurrent assets:

Cash and investments with fiscal agents 14,092,021 22,372,534 - 36,464,555 Capital assets:

Ion-depreciable 880,382 2,500,944 3,381,326
lepreciable, ne 29,505,877 8,580,667 6,039,067 44,125,611 Total net capital assets 30,386,259 11,081,611 6,039,067 47,506,937 Total noncurrent assets 44,478,280 33,454,145 6.039,067 83,971,492 Total assets 60,690,964 64,362,516 6,101,859 131,155,339 6,651,852

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding, net 62,129 62,129
Pension-related deferred outflows of resources 1,081,336 696,679 1,778,015 OPE-related deferred outflows of resources 2,195,296 1,557,160 3,752,456 Total deferred outflows of resources 3,338,761 2,253,839 5,592,600 See accompanying Notes to the Basic Financial Statements. 24 City of Calexico
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
Non-Major Internal
Major Funds Fund Service
Water Wastewater Airport Total Funds

LIABILITIES
Current liabilities:

Accounts payable 182,258 154,512 2,518 343,948 776,686
Accrued payroll 37,171 22,820 62,509
Interest payable 80,708 112,833 193,541
Compensated absences - due within one year 19,129 2,287 21,416 Claims payable - due within one year 850,000
Long-term debt - due within one year 371,104 503,753 : 874,857 Total current liabilities 690,370 796,205 9,696 1,496,271 1,626,686 Noncurrent liabilities:

Deposits payable 238,842 : 238,842
Compensated absences - due in more than one year 220,237 157,927 378,164 Aggregate net pension liability 3,988,062 2,655,703 6,643,765 Total OPEB liability 7,003,239 4,677,653 11,680,892
Claims payable - due in more than one year 2,127,000
Long term debt - due in more than one year 15,434,088 21,582,866 37,016,954 Total noncurrent liabilities 26,884,468 29,074,149 55,958,617 2,127,000 Total liabilities 27,574,838 29,870,354 9,696 57,454,888 3,753,686

DEFERRED INFLOWS OF RESOURCES
Pension-related deferred inflows of resources 106,265 66,364 172,629 : 1,158,375
OPEB-related deferred inflows of resources 715,079 443,296 Total deferred inflows of resources 821,344 509,660 1,331,004

NET POSITION
Net investment in capital assets 28,735,217 11,367,526 6,039,067 46,141,810 Unrestricted 6,898,326 24.868.815 1 3 60345 7,200 - 20810 Total net position $ 35,633,543 5 36.236,341
See accompanying Notes to the Basic Financial Statements. 25 This page intentionally left blank.
26 City of Calexico
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
Non-Major Internal
Fund Service
Water Major Pund astewater Airport Total Funds
OPERATING REVENUES:

Charges for scrvices $ 8,396,567 6,289,164 291,286 $ 14,977,017 $ 6,474,827 Other revenue 2,127,827
Total operating revenues 8,396,567 6,289,164 291,286 14,977,017 8,602,654 OPERATING EXPENSES:

Salaries and bencfits 3,845,589 2,511,346 175,315 6,532,250 104,000 Material, supplies, and operational expenses 3,170,235 2,515,129 227,831 5,913,195 205,093 Insurance 7,823 7,823 1,409,251
Claim payments : 2,845,376
Claims administration 1,707,791
Depreciation 1,518,487 425,295 439,994 2,383,776
Total operating expenses 8,534,311 5,451,770 850,963 14,837,044 6,271,511 OPERATING INCOME (LOSS) (137,744) 837,394 (559,677) 139,973 2,331,143 NONOPERATING REVENUES (EXPENSES):

Capital grants and contributions 24,905 19,376 10,000 54,281 Investment income 461,142 1,027,860 1,489,002 280,369
Interest expense (446,654) (617,723) : (1,064,377)
Total nonoperating revenues (expenses) 39,393 429,513 10,000 478,906 280,369 INCOME (LOSS) BEFORE TRANSFERS (98,351) 1,266,907 (549,677) 618,879 2,611,512 TRANSFERS:

Transfers in 856,358 98,000 954,358 665,000
Transfers out : (1,521,358)
Total transfers 856,358 98,000 954,358 (856,358)
Change in net position 758,007 1,266,907 (451,677) 1,573,237 1,755,154 NET POSITION:

Beginning of year 34,875,536 34,969,434 6,543,840 76,388,810 1,143,012 End of year $ 35,633,543 36,236,341 6,092,163 77,962,047 2,898,166 See accompanying Notes to the Basic Financial Statements. 27 City of Calexico
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
Non-Major Internal
Major Funds Fund Service
Water Wastewater Airport Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers and users $ 8,113,513 $ 6,186,588 291,286 $ 14,591,387 $ 8,596,932 'ash payments to suppliers for goods and service (3,102,678) (2,643,156) (232,259) (5,978,093) (1,693,974) ash payments to employees for services (3,113,561) (1,976,862) (175,543) (5,265,966) (6,264,276) Net cash provided by (used in) operating activities 1,897,274 1,566,570 (116,516) 3,347,328 638,682

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from other funds 3,170,458
856,358 93,000 954,358 665,000
Transfers in
Transfers out (1,521,358)
Net cash provided by (used in) noncapital
financing activities 856,358 98,000 954,358 2,314,100

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition of capital assets (151,604) (76,870) (228,474) Capital grants and contributions 24,905 19,376 10,000 54,281 Proceeds from issuance of bonds :

Principal payments on bonds (330,000) (460,000) (790,000) Principal payments on capital leases (11,855) (12,052) (23,907) Interest payments on debt (491,646) (687,505) : (1,179,151) Net cash provided by (used in) capital and
related financing activities (960,200) (1,217,051) 10,000 (2,167,251) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income (loss) 461,142 1,027,860 1,489,002 280,369 Net cash provided by (used in) investing activities 461,142 1,027,860 1,489,002 280,369 Net increase (decrease) in cash and cash equivalents 2,254,574 1,377,379 (8,516) 3,623,437 3,233,151 CASH AND CASH EQUIVALENTS:

Beginning of year 24,182,240 51,800,950 43,309 76,026,499 2,654,892 -
End of year $ 26,436,814 $ 53,178,329 $ 34,793 $ 79,649,936 $ 5,888,043

RECONCILIATION OF CASH AND INVESTMENTS
TO STATEMENT OF NET POSITION:

Cash and investments $ 12,344,793 $ 30,805,795 $ 34,793 $ 43,185,381 $ 5,888,043 Cash and investments with fiscal agents 14,092,021 22,372,534 36,464,555 Total cash and investments $ 26,436,814 5 $ 53,178,329 $ 34,793 $ 79,649,936 $ 5,888,043 See accompanying Notes to the Basic Financial Statements.

City of Calexico
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
Internal
Major Funds Service
Water Wastewater Airport Total Funds

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED
BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) (137,744) $ 837,394 $ (559,677) $ 139,973 $ 2,331,143 Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation 1,518,487 425,295 439,994 2,383,776 -
Changes in operating assets and liabilities:

Accounts receivable (239,993) (239,993) 85,656
Intergovernmental receivable (42,740) (102,576) : (145,316) (100,956) Deposits (53,457)
Inventories and prepaid items 1,660 (556) 1,104 4,415
Pension-related deferred outflows 381,589 275,992 657,581 OPEB-related deferred outflows (950,771) (700,107) (1,650,878) Accounts payable 65.897 (128,027) 3,951 (58,179) 226,513 Accrued payroll 6,420 4,423 (228) 10,615
Deposits payable (321) (321)
Compensated absences 17,472 12,566 30,038
Aggregate net pension liability (31,537) (22,810) (54,347) Total OPEB liability 1,510,447 1,112,228 2,622,675
Claims payable (1,854,632)
Pension-related deferred inflows (48,597) (35,149) (83,746) OPEB-related deferred inflows (152,995) (112,659) (265,654) Total adjustments 2,035,018 729,176 443,161 3,207,355 (1,692,461) et cash provided by (used ir
perating activiti $ 1,897,274 1,566,570 (116,516) $ 3,347,328 638,682 SCHEDULE OF NONCASH ITEMS:

Claims reserve adjustment (reduction in claims liability) $ $ $ - $ 1,641,055 Amortization of bond premiums 47,762 66,715 114,477
Total noncash items $ 47,762 66,715 $ $ 114,477 $ 1,641,055 See accompanying Notes to the Basic Financial Statements. 29 This page intentionally left blank.
30 FIDUCIARY FUND

FINANCIAL STATEMENTS
Custodial Funds - These funds are used to account for money and property held by the City as trustee or custodian.

Such funds include 2013-1 Gran Plaza CFD and Hearthstone 2005-1 CFD.

Successor Agency to the Calexico Redevelopment Agency Private Purpose Trust Fund - This fund is used to account for monies received from the Imperial County Auditor-Controller for the repayment of the enforceable obligations of the former Redevelopment Agency of the City of Calexico. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS).

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32 City of Calexico
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
Successor Agency
to the Calexico
Custodial Redevelopment
Funds Agency
ASSETS
Current assets:

Cash and investments $ 265,980 $ 3,588,203
Cash and investments with fiscal agents 1,512,735 370,553 Due from other governments 16,552
Total current assets 1,795,267 3,958,756
Noncurrent assets:

Capital assets:

Nondepreciable 1,106,663
Depreciable, net accumulated depreciation 1,479,543
Total noncurrent assets 2,586,206
Total assets 1,795,267 6,544,962

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding, net 375,380
Total deferred outflows of resources 375,380

LIABILITIES
Current liabilities:

Accounts payable 111,863 769,286
Interest payable 169,204
Long-term debt - due within one year 1,940,000
Total current liabilities 111,863 2,878,490
Noncurrent liabilities:

Long term debt - due in more than one year 10,864,755
Total noncurrent liabilities 10,864,755
Total liabilities 111,863 13,743,245

NET POSITION (DEFICIT)
Restricted for:

Individuals, organizations, and other governments 1,683,404 Held in trust for dissolution of RDA (6,822,903)
Total net position (deficit) 1,683,404 $ (6,822,903)
See accompanying Notes to the Basic Financial Statements. 33 City of Calexico
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
Successor Agency
to the Calexico
Custodial Redevelopment
Funds Agency
ADDITIONS:

Property taxes - Redevelopment Property Tax Trust Fund (RPTTF) $ 2,289,843 Fee collections for other governments 180,375
Special assessments for other governments 160,205
Investment income 78,893
Contribution from City 264,031
Total additions 1,017,548 2,630,423
DEDUCTIONS:

Administration 126,670
Depreciation 45,877
: 258,074
Enforceable obligations
Payments - principal 175,000 :

Payments- interest 656,791
Interest expense and fiscal charges 340,592
Total deductions 958,461 644,543
Change in net position 59,087 1,985,880
NET POSITION (DEFICIT):

Beginning of year 1,624,317 (8,808,783)
End of year 1,683,404 $ (6,822,903)
See accompanying Notes to the Basic Financial Statements. 34 NOTES TO THE BASIC FINANCIAL STATEMENTS
35 This page intentionally left blank.
36 City of Calexico
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies.. .. 41 A. Financial Reporting Entity. .. 41
B. Basis of Accounting and Measurement Focus.. 42
C. Deferred Outflows and Inflows of Resources. ... 46
D. Cash, Cash Equivalents and Investments... ...46
E. Restricted Cash and Investments .. 46
F. Fair Value Measurement. ... 47
G. Interfund Transactions.. .. 47
H. Inventories and Prepaid Items. 47
I. Leases ... ... 47
J. Capital Assets ... 49
K. Pensions... .. 49
L. Other Postemployment Benefits ("OPEB")... ... 50
M. Compensated Absences .. ...50
N. Unearned Revenue... ... 51
O. Long-Term Debt. ..51
P. Net Position 51
Q. Fund Balances.. ... 52
R. Spending Policy ... 52
S. Property Taxes ... 53
T. Use of Accounting Estimates. ... 53
U. Implementation of New GASB Pronouncements for the Year Ended June 30, 2025 .... 54 V. Upcoming Governmental Accounting Standards Implementation .. .. 54 Note 2 - Cash and Investments 55
A. Demand Deposits. .. 55
B. Investments Authorized by the California Government Code and the City's Investment Policy ... 56
C. Investments Authorized by Debt Agreements. ... 56
D. External Investment Pool ... 56
E. Risk Disclosures ... 57
Note 3 - Lease Receivable.. ... 58
A. Governmental Activities ... 58
Note 4 - Notes and Loans Receivable and Allowance for Doubtful Accounts.. ... 59 Note 5 - Interfund Transactions.... ... 61
A. Due To and Due From Other Funds .. 61
B. Transfers In/Out... .. 61
Note 6 - Capital Assets .. 62
A. Governmental Activities .. 62
B. Business-Type Activities ... 63
C. Fiduciary Funds .. 63
37 City of Calexico
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025
Note 7 - Long-Term Debt.. ... 64
A. Governmental Activities.. .. 64
B. Business-Type Activities ... 65
C. Fiduciary Funds..... ... 67
D. Conduit Debt. .. 69
Note 8 - Compensated Absences.... ... 70
A. Governmental Activities.. .. 70
B. Business-Type Activities.. ... 70
Note 9 - Risk Management. .. 70
A. Summary .. 70
B. Public Risk Innovation, Solutions, and Management - Excess Insurance Authority. ..71 Note 10 - Pension Plans ... 72
A. Summary.. .. 72
B. General Information about Pension Plans. ... 73
C. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions .. ..75
D. Payable to the Pension Plan .. 78
Note 11 - Other Postemployment Benefits .. 78
A. Summary.. .. 78
B. General Information about OPEB.. 79
C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB .. 79
Note 12 - Commitments and Contingencies ... .. 82
A. Litigation. 82
B. Grants.... 82
C. Construction. .. 83
D. CFD 2013-1 . 83
Note 13 - Deferred Compensation Plan .. 83
Note 14 - Self-Funded Medical, Dental and Vision Plan. ... 83 Note 15 - Other Required Disclosures...... .... 84
A. Deficit Fund Balances/Net Position... ... 84
B. Expenditures Exceeding Appropriations. .. 84
38 City of Calexico
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2025
Note 16 - Fund Balance Classification... .... 85
Note 17 - Net Investment in Capital Assets ..... .... 85 39 This page intentionally left blank.
40 City of Calexico
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies The basic financial statements of the City of Calexico, California (the "City") have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") as applied to governmental agencies. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for establishing governmental accounting and financial reporting standards in the United States. The more significant of the City's accounting policies are described below.

A. Financial Reporting Entity
The City was incorporated in April, 1908, under the General Laws of the State of California and enjoys all the rights and privileges pertaining to such "General Law" cities. It is governed by an elected five-member council. The City operates under a Council-Manager form of government and provides the following services: public safety (police and fire), highways and streets, culture-recreation, public improvements, planning and building (planning, engineering, and building), airport, public utilities (water and wastewater), and general administrative services.

In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body's financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship if it appoints a voting majority of an organization's governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Blended Component Units
The financial reporting entity consists of the primary government, the City, and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government is accountable and their exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Blended component units, although legally separate entities, are, in substance part of the government's operation and so data from these units are combined with data of the primary government. Discretely presents component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the government.

Although the following are legally separate from the City, they have been "blended" as though they are part of the City because the component unit's governing body is substantially the same as the City's and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) A. Financial Reporting Entity (Continued)
Calexico Financing Authority (the "Financing Authority") The Calexico Financing Authority is a joint powers authority, organized pursuant to a Joint Exercise of Powers Agreement, dated as of December 1, 1990 (the "Joint Powers Agreement") by and between the Successor Agency to the Community Redevelopment Agency of the City of Calexico (as successor in interest to the Community Redevelopment Agency of the City of Calexico) (the "Successor Agency") and the City. Such agreement was entered into pursuant to the provisions of Articles 1, 2 and 4 29 of Chapter 5 of Division 7 of Title I of the California Government Code (the "Act"). The Financing Authority was created for the purpose of assisting the financing or refinancing of certain public capital facilities within the City. Under the Act, the Financing Authority may purchase bonds issued by any local agency at public or negotiated sale and may sell bonds to public or private purchasers at public or negotiated sale. The Financing Authority is governed by a five-member board of directors, which consists of the members of the City Council of the City. The Mayor acts as the Chair of the Financing Authority, the City Manager as its Executive Director, the City Clerk as its Secretary and the Finance Director of the City as the Treasurer of the Financing Authority. The Authority, the City, and the Successor Agency are each separate and distinct legal entities, and the debts and obligations of each such entity are not debts or obligations of the other entity.

Under the provisions of State law, the Community Redevelopment Agency of the City of Calexico was statutorily dissolved and succeeded by the Successor Agency with respect to the Joint Powers Agreement. The Financing Authority reasonably expects that the existence of the Successor Agency will continue through at least August 1, 2033, which is later than the last maturity of the Bonds. Nonetheless, under the Trust Agreement, the Financing Authority has covenanted to take or cause to be taken all actions reasonably necessary to continue the Financing Authority's existence until such time as the Bonds are no longer Outstanding under the Trust Agreement, including but not limited to the addition of one or more new members to the Joint Powers Agreement.

Calexico Housing Authority (the "Housing Authority")
The Housing Authority was formed on January 31, 2012 to develop or acquire and subsequently operate rental housing projects within the City. The Housing Authority does not issue separate financial statements.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Financial Statements
The City's Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position.
42 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government-Wide Financial Statements (Continued)
Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses re recognized in the period in which the liability is incurred. Under the accrual basis of accounting, revenues xpenses, gains. losses, assets, deferred outflows of resources. liabilities and deferred inflows of resource resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33.

Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Program revenues for the City are classified in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:

Due to/from other funds
• Transfers in/out
Government Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances. An accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in these statements to the Net Position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 90 days for all revenues, with the exception of grant revenues, for which the availability period is one year.
43 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government Fund Financial Statements (Continued)
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period.

Other revenue items are considered to be measurable and available when cash is received by the government.

Revenue recognition is subject to the measurable and available criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed non- exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions have been recognized as revenues when all applicable eligibility requirements have been met.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.

The City reports the following major governmental funds:

General Fund - This fund accounts for all revenues and expenditures to finance the traditional services associated with a municipal government which are not accounted for in the other funds.

LTA Measure D Capital Projects Fund - This fund accounts for revenues from 0.5% retail and use tax used for transportation improvements to repair and rehabilitate existing roadways, reduce congestion and improve safety, and to provide for construction of needed facilities. The reported tax revenue amounts are net of amounts deposited directly to the Measure D Debt service fund which are pledged for the payment of Measure D Sales Tax Revenue Bonds.

New River Grants Capital Projects Fund - This fund accounts for expenditures for the planning, design, and construction of capital facilities funded through various grants received by the City for the New River Project.

Proprietary Fund Financial Statements
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. 44 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements (Continued)
Proprietary funds are supported by user fees or other restricted grant revenues and their resources in the funds are not available for general city operations. In California, voters have enacted limitations on the ability of local governments to assess taxes for general operations. User fees are an important alternate revenue tool that is available to local governments to finance specific municipal services. Because user rates are set with a nexus to the cost of service supporting the fee, they may be set by the local government outside of tax limitations. However, if user fees are redirected outside of their source program, they would no longer have a nexus to the cost of service, and would cause the revenue to become an unauthorized general tax.

The City reports the following major proprietary funds:

Water Enterprise Fund - This fund accounts for the operation, maintenance, debt service, and capital improvements of the City's water distribution system.

