Industry City Council
March 14, 2024

CITY OF INDUSTRY CITY COUNCIL,

PUBLIC FACILITIES AUTHORITY AND

SUCCESSOR AGENCY TO THE INDUSTRY

URBAN-DEVELOPMENT AGENCY
Mayor/Chair Cory C. Moss
Mayor Pro Tem/Vice Chair Cathy Marcucci
Council/Board Member Michael Greubel
Council/Board Member Mark D. Radecki
Council/Board Member Newell Ruggles

JOINT SPECIAL MEETING AGENDA
MARCH 14, 2024 AT 9:00 A.M.

Location: City Council Chamber, 15651 Mayor Dave Way, City of Industry, California 91744 Agenda Items: Members of the public may address the Council/Authority/ Agency on any matter listed on the Agenda. In order to conduct a timely meeting, there will be a one-minute time limit per person for any matter listed on the Agenda.

Public Comments (Non-Agenda Items Only): Anyone wishing to address the Council/Authority/Agency on an item not on the Agenda may do so during the "Public Comments" period. In order to conduct a timely meeting, there will be a one-minute time limit per person for the Public Comments portion of the Agenda. State law prohibits the Council/Authority/Agency from taking action on a specific item unless it appears on the posted Agenda.

Agendas and other writings:

In compliance with Government Code Section 54957.5(b), staff reports and other public records permissible for disclosure related to open session agenda items are available at City Hall, 15625 Mayor Dave Way, City of Industry, California, at the office of the City Clerk of the City Council during regular business hours, Monday through Thursday, 8:00 a.m. to 5:00 p.m., Fridays 8:00 a.m. to 4:00 pm. City Hall doors are closed between 12:00 p.m. to 1:00 p.m. each day. Any person with a question conceming any agenda item may call the City Clerk's Office at (626) 333-2211.

At the time of publication, no Councilmembers intend to take part in the meeting remotely under the provisions of AB 2449. Should that change between the time of publication and the start of the meeting, a live webcasting www.microsoft.com/microsoft-teams/join-a-meeting
Meeting ID: 272 841 120 098
Meeting Passcode: 9foGEL
Or call in (audio only)
+1 657-204-3264,
Phone Conference ID: 466 507 133#

CITY OF INDUSTRY JOINT SPECIAL MEETING AGENDA
MARCH 14, 2024
PAGE NO. 1
Americans with Disabilities Act:

In compliance with the ADA, if you need special assistance to participate in any City meeting (including assisted listening devices), please contact the City Clerk's Office (626) 333-2211. Notification of at least 48 hours prior to the meeting will assist staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting.

Agendas and other writings:

In compliance with SB 343, staff reports and other public records permissible for disclosure related o open session agenda items are available at City Hall, 15625 Mayor Dave Way, City of Industry California, at the office of the City Clerk during regular business hours, Monday through Thursda 8:00 a.m. to 5:00 p.m., Friday 8:00 a.m. to 4:00 p.m. Any person with a question concerning any agenda item may call the City Clerk's Office at (626) 333-2211.

Call to Order
Flag Salute
Roll Call

CONSENT CALENDAR

4.1 Consideration of the Annual Audited Basic Financial Statements for the Year Ending June 30, 2023, with Independent Auditors' Report RECOMMENDED ACTION: Approve the Annual
Audited Financial Statements for FY 22-23.

4.2 RECOMMENDED ACTION: Approve the Independent
Auditor's Report for FY 22-23.

Consideration of Auditor's Communications with City Council for the Year Ending June 30, 2023
RECOMMENDING ACTION: Approve the Auditor's
Communication Report for FY 22-23

CITY OF INDUSTRY JOINT SPECIAL MEETING AGENDA
MARCH 14, 2024
PAGE NO. 2

4.4 Consideration of the Independent Auditor's Report on Agreed-Upon Procedures Applied to the Appropriations Limit Worksheets for the Year Ending June 30, 2023
RECOMMENDING ACTION: Approve the Appropriations
Limit Worksheet for FY 22-23.

4.5 Consideration of the Annual Audited Basic Financial Statements for the Year Ending June 30, 2023, with Independent Auditors' Report for the Public Rainies Autor y RECOMMENDED ACTION: Approve the Annual
Audited Financial Statements for FY 22-23.

4.6 Consideration of Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and other Matters for the Year Ending June 30, 2023, for the Public Facilities Authority RECOMMENDED ACTION: Approve the Independent
Auditor's Report for FY 22-23.

4.7 Consideration of Auditors Communications with the Chair and Board Members for the Year Ending June 30, 2023, for the Public Facilities