Wastewater Enterprise Fund - This fund accounts for the operation, maintenance, debt service, and capital improvements of the City's wastewater collection system, the wastewater treatment facility, and the recycled water disposal system.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City's fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting.

Fiduciary fund types are accounted for according to the nature of the fund. The City's custodial funds are purely custodial in nature (assets equal liabilities) and thus do not involve measurement of results of operations. These funds are used to account for money and property held by the City as trustee or custodian. The City established Custodial funds and used to account for money and property held by the City as trustee or custodian.

The City's private purpose trust fund is a fiduciary fund type used by the City to report assets, liabilities and activities of the Successor Agency to the Redevelopment Agency for the City of Calexico. Its results of operations are presented on the Statement of Changes of Fiduciary Net Position.

Successor Agency of the Redevelopment Agency for the City of Calexico The Redevelopment Obligation Retirement Fund (Successor Agency) was created to serve as a custodian for the assets and to wind down the affairs of the Redevelopment Agency (RDA) on February 1, 2012, pursuant to Assembly Bill x1 26. Its purpose is to expeditiously wind down the affairs of the dissolved RDA. The Successor Agency is a separate public entity from the City, subject to the direction of an oversight board. The City Council serves as the governing board of the Successor Agency. In general, the Successor Agency's assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). 45 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1- Reporting Entity and Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Successor Agency of the Redevelopment Agency for the City of Calexico (Continued) In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is necessary to pay he estimated annual installment payments on enforceable obligations of the former RDA until all enforceabl bligations of the former RDA have been paid in full and all assets have been liquidated. Based upon the natur of the Successor Agency's custodial role, the Successor Agency has been included in the accompanying basic financial statements as a private purpose trust fund.

C. Deferred Outflows and Inflows of Resources
The Statement of Net Position and Balance Sheet - Governmental Funds reports separate sections for Deferred Outflows of Resources, and Deferred Inflows of Resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

Deferred Inflows of Resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

D. Cash, Cash Equivalents and Investments
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF) which has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these structured notes and asset-backed securities are subject to market risk as to change in interest rates.

Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost.

All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.

E. Restricted Cash and Investments
Certain restricted cash and investments are held by a fiscal agent for the redemption of bonded debt and for acquisition and construction of capital projects.

City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) F. Fair Value Measurement
U.S. GAAP defines fair value, establishes a framework for measuring fair value, and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Levels of inputs are as follows:

Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 - Inputs, other than quoted prices included in Level 1, which are observable for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 - Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

G. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" or "advances to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as "internal balances."
H. Inventories and Prepaid Items
Inventories within the proprietary fund types consist of materials and supplies which are valued at cost on a first-in, first-out basis. Prepaid items are items that the City has paid for in advance and will provide a future benefit.

I. Leases
Lessee
The City has a policy to recognize a lease liability and a right-to-use lease asset (lease asset) in the government-wide financial statements. The City recognizes lease liabilities with an initial, individual value of $25,000 or more.

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.

Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.
47 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued)

1. Leases (Continued)
Lessee (Continued)
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. • 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 monitors changes in circumstances that would require a remeasurement of its lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported as right to use along with other capital assets and lease liabilities are reported with long- term debt on the Statement of Net Position.

Lessor
The City is a lessor for leases of special purpose facilities, office and commercial space, and land. The City recognizes leases receivable and deferred inflows of resources in the financial statements.

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 inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. • The City uses its estimated incremental borrowing rate as the discount rate for leases. • 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.

City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) J. Capital Assets
Capital assets, which include property, plant, equipment, infrastructure assets, and the right to use leased equipment and buildings, are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Such assets are recorded at historical cost (except for intangible right-to-use lease assets) or estimated historical cost if purchased or constructed. Donated capital assets are valued at their estimated acquisition value on the date donated. City policy has set the capitalization threshold for reporting capital assets at $10,000. Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows:

Asset Type Years
Land improvements 20 years
Buildings and improvements 25-50 years
Machinery and equipment 5-20 years
Infrastructure 15-65 years
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include streets, water, sewer, and park lands. 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, landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

For all infrastructure systems, the City estimated the original historical cost, defined as the actual cost to acquire new property in accordance with market prices at the time of first construction/acquisition for all property in existence when the City first reported infrastructure assets. The City estimated the original historical cost, which is defined as the actual cost to acquire new property in accordance with market prices at the time of first construction/acquisition. Estimated original historical costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition to the current date on a straight line, was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the estimated original historical cost.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets acquired under capital leases are capitalized at the net present value of the total lease payments.

Capital Assets Acquired Under Finance Purchase Agreements The long-term principal portion of debt on capital assets acquired through finance purchase agreements is accounted for in the government-wide financial statements as "long-term debt - due within one year" or "long-term debt - due in more than one year". A capital asset is recorded at the net present value of the total lease payments in the government-wide financial statements.

K. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as they are reported by the plans (Note 10). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. 49 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1- Reporting Entity and Summary of Significant Accounting Policies (Continued) K. Pensions (Continued)
The following timeframes are used for pension reporting:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

I. Other Postemployment Benefits ("OPEB")
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's Retiree Benefits Plan ("OPEB Plan") and additions to/deductions from OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan (Note 11). For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments, which are reported at amortized cost.

The following timeframes are used for OPEB reporting:

Valuation Date July 1, 2024
Measurement Date June 30, 2025
Measurement Period July 1, 2024 to June 30, 2025
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized on a straight-line basis over five years. All other amounts are amortized on a straight-line basis over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) at the beginning of the measurement period.

M. Compensated Absences
The City recognizes a liability for compensated absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled (for example paid in cash to the employee or payment to an employee flex spending account) during or upon separation from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences - vacation and sick leave. The liability for compensated absences is reported as incurred in the government-wide and proprietary fund financial statements. A liability for compensated absences is recorded in the governmental funds only if the liability has matured because of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable.
50 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) M. Compensated Absences (Continued)
Vacation: The City's policy permits employees to accumulate earned but unused vacation benefits, which are eligible for payment at the employee's current pay rate upon separation from employment.

Sick Leave: The City's policy permits employees to accumulate earned but unused sick leave. All sick leave lapses when employees leave the employ of the City and, upon separation from service, no monetary obligation exists.

However, a liability for estimated value of sick leave that will be used by employees as time off is included in the liability for compensated absences.

N. Unearned Revenue
Unearned revenue recorded in the Government-Wide Statement of Net Position for governmental activities, business-type activities, the governmental fund financial statements, and the proprietary fund financial statements, consist of federal and state capital grants, representing voluntary nonexchange transactions, for which advance payments have been received from the provider for which eligibility requirements, other than timing requirements, have not been satisfied as well as rents received in advance.

O. Long-Term Debt
Government-Wide Financial Statements
In the government-wide financial statements and the proprietary fund financial statements, long-term liabilities, and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Initial issue bond premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Bond issuance costs except for insurance, are expenses in the period incurred. Amortization of bond premiums or discounts, issuance costs, and deferred amounts on refunding is included in interest expense.

Fund Financial Statements
In the fund financial statements, governmental fund types recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Long-term debt obligations are reported as liabilities in the appropriate activities.

P. Net Position
For government-wide and proprietary fund financial statements, net position is categorized as follows:

Net Investment in Capital Assets - This component of net position consists of capital assets, net of accumulated depreciation, increased by an unspent capital-related debt proceeds and capital-related debt deferred inflows of resources, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets.
51 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) P. Net Position (Continued)
Restricted - This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted - This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

2. Fund Balances
For governmental fund financial statements, fund balances are categorized as follows:

Nonspendable - Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories and long-term receivables, or items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted - Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed - Committed fund balances encompass the portion of net fund resources which are constrained, the use of which is constrained by limitations imposed by the formal action of the government's highest level of decision-making authority normally through resolutions, etc., and that remain binding unless rescinded or modified in the same manner. The City Council is considered the highest authority for the City.

Assigned - Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. On June 29, 2011, the City Council adopted Resolution 2011 77 adopting the fund balance policy authorizing the Finance Director; with concurrence of the City Manager and City Council, to make the determination.

Unassigned - This amount is for any portion of the fund balances that do not fall into one of the above categories.

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 for those purposes, it may be necessary to report negative unassigned fund balance in that particular fund.

R. Spending Policy
Government-Wide Financial Statements and the Proprietary Fund Financial Statements 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.

Governmental Fund Financial Statements
When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned. 52 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1- Reporting Entity and Summary of Significant Accounting Policies (Continued) S. Property Taxes
Property taxes in the State of California are administered for all local agencies at the county level and consist of secured, unsecured, and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:

Property valuations - are established by the Assessor of the County of Imperial (County) for the secured and unsecured property tax roll; the utility property tax rolls are valued by the State Board of Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), property is assessed at 100 percent of purchase price or value in 1978 whichever is later. From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2 percent per year. However, increases to current value are allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations, and is subject to annual reappraisal.

Tax levies - are limited to 1 percent of full value which results in a tax rate of $1 per $100 assessed valuation, under the provision of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation.

Tax levy dates - are attached annually on January 1 of the preceding fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property and are not relieved by subsequent renewal or change in ownership.

Tax collections - are the responsibility of the County Tax Collector. Taxes and assessments on secured and utility tax rolls constitute a lien against the property and may be paid in two installments; the first installment is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against real property unless the taxes become delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Penalties are imposed by the County for late payment.

Tax levy apportionments - Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by the County Auditor-Controller based primarily on the ratio that each agency represented by the total City-wide levy compared to the total County for the three years prior to fiscal year 1979.

Property tax administration fees - the State's Fiscal Year 1990-91 Budget Act authorized counties to collect administrative fees for collection and distribution of property taxes.

T. Use of Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, in some cases when applicable, that affect the amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.

City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 - Reporting Entity and Summary of Significant Accounting Policies (Continued) U. Implementation of New GASB Pronouncements for the Year Ended June 30, 2025 The requirements of the following accounting standards are effective for the purpose of implementation, if applicable to the City, for the year ended June 30, 2025. The financial statements included herein apply the requirements and provisions of these statements, including necessary retroactive adjustments to financial statement classifications and presentations.

GASB Statement No. 101 - In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.

Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2025.

GASB Statement No. 102 - In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Implementation of this Statement did not have a significant effect on the City's financial statements for the fiscal year ended June 30, 2025.

V. Upcoming Governmental Accounting Standards Implementations The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB statements:

GASB Statement No. 103 - In April 2024, GASB issued 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. Application of this statement is effective for the City's fiscal year ending June 30, 2026.

GASB Statement No. 104 - In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized in accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital assets note disclosures. Subscription assets recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements, also should be separately disclosed. In addition, this Statement requires intangible assets other than those three types to be disclosed separately by major class.

Application of this statement is effective for the City's fiscal year ending June 30, 2026.

GASB Statement No. 105 - In December 2025, GASB issued Statement No. 105, Subsequent Events. This Statement establishes accounting and financial reporting requirements for events and transactions that occur after the financial statement date but before financial statements are issued. The Statement defines the types of subsequent events and requires disclosure of certain nonrecognized subsequent events. Application of this Statement is effective for the City's fiscal year ending June 30, 2027.
54 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 - Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2025:

Primary Government
Governmental Business-type Fiduciary
Activities Activities Total Funds Total
Cash and investments $ 66,125,567 $ 43,185,381 $ 109,310,948 $ 3,854,183 $ 113,165,131 Cash and investments with fiscal agent 998,040 36,464,555 37,462,595 1,883,288 39,345,883 Total $ 67,123,607 $ 79,649,936 $ 146,773,543 $ 5,737,471 $ 152,511,014 Cash and investments consisted of the following at June 30, 2025:

Cash and cash equivalents:

Petty cash $ 6,350
Demand deposits 21,052,879
Investments:

LAIF - City 75,049,603
LAIF - Financing Authority 17,056,299
Money market funds 39,345,883
Total $ 152,511,014
At June 30, 2025, cash and investments, are reported at fair value based on quoted market prices. The following table represents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025:

Investments measured by fair value level: June 30, 2025 Level 1 Level 2 Level 3 Held by bond trustee:

Money market mutual funds $ 39,345,883 $ - $ 39,345,883 $ Total investments by fair value level 39,345,883 $ $ 39,345,883 $ Investments not subject to the fair value hierarehy:

Local Agency Investment Fund - State of CA - City 75,049,603 Local Agency Investment Fund - State of CA - Financing Authority 17,056,299 Total investments not subject to the fair value hierarchy 92,105,902 Total investments $131,451,785
A. Demand Deposits
The carrying amounts of the City's demand deposits were $21,052,879 at June 30, 2025. Bank balances were $21,713,122 at that date. The total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City's name is discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements.
55 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 - Cash and Investments (Continued)
B. Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
Certificates of Deposit 1 year Unlimited None
State of California Local Agency Investment Fund N/A N/A $75,000,000 Savings Accounts Unlimited Unlimited None
U.S. Treasury Obligations 3 years Unlimited None
U.S. Government Agency Issues 3 years Unlimited None
Repurchase Agreements 3 years Unlimited None
C. Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of risk.

Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
Certificates of Deposit None None None
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Municipal Obligations, Prime Quality None None None
Banker's Acceptances, Prime Quality 360 days None None
Commercial Paper, Prime Quality 270 days None None
Money Market Funds, Prime Quality N/A None None
Investment Contracts None None None
Repurchase Agreements, Approve by Bond Issuer None None None D. External Investment Pool
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. As of June 30, 2025, the City and the Financing Authority had $75,049,603 and $17,056,299, respectively, invested in LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.
56 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 - Cash and Investments (Continued)
E. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity, the greater the sensitivity its fair value is to changes in market interest rates. A means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment polic provides that final maturities of securities cannot exceed five years. Specific maturities of investments depend on liquidity needs.

Information about the sensitivity of the fair values of the City's investments to market rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity as of June 30, 2025:

Maturities
Amount 1 year or less
Investments:

LAIF - City $ 75,049,603 $ 75,049,603
LAIF - Financing Authority 17,056,299 17,056,299
Money market funds 39,345,883 39,345,883
Total $ 131,451,785 $ 131,451,785
The City has no investments (including investments held by bond trustees) that are highly sensitive to interest rate fluctuations.

Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization However, some issuers do not seek a credit rating. For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely responsible for performing their own due diligence before purchasing an investment or participating in an external investment pool. Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance Corporation (FDIC), and therefore, do not seek a credit rating.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating as of year-end for each investment type.

Credit Quality Ratings
Standard &
Amount Moody's Poor's
Investments:

LAIF - City $ 75,049,603 Not Rated Not Rated
LAIF - Financing Authority 17,056,299 Not Rated Not Rated Money market funds 39,345,883 Not Rated Not Rated
Total $ 131,451,785
City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 - Cash and Investments (Continued)
E. Risk Disclosures (Continued)
Disclosures Relating to Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

At June 30, 2025, the City's deposits (bank balances) were collateralized under California Law. All securities, with the exception of LAIF and other pooled investments, are held by a third-party custodian (BNY Mellon and UBS).

BNY is a registered member of the Federal Reserve Bank.

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated in the Gov't Code. GASB Statement No. 40 requires disclosure by amount and issuer, of investments in any one issuer that represent 5% or more of total investments. Investments in any one issuer (other than U.S.

Treasury securities, mutual funds, and external investment pools) that represents 5% or more of the City's total investments are as follows:

Total Percentage
as of of
Investment Type June 30, 2025 Investments
Investments:

LAIF - City $ 75,049,603 57.09%
LAIF - Financing Authority 17,056,299 12.98%
Money market funds 39,345,883 29.93%
Total $ 131,451,785
Note 3 - Lease Receivable
A. Governmental Activities
The portion of the City's property is leased to others. Such property includes special purpose facilities, office and ommercial space, and land. Lease receivable consists of agreements with other for the right-to-use of the underlyin ssets at various locations owned by the City. The terms of the arrangements range from 2 to 10 years. The calculate interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2025, the City recognized $30,556 in lease revenue and $2,484 in interest revenue. As of June 30, 2025, the balance of the deferred A summary of changes in lease receivable for the fiscal year ended June 30, 2025 is as follows:

Classification
Balance Balance Due within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Leases receivable 233,584 $ $ (61,915) $ 171,669 $ 30,259 $ 141,410 Total $ 233,584 $ $ (61,915) $ 171,669 $ 30,259 141,410 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 3 - Lease Receivable (Continued)
A. Governmental Activities (Continued)
As of June 30, 2025, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2026 $ 30,259 $ 2,093 $ 32,352
2027 31,639 1,683 33,322
2028 33,067 1,255 34,322
2029 34,544 808 35,352
2030 42,160 351 42,511
Total $ 171,669 $ 6,190 $ 177,859
Note 4 - Notes and Loans Receivable and Allowance for Doubtful Accounts The City and Successor Agency have issued various long-term notes and loans receivable to support affordable housing and development objectives. The City reports its long-term notes and related interest receivable fully offset with an allowance on the Government-Wide Statement of Net Position, the Governmental Funds Balance Sheet, and the Statement of Fiduciary Net Position due to the uncertain nature of long-term affordable housing and development loans.

At June 30, 2025, notes and loans receivable consisted of the following:

Notes/Loans Notes/Loans Allowance for Financial
• Receivable Receivable Doubtful Accounts Statement
Balance Balance Balance Balance
7/1/2024 Additions Deletions 6/30/2025 6/30/2025 6/30/2025 City:

Calexico Community Action Council $ 306,377 $ 306,377 (306,377) $ De Anza Limited Partnership #1 422,977 : ... 422,977 (422,977) De Anza Limited Partnership #3 5,000,000 5,000,000 (5,000,000) De Anza Renovation 759,332 759,332 (759,332)
Victoria Manor Senior Apartments 200,000 .... (200,000) California Family Apartments II, LP 3.400,000
3,400,000 (3,400,000)
HPD Villa Del Este, LP 1,363,887 1,363,887 (1,363,887)
Villa Primavera Family Apartments loan 5,100,000 5,100,000 (5,100,000) Other loans 9,811,467 (114,586) 9,696,881 (9,696,881)
City notes and loans receivable total 26,364,040 (314,586) 26,049,454 (26,049,454) Successor Agency:

Other loans 320,757 320,757 (320,757)
Successor Agency notes and loans receivable total 320,757 320,757 (320,757) Total notes and loans receivable $ 26,684,797 $ (314,586). $ 26,370,211 $ (26,370.211) $ Calexico Community Action Council
On September 11, 1996, the City issued a promissory note to Calexico Community Action Council to supersede a prior note for development of the Alejandro Rivera Senior Citizens Apartments II. The note bears an interest rate of 6.5% per annum. Annual payments are based on an estimated amount of the profit and shall be due and payable on December 31 of each year until the entire principal amount is paid off. At June 30, 2025, the outstanding balance was $306,377. 59 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 4 - Notes and Loans Receivable and Allowance for Doubtful Accounts (Continued) De Anza Limited Partnership #1
In 1997, the City loaned De Anza Limited Partnership the amount of $422,977 for the De Anza Hotel constructior roject. The note is secured by property. The note bears interest at a rate of 3% per annum and is due on the 16" anniversary of the date the project was placed in service. At June 30, 2025, the outstanding balance of the note was $422,977.

De Anza Limited Partnership #3
On February 12, 2012, the City loaned De Anza Limited Partnership $5,000,000 for the construction of a 54-unit apartment complex, subject to the completion of the project. The note is secured by a first assignment of leases and rents, and a deed of trust. The note bears an interest rate of 3% per annum and is due and payable in full in 55 years from the completion of the project. The City received the notice of project completion on December 12, 2012. At June 30, 2025, the outstanding balance of the note was $5,000,000.

De Anza Renovation
On September 21, 2010, the City authorized the De Anza Limited Partnership to borrow up to $760,000 for the De Anza Hotel earthquake rehabilitation and repair project. Borrowings are secured by a first assignment of leases and rents, and a deed of trust. Borrowings bear an interest rate of 3% per annum and are payable from residual receipts in the amount of 40% of the residual receipts and in no event less than $1,000 per year beginning March 30, 2011. At June 30, 2025, the outstanding balance of the note was $759,332.

Victoria Manor Senior Apartments
On October 19, 2010, the City loaned the Housing Authority of the City of Calexico ("Authority") $200,000 in order for the Authority to purchase certain real property. The note is secured by a deed of trust on the property. The note bears an interest rate of 6.25% per annum and is due at the earlier of the commencement of the term for the option agreement included with the note or nine years from the execution of the note. At June 30, 2025, the outstanding balance of the note was paid in full.

California Family Apartments II, LP
On November 1, 2006, the Agency loaned Calexico II, LP $3,400,000 for affordable housing projects. The note bears interest at 3% and is payable annually within 90 days following the end of each calendar year, contingent upon the LP realizing a profit. At June 30, 2025, the outstanding balance of the note was $3,400,000.

HPD Villa Del Este, LP
On June 30, 2008, the Agency loaned HPD Villa Del Este, LP $1,363,887 for affordable housing projects. The note is secured by a deed of trust. The note bears interest at 3% per annum. Principal and accrued interest shall be repaid beginning January 1, 2018, for each preceding calendar year in which there was a cash flow balance, and continuing annually on the first day of each and every year thereafter for the remainder of the term in which there is a cash flow balance. At June 30, 2025, the outstanding balance of the note was $1,363,887.

Villa Primavera, LLP
On November 4', 2014, the City approved a loan to Villa Primavera CIC, LP an amount not to exceed $5,100,000 for an affordable housing project for low income and senior citizens. The note is secured by a deed of trust. This promissory note bears interest at a rate of 3% per annum with a term of 55 years. Principal and accrued interest shall be repaid beginning from the date of Project Completion as defined by 24CFT 92.2, wherein the project must meet the affordability requirements contained herein. At June 30, 2025, the outstanding balance of the note was $5,100,000. 60 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 4 - Notes and Loans Receivable and Allowance for Doubtful Accounts (Continued) Other Loans
The City and Successor Agency have established various loan programs that assist residents of the City in purchasing and/or rehabilitating their homes and for business development. These loans are in the form of fully amortized or deferred loans. The deferred loans are usually due upon sale of property. At June 30, 2025, the outstanding balance of the City and Successor Agency loans were $9,696,881 and $320,757, respectively.

Note 5 - Interfund Transactions
A. Due To and Due From Other Funds
Due from and to other funds as of June 30, 2025, for short-term borrowing pending subsequent grant, tax, or fee reimbursement, were as follows:

Receivable Fund Payable Fund Amount Purpose
Workers' Compensation Internal Service Fund rop 172 Public Safety Sales Tax Special Revenue Fun $ 77,967 Overdrawn Cash (A) Workers' Compensation Internal Service Fund tate COPS Grant Special Revenue Fun 6,773 Overdrawn Cash (A) Workers' Compensation Internal Service Fund Operation Stonegarden Special Revenue Fund 9,506 Overdrawn Cash (A) Workers' Compensation Internal Service Fund HIDTA Special Revenuc Fund 43,199 Overdrawn Cash (A) Workers' Compensation Internal Service Fund Capital Grants Capital Projects Fund 172,973 Overdrawn Cash (A) Workers' Compensation Internal Service Fund New River Grants Capital Projects Fund 80,000 Overdrawn Cash (A) Workers' Compensation Internal Service Fund 30,959 Overdrawn Cash (B) Total $ 421,377
(A) Reimbursement is pending grants/intergovernmental receivable. (B) Reimbursement is pending receipt of developer fees.

B. Transfers In/Out
Transfers in and out for the year ended June 30, 2025, were as follows:

Transfers In Transfers Out Amount Purpose
Measure H Debt Service Fund General Fund 1,000,447 Debt Service Airport Enterprise Fund General Fund 98,000 Operations
Subtotal 1,098,447
Water Enterprise Fund General Liability Internal Service Fund 856,358 Operations jeneral Capital Projects Fun EMA Capital Projects Func 1,318,741 Capital Program Jeneral Capital Projects Fun ew River Capital Projects Fun 73,110 Capital Program Subtotal 1,391,851
Medical Retirees Internal Service Fund Employee Benefits Internal Service Fund 665,000 Operations Total $ 4,011,656
61 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 6 - Capital Assets
A. Governmental Activities
The following is a summary of changes in capital assets for the governmental activities:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Non-depreciable Assets:

Land $ 5,511,772 $ $ $ $ 5,511,772
Construction in progress 41,764,268 14,79,970 (47,465,893) 9,098,345 Total non-depreciable assets 47,276,040 14,799,970 (47,465,893) 14,610,117 D precine and improvements 32,293,338 47,465,893 79,784,904 25,673
Machinery and equipment : 14,607,508
13,624,724 982,784 -
Infrastructure 136,684,535 136,684,535
Total depreciable assets, at cost 182,602,597 1,008,457 47,465,893 231,076,947 (14,161,627) (1,467,173) (15,628,800)
(11,077,002) (618,110) (11,695,112)
..i. (93,759,691)
(90,884,824) (2,874,867)
Total accumulated depreciation (116,123,453) (4,960,150) (121,083,603) Total depreciable assets, net 66,479,144 (3,951,693) 47,465,893 109,993,344 Total governmental activities $113,755,184 $ 10,848,277 $ $ $ 124,603,461 Governmental activities depreciation expense for capital assets for the year ended June 30, 2025 are as follows:

General government $ 223,474
Public safety 963,069
Public works 3,587,726
Coming ny serving 184,483
1,398
Total depreciation expense $ 4,960,150
62 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 6 - Capital Assets (Continued)
B. Business-Type Activities
The following is a summary of changes in capital assets for business-type activities:

Balance Adjustments/ Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Non-depreciable Assets:

Land $ 281,615 $ $ - $ 281,615
Construction in progress 3,099,711 3,099,711
Total non-depreciable assets 3,381,326 3,381,326
Depreciable Assets:

Building and improvements 37,233,197 37,233,197
Machinery and equipment 20,885,735 228,474 21,114,209
Infrastructure 31,552,881 31,552,881
Total depreciable assets, at cost 89,671,813 228,474 89,900,287 Less accumulated depreciation:

Building and improvements (19,556,859) (617,322) (20,174,181) Machinery and equipment (13,554,392) (981,940) : (14,536,332) (10,279,649) (784,514) ... (11,064, 163)
Total accumulated depreciation (43,390,900) (2,383,776) (45,774,676) Total depreciable assets, net 46,280,913 (2,155,302) 44,125,611 Total business-type activities $ 49,662,239 $ 2,155,302) $ - $ $ 47,506,937 Depreciation expense for capital assets of the business-type activities for the year ended June 30, 2025 was as follows:

Water $ 1,518,487
Wastewater 425,295
Airport 439,994
Total depreciation expense $ 2,383,776
C. Fiduciary Funds
The following is a summary of changes in capital assets for the Fiduciary Funds:

Balance Balance
_July 1,2024 Additions Deletions June 30, 2025
Non-depreciable Assets:

Land $ 1,106,663 $ 1,106,663
Total non-depreciable assets 1,106,663 1,106,663
Depreciable Assets
Building and improvements 2,293,864 2,293,864
Total depreciable assets, at cost 2,293,864 2,293,864
Less accumulated depreciation:

Building and improvements (768,444) (45,877) (814,321)
Total accumulated depreciation (768,444) (45,877) (814,321) Total depreciable assets, net 1,571,297 (45,877) 1,479,543 Total fiduciary funds $ 2,677,960 $ (45,877) $ 2,586,206 Depreciation expense for capital assets of the fiduciary funds for the year ended June 30, 2025 was $45,877. 63 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt
A. Governmental Activities
Summary of changes in long-term liabilities for the governmental activities for the year ended June 30, 2025 is as follows:

Classification
Balance Debt Debt Balance Due in Due in more
July 1, 2024 Issued Retired June 30, 2025 One Year than One Year Governmental Activities:

Publicly Offered:

Measure HI Lease Revenue Bonds $ 5,060,000 $ : S (265,00) 1.34200 $ 780,000 $ 3,535,000 Bond premium 303,313 (60,663) 242,650 - 242,650
Privately Offered:

Finance purchase agreement 520,259 (201,673) 318,586 103,492 215,094 Total governmental activities $ 5,883,572 $ (1,007,336) $ 4,876,236 883,492 $ 3,992,744 Measure H Lease Revenue Bonds
On April 1, 2014, Calexico Financing Authority (the "Authority") issued its Measure "H" Sales Tax/Lease Revenue Bonds, Issue of 2014 (the "Bonds") pursuant to a trust agreement, dated as of June 1, 2014 (the "Trust Agreement"), by and among the City of Calexico (the "City"), the Authority and U.S. Bank National Association, as trustee (the "Trustee"). Proceeds of the Bonds are being used to (i) finance a portion of the costs of a new fire station headquarters and various park and recreation improvements; (ii) fund a deposit to the Reserve Account in an amount equal to the Reserve Requirement; and (iii) pay costs of issuance of the Bonds. The Bonds are payable solely from, and secured by, the trust estate and certain funds and accounts held under the Trust Agreement.

The issue consisted of serial bonds in the amount $11,200,000 payable annually on June 1 of each year, commencing on April 1, 2013 and maturing in 2030 with interest rates ranging from 3% to 4% per annum. Interest payments are due on April 1 and October 1 of each year until the bonds are paid off. At June 30, 2025, the outstanding balance of the bonds was $4,315,000. Total principal and interest remaining on the bond is $4,983,500, payable through 2030.

The annual debt service requirements for the bonds are as follows:

Year Ending
June 30, Principal Interest Total
2026 $ 780,000 $ 215,750 $ 995,750
2027 820,000 176,750 996,750
2028 860,000 135,750 995,750
2029 905,000 92,750 997,750
2030 950,000 47,500 997,500
Total GA 4,315,000 $ 668,500 4,983,500
Finance Purchase Agreements
The City has entered into several finance purchase agreements for the financing of vehicles and other equipment.

The lease agreements qualify as finance purchase agreements for accounting purposes and, therefore, have been recorded at the present value of future minimum lease payments as of the date of inception. 64 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt (Continued)
A. Governmental Activities (Continued)
Finance Purchase Agreements (Continued)
The annual debt service requirements for the finance purchase agreements outstanding at June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 $ 103,492 $ 8,251 111,743
2027 106,172 5,571 111,743
2028 108,922 2,821 111,743
Total $ 318,586 $ 16,643 $ 335,229
The leased assets are included in capital assets and are summarized by major asset class below:

Machinery and equipment $ 629,540
Less: accumulated depreciation (503,652)
Total $ 125,888
B. Business-Type Activities
Summary of changes in long-term liabilities for the business-type activities for the year ended June 30, 2025 is as follows:

Classification
Balance Debt Debt Balance Due in Due in more
_July 1,2024 Issued Retired June 30, 2025 One Year than One Year Business-Type Activities:

Publicly Offered:

Water Revenue Bonds, Series 20201 $ 14,915,000 $ 345,000 $ 14,240,000 Bond premium 1,241,85l (47,762) 1,194,089 1,194,089
Wastewater Revenue Bonds, Series 2020A 20,855,000 (460,000) 20,395,000 480,000 19,915,000 Bond premium 1,734,580 (66,715) 1,667,865
Privately Offered:

Finance purchase agreement 73,764 (23,907) 49,857 49,857 Total business-type activities $ 38,820,195 $ (928,384) $ 37,891,811 $ 874,857 $ 37,016,954 Water and Wastewater 2020 Refunding Revenue Bonds
In July 2020, the Calexico Financing Authority (the "Authority") issued its Water Revenue Bonds Series 2020A (the "Water Bonds") in the principal amount of $16,255,000 and Wastewater Revenue Bonds Series 2020A (the "Wastewater Bonds" - collectively "the Bonds") in the principal amount of $22,715,000 under an Indenture of Trust, dated as of July 1, 2020. The Bonds mature annually on November 1 beginning in 2020 and bear interest at rates ranging from 3% to 4% per annum. Interest payments are due on May 1 and November 1 of each year until the bonds are paid off. Proceeds of the Water Bonds were used to (i) refund the community Redevelopment Agency of the City of Calexico Water System Lease Revenue Bonds Issue of 2007, (ii) to finance certain improvement to the water system, (iii) to purchase a municipal bond insurance policy and a debt service surety for the Water Bonds, and (iv) to pay costs of issuance of the Water Bonds. Proceeds of the Wastewater Bonds were used to (i) finance certain improvements to the wastewater system, (ii) to purchase a municipal bond insurance policy and a debt service surety for the Wastewater Bonds, and (iii) to pay costs of issuance of the Wastewater Bonds. 65 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt (Continued)
B. Business-Type Activities (Continued)
Water and Wastewater 2020 Refunding Revenue Bonds (Continued) The issues consist of serial bonds maturing from 2020 to 2050 in combined annual installments of $1,005,000 to $1,940,000. The bonds carry interest rates ranging from 3.0% to 4.0% and mature in 2050. Interest payments are due on May 1 and November 1 of each year until the bonds are paid off.

The annual debt service requirements for the bonds are as follows:

Water Revenue Bonds, Series 2020A
Year Ending
June 30, Principal Interest Total
2026 $ 345,000 $ 477,350 $ 822,350
2027 360,000 463,250 823,250
2028 375,000 448,550 823,550
2029 390,000 433,250 823,250
2030 405,000 417,350 822,350
2031-2035 2,280,000 1,825,850 4,105,850
2036-2040 2,740,000 1,366,525 4,106,525
2041-2045 3,185,000 920,175 4,105,175
2046-2050 3,695,000 405,375 4,100,375
2051 810,000 12,150 822,150
Total $ 14,585,000 $ 6,769,825 $ 21,354,825
Wastewater Revenue Bonds, Series 2020A
Year Ending
June 30, Principal Interest Total
2026 $ 480,000 $ 667,400 $ 1,147,400
2027 500,000 647,800 1,147,800
2028 520,000 627,400 1,147,400
2029 545,000 606,100 1,151,100
2030 565,000 583,900 1,148,900
2031-2035 3,185,000 2,554,500 5,739,500
2036-2040 3,835,000 1,913,025 5,748,025
2041-2045 4,455,000 1,288,425 5,743,425
2046-2050 5,180,000 567,300 5,747,300
2051 1,130,000 16,950 1,146,950
Total $ 20,95,000 $ 9,472,800 $ 29,867,800
Finance Purchase Agreements
The City has entered into several lease agreements for the financing of water and wastewater vehicles. The lease agreements qualify as finance purchases for accounting purposes and, therefore, have been recorded at the present value of future minimum lease payments as of the date of inception.

City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt (Continued)
B. Business-Type Activities (Continued)
Finance Purchase Agreements (Continued)
The annual debt service requirements for the finance purchase agreements outstanding at June 30, 2025 are as follows:

Year Ending
June 30, Principal Interest Total
2026 49,857 $ 139 $ 49,996
Total $ 49,857 $ 139 $ 49,996
The leased assets are included in capital assets and are summarized by major asset class below:

Machinery and equipment $ 173,422
Less: accumulated depreciation (156,080)
Total 17,342
C. Fiduciary Funds
Summary of changes in long-term liabilities for the fiduciary funds for the year ended June 30, 2025 is as follows:

Classification
Balance Debt Debt Balance Due in Due in more
July 1,2024 Issued Retired June 30, 2025 One Year than One Year Fiduciary Funds:

Publicly Offered:
2014 Tax Allocation Refunding Bonds $ 3,795,000 $ $ (1,570,000) $ 2,225,000 $ 520,000 $ 1,705,000 Bond premium 599,694 : (119,939) 479,755 479,755
2020 Tax Allocation Refunding Bonds 10,320,000 (220,000) 10,100,000 1,120,000 8,680,000 Total Tax Allocation Bonds $14,714,694 $ $ (1,909,939) $ 12,804,755 $ 1,940,000 $ 10,864,755 2014 Tax Allocation Refunding Bonds
On August 1, 2014, the Calexico Community Redevelopment Agency (Agency) issued the 2014 Tax Allocation Refunding Bonds in the amount of $15,395,000. The Bonds were issued to refinance previously issued bonds: (i) $16,120,000 original principal amount of Merged Central Business District and Residential Redevelopment Project Area Tax Allocation Refunding Bonds Issue of 2003A, outstanding principal refunded in the amount of $11,335,000; • and (i) $8,600,000 original principal amount of Merged Central Business District and Residential Redevelopment Project Area Tax Allocation Bonds, Issue of 2003C, outstanding principal refunded in the amount of $6,040,000.

The issue consists of serial bonds in the amount $15,395,000 payable annually on August 1 of each year, commencing on August 1, 2015 and maturing in 2028 with interest rates ranging from 2.00% to 5.00% per annum.

Interest payments are due on August 1 and February 1 of each year until the bonds are paid off. At June 30, 2025, the outstanding balance of the bonds was $2,225,000. Total principal and interest remaining on the bond is $2,454,125 payable through 2029.
67 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt (Continued)
C. Fiduciary Funds (Continued)
2014 Tax Allocation Refunding Bonds (Continued)
The annual debt service requirements for the 2014 Tax Allocation Refunding Bonds at June 30, 2025, are as follows:

Year Ending
June 30, Principal Interest Total
2026 $ 520,000 $ 98,250 618,250
2027 540,000 71,750 611,750
2028 565,000 44,125 609,125
2029 600,000 15,000 615,000
Total $ 2,225,000 $ 229,125 $ 2,454,125
2020 Tax Allocation Refunding Bonds
In January 2020 the Successor Agency issued $11,085,000 of Subordinate Tax Allocation Refunding Bonds. The bonds are special obligations of the Successor Agency payable from and secured by a pledge of the Successor Agency's tax revenues. Proceeds from the bonds, along with funds on hand, were used to refinance the Agency' outstanding bonds from series previously issued in 2000 ($515,000), 2006 ($9,465,000), and 2011 ($7,120,000).

The issue consists of serial bonds maturing from 2021 to 2034 in annual installments of $260,000 to $1,680,000.

The bonds carry interest rates ranging from 1.9% to 3.2% and mature in 2034.

The annual debt service requirements for the 2020 Tax Allocation Refunding Bonds at June 30, 2025, are as follows:

Year Ending
June 30, Principal Interest Total
2026 $ 1,420,000 $ 277,210 $ 1,697,210
2027 1,480,000 239,964 1,719,964
2028 1,525,000 198,836 1,723,836
2029 1,560,000 153,832 1,713,832
2030 1,635,000 104,898 1,739,898
2031-2034 2,480,000 92,895 2,572,895
Total $ 10,100,000 $ 1,067,635 $ 11,167,635
Pledged Revenues
The Successor Agency has pledged tax revenues to the repayment of the former Calexico Redevelopment Agency's debts transferred to it on February 1, 2012 through the final maturity of the Bonds, or early retirement of the Bonds, whichever comes first.

Tax revenues consist of property tax revenues allocated to the Redevelopment Property Tax Trust Fund (RPTTF) for the Successor Agency that is maintained by the County of Imperial Auditor and Controller. The amounts so allocated are those that would have been allocated to the RDA had the RDA not been dissolved. The Auditor and Controller (A&C) then distributes RPTTF revenues to the Successor Agency based on Recognized Obligation Payment Schedules (ROPS) as approved by the California State Department of Finance (DOF) and after deducting amounts for A&C administrative costs and amounts required to be paid under tax-sharing agreements unless the payment of such amounts has been subordinated to payment of debt services on the Bonds. 68 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 - Long-Term Debt (Continued)
C. Fiduciary Funds (Continued)
Pledged Revenues (Continued)
Each ROPS covers a twelve-month period and includes the applicable debt service payments on the Bonds.

Property tax revenue allocated to the RPTTF for the Successor Agency totaled $7,429,419 in fiscal year 2025. Total debt service of all Tax Allocation Bonds paid was $2,237,884, 30% of the RPTTF revenue available for distribution to the Successor Agency.

D. Conduit Debt
Community Facilities District No. 2005-1 - Special Assessment Tax Bonds On September 1, 2005, the City issued special assessment tax bonds under the State Improvement Acts of 1911 and 1915 through the Community Facilities District No. 2005-1 (Hearthstone) of the City of Calexico ("District"), which was established by the City pursuant to a bond indenture dated July 1, 2006. The bonds were issued to finance certain public facilities and capital impact fees relating to a residential development within the District, fund an escrow account, fund a reserve account for the bonds, fund 18 months of capitalized interest on the bonds, and pay the cost of issuance of the bonds. These bonds are payable only from special assessment collections from the property owners. The City is not liable for repayment in any manner.

The City is only acting as an agent for the property owners and bondholders in collecting and applying the special assessments toward bond debt service. The bonds are, therefore, not reported as a liability in the accompanying basic financial statements. The special assessment tax bonds totaling $12,450,000 at June 30, 2025 were held by the District.

The development phases within the District have not been completed and sufficient District levies have not been administrators, community facilities district consultants, the City Attorney, new property owners, and trustee attorneys are currently working on a financial plan to auction undeveloped property to provide a final solution to this issue.

Community Facilities District No. 2013-1 - Special Tax Bonds On February 1, 2014, the City issued special assessment tax bonds under the State Improvement Acts of 1911 and 1915 through the Communities Facilities District No. 2013-1 (Gran Plaza) of the City of Calexico ("District"), which was established by the City pursuant to a bond indenture dated February 1, 2014. Proceeds of the Bonds were used to (i) finance certain public facilities relating to an outlet shopping center within the District; (ii) fund a debt service reserve account; (iii) fund capitalized interest; and (iv) pay costs of issuance of the Bonds. These bonds are payable from special assessment collections from the property owner and from certain payments contributed to the District by the City pursuant to an agreement between the City and Property owner dated July 2, 2013. The City acts as an agent for the property owners and bondholders in collecting special assessments from the property owner and its own contributions on behalf of the property owner. The District applies such collections toward bond debt service.

The bonds are not reported as a liability of the City in the accompanying basic financial statements. The special assessment tax bonds totaling $5,775,000 at June 30, 2025 were held by the District. 69 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 8 - Compensated Absences
A. Governmental Activities
The City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) in the governmental activities has been accrued and amounts to $1,789,833 at June 30, 2025.

Classification
Balance Increase/ Balance Due Within Due in More
July 1, 2024 Decrease June 30, 2025 One Year Than One Year Compensated absences $ 1,693,427 $ 96,406 $ 1,789,833 $ 278,971 $ 1,510,862 B. Business-Type Activities
In proprietary funds, the liability for vested and unpaid compensated absences (accrued vacation and sick pay) is reported in the funds as the benefits vest and is earned. The compensated absences accrued in the proprietary funds amount to $399,580 at June 30, 2025.

Classification
Balance Increase/ Balance Due Within Due in More
July 1, 2024 Decrease June 30, 2025 One Year Than One Year Compensated absences $ 369,542 $ 30,038 $ 399,580 $ 21,416 $ 378,164 Note 9 - Risk Management
A. Summary
Changes in the claims liability amounts for the last three years were as follows:

Workers' Compensation
Current Year
Beginning of Claims and Balance at
Fiscal Year Changes in Claim Fiscal Year
Liability Estimates Payments End
2022-2023 $ 2,356,000 $ 731,949 $ (708,949) $ 2,379,000 2023-2024 2,379,000 537,426 (618,426) 2,298,000
2024-2025 2,298,000 580,759 (477,759) 2,401,000
General Liability
Current Year
Beginning of Claims and Balance at
Fiscal Year Changes in Claim Fiscal Year
Liability Estimates Payments End
--
2022-2023 $ 1,017,800 $ 795,592 $ 38,368 $ 1,851,760
2023-2024 1,851,760 922,455 (240,583) 2,533,632
2024-2025 2,533,632 (1,500,535) (457,097) 576,000
70 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 9 - Risk Management (Continued)
B. Public Risk Innovation, Solutions, and Management - Excess Insurance Authority The City is a member of Public Risk Innovation, Solutions, and Management - Excess Insurance Authority (PRISM) The Authority is comprised of 55 California counties and currently consists of 262 public agencies, which includes municipalities, school districts, special districts and other Joint Powers Authorities (JPA). PRISM was formed as a Joint Powers Authority in 1979, pursuant to the California Government Code. The purpose of the Authority is to arrange, provide and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage.

The Board of Directors is comprised of 62 members, one representative from each member county and seven members elected by the public entity membership.

General Liability Insurance
Annual deposits are paid by member cities and are adjusted retroactively to cover costs. Each member city has a specific self-insured retention ('SIR") level. The City has a SIR level of $100,000 and pays 100% of all losses incurred under $100,000. The City does not share or pay for losses of other cities under $100,000. Losses of $100,000 to $5,000,000 are prorated among all participating cities on a payroll basis. Losses in excess of $5,000,000 are covered by excess insurance purchased by the participating cities, as a part of the pool, to a limit of $10,000,000.

This cost is also prorated on a payroll basis. The City purchased an optional excess coverage, which covers up to $20,000,000, and catastrophic coverage up to $50,000,000.

Workers' Compensation
The City has a SIR of $125,000 per claim and additional coverage above its SIR with PRISM to $5 million per claim; there is an additional $45 million of reinsurance above PRISM coverage bringing the total coverage to over $50 million per claim. The PRISM is ranked as the second largest public entity risk pool and the largest property and casualty pool in the nation.

During the past three fiscal (claims) years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage in the prior year.

The latest financial information of the Public Risk Innovation, Solutions, and Management - Excess Insurance Authority for fiscal year ended June 30, 2025, is as follows:

Total assets $1,840,453,495
Total deferred outflows 3,656,547
Total liabilities 51,528,080,048
Total deferred inflows $ 5,702,826
Total equities $ 310,327,168
Total revenues $2,272,666,059
Total expenses $2,183,673,834
Revenues over expenses $ 88,992,225
71 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans
A. Summary
Governmental Business-Type
Activities Activities Total
Deferred Outflows of Resources:

Pension contribution made after measurement date:

CaPERS Miscellaneous $ 1,181,438 $ 739,019 $ 1,920,457
CaPERS Safety 2,363,042 2,363,042
Total pension contribution made after measurement date 3,544,480 73,019 4,283,499 Change in assumption:

CaPERS Miscellaneous 293,573 156,906 450,479
CaPERS Safety 495,240 495,240
Total change in assumption 788,813 156,906 945,719
Projected earnings on pension plan investments in excess of actual earnings:

CalPERS Miscellaneous 698,271 310,732 1,009,003
CaPERS Safety 971,577 971,577
Total projected earnings on pension plan investments in excess of actual earnings 1,669,848 310,732 1,980,580
Adjustment due to difference in proportions:

CalPERS Safety 35,630 35,630
Total adjustment due to difference in proportions 35,630 35,630 Difference between expected and actual experience:

CaPERS Miscellaneous 884,876 571,358 1,456,234
CaPERS Safety 1,587,061 1,587,061
Total difference between expected and actual experience 2,471,937 571,358 3,043,295 Total deferred outflows of resources:

CaPERS Miscellaneous 3,058,158 1,778,015 4,836,173
CaPERS Safety 5,555,513 5,555,513
Total deferred outflows of resources 8,613,671 $ 1,778,015 $ 10,391,686 Net Pension Liabilities:

CaPERS Miscellaneous $ 10,981,312 $ 6,643,765 $ 17,625,077 CaPERS Safety 20,248,197 20,248,197
Total net pension liabilities $ 31,229,509 6,643,765 $ 37,873,274 Deferred Inflows of Resources:

Adjustment due to difference in proportions:

CaPERS Miscellaneous 78,559 $ 53,027 $ 131,586
Total adjustment due to difference in proportions 78,559 53,027 131,586 Employer contributions in excess of proportionate share of contribution:

CaPERS Miscellaneous 207,190 119,602 326,792
Total employer contributions in excess of proportionate share of contribution 207,190 119,602 326,792
Total deferred inflows of resources:

CaPERS Miscellaneous 285,749 172,629 458,378
CalPERS Safety
Total deferred inflows of resources 285,749 $ 172,629 $ 458,378 72 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
A. Summary (Continued)
Governmental Business-Type
Activities Activities Total
Pension Expense:

CaPERS Miscellaneous $ 1,998,802 $ 1,153,823 $ 3,152,625 CalPERS Safety 3,997,987 3,997,987
Total net pension expense $ 5,996,789 $ 1,153,823 $ 7,150,612 B. General Information about Pension Plans
Plan Description
The City contributes to the California Public Employees' Retirement System ("CalPERS"), a cost-sharing multiple- employer defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and City ordinance. Copies of the CalPERS annual financial report may be obtained from their executive office located at 400 P Street, Sacramento, California 95814.

Employees Covered by Benefit Terms
At June 30, 2024, the measurement date, the following employees were covered by the benefit terms:

Miscellaneous Miscellaneous Safety Safety
Classic PEPRA Classic PEPRA
Active employees 42 55 23 24
Transferred and terminated employee 87 46 68 14
Retired employees and beneficiarie 152 106
Total 281 101 197 38
Benefits Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Classic and PEPRA Safety CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least five years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay. 73 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
B. General Information about Pension Plans (Continued)
Benefits Provided (Continued)
Following are the benefit provisions for each plan:

Miscellaneous Miscellaneous Safety Safety
Classic PEPRA Classic PEPRA
Benefit formula 2.7% @55 2.0% @62 3.0% @50 2.7% @57
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 62 50-57
Monthly benefits, as a % of
ligible compensatior 2.7% 2.0% 3.0% 2.7%
equired emp lover contribution rat 10.150% 7.870% 20.090% 13.760% Contributions
For the year ended June 30, 2025, the contributions recognized as part of pension expense for each plan were as follows:

Miscellaneous $ 1,920,457
Safety 2,363,042
$ 4,283,499
Proportionate Share of Net Pension Liability and Pension Expense The following table shows the plan's proportionate share of the risk pool collective net pension liability over the measurement period:

Plan Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Miscellaneous
Balance at: 6/30/23 (valuation date) $ 62,678,928 $ 45,023,110 $ 17,655,818 Balance at: 6/30/24 (measurement date) 61,905,086 44,280,009 17,625,077 Net changes during 2023-2024 (773,842) (743,101) (30,741) Safety
Balance at: 6/30/23 (valuation date) $ 66,999,959 $ 46,598,889 $ 20,401,070 Balance at: 6/30/24 (measurement date) 66,604,302 46,356,105 20,248,197 Net changes during 2023-2024 (395,657) (242,784) (152,873) Balance at: 6/30/23 (valuation date) $ 129,678,887 $ 91,621,999 $ 38,056,888 Balance at: 6/30/24 (measurement date) 128,509,388 90,636,114 37,873,274 Net changes during 2023-2024 (1,169,499) (985,885) (183,614) 74 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
C. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions The City's net pension liability/(asset) for each Plan is measured as the proportionate share of the net pension liability/(asset). The net pension liability/(asset) of each of the Plans is measured as of June 30, 2024, and the total pension liability/(asset) for each Plan used to calculate the net pension liability/(asset) was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. The City's proportion of the net pension liability/(asset) 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/(asset) for each plan as of June 30, 2023 and 2024 was as follows:

Miscellaneous Safety Total
Proportion - June 30, 2023 0.35309% 0.27293% 0.62601%
Proportion - June 30, 2024 0.36238% 0.27570% 0.63808%
Change - increase/(decrease) 0.00929% 0.00277% 0.01207% For the year ended June 30, 2025, the City recognized pension expense of $3,152,625 and $3,997,987, for the Miscellaneous and Safety plans, respectively. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plans
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent to measurement date $ 1,920,457 $ Difference between projected and actual earning on
pension plan investments 1,009,003 131,586
Adjustment due to differences in proportions
450,479
Changes in assumptions :

Difference between actual and expected experience 1,456,234 Difference between employer's actual contributions
and proportionate share of contributions 326,792
Total 4,836,173 458,378
Safety Plans
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent to measurement date $ 2,363,042 $ Difference between projected and actual earning on
pension plan investments 971,577
Adjustment due to differences in proportions 35,630
Changes in assumptions 495,240 :

Difference between actual and expected experience 1,587,061 Difference between employer's actual contributions
and proportionate share of contributions 102,963 -
Total $ 5,555,513 $
75 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
C. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent to measurement date 4,283,499 $ Difference between projected and actual earning on
pension plan investments 1,980,580 131,586
Adjustment due to differences in proportions 35,630
Changes in assumptions 945,719 :

Difference between actual and expected experience 3,043,295 Difference between employer's actual contributions
and proportionate share of contributions 102,963 326,792 Total $ 10,391,686 $ 458,378
For the Miscellaneous Plan and Safety Plan, $1,920,457 and $2,363,042, respectively, was reported as deferred outflows of resources related to pensions resulting from City's contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Measurement Period Miscellaneous Safety
Ended June 30, Plans Plans Total
2025 $ 720,220 1,235,287 1,955,507
2026 2,119,821 2,294,088 4,413,909
2027 (36,930) (4,474) (41,404)
2028 (345,773) (332,430) (678,203)
2029 :

Thereafter
$ 2,457,338 $ 3,192,471 $ 5,649,809
Actuarial Assumptions
The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Actuarial Cost Method Entry Age Normal
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table) Derived using CalPERS' Membership Data for all Funds.

Post Retirement Bencfit Increase The lesser of contract COLA or 2.30% until Purchasing Power Protection. Allowance floor on purchasing power applies, 2.30% thereafter.
(1) The mortality table used was developed based on CaPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website. 76 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
. C. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90% for each plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CaPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.

Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called "GASB Crossover Testing Report" that can be obtained from the CaPERS website under the GASB 68 Section.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long- term (11-60 years) using a building block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Assumed Asset Real Return
Asset Class' Allocation Years 1-10'2
Global Equity 30.00% 4.45%
Global Equity 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Liquidity -5.00% -0.59%
100.00%
' An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study. 77 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 - Pension Plans (Continued)
C. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net position liability for the Plan, calculated using the discount rate for each Plan, as well as 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 or 1-percentage point higher than the current rate:

Plan's Net Pension Liability/(Asset)
Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous $ 26,390,077 $ 17,625,077 10,231,226
Safety $ 29,655,835 $ 20,248,197 12,285,973
Total $ 56,045,912 $ 37,873,274 $ 22,517,199
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in the separately issued CaPERS financial reports.

D. Payable to the Pension Plan
At June 30, 2025, the City had no outstanding amounts owed to the pension plan for contributions for the year ended June 30, 2025.

Note 11 - Other Postemployment Benefits
A. Summary
Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

Difference between expected and actual experience $ 11,004,058 $ 3,752,456 $ 14,756,514 Total deferred outflows of resources $ 11,004,058 $ 3.752,456. $ 14,756,514 NetOPEB liability:

Net OPEB liability • $ 33,488,342 $ 11,680,892 45,169,234 Net OPEB liability $ 33,488,342 $ 11,680,892 $ 45,169,234 Deferred inflows of resources:

Changes in assumptions $ 3,200,768 $ 1,140,988 $ 4,341,756 Net difference between projected and
actual earnings in OPE plan investments 50,618 17,387 68,005 Total deferred inflows of resources $ 3,251,386 $ 1,158,375 $ 4,409,761 78 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 - Other Postemployment Benefits (Continued)
B. General Information about OPEB
Plan Description
As of June 30, 2024, the date of its most recent OPEB actuarial valuation, the City provided health benefits to 45 retirees. In addition, 73 active employees are earning service credit for future retiree health benefits. With the exception of members of the Calexico Police Officers Association, employees hired on or after July 1, 2008 are not eligible for retiree health benefits. Employees hired prior to May 18, 1993 retiring from the City under CalPERS are eligible for City-paid retiree medical and dental benefits for themselves and eligible dependents. The retiree is responsible for a monthly contribution equal to $120. Employees hired on or after May 18, 1993 are eligible for City paid retiree medical benefits for themselves only to the retiree's attainment of age 65.

Eligibility
Eligibility requires retirement from the City under PERS with at least 20 years of service. Retirees with less than 30 years of service at retirement are required to pay a monthly contribution. The retiree may also elect to cover and pay for eligible dependents based on the COBRA rate.

Membership in the plan consisted of the following at June 30, 2025, the date of the latest actuarial valuation:

Retirees 47
Active plan members
Total 113
Contributions
The obligation of the City to contribute to the Plan is established and may be amended by the City Council. For the 2024-25 fiscal year, measurement period, Payments made outside of the trust were $1,212,931. Employees are currently not required to contribute to the plan. The City's funding policy is to amortize the unfunded net OPEB liability over a 30 year period as a level percentage of payroll.

In fiscal year 2023, the City elected to begin prefunding its OPEB obligation through the use of an irrevocable trust established with the California Employers' Retiree Benefit Trust Fund (CERBT). This trust fund is an agent multiple- employer plan which is administered by the CaPERS Board of Administration. The trust is used to accumulate and invest funds necessary to pay for future retiree benefits and to reduce the City's future cash flow requirements. At June 30, 2025, measurement date, the balance in this trust account was $1,384,616.

CERBT is a tax qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to prefund retirement health benefits. The CERBT issues a publicly available financial report that included financial statements and required supplementary information for the City, not individualizing, but in aggregate with the other CERBT participants. That report may be obtained by contacting CaPERS.

C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2025. The net OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2024. The net OPEB liability at June 30, 2025 was $45,169,234.
79 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 - Other Postemployment Benefits (Continued)
• C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued) Actuarial Assumptions
The net OPEB liability in the July 1, 2025 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Valuation Date July 1, 2025
Actuarial Cost Method Entry-Age Normal Cost
Asset Valuation Method Market Value
Inflation 2.50%
Payroll Growth 3.00%
Salary Increases Varies by Entry Age and Service
Contribution Policy Contributes full ADC
Discount Rate 5.80%
Mortality, Retirement, Disability, Termination CaPERS 2021 Experience Study Mortality Improvement Mortality projected fully generational with Scale MP-2021 Medical Trend Non-Medicare - 8.00% for 2026, decreasing to an ultimate rate of

4.50% in 2039
Medicare - 6.50% for 2026, decreasing to an ultimate rate of 4.50% in 2033
The actuarial assumptions used in the July 1, 2025 valuation were based on the results of an actuarial experience study for the period July 1, 2024 through June 30, 2025. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of 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.

Discount Rate
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Target Long-Term Expected
Asset Class Allocation Rate of Return
Global Equity 23.00% N/A
Fixed Income 51.00% N/A
TIPS 9.00% N/A
Commodities 3.00% N/A
REITs 14.00% N/A
100.00%
Long-term expected rate of return 5.80%
City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 - Other Postemployment Benefits (Continued)
C. Net OPEB Liability, OP Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued) Change in the Net OPEB Liability
Total OPEB Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2024 $ 36,034,499 $ 1,168,829 $ 34,865,670 Changes Recognized for the Measurement Period:

Service Cost 418,708 418,708
Interest on the total OPE liability 2,079,607 : 2,079,607 Difference between expected and actual experience 9,149,266 9,149,266 Changes of assumptions 85,221 85,221
Contributions from the employer 1,316,931 (1,316,931)
Net investment income 112,680 (112,680)
Administrative expenses (373) 373
Benefit payments (1,212,931)
Net Changes during July 1, 2024 to June 30, 2025 10,519,871 216,307 10,303,564 Balance at June 30, 2025 (measurement date) $ 46,554,370 $ 1,385,136 $ 45,169,234 Sensitivity of the Net OPEB Liability to Changes in the Discount Rate 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 (4.80%) or 1-percentage- point higher (6.80%) than the current discount rate:

Plan's Net OPEB Liability
Discount Rate - 1% Current Discount Discount Rate + 1%
(4.80%) Rate (5.80%) (6.80%)
$ 50,739,016 $ 45,169,234 $ 40,449,831
Sensitivity of the Net OPEB Liability to Changes in the Health Care 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 healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

Plan's Net OPEB Liability
Healthcare Cost
-1% Trend Rates + 1%
$ 40,281,014 $ 45,169,234 $ 50,911,597
City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 - Other Postemployment Benefits (Continued)
C. Net OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued) OPE Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $2,774,191. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience $ 14,756,514 $ Changes of assumptions 4,341,756
Net difference between projected and
actual earnings in OPEB plan investments 68,005
Total $ 14,756,514 $ 4,409,761
As of June 30, 2025, the Plan's policy is to amortize the difference between projected OPE plan investment earnings and actual earnings is amortized over a five-year period. The remaining gains and losses are amortized over the expected average remaining service life. The expected average remaining service life is 5 years, which was determined as of June 30, 2024, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms as of the valuation date.

Amount reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as future OPEB expense as follows:

Measurement Period Deferred Outflows/
Ended June 30 (In flows) of Resources
2026 1,663,186
2027 2,625,486
2028 1,079,521
2029 3,439,483
2030 1,539,077
Thereafter
$ 10,346,753
Note 12 - Commitments and Contingencies
A. Litigation
The City is a defendant in certain legal actions arising in the normal course of operations. Liabilities for the probable amounts of loss associated with these claims are have been accrued in the financial statements as discussed in Note 9 - Risk Management.

B. Grants
The City participates in certain federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors and their representatives. With respect to the City's other grant programs, any liability for reimbursement which may arise as the result of grantor audits, if any, is not believed to be material. 82 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 12 - Commitments and Contingencies (Continued)
C. Construction
Various construction projects were in progress at June 30, 2025 with an estimated cost to complete of $24,113,107 planned for in all fund types.

D. CFD 2013-1
The City has committed to make annual payments to the Community Facility District 2013-1 (District) on behalf of the District's property owner through an Agreement Re: Covenants ("Agreement") executed in July 2013. Th District was formed in 2013 to finance improvements supporting the development of the Gran Plaza shopping centel and related City development impact fees.

In the Agreement, the City agreed to pay a portion of sales tax revenues earned from the Gran Plaza shopping center to the CFD on behalf of the property owner. Annual City payments are calculated in the following four step process:

1. The City retains the first $300,000 of sales tax earned at Gran Plaza each operating (calendar) year.

2. Sales tax in excess of $300,000 is paid to the District up to the District's annual debt service.

3. Sales tax in excess of $300,000 and in excess of the District's annual debt service is retained by the City, up to an amount matching the City's payment to the District for its annual debt service.

4. Sales tax in excess of amounts applied in Steps 1 to 3 is divided in half, with half retained by the City and half paid to the District for the refunding of outstand District bonds.

During the year ended June 30, 2025, the City paid $264,031 to the District under the terms of this Agreement.

Note 13 - Deferred Compensation Plan
The City offers a deferred compensation plan for regular employees created in accordance with Internal Revenue Code Section 457. Under the terms of this plan, employees may defer amounts of income up to a maximum of $17,000 per year or one-hundred percent (100%) of includable compensation, whichever is less. Amounts so deferred may be withdrawn or directed for future payment at separation of employment but may not be paid to the employee during employment with the City except for a catastrophic circumstance creating an undue and unforeseen financial hardship for the employee.

Federal legislation, (Small Business Job Protection Act of 1996) requires the Section 457 plan assets to be placed in trust for the exclusive use of the plan participants and their beneficiaries. The City's deferred compensation administrator qualifies as the plan trustee to meet Federal requirements. Since the plan assets are not considered the property and rights of the City, such assets are not reflected in the accompanying basic financial statements.

Note 14 - Self-Funded Medical, Dental and Vision Plan
The City provides its employees, eligible retirees and elected officials with an option to participate in a self-funded employer sponsored health plan. In this plan the City takes on the financial risk of funding the plan from its assets and is responsible for managing and administering the plan. 83 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 14 - Self-Funded Medical, Dental and Vision Plan (Continued) The City administers the plan through a third-party administrator (TPA) and purchases excess insurance coverage to protect itself from extreme claims and utilization levels. This excess insurance is called employer stop-loss (ESL) coverage. In addition to covering the potential losses inherent with any group benefit plan, the City's ESL coverage provides protection for the entire covered group, reimbursement for medical expenses above a specified dollar amount of $75,000, and coverage for catastrophic and high dollar claims such as transplants, leukemia, renal failure and premature births.

The City provides a network of Exclusive Provider Organization (EPO) participants and a Preferred • Provider Organization (PPO) network for eligible retirees and Police Officers Association (POA) members.

Note 15 - Other Required Disclosures
A. Deficit Fund Balances/Net Position
At June 30, 2025, the Governmental Activities Statement of Net Position had an unrestricted net position deficit of $39,217,788.

At June 30, 2025, the following funds had a fund balances (deficit) or net position (deficit), which will be eliminated through the collection of grants revenues, future RPTTF tax allocations, and future development fees:

Fund Fund Type Deficit
DIF - Fire Fund Special Revenue Fund $ 11,412
Successor Agency to the Calexico Community Private Purpose Trust Fund Redevelopment Agency 6,822,903
B. Expenditures Exceeding Appropriations
For the year ended June 30, 2025, expenditures exceeded appropriations in the following functions of the General Fund:

Fund Function Excess Expenditures
General Fund Public safety: Fire 457,130
84 City of Calexico
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 16 - Fund Balance Classification
The City classifies fund balances, as shown on the Balance Sheet - Governmental Funds as of June 30, 2025 as follows:

Major Funds
LTA Measure D New River Grants Other
General Capital Projects Capital Projects Governmental
Fund Fund Fund Funds Total
Non-spendable:

Inventories and prepaid items S 70;483 - 600 $ 71,083
Total non-spendable 70,483 600 71,083
Restricted:

Debt service payments 996,693 996,693
Public works 9,409,109 9,409,109
Culture and recreation .... 82,313 82,313
Housing 8,134,563 8,134,563
Capital projects 16,719,75 10,010,918 26,730,393
Total restricted 16,719,475 28,633,596 45,353,071
Assigned:

Capital projects 3,334,930 3,334,930
Total assigned 3,334,930 3,334,930
Unassigned (deficit) 4,935,787 (11,412) 4,924,375
Total unassigned 4,935,787 (11,412) 4,924,375
Total fund balances $ 5,006,270 $ 16,719,475 $ $ 31,957,714 $53,683,459 Note 17 -Net Investment in Capital Assets
Net Investment in Capital Assets at June 30, 2025 consisted of the following:

Governmental Business-Type
Activities Activities
Net investment in capital assets:

Capital assets, nondepreciable $ 14,610,117 $ 3,381,326 Capital assets, depreciable, net 109,993,344 44,125,611 Unspent bond proceeds 36,464,555
: 62,129
Deferred loss on refunding
Long-term debt:

Measure H Lease Revenue Bonds (4,557,650)
Finance Purchase Agreement (318,586) (49,857)
Water Revenue Bonds (15,779,089)
Wastewater Revenue Bonds (22,062,865)
Total net investment in capital assets $ 119,727,225 $ 46,141,810 85 This page intentionally left blank.
86 REQUIRED SUPPLEMENTARY INFORMATION
(Unaudited).
87 This page intentionally left blank.
88 City of Calexico
Required Supplementary Information (Unaudited)
Notes to the Budgetary Information
For the Year Ended June 30, 2025
Note 1 - Budgetary Information
The City Council has the responsibility for adoption of the City's budget. From the effective date of the budget, the amounts stated as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by motion during each fiscal year. The City Manager is authorized to transfer budget appropriations within the General Fund at the department level or at the fund level for other funds. Budget amendments to a total General Fund department budget, non-General Fund budget, or a capital project require City Council approval.

All appropriations lapse at the end of the fiscal year to the extent that they have not been expended. Lease contracts entered into by the City are subject to annual review by the City Council; hence, they legally are one-year contracts with an option to review for another fiscal year.
89 This page intentionally left blank.

City of Calexico
Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2025
udgeted Amoun
General Fund Measure H Fund Original Actual Variance with Original Original Total Final Amounts Final Budget
REVENUES:

Property taxes $ 3,619,109 $ 3,619,109 $ 3,654,109 $ 3,518,290 $ (135,819) Other taxes:

Other taxes 6,921,202 1,050,000 6,921,202 6,639,202 6,473,118 (166,084) Measure H sales tax =. 4,050,000 3,900,000 3,642,010 (257,990) Total other taxes 6,921,202 4,050,000 10,971,202 10,539,202 10,115,128 (424,074) Licenses, permits and fees 1,973,514 1,973,514 1,724,849 1,684,812 (40,037) Intergovernmental 3,864,060 3,864,060 4,143,060 3,964,800 (178,260) Charges for services 2,960,931 2,960,931 3,821,983 4,262,873 440,890 Fines and forfeitures 196,000 196,000 160,700 165,430 4,730 Investment income (loss) 594,738 594,738 690,186 715,234 25,048 Other revenues 250 250 100 3,370 3,270
Total revenues 20,129,804 4,050,000 24,179,804 24,734,189 24,429,937 (304,252) EXPENDITURES:

Current:

General government 3,444,670 3,444,670 3,880,868 3,742,951 137,917 Public safcty:

Police 7,852,709 7,852,709 7,527,426 7,331,283 196,143
Fire 6,452,899 6,452,899 6,452,899 6,910,029 (457,130)
Total public safety 14,305,608 14,305,608 13,980,325 14,241,312 (260,987) Public works 1,898,848 1,898,848 1,898,848 1,786,294 112,554 Culture and recreation 1,484,715 : 1,484,715 1,424,715 1,398,546 26,169 Planning and building 1,373,709 1,373,709 983,709 908,186 75,523 Contribution to CFD 2013-1 225,000 225,000 265,000 264,031 969 Capital outlay 586,000 586,000 586,000 480,522 105,478
Debt service:

Principal 212,254 212,254 201,673 201,673 :

Interest and fiscal charges 10,864 10,864
Total expenditures 22,944,804 586,000 23,530,804 23,232,002 23,034,379 197,623

REVENUES OVER
(UNDER) EXPENDITURES (2,815,000) 3,464,000 649,000 1,502,187 1,395,558 (106,629) -
OTHER FINANCING SOURCES (USES):

Transfers in 2,815,000 (2,815,000)
Transfers out (1,002,000) (1,002,000) (1,100,000) (1,098,447) 1,553 Total other financing sources (uses) 2,815,000- (3,817,000) (1,002,000) (1,100,000) (1,098,447) 1,553
Net change in fund balance $ $ (353,000) $ (353,000) S 402,187 297,111 $ (105,076) FUND BALANCE:

Beginning of year 4,709,159
End of year $ 5,006,270
91 City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios Last Ten Years
For the Year Ended June 30, 2025
Miscellaneous Plan
Measurement period, year ended 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Plan's proportion of the
net pension liability 0.353087% 0.1431500% 0.1431511% 0.1500581% 0.1282135% Plan's proportionate share of
the net pension liability $ 17,625,077 17,655,818 $ 16,535,099 $ 8,115,575 $ 13,950,179 Plan's covered payroll $ 6,539,089 6,348,630 $ 6,163,719 $ 5,984,193 $ 5,434,448 Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 269.53% 278.10% 268.26% 135.62% 256.70% Plan's fiduciary net position 44,280,009 45,023,110 $ 43,649,026 $ 49,348,516 41,257,766 Plan's fiduciary net position as a percentage
of the total pension liability 71.53% 71.83% 72.53% 85.88% 74.73% Plan's proportionate share of aggregate
employer contributions 1,709,244 $ 1,689,636 $ 1,494,398 1,313,856 $ 1,133,328 Measurement period, year ended 6/30/2019 6/30/2018 6/30/2017 6/30/2016' Plan's proportion of the
net pension liability 0.1248795% 0.1205049% 0.1152051% 0.1187121% Plan's proportionate share of
the net pension liability 12,796,448 $ 11,612,169 $ 11,772,982 $ 11,772,982 Plan's covered payroll $ 5,438,921 $ 5,280,506 $ 5,126,704 $ 4,977,383 Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 235.28% 219.91% 229.64% 236.53% Plan's fiduciary net position $ 40,604,002 39,627,144 $ 38,307,558 35,624,733 Plan's fiduciary net position as a percentage
of the total pension liability 76.04% 77.34% 76.49% 75.16% Plan's proportionate share of aggregate
employer contributions $ 895,434 $ 687,419 $ 467,363 $ 438,015 The Miscellaneous Plans transitioned from an Agent plan to Cost-Sharing plan at Measurement Date (6/30/2016), therefore only years since transition are shown.
92 City of Calexico.

Required Supplementary Information (Unaudited) (Continued) Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) Last Ten Years
For the Year Ended June 30, 2025
Safe ty Plan
Measurement period, year ended 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Plan's proportion of the
net pension liability 0.272926% 0.163980% 0.163980% 0.189542% 0.149893% Plan's proportionate share of
the net pension liability $ 20,248,197 20,401,070 18,941,036 $ 10,250,954 $ 16,309,009 Plan's covered payroll $ 5,183,447 $ 5,032,473 $ 4,885,896 $ 4,743,588 $ 3,298,148 Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 390.63% 405.39% 387.67% 216.10% 494.49% Plan's fiduciary net position 46,356,105 46,598,889 44,889,924 49,540,092 41,647,330 Plan's fiduciary net position as a percentage
of the total pension liability 69.60% 69.55% 70.33% 82.86% 71.86% Plan's proportionate share of aggregate
employer contributions 2,122,708 2,089,521 1,860,024 1,750,135 1,517,998 Measurement period, year ended 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Plan's proportion of the
net pension liability 0.145009% 0.146625% 0.144796% 0.144796% 0.151039% Plan's proportionate share of
the net pension liability 14,859,140 $ 14,129,130 $ 14,359,822 $ 12,862,930 $ 10,367,155 Plan's covered pay roll $ 4,302,084 4,176,782 4,055,128 3,937,017 $ 4,423,592 Plan's proportionate share of
the net pension liability as a percentage
of covered-employee payroll 345.39% 338.28% 354.12% 326.72% 234.36% Plan's fiduciary net position 40,888,911 39,609,126 37,100,280 34,521,294 36,372,416 Plan's fiduciary net position as a percentage
of the total pension liability 73.35% 73.71% 72.10% 72.85% 77.82% Plan's proportionate share of aggregate
employer contributions 1,249,931 1,523,035 $ 1,466,631 $ 1,385,061 1,275,182 93 This page intentionally left blank.
94 City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Years
For the Year Ended June 30, 2025
Miscellaneous Plan
Total Pension Liability 6/30/2015'
Service cost 667,325
Interest on total pension liability 3,135,933
Differences between expected and actual experience (259,080) Changes in assumptions (840,438)
Changes in benefit terms
Benefit payments, including refunds of employee contributions (1,654,333) Net change in total pension liability 1,049,407
Total pension liability - beginning 42,585,621
Total pension liability - ending (a) $ 43,635,028
Plan fiduciary net position
Contributions - employer $ 389,771
Contributions - employee 375,172
Investment income (net of administrative expenses) 807,277 Benefit payments (1,654,333)
Other (40,762)
Net change in plan fiduciary net position (122,875)
Plan fiduciary net position - beginning 36,319,001
Plan fiduciary net position - ending (b) $ 36,196,126
Net pension liability - ending (a)-(b) $ 7,438,902
Plan fiduciary net position as a percentage of the
total pension liabilitv 82.95%
Covered-employee payroll $ 5,315,723
let pension liability as a percentage of covere
nployee payro 139.94%
Notes to Schedule:
' - The Miscellaneous Plans transitioned from an Agent plan to Cost-Sharing plan at Measurement Date (6/30/2016), therefore only one year is shown.

City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of Plan Contributions - Pension
Last Ten Years
For the Year Ended June 30, 2025
Miscellaneous Plan
Fiscal Year: 2024-25 2023-24 2022-23 2021-22 2020-21
Contractually determined contribution (actuarially determined) $ 1,920,457 $ 1,709,244 $ 1,689,636 $ 1,494,398 $ 1,313,856 Contributions in relation to the actuarially determined contributions (1,920,457) (1,709,244) (1,689,636) (1,494,398) (1,313,856) Contribution deficiency (excess) $ $ $
Covered payroll $ 6,735,262 $ 6,539,089 $ 6,348,630 $ 6,163,719 $ 5,984,193 Contributions as a percentage of covered payroll 28.51% 26.14% 26.61% 24.25% 21.96% Fiscal Year: 2019-20 2018-19 2017-18 2016-17 2015-16
Contractually determined contribution (actuarially determined) $ 1,133,328 $ 895,434 687,419 $ 467,363 $ 438,015 Contributions in relation to the actuarially determined contributions (1,133,328) (895,434) (687,419) (467,363) (438,015) Contribution deficiency (excess) $ $ $ $ $
Covered payroll $ 5,434,448 $ 5,438,921 $ 5,280,506 $ 5,126,704 0 $ 4,977,383 Contributions as a percentage of covered payroll 20.85% 16.46% 13.02% 9.12% 8.80% Notes to Schedule
Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2025:

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 were derived from the June 30, 2021 funding valuation report.

Actuarial cost method Entry Age Normal
Amortization method/period For details, see June 30, 2021 Funding Valuation Report Asset valuation method Actuarial Value of Assets. For details, see June 30, 2021 Funding Valuation Report.

Inflation 2.30%
Salary increases Varies by entry age and service
Payroll growth 2.80%
Investment rate of return 6.80% net of pension plan investment and administrative expenses.

The probabilities of retirement are based on the 2021 CaPERS Experience Study for the period from 2000 and Retirement age 2019.

The probabilities of mortality are based on the the 2021 experience study report. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality Mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. 96 City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of Plan Contributions - Pension (Continued)
Last Ten Years
For the Year Ended June 30, 2025
Safety Plan
Fiscal Year: 2024-25 2023-24 2022-23 2021-22 2020-21
Contractually determined contribution (actuarially determined) $ 2,363,042 $ 2,122,708 $ 2,089,521 $ 1,860,024 $ 1,750,135 Contributions in relation to the actuarially determined contributions (2,363,042) (2,122,708) (2,089,521) (1,860,024) (1,750,135) - -
Contribution deficiency (excess) $ - $ $ $ $
Covered payroll $ 5,338,950 $ 5,183,447 $ 5,032,473 $ 4,885,896 $ 4,743,588 Contributions as a percentage of covered payroll 44.26% 40.95% 41.52% 38.07% 36.89% Fiscal Year: 2019-20 2018-19 2017-18 2016-17 2015-16
Contractually determined contribution (actuarially determined) $ 1,517,998 $ 1,249,931 $ 1,523,035 $ 1,466,631 $ 1,385,061 Contributions in relation to the actuarially determined contributions (1,517,998) (1,249,931) (1,523,035) (1,466,631) (1,385,061) Contribution deficiency (excess) $ $ $ $ $
Covered payroll $ 3,298,148 $ 4,302,084 $ 4,176,781 $ 4,055,128 $ 3,937,017 Contributions as a percentage of covered payroll 46.03% 29.05% 36.46% 36.17% 35.18% Notes to Schedule
Methods and assumptions used to determine contribution rates for the fiscal year ended June 30, 2025:

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 were derived from the June 30, 2021 funding valuation report.

Actuarial cost method Entry Age Normal
Amortization method/period For details, see June 30, 2021 Funding Valuation Report Asset valuation method Actuarial Value of Assets. For details, sce June 30, 2021 Funding Valuation Report.

Inflation 2.30%
Salary increases Varies by entry age and service
Pay roll growth 2.80%
Investment rate of return 6.80% net of pension plan investment and administrative expenses.

The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 2000 and Retirement age 2019.

The probabilities of mortality are based on the the 2021 experience study report. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality Mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. 97 1
City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years
For the Year Ended June 30, 2025
Measurement period, year ending: 6/30/2025 6/30/2024 6/30/2023 6/30/2020 6/30/2019 Total OPEB liability
Service cost $ 1,117,996 744,778 590,159 517,429
Interest 2,079,607 876,705 751,908 1,072,411 1,102,423
Changes of benefit terms
Differences between expected and actual experience 9,149,266 12,752,764 537,612 (10,079,367) 8,428,759 (9,512,833) Changes of assumptions 85,221 (1,342,650) (487,886) (6,361,053) 2,394,594 2,776,757 1,696,768 enefit payments, including refunds of member contributio: (1,212,931) (1,194,917) (1,141,219) (985,181) (871,030) (852,037) (832,731) et change in total OPEB liabili 10,519,871 11,711,890 349,408 (15,430,900) 11,449,009 (5,925,543) 2,483,889 Total OPEB liability - beginning 36,034,499 24,322,609 23,973,201 39,104, 101 27,955,092 33,880,635 31,396,746 Total OPEB liability-ending (a) I 16,554,370 - 36,034,499 24,322,609 $ 23,973,201 $ 33.404,101 01 = 27,955,092 _S 333,880,635 OPEB fiduciary net position
Contributions -employer 1,316,931 $ 1,593,917 $ 1,853,249 s 985,181 S 871,030 S 852,037 $ 832,731 Net investment income 112,680 56,797 1,316
Benefit payments, including refunds of member contributions (1,212,931) (1,194,917) (1,141,249) (985,181) (871,030) (852,037) (832,731) Administrative expense (373) (282) - 2)
Net change in plan fiduciary net position 216,307 455,515 713,314 Plan fiduciary net position - beginning 1,168,829 713,314 Plan fiduciary net position - ending (b) 1,385,136 — 1,168,829 713,314 Plan net OPEB liability - ending (a) - (b) $ 45,169,234 34 5 34,865,670 $ 23,09,295 5 23,973,201 - S 39,404,101 5 27,955,092 -S 33,880,635 Plan fiduciary net position as a
percentage of the total OPE liability 0.00%
Covered-employee payroll 5,080,475 5,532,323 5,756,155 6,400,439 6,229,138 6,062,421 Pan ne gro abirty employe payroll
864.86% 686.27% 416.48% 416.48% 615.65% 308.14% 347.81% ' Information only presented from the implementation year City of Calexico
Required Supplementary Information (Unaudited) (Continued) Schedule of Plan Contributions - OPEB
Last Ten Years
For the Year Ended June 30, 2025
Contractually determined
contribution (actuarially determined) $ 2,954,887 $ 1,816,246 $ 1,853,249 871,030 852,037 $ Contributions in relation to the
actuarially determined contributions (1,316,931) (1,593,917) (1,853,249) (985,181) (871,030) (852,037) (832,731) Contribution deficiency (excess) $ 1,637,956 $ $ $
Covered-employee payroll $ 5,222,728 $ 5,080,475 $ 5,532,323 $ 5,756,155 $ 6,400,439 $ 6,229,138 $ 6,062,421 Contributions as a percentage of
covered-employee payroll 25.22% 31.37% 33.50% 17.12% 13.61% 13.68% 13.74% ' Information only presented from the implementation year of 2018 Notes to Schedule
Methods and assumptions used to determine contribution rates:

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 are as follows:

Actuarial cost method Entry Age Normal, Level% of pay
Amortization method/period Level% of pay / 30-year fixed period for 2023/24 Asset valuation method Investment gains and losses spread over 5-year rolling period Discount rate 5.80%
Inflation 5.80%
Salary increases Varies by entry age and service
Medical trend Non-Medicare - 8.00% for 2026, decreasing to an ultimate rate of 4.50% in 2039 Medicare - 6.50% for 2026, decreasing to an ultimate rate of 4.50% in 2033 Mortality CaPERS 2000-2019 Experience Study
Mortality improvement Mortality projected fully generational with Scale MP-2021 This page intentionally left blank.
100

SUPPLEMENTARY INFORMATION
101
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102

NON-MAJOR GOVERNMENTAL FUNDS
103
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....

City of Calexico
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Special Revenue
Library Community Operating
Donations
ASSETS
Cash and investments $ 23,975 62,444 $ 191,915 $ 47,904 $ 154,828 $ 380,793 Cash and investments with fiscal agents -
Receivables:

Accounts - 15,970
Intergovernmental : 330,014 94,230
:

Deposits -
Inventories
Total assets 23,975 $ 207,885 47,904 $ 485,112 $ 475,023

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 4,106 $ $ $ 606 $ 656 $ 65,248 Accrued payroll - 8,928
Due to other funds :

Deposits payable 47,298 :

Unearned revenue 407,233
Total liabilities 4,106 47,904 407,889 74,176
Deferred Inflows of Resources:

Unavailable revenue
Total deferred inflows of resources
Fund Balances:

Non-spendable 600
Restricted 19,869 62,444 207,885 76,953 400,847
Assigned -
Unassigned (deficit)
Total fund balances 19,869 62,444 207,885 - 1735 10034 400,847 Total liabilities, deferred inflows of resources,
and fund balances $ 207,885 47,904 $ 485,442 $ 475,023
(Continued)
105
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Special Revenue
Road Prop 172 State
Maintenance LTF Public Safety COPS Operation
Rehabilitation Article 3 Sales Tax Grant Stonegarden
ASSETS
Cash and investments $5,158,654 $ 432,493 $ 195,173 :

Cash and investments with fiscal agents :

Receivables:

Accounts
Intergovernmental 188,807 38,292 41,708 77,967 100,000 11,181 Deposits - :

Inventories
Total assets $5,347,461 $ 470,785 $ 236,881 $ 77,967 $ 100,000 S 11,181

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 52,412 $ $ 12 $ $ 1,675 Accrued payroll
Due to other funds 77,967 6,773 9,506
Deposits payable
Unearned revenue
Total liabilities 52,412 12 77,967 6,773 11,181
Deferred Inflows of Resources:

Unavailable revenue
Total deferred inflows of resources
Fund Balances:

Non-spendable
Restricted 5,295,049 470,785 236,869 93,227 :

Assigned -
Unassigned (deficit)
Total fund balances 5,295,049 470,785 236,869
Total liabilities, deferred inflows of resources,
and fund balances $5,347,461 $ 470,785 $ 236,881 $ 77,967 $ 100,000 $ 11,181 (Continued)
106
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Special Revenue
National Bravo-Victoria Business
Asset Opioid Eastside Village Solid Improvement
HIDTA Forfeiture Settlement Assessment Waste District
ASSETS
Cash and investments $ $ $ 159,821 $ 1,397,286 $1,479,962 $ 5,828 Cash and investments with fiscal agents -
Receivables:

Accounts
Intergovernmental 43,199 13,239 : 1,406 :

Deposits
Inventories
Total assets 43,199 13,239 $ 159,821 $ 1,398,692 $1,479,962 5,828

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ $ $ - $ 73,107 $ 205,926 $ Accrued payroll
Due to other funds 43,199
Deposits payable -
Unearned revenue 151,015
Total liabilities 43,199 151,015 73,107 205,926
Deferred Inflows of Resources:

Unavailable revenue
Total deferred inflows of resources
Fund Balances:

Non-spendable
Restricted 13,239 8,806 1,325,585 1,274,036 5,828
Assigned
Unassigned (deficit)
Total fund balances 132398805 1225585 1274036382 5,828
Total liabilities, deferred inflows of resources,
and fund balances $ 159,821 $1,398,692 $1,479,962 5,828 (Continued)
107
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Special Revenue
Federal Federal
HOME Grant CalHOME CDBG Housing FEMA/ARPA
Programs
ASSETS
Cash and investments $1,099,520 $3,634,320 $ 97,031 $2,993,517 $ 274,004 $2,972,336 Cash and investments with fiscal agents
Receivables:

Accounts 2,779 (91) 29,650 5,446
Intergovernmental ... ∞ 109,897
Deposits : :

Inventories
Total assets $1,102,299 $3,634,398 $ 96,940 $3,023,167 $ 279,450 53,082,233

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ $ 1,691 $ $ - $ - $ : 139,721 Accrued payroll -
Due to other funds
Deposits payable
Unearned revenue
Total liabilities 1,691 139,721
Deferred Inflows of Resources:

Unavailable revenue 43,676
Total deferred inflows of resources 43,676
Fund Balances:

Non-spendable 96,940 3,023,167 279,450 2,898,836
Restricted 1,102,299 3,632,707
Assigned
Unassigned (deficit)
Total fund balances 1,102,299 3,632,707 96,940 3,023,167 279,450 2,898,836 Total liabilities, deferred inflows of resources,
and fund balances $1,102,299 $3,634,398 $ 96,940 $3,023,167 _ $ 279,450 _$3.082,233 (Continued)
108
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Debt Service Capital Projects
Capital Grants
Measure H General CapitalCapital Projects DIF - Parks/
Debt Service Projects Fund DIF - Libraries Recreation DIF - Parking ASSETS
Cash and investments $3,399,375 : $ 190,076 $ 298,729 $ 289,694 Cash and investments with fiscal agents 998,040
Receivables:

Accounts 21,017 41,618
: 275,054
Intergovernmental :

Deposits 137,900 : -
Inventories
Total assets $ 998,040 $3,399,375 $ 413,554 $ 211,093 $ 340,347 $ 289,694

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 1,347 63,892 $ 73,081 833 $ $ Accrued payroll 553
Due to other funds 172,973
Deposits payable
Unearned revenue 167,500
Total liabilities 1,347 64,445 413,554 833
Deferred Inflows of Resources:

Unavailable revenue
Total deferred inflows of resources
Fund Balances:

Non-spendable
Restricted 996,693 210,260 340,347 289,694
Assigned 3,334,930
Unassigned (deficit)
Total fund balances 996,693 3,334,930 210,260 340,347 289,694 Total liabilities, deferred inflows of resources,
and fund balances $ 998,040 $3,399,375 $ 413,554 •$ 211,093 $ 340,347 $ 289,694 (Continued)
109
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Capital Projects
Northwest
DIF - General Cole Road Area
Government DIF - Traffic DIF - Police DIF - Fire Improvements Development ASSETS
ash and investment $ 400,526 $2,184,639 $ 381,686 : $1,721,695 $ 495,026 'ash and investments with fiscal agent
Receivables:

Accounts 14,916 30,758 18,781 19,547
Intergovernmental
Deposits :

Inventories
Total assets $ 415,442 $2,215,397 $ 400,467 19,547 $1,721,675 $ 495,026

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ $ $ - $ - $ - $ Accrued payroll
Due to other funds 30,959
Deposits payable
Uncarned revenue
Total liabilities 30,959
Deferred Inflows of Resources:

Unavailable revenue
Total deferred inflows of resources
Fund Balances:

Non-spendable
Restricted 415,442 2,215,397 400,467 1,721,675 195,026
Assigned
Unassigned (deficit) (11,412)
Total fund balances 415,442 2,215,397 400,467 (11,412) 1,721,675 495,026 'otal liabilities, deferred inflows of resource.
nd fund balance $ 415,442 | $2,215,397 $ 400,467 $ 19,547 $1,721,675 $ 495,026 (Continued)
110
City of Calexico
Combining Balance Sheet (Continued)
Non-Major Governmental Funds
June 30, 2025
Capital Projects Total
Non-Major
East Area Governmental
Facilities Plan Funds
ASSETS
Cash and investments $ 1,023,774 $ 31,147,004
Cash and investments with fiscal agents 998,040
Receivables:

Accounts 200,469
Intergovernmental : 1,325,594
Deposits 137,900
Inventories 600
Total assets $ 1,023,774 - $ 33,809,607

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ - $ 684,313
Accrued payroll 9,481
Due to other funds 341,377
Deposits payable : 47,298
Uncarned revenue 725,748
Total liabilities 1,808,217
Deferred Inflows of Resources:

Unavailable revenue 43,676
Total deferred inflows of resources 43,676
Fund Balances:

Non-spendable 600
Restricted 1,023,774 28,633,596
Assigned 3,334,930
Unassigned (deficit) (11,412)
Total fund balances 1,023,774 31,957,714
Total liabilities, deferred inflows of resources,
and fund balances $ 1,023,774 $ 33,809,607
(Concluded)
111
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
For the Year Ended June 30, 2025
Special Revenue
Other
Library Community Art in Cannabis Operating Gas
Grant Donations Public Places Permits Grants Tax
REVENUES:

Intergovernmental $ 86,867 $ $ 389,359 $ 1,107,501
Charges for services : 15,022 61,105
Investment income (loss) 8,451 : 15,458
Other revenues 14,508
Total revenues 86,867 14,508 23,473 389,359 1,184,064
EXPENDITURES:

Current:

General government 992 13,755
Public safety : 176,121 1.16502
Public works 50,523
Culture and recreation 84,628 16,304 25,117
Housing :

Capital outlay : : 5,012 46,290 210,659
Debt service:

Principal - :

Interest and fiscal charges
Total expenditures 17,296 5,012 311,806 1,375,671

REVENUES OVER
(UNDER) EXPENDITURES 2,239 (2,788) 18,461 77,553 (191,607) OTHER FINANCING SOURCES (USES):

Transfers in
Transfers out : : :

Total other financing sources (uses)
Net change in fund balances 2,239 (2,788) 18,461 - 77,553 (191,607) FUND BALANCES (DEFICIT):

Beginning of year 17,630 65,232 189,424 - - 592,454
End of year 19,869 $ 62,444 $ 207,885 $ 77,553 $ 400,847 (Continued)
112
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Special Revenue
Road Prop 172 State
Maintenance LTF Public Safety COPS Operation
Rehabilitation Article 3 TDA Sales Tax Grant Stonegarden REVENUES:

Intergovernmental $ 1,071,425 38,292 $ 41,708 $ 324,837 206,697 $ 185,168 Charges for services
Investment income (loss) 185,903 16,858 7,608
Other revenues
Total revenues 1,257,328 55,150 49,316 324,837 206,697 185,168 EXPENDITURES:

Current:

General government
Public safety : : 324,837 150,000 166,308
Public works • , 28,555 :

Culture and recreation
Housing : 18,860
Capital outlay 155,628 5,492
Debt service:

Principal - -
Interest and fiscal charges :

Total expenditures 155,628 5,492 28,555 324,837 150,000 185,168

REVENUES OVER
(UNDER) EXPENDITURES 1,101,700 49,658 20,761 56,697
OTHER FINANCING SOURCES (USES):

Transfers in
Transfers out : • • :

Total other financing sources (uses)
Net change in fund balances 1,101,700 49,658 20,761 - 56,697 - FUND BALANCES (DEFICIT):

Beginning of year 4,193,349 — 421,127 216,108 36,530
End of year $ 5.295,049 S 470,785 $ 236,869 $ =$ 93,227 $ (Continued)
113
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Special Revenue
National Bravo-Victoria Business
Asset Opioid Eastside Village Solid Improvement
HIDTA Forfeiture Settlement Assessment Waste District
REVENUES:

Intergovernmental 58,816 13,239 $ - $ $ - $
Charges for services - 249,092 2,695,601
Investment income (loss) 6,229 54,465 45,951
Other revenues :

Total revenues 58,816 13,239 6,229 303,557 2,741,552
EXPENDITURES:

Current:

General government
Public safety 58,816 : 267035
Public works
Culture and recreation -
- Housing
Capital outlay 362,970
Debt service:

Principal :

Interest and fiscal charges
Total expenditures 58,816 388,463 2,677,033

REVENUES OVER
(UNDER) EXPENDITURES 13,239 6,229 (84,906) 64,519 217
-
OTHER FINANCING SOURCES (USES):

Transfers in : .. :

Transfers out :

Total other financing sources (uses)
Net change in fund balances - 13,239 6,229 (84,906) 64,519 217 FUND BALANCES (DEFICIT):

Beginning of year 2,577 _ 1,410,491 1,209,517 5,611
End of year 13,239 $ 8,806 $ 1,325,585 $ 1,274,036 S 5,828 (Continued)
114
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Federal State Federal Local
HOME Grant Successor CalHOME CDBG Housing FEMA/ARPA
Fund Housing Grant Grant Programs Fund
REVENUES:

Intergovernmental $ 64,500 $ 65,592 $ $ 1,318,741
Charges for services 1,000
Investment income (loss) 42,850 244,465 116,684 32,753
Other revenues
Total revenues 107,350 244,465 3,782 182,276 36,753 1,318,741 EXPENDITURES:

Current:

General government
Public safety : : : :

Public works
Culture and recreation 63.716
-
Housing 6,507 45,955 1,064 5,854
Capital outlay 1,466,436
Debt service:

Principal
Interest and fiscal charges
Total expenditures 6,507 45,955 1,064 5,854 794 1,530,152

REVENUES OVER
(UNDER) EXPENDITURES 100,843 198,510 2,718 176,422 35,959 (211,411) OTHER FINANCING SOURCES (USES):

Transfers in
Transfers out : : . (1,318,741)
Total other financing sources (uses) (1,318,741)
Net change in fund balances 100,843 198,510 2,718 176,422 35,959 (1,530,152) FUND BALANCES (DEFICIT):

Beginning of year 1,001,456 3,434,197 94,222 2,846,745 243,491 4,428,988 End of year $ 1,102,299 $ 3,632,707 $ 96.940 $ 3,023,167 $ 279,450 $ 2,898,836 (Continued)
115
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Debt Service Capital Projects
Capital Grants
Measure H General Capital Capital Projects DIF - Parks/ Debt Service Projects DIF - Libraries Recreation DIF - Parking REVENUES:

Intergovernmental $ - - $ 2,850,349 $ - - $ :

Charges for services 214,300 24,886 49,281
Investment income (loss) 8,686 14,172 11,292
Other revenues
Total revenues 53 244,390 2,850,349 33,572 63,453 11,292 EXPENDITURES:

Current:

General government 3,847 87,094
Public safety : :

Public works : : :

Culture and recreation
Housing :

Capital outlay 878,611 2,763,255 16,842 398,584
Debt service:

Principal 745,000 - - -
Interest and fiscal charges 253,000 :

Total expenditures 1,001,847 878,611 2,850,349 16,842 398,584

REVENUES OVER
(UNDER) EXPENDITURES (1,001,794) (634,221) 16,730 (335,131) 11,292 OTHER FINANCING SOURCES (USES):

Transfers in 1,000,447 1,391,851
Transfers out : : : :
-
Total other financing sources (uses) 1,000,447 1,391,851 Net change in fund balances (1,347) 757,630 - 16,730 (335,131) 11,292 FUND BALANCES (DEFICIT):

Beginning of year 298,040 2,577,300 193,530 675,478 278,402 End of year $ 996,693 $ 3,334,930 210,260 340,347 $ 289,694 (Continued)
116
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Capital Projects
Northwest
DIF - General Cole Road Area
Government DIF - Traffic DIF - Police DIF - Fire Improvements Development REVENUES:

Intergovernmental $ - $ - $ - $ - $
Charges for services 17,664 36,421 22236 23,144
Investment income (loss) 16,518 87,023 16,018 1,187 67,109 19,296 Other revenues
Total revenues 34,182 123,444 38,254 24,331 67,109 19,296 EXPENDITURES:

Current:

General government
Public safety
Public works
Culture and recreation ....

Housing
Capital outlay 12,407
Debt service:

Principal -
Interest and fiscal charges
Total expenditures 12,407

REVENUES OVER
(UNDER) EXPENDITURES 34,182 123,444 38,254 24,331 67,109 6,889 OTHER FINANCING SOURCES (USES):

Transfers in : : : :

Transfers out
Total other financing sources (uses)
Net change in fund balances 34,182 123,444 38,254 24,331 67,109 6,889 FUND BALANCES (DEFICIT):

Beginning of year 381,2602,091,953 - 362,213 — (35,743) _ 1,654,566 — 488,137 End of year $ 415,442 $ 2,215,397 $ 400,467 $ (11,412) $ 1,721,675 $ 495,026 (Continued)
117
City of Calexico
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds
For the Year Ended June 30, 2025
Capital Projects Total
Non-Major
East Area Governmental
Facilities Plan Funds
REVENUES:

Intergovernmental $ - $ 7,823,091
Charges for services 3,198,669
Investment income (loss) 39,905 1,307,106
Other revenues 14,508
Total revenues 39,905 12,343,374
EXPENDITURES:

Current:

General government : 105,688
Public safety 876,082
Public works 3,946,616
Culture and recreation 189,765
Housing 60,174
Capital outlay 6,341,046
Debt service
Principal 745,000
Interest and fiscal charges :
1251.00
Total expenditures

REVENUES OVER
(UNDER) EXPENDITURES 39,905 (173,997)
OTHER FINANCING SOURCES (USES):

Transfers in 2,392,298
Transfers out (1,318,741)
Total other financing sources (uses) 1,073,557
Net change in fund balances 39,905 899,560
FUND BALANCES (DEFICIT):

Beginning of year 983,869 31,058,154
End of year. $ 1,023.774 $31,957,714
(Concluded)
118

INTERNAL SERVICE FUNDS
119
City of Calexico
Statement of Net Position
All Internal Service Funds
June 30, 2025
Employee Medical Workers'
Payroll Benefits Retirees Compensation

ASSETS -
Current assets:

Cash and investments $ 286,896 $ 1,053,684 801,754 $ 2,278,059 Accounts receivable, net 9,578
Intergovernmental receivable 100,956
Due from other funds 421,377
Deposits 178,457
Inventories and prepaid items
Total current assets 296,474 1,053,684 801,754 2,978,849 Total assets 296,474 1,053,684 801,754 2,978,849

LIABILITIES
Current liabilities:

Accounts payable 296,474 194,433 100,354 66,142
Claims payable - due within one year 702,000
Total current liabilities 296,474 194,433 100,354 768,142 Noncurrent liabilities:

Claims payable -due in more than one year 1,699,000
Total noncurrent liabilities - 100,354 1,699.000
Total liabilities 296,474 194,433 2,467,142

NET POSITION
Unrestricted 859,251 701,400 511,707
Total net position $ 859,251 $ 701,400 $ 511,707
(Continued)
120
City of Calexico
Statement of Net Position (Continued)
All Internal Service Funds
June 30, 2025
General Unemployment
Liability Insurance Total
ASSETS
Current assets:

Cash and investments $ 1,458,141 $ 9,509 $ 5,888,043
Accounts receivable, net 9,578
Intergovernmental receivable 100,956
Due from other funds 421,377
Deposits 50,000 228,457
Inventories and prepaid items 3,441 3,441
Total current assets 1,511,582 9,509 6,651,852
Total assets 1,511,582 9,509 6,651,852

LIABILITIES
Current liabilities:

Accounts payable 119,283 : 776,686
Claims payable - due within one year 148,000 850,000
Total current liabilities 267,283 1,626,686
Noncurrent liabilities:

Claims payable - due in more than one year 428,000 2,127,000 Total noncurrent liabilities 428,000 2,127,000
Total liabilities 695,283 3,753,686

NET POSITION
Unrestricted 816,299 9,509 2,898,166
Total net position $ 816,299 $ 2,509 $ 2,898,166
(Concluded)
121
City of Calexico
Statement of Revenues, Expenses, and Changes in Net Position All Internal Service Funds
For the Year Ended June 30, 2025
Employee Medical Workers'
Payroll Benefits Retirees Compensation
OPERATING REVENUES:

Charges for services $ - $ 2,572,361 $ 1,162,400 $ 1,391,488 Other revenue : 418,272 68,500
Total operating revenues 2,990,633 1,230,900 1,391,488
OPERATING EXPENSES:

Salaries and benefits 104,000 111,271
Material, supplies, and operational expenses 32,124 7,700 Insurance 820,503 408,430
Claims 1,036,557 527,302
Claims administration 1,150,970 445,544 75,359
Total operating expenses 2,219,951 1,377,937 1,122,368
OPERATING INCOME (LOSS) 770,682 (147,037) 269,120
NONOPERATING REVENUES (EXPENSES):

Investment income 72,839 5,331 109,055
Total nonoperating revenues (expenses) 72,839 5,331 109,055 INCOME (LOSS) BEFORE TRANSFERS 843,521 (141,706) 378,175 TRANSFERS:

Transfers in 665,000
Transfers out (665,000)
Total transfers (665,000) 665,000
Changes in net position - 178,521 523,294 378,175
NET POSITION:

Beginning of year 680,730 178,106 133,532
End of year $ 859,251 $ 701,400 511,707
(Continued)
122
....

City of Calexico
Statement of Revenues, Expenses, and Changes in Net Position (Continued) All Internal Service Funds
For the Year Ended June 30, 2025
General Unemployment
Liability Insurance Total
OPERATING REVENUES:

Charges for services $ 1,344,500 $ 4,078 6,474,827
Other revenue 1,641,055 2,127,827
Total operating revenues 2,985,555 4,078 8,602,654
OPERATING EXPENSES:

Salaries and benefits 104,000
Material, supplies, and operational expenses 553,692 205,093 Insurance 1,000,821 1,409,251
Claims 457,097 2,845,376
Claims administration 35,918 1,707,791
Total operating expenses 1,547,528 3,727 6,271,511
OPERATING INCOME (LOSS) 1,438,027 351 2,331,143
NONOPERATING REVENUES (EXPENSES):

Investment income 90,318 2,826 280,369
Total nonoperating revenues (expenses) 90,318 2,826 280,369 INCOME (LOSS) BEFORE TRANSFERS 1,528,345 3,177 2,611,512 TRANSFERS:

Transfers in 665,000
Transfers out (856,358) (1,521,358)
Total transfers (856,358) (856,358)
Changes in net position 671,987 3,177 1,755,154
NET POSITION:

Beginning of year 144,312 6,332 1,143,012
End of year $ 816,299 $ 9,509 $ 2,898,166
(Concluded)
123
.....

City of Calexico
Statement of Cash Flows
All Internal Service Funds
For the Year Ended June 30, 2025
Employee Medical Workers
Payroll Benefits Retirees Compensation
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from users $ $ 2,993,123 $ 1,230,900 $ 1,290,532 286,896 71,006 (134,188) (742,018)
Cash payments to suppliers for goods and services
Cash payments for claims (2,187,527) (1,266,237) (463,951) Net cash provided by (used in) operating activities 286,896 876,602 (169,525) 84,563

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from other funds : 65,000 1,017,459
Transfers in
Transfers out
Net cash provided by (used in) noncapital
financing activities (665,000) 665,000 1,017,459
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income 72,839 5,331 109,055
: 109,055
Net cash provided by investing activities 72,839 5,331
Net increase (decrease) in cash and cash equivalents 286,896 284,441 500,806 1,211,077 CASH AND CASH EQUIVALENTS:

Beginning of year 769,243 300,948 1,066,982
End of year $ 286,896 1,053,684 $ 801,754 $ 2,278,059

RECONCILIATION OF CASH AND INVESTMENTS
TO STATEMENT OF NET POSITION:

Cash and investments 286,896 1,053,684 801,754 2,278,059 Total cash and investments 286,896 1,053,684 801,754 2,278,059 (Continued)
124
City of Calexico
Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
General Unemployment
Liability Insurance Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from users $ 3,078,299 $ 4,078 $ 8,596,932 Cash payments to suppliers for goods and services (1,175,670) (1,693,974) Cash payments for claims (2,335,241) (11,320) (6,264,276) Net cash provided by (used in) operating activities (432,612) (7,242) 638,682

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from other funds 2,152,999 : 3,170,458
Transfers in 665,000
Transfers out (856,358) (1,521,358)
Net cash provided by (used in) noncapital
financing activities 1,296,641 2,314,100
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income 90,318 2,826 280,369
Net cash provided by investing activities 90,318 2,826 280,369 Net increase (decrease) in cash and cash equivalents 954,347 (4,416) 3,233,151 CASH AND CASH EQUIVALENTS:

Beginning of year 503,794 13,925 2,654,892
End of year $ 1,458,141 $ 9,509 $ 5,888,043

RECONCILIATION OF CASH AND INVESTMENTS
TO STATEMENT OF NET POSITION:

Cash and investments $ 1,458,141 $ 9,509 $ 5,888,043
- -
Total cash and investments 1,458,141 $ 9,509 $ 5,888,043 (Continued)
125
City of Calexico
Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
Employee Medical Workers
Payroll Benefits Retirees Compensation

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED
BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ 770,682 $ (147,037) $ 269,120 Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Changes in operating assets and liabilities:

Accounts receivable (2,578) 2,490 -
Intergovernmental receivable : (100,956)
Deposits (53,457)
Inventories and prepaid items 5,087
296,474 (22,488) (138,231)
Accounts payable
Claims payable 103,000
Total adjustments 286,896 105,920 (22,488) (184,557)
Net cash provided by (used in)
operating activities $ 286,896 $ 876,602 $ (169,525) $ 84,563 SCHEDULE OF NONCASH ITEMS:

Claims reserve adjustment (reduction in claims liability) $ $ - $ - $ Total noncash items $ $ $ $ :
(Continued)
126
City of Calexico
Statement of Cash Flows (Continued)
All Internal Service Funds
For the Year Ended June 30, 2025
General Unemployment
Liability Insurance Total

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED
BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ 1,438,027 $ 351 $ 2,331,143
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Changes in operating assets and liabilities:

Accounts receivable 92,744 85,656
Intergovernmental receivable : (100,956)
Deposits : (53,457)
Inventories and prepaid items (672) 4,415
Accounts payable (5,079) (7,593) 226,513
Claims payable (1,957,632) (1.854,632)
Total adjustments (1,870,639) (7,593) (1,692,461)
Net cash provided by (used in)
operating activities $ (432,612) $ (7,242) $ 638,682
SCHEDULE OF NONCASH ITEMS:

Claims reserve adjustment (reduction in claims liability) $ 1,641,055 $ - $ 1,641,055 Total noncash items $ 1,641,055 $ $ 1,641,055
(Concluded)
127
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128

CUSTODIAL FUNDS
129
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130
City of Calexico
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2025
Corsair 2013-1 Hearthstone
Gran Plaza 2005-1
CFD CFD Total
ASSETS
Cash and investments $ 265,980 $ 265,980
Cash and investments with fiscal agents 1,073,191 439,244 1,512,735 Receivables:

Intergovernmental 16,552 16,552
Total assets 1,073,491 721,776 1,795,267

LIABILITIES
Accounts payable 104,861 7,002 111,863
Total liabilities 104,861 7,002 111,863

NET POSITION
Restricted for:

Individuals, organizations, and other governments 968,630 714,774 1,683,404 Total Net Position 968,630 714,774 1,683.404
131
City of Calexico
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the Year Ended June 30, 2025
Corsair 2013-1 Hearthstone
Gran Plaza 2005-1
CFD CFD Total
ADDITIONS:

Special assessments for other government $ 153,046 $ 521,578 $ 674,624 Investment earnings 48,813 30,080 78,893
Contribution from City 264,031 - 264,031
Total additions 465,890 551,658 1,017,548
DEDUCTIONS:

Administration 27,406 99,264 126,670
Payments - principal 175,000 175,000
Payments - interest 331,747 325,044 656,791
Total deductions 534,153 424,308 958,461
Changes in net position (68,263) 127,350 59,087
NET POSITION:

Beginning of year 1,036,893 587,424 1,624,317
End of year $ 968,630 714,774 $ 1,683,404
132
ATTACHMENT NO. 2
City of Calexico
Transportation Development Act
Article 3 and Article 8e
Calexico, California
Financial Statements
and Independent Auditor's Report
For the Years Ended June 30, 2025 and 2024
THE

PUN GROUP

ACCOUNTANTS & ADVISORS
...-
City of Calexico
Transportation Development Act - Article 3 and Article 8e For the Years Ended June 30, 2025 and 2024
Table of Contents
Page
Independent Auditor's Report.... .. 1
Financial Statements:

Balance Sheets - Article 3 .. 9
Statements of Revenues, Expenditures, and Change in Fund Balance - Article 3.... .. 10 Balance Sheets — Article 8e............. .. 13
Statements of Revenues, Expenditures, and Change in Fund Balance - Article 8e . 14 Notes to the Financial Statements.. .. 15
Supplementary Information:

Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual for:

Article 3 - For the Year Ended June 30, 2025 . 21
Article 3 - For the Year Ended June 30, 2024 22
Article 8e - For the Year Ended June 30, 2025. 23
Article 8e - For the Year Ended June 30, 2024 . 24
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards . 25 This page intentionally left blank.

THE

PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Sulte 100
San Diego, Califomia 92122
www.pungroup.cpa

INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Transportation Development Act (TDA) Article 3 and Article 8e Funds (the "TDA Non-Transit Funds") of the City of Calexico, California (the "City") as of and for the years ended June 30, 2025 and 2024, and the related notes to the financial statements, which collectively comprise the TDA Non-Transit Funds' 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 TDA Non-Transit Funds of the of the City, as of June 30, 2025 and 2024, and the respective changes in financial position, for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
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 requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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

Emphasis of Matter
As described in Note 1, the accompanying financial statements present only the TDA Non-Transit Funds and are not intended to, and do not, present fairly the financial position of the City as of June 30, 2025 and 2024, and the changes in fund balance thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.

ORANGE COUNTY • SAN DIEGO SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California

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 auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we
• exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the TDA Non-Transit Fund'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.

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.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the TDA Non-Transit Fund's basic financial statements. The Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2 To the Honorable Mayor and Members of the City Council of the City of Calexico
Calexico, California

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 24, 2026, on our consideration of the TDA Non-Transit Fund'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 TDA Non-Transit Fund'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 TDA Non-Transit Fund's internal control over financial reporting and compliance.

The her Group, up
San Diego, California
March 24, 2026
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FINANCIAL STATEMENTS
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TDA ARTICLE (3)
7 This page intentionally left blank.

City of Calexico
Transportation Development Act Fund - Article 3
Balance Sheets
June 30, 2025 and 2024
2025 2024
ASSETS
Cash and investments $ 432,493 $ 384,073
Due from other governmental agencies 38,292 37,054
Total assets 470,785 = 5 421,127

FUND BALANCE
Fund balance:

Restricted 470,785 421,127
Total fund balance 421,127
Total fund balance $ 470,785 421,127
See accompanying Notes to the Financial Statements.
9 City of Calexico
Transportation Development Act Fund - Article 3
Statements of Revenues, Expenditures, and Change in Fund Balance For the Years Ended June 30, 2025 and 2024
2025 2024
REVENUES:

TDA funds 38,292 $ 71,484
Use of money and property 16,858 15,396
Total revenues 55,150 86,880
EXPENDITURES:

Capital outlay 6,450
Total expenditures 6,450
CHANGE IN FUND BALANCE 49,658 80,430
FUND BALANCE:

Beginning of year 21,12 340,697
$ 170,78 $ 421,127
End of year
See accompanying Notes to the Financial Statements.
10 TDA ARTICLE (8e)
11 This page intentionally left blank.
12 City of Calexico
Transportation Development Act Fund - Article 8e
Balance Sheets
June 30, 2025 and 2024
2025 2024
ASSETS
Cash and investments $ 195,173 $ 174,723
Due from other governmental agencies 236700 3 41,769
Total assets 216,492

LIABILITIES AND FUND BALANCE
Liabilities:

Accounts payable and accrued liabilities 12 $ 384
Total liabilities 12 384
Fund balance:

Restricted 236,869 216,108
Total fund balance 236,869 216,108
Total liabilities and fund balance 236,881 $ 216,492
See accompanying Notes to the Financial Statements.
13 City of Calexico
Transportation Development Act Fund - Article 8e
Statements of Revenues, Expenditures, and Change in Fund Balance For the Years Ended June 30, 2025 and 2024
2025 2024
REVENUES:

TDA funds $ 41,708 $ 83,579
Use of money and property 7,608 7,004
Total revenues 49,316 90,583
EXPENDITURES:

Current expenditures:

Public works 28,555 16,040
Total expenditures 28,555 - -16,040
CHANGE IN FUND BALANCE 20,761 74,542
FUND BALANCE:

Beginning of year
236108 3 216,66
End of year
See accompanying Notes to the Financial Statements.
14 City of Calexico
Transportation Development Act - Article 3 and Article 8e Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
Note 1 - Summary of Significant Accounting Policies
The financial statements of the Transportation Development Act (TDA) Article 3 and Article &e Funds (the "TDA Non- Transit Funds") of the City of Calexico, California (the "City") are in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") as applied to governmental agencies. The Governmenta Accounting Standards Board ("GASB") is the accepted standard-setting body for establishing accounting and financia reporting principles. The following is a summary of the more significant accounting policies.

The Reporting Entity
The City was incorporated in April 1908, under the General Laws of the State of California and enjoys all the rights and privileges pertaining to such "General Law" cities. It is governed by an elected five-member council.

The financial statements of the TDA Non-Transit Funds are intended to present the financial position and changes in financial position of only those transactions attributable to the TDA Non-Transit Funds administered and disbursed by the City.

Fund Accounting
The accounts of the City are organized on the basis of funds, which are considered to be separate accounting entities.

The operations of the TDA Non-Transit Funds are accounted for in a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues and expenditures. Government resources are allocated to and for The TDA Non-Transit Funds are legally restricted for specific purposes and are included in the financial statements of the City.

Basis of Accounting
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus and basis of accounting. Financial statements for the special revenue fund type of governmental funds are presented using the current financial resources measurement focus and the modified accrual basis of accounting.

Basis of accounting refers to when revenues and the related assets and liabilities are recognized in the accounts and reported in the TDA Non-Transit Funds' financial statements. Specifically, it relates to the timing of measurements made, regardless of the nature of the measurement. Revenues are recognized in the accounting period in which they become measurable and available. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long term-liabilities, which is recognized when due.

Additionally, consistent with the flow of "current financial resources" measurement focus required for governmental fund financial statements, unmatured long-term indebtedness are reported as a long-term liability of the City, not as a liability of the fund.

Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; that is, when they become both measurable and available to finance expenditures in the fiscal period. "Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For the TDA Non-Transit Funds, revenues and other governmental fund financial resources are recognized if measurable and collectible generally within 60 days following the end of the fiscal year. Revenues considered susceptible to accrual primarily include TDA Article 3 and Article 8e funds and interest.
15 City of Calexico
Transportation Development Act - Article 3 and Article Se Notes to the Financial Statements (Continued)
For the Years Ended June 30, 2025 and 2024
Note 1 - Summary of Significant Accounting Policies (Continued) Cash and Investments
TDA Non-Transit Funds pool cash resources with all funds in the City in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

Highly liquid money market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.

The City considers amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the City and are presented as "Cash and Investments" in the accompanying financial statements.

Revenue Recognition
Recognition of revenues arising from non-exchange transactions, which include revenues from taxes, certain grants, and contributions, is based on the primary characteristic from which the revenues are received by the City. Funds allocated under the capital improvements program obtain the characteristic of a voluntary non-exchange transaction similar to a grant.

Unavailable revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues also arise when the City receives resources before it has a lega laim to them, as when grant monies are received prior to the incurrence of qualified expenditures. In subsequen periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet and revenue is recognized.

Budgetary Control and Encumbrances
The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and stumpion that after centin reported amums and dischaues, Accordinsly, acual results could fer from those Fund Balances
The City reports fund balance for governmental funds in specific classifications (nonspendable, restricted, committed, 16 City of Calexico
Transportation Development Act - Article 3 and Article 8e Notes to the Financial Statements (Continued)
For the Years Ended June 30, 2025 and 2024
Note 2 - Cash and Investments
The City has pooled its cash and investments in order to achieve a higher return on investments while facilitating management of cash. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms. The balance of the TDA Non-Transit Funds' cash, as of June 30, 2025 and 2024, respectively, was as follows:
2025 2024
TDA Article 3 $ 432,493 $ 384,073
TDA Article 8e $ 195,173 $ 174,723
The TDA Non-Transit Funds' cash is deposited in the City's internal investment pool, which is reported at fair value.

Interest income is allocated based on average cash balances. Investment policies and associated risk factors applicable to the TDA Non-Transit Funds are those of the City and are included in the City's financial statements.

Note 3 - Restrictions
Funds received pursuant to TDA Article 3 may only be used for pedestrian and bicycle projects.

Funds received pursuant to TDA Article &e may only be used to pay for capital expenses incurred while contracting for transit services with profit making or non-profit companies for public transportation services as described in TDA Article 8e.

Note 4 - Contingencies
A. Litigation
The City is a defendant in certain legal actions arising in the normal course of operations. Liabilities for the probable B. TDA Non-Transit Funds
The TDA Non-Transit Funds are subject to program compliance audits by the grantors and their representatives.

Any liability for reimbursement which may arise as the result of these audits is not believed to be material.

Note 5 - Pedestrian and Bicycle Projects
The City has planned a bikeway system in conformance with specifications of Caltrans' Planning and Design Criteria for Bikeways in California, and the Regional Transportation Plan using funds received pursuant to TDA Article 3. 17 This page intentionally left blank.
18 SUPPLEMENTARY INFORMATION
19 This page intentionally left blank.
20 City of Calexico
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual TDA Article 3
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Fund balance, July 1, 2024 $ 421,127
Resources (inflows):

TDA funds $ 34,430 34,430 38,292 $ 3,862
Use of money and property 16,858 16,858
Amount available for appropriation 34,430 34,430 55,150 20,720 Charges to appropriations (outflows):

Capital outlay 152,000 152,000 5,492 146,508
Total charges to appropriations 152,000 152,000 5,492 146,508 Excess of resources over (under)
charges to appropriations $ (117,570) (117,570) 49,658 $ 167,228 Fund balance, June 30, 2025 $ 470,785
21 City of Calexico
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual TDA Article 3
For the Year Ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Fund balance, July 1, 2023 $ 340,697
Resources (inflows):

TDA funds $ 34,430 $ 34,430 71,484 $ 37,054
Use of money and property 15,396 15,396
Amount available for appropriation 34,430 34,430 86,880 52,450 Charges to appropriations (outflows):

Capital outlay 152,000 152,000 6,450 145,550
Total charges to appropriations 152,000 152,000 6,450 145,550 Excess of resources over (under)
charges to appropriations $ (117,570) (117,570) 80,430 $ 198,000 Fund balance, June 30, 2024 $ 421,127
22 City of Calexico
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual TDA Article Se
For the Year Ended June 30, 2025
Variance with
Final Budget
Bindeted Amountinal Actual Positive/
Original Amounts (Negative)
Fund balance, July 1, 2024 216,108
Resources (inflows):

TDA funds $ 41,810 41,810 41,708 $ (102)
Use of money and property 7,608 7,608
Amount available for appropriation 41,810 41,810 49,316 7,506 Charges to appropriations (outflows):

Current:

Public works 36,000 36,000 28,555 7,445
Capital outlay 30,000 30,000 30,000
Total charges to appropriations 66,000 66,000 28,555 37,445 Excess of resources over (under)
charges to appropriations $ (24,190) $ (24,190) 20,761 $ 44,951 Fund balance, June 30, 2025 $ 236,869
23 City of Calexico
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual TDA Article 8e
For the Year Ended June 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Fund balance, July 1, 2023 141,566
Resources (inflows):

TDA funds $ 41,810 41,810 83,579 $ 41,769
Use of money and property 7,004 7,004
Amount available for appropriation 41,810 41,810 90,583 48,773 Charges to appropriations (outflows):

Current:

Public works 34,881 34,881 16,040 18,841
Capital outlay 30,000 30,000 30,000
Total charges to appropriations 64,881 64,881 16,040 48,841 Excess of resources over (under)
charges to appropriations $ (23,071) $ (23,071) 74,542 $ 97,613 Fund balance, June 30, 2024 $ 216,108
24 THE

PUN GROUP

ACCOUNTANTS & ADVISORS
660 La Jolla Village Drive, Suite 1
an Diego, California 921:
www.pungroup.cpa

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor's Report
To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California
We have audited, in accordance with generally accepted auditing standards in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the accompanying financial statements of the Transportation Development Act ("TDA") Article 3 and Article 8e Funds (the "TDA Non-Transit Funds") of the City of Calexico, California (the "City"), as of and for the years ended June 30, 2025 and 2024, and the related notes to the financial statements, which collectively comprise the TDA Non-Transit Funds' financial statements, and have issued our report thereon dated March 24, 2026.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the TDA Non-Transit Funds' internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the TDA Non-Transit Funds' internal control. Accordingly, we do not express an opinion on the effectiveness of the TDA Non-Transit Funds' internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies.

Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the TDA Fund's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

In connection with our audit referred to above, we also performed an audit for compliance with the Transportation Development Act, the California Code of Regulations, and the rules and regulations and allocation instructions of the Imperial County Transportation Commission, for the year ended June 30, 2024. In connection with our audit, we performed to the extent applicable, the compliance audit tasks set forth in Sections §6666 and §6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations. The results of performing the tasks specified above disclosed no instances of noncompliance with the applicable statutes, rules, and regulations of the Act, and the allocation instructions and resolutions of the Madera County Transportation Commission. In our opinion, the funds allocated to and received by the TDA Funds for the year ended June 30, 2024, pursuant to the Transportation Development Act, were accounted for and expended in conformance with the Transportation Development Act, the California Code of Regulations, and the rules and regulations and allocation instructions of the Imperial County Transportation Commission.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing and to express an opinion on the compliance of the TDA Non-Transit Funds with the Transportation Development Act, the California Code of Regulations, and the rules and regulations and allocation instructions of the Imperial County Transportation Commission, and not to provide an opinion on the effectiveness of the TDA Non- Transit Funds' internal control or on other compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the TDA Non-Transit Funds' internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

The Pens Group, up
San Diego, California
March 24, 2026
26 ATTACHMENT NO. 3
City of Calexico
Calexico, California
Single Audit and
Independent Auditor's Reports
For the Year Ended June 30, 2025
THE

PUN GROUP

ACCOUNTANTS & ADVISORS

City of Calexico
Table of Contents
Page
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. ...1 Independent Auditor's Report on Compliance for Each Major Federal Program, on Internal Control Over Compliance Required by the Uniform Guidance, and on Schedule of Expenditures of Federal Awards .3
Schedule of Expenditures of Federal Awards .......... ....7 Notes to the Schedule of Expenditures of Federal Awards . ...8 Schedule of Findings and Questioned Costs ….................. ....9 This page intentionally left blank
THE

PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Suite 10
San Diego, Califomia 9212
www.pungroup.cpa

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor's Report
To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Calexico (the "City"), as of and for the year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated March 24, 2026.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting ("internal control") as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies.

Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's basic financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

The Purs Group, up
San Diego, California
March 24, 2026
2 THE

PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Sulte 100
San Diego, Califomla 92122
www.pungroup.cpa

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM,

ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE

UNIFORM GUIDANCE, AND ON SCHEDULE OF EXPENDITURS OF FEDERAL AWARDS Independent Auditors' Report
To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Calexico, California's (the "City") compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2025. The City's major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors' Responsibilities for the Audit of Compliance section of our report We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City's compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City's federal programs.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX O To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California

Auditors' Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. 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, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, we • exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material noncompliance, 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 City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 4 To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated March 24, 2026, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance 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 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

The furt Group, up
San Diego, California
March 24, 2026
This page intentionally left blank.

City of Calexico
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2025
Assistance
Federal Grantor/Passed through Grantor Listing Grant Award Federal Program Title Number Number Expenditures
U.S. Department of Housing and Urban Development:

CDBG - Entitlement Grants Cluster:

Passed through the State of California Department of Housing and Community Development:

Home and Ownership Section 14.218 Program Income $ 8,678 CDBG-CV 2-3 14.218 CDBG-CV2-3-00374 592,202
Total CDBG - Entitlement Grants Cluster 600,880
HEre i Sat aise Departmen or Housin and communis Developmention Program Income 7,890 HOME Investment Partnerships Program
Total U.S. Department of Housing and Urban Development 608,770 U.S. Department of Transportation:

Highway Planning and Construction Program:

Passed Through State of California Department of Transportation:

Weakley Road Improvements 20.205 CML-5168(032) 3,819
Total Highway Planning and Construction Program 3,819
Total U.S. Department of Transportation 3,819
U.S. Department of Treasury:

Passed through the State of California:

State and Local Fiscal Recovery Fund 21.027 CA1310002 66,221 Total State and Local Fiscal Recovery Fund 66,221
Total U.S. Department of Treasury 66,221
Executive Office of the President:

Passed through the County of San Diego:

High Intensity Drug Trafficking Areas (HIDTA) 95.001 N/A 120,967 Passed through the County of Imperial:

Homeland Security Grant Program (Operation Stonegarden) 97.067 N/A 166,308 Total Executive Office of the President 287,275
Total Expenditures of Federal Awards $ 966,085
See Accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 City of Calexico
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2025
Note 1 - Reporting Entity
The financial reporting entity consists of the primary government, City of Calexico (the "City"), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Note 2 - Basis of Accounting
The various grant programs have been recorded within the general fund and special revenue funds of the City. The City ıtilizes the modified accrual method of accounting for the general fund and special revenue funds. The accompanying Schedule of Expenditures of Federal Awards ("Schedule") is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in, the preparation of the City's basic financial statements Note 3 - Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all federal financial assistance programs of the City. Federal inancial assistance received directly from federal agencies as well as federal financial assistance passed through the state of California and County of Imperial is included in the Schedule. The Schedule was prepared from only th accounts of various grant programs and, therefore, does not present the financial position, change in fund balance, or results of operations of the City.

Note 4 - Subrecipients
During the fiscal year ended June 30, 2025, there were no amounts provided to subrecipients.

Note 5 - Indirect Cost Rate
The City has not elected to use the de minimis indirect rate as allowed under the Uniform Guidance (10 percent of modified total direct costs for awards issued prior to October 1, 2024 and 15 percent for awards issued or amended on or after October 1, 2024).

City of Calexico
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
Section I - Summary of Auditor's Results
Financial Statements
Type of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:
. Material weaknesses) identified? No
• Significant deficiency(ies) identified? None noted
Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:

Material weaknesses) identified? No
• Significant deficiency(ies) identified? None noted
Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major programs:

Assistance Federal
Major Programs) isting Numbe Expenditures
CDBG - Entitlement Grants Cluster 14.218 $ 600,880
Total major program expenditures 600,880
Total expenditures of federal awards $ 966,085
Percent of total federal award expenditures 62.20%
Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee in accordance with 2 CFR 200.520? Yes 9 City of Calexico
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2025
Section II - Financial Statement Findings
A. Current Year Findings - Financial Statement Audit
No findings were noted on the City's financial statement audit for the year ended June 30, 2025.

B. Prior Year Findings - Financial Statement Audit
No findings were noted on the City's financial statement audit for the year ended June 30, 2024. 10 City of Calexico
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2025
Section III - Federal Awards Findings and Questioned Costs A. Current Year Findings and Questioned Costs - Major Federal Award Program Audit No findings or questioned costs were noted on the City's major federal programs for the year ended June 30, 2025.

B. Prior Year Findings and Questioned Costs - Major Federal Award Program Audit No findings or questioned costs were noted on the City's major federal programs for the year ended June 30, 2024. 11 This page intentionally left blank
12 ATTACHMENT NO. 4
THE

PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Suite 100
San Diego, California 92122
www.pungroup.cpa
March 24, 2026
To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Calexico, California (the "City") for the year ended June 30, 2025. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 16, 2026. Professional standards also require that we communicate the following information related to our audit.

Qualitative Aspects of Accounting Practices
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the basic financial statements. • In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement did not have a significant effect on the City's financial reporting for the fiscal year ended June 30, 2025.
• In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints which may limit a government's ability to acquire resources or control spending. Application of this statement did not have a significant effect on the City's financial reporting for the fiscal year ended June 30, 2025.

We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting Estimates
estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. As part of our audit, we evaluated the key factors and assumptions used to develop the accounting estimates described above and in determining that it is reasonable in relation to the financial statements taken as a whole.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California

The most sensitive estimates affecting the City's financial statements were:
• Management's estimate of the investment fair market value is based on information provided by the State of California for its investment in the Local Agency Investment Fund and based on market price provided by the trustee for investments in U.S. government sponsored enterprise securities and negotiable certificates of deposit. We evaluated the key factors and assumptions used to develop the investment fair market value in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the depreciation on capital assets is based on the industry standard and past experience on actual useful life of the asset groups. We evaluated the key factors and assumptions used to develop the depreciation on capital assets in determining that it is reasonable in relation to the financial statements taken as a whole.
• Management's estimate of the total OPEB liability is based on the actuarial valuation on total OPEB liability. We evaluated the key factors and assumptions used to develop the total OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the net pension liability is based on the actuarial valuation on total pension liability and based on audited financial statements on fiduciary net position for CalPERS plans. We evaluated the key factors and assumptions used to develop the net pension liability in determining that it is reasonable in relation to the financial statements taken as a whole.

As part of our audit, we evaluated the key factors and assumptions used to develop the accounting estimates described above and in determining that it is reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
• Note 1 - Summary of Significant Accounting Policies
Note 3 - Lease Receivable
• Note 10 - Pension Plans
• Note 11 - Other Postemployment Benefits
Note 12 - Commitments and Contingencies
• Note 15 - Other Required Disclosures
The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no misstatements identified during our audit that management had to correct and none of the misstatements detected as a result of audit procedures were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report.

We are pleased to report that no such disagreements arose during the course of our audit.

To the Honorable Mayor and Members of the City Council
of the City of Calexico
Calexico, California

Management Representations
We have requested certain representations from management that are communicated to us in the management representation letter dated March 24, 2026.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Information in Documents Containing Audited Financial Statements Our responsibility for the supplementary information accompanying the financial statements, as described by professional standards, is to evaluate the presentation of the supplementary information in relation to the financial statements as a whole and to report on whether the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole. We applied certain limited procedures to the Budgetary Comparison Schedules, Schedules of the Proportionate Share of the Net Pension Liability and Related Ratios, Schedule of Changes in Net Pension Liability and Related Ratios, and the Schedules of Contributions for Pension, Schedule of Changes in Total OPEB Liability and Related Ratios, which are Required Supplementary Information ("RSI") that supplement the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the Combining and Individual Non-major Fund Financial Statements, which accompany Restriction on Use
This information is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
The fur Group, Up
San Diego, California
ATTACHMENT NO. 5
City of Calexico
Calexico, California
Independent Accountant's Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the Year Ending June 30, 2026
THE
PÜN GROUP

ACCOUNTANTS & ADVISORS
THE

KG PUN GROUP

ACCOUNTANTS & ADVISORS
4660 La Jolla Village Drive, Sulte 100
San Diego, Califomia 9212:
www.pungroup.cpa

INDEPENDENT ACCOUNTANT'S REPORT ON

APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Calexico, California (the "City") for the year ending June 30, 2026. The City is responsible for the Appropriations Limit Schedule.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) has agreed to and acknowledged that the procedures performed are appropriate for its purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ending June 30, 2026, and determined that the limit and annual calculation factors were adopted by resolution of City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Schedule, we added the prior year's limit to the total adjustments, and agreed the resulting amount to the current year's limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.

Finding: No exceptions were noted as a result of our procedures.

We agreed the appropriations limit presented in the accompanying Appropriations Limit Schedule to the appropriations limit adopted by the City Council.

Finding: No exceptions were noted as a result of our procedures.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LASVEGAS • PHOENIX To the Honorable Mayor and Members of City Council
of the City of Calexico
Calexico, California

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be, used by anyone other than these specified parties.

The Purs Group, up
San Diego, California
March 24, 2026
2 City of Calexico
Appropriations Limit Schedule
For the Year Ending June 30, 2026
Amount Source
A. Appropriations Limit FY 2024-2025 $ 41,666,628 Prior year B. Calculation Factors:

Population increase % 1.0098 State Department of Finance Inflation increase % 1.0644 State Department of Finance Total adjustment % 1.0748 (B1*B2)
C. Annual Adjustment Increase 3,117,960 [A*(B3-1)]
D. Other Adjustments:
1) Loss responsibility (-) - N/A
2) Transfer to private (-) N/A
3) Transfer to fees (-) N/A
4) Assumed responsibility (+) - N/A
E. Total Adjustments 3,117,960 (C+D)
F. Appropriations Limit FY 2025-2026 $ 44,784,588 (AtE) See accompanying Notes to Appropriations Limit Schedule. 3 City of Calexico
Notes to Appropriations Limit Schedule
For the Year Ending June 30, 2026
Note 1 - Purpose of Limited Procedures Review
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.

Note 2 - Method of Calculation
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

Note 3 - Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction's own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City for the year 2025-2026 represents the annual percentage change in population for the City.

Note 4 - Inflation Factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4* quarter per capita personal income (which percentage is supplied by the State Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for the year 2025-2026 represents the percentage change in California per capita personal income.

Note 5 - Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year 2025-2026.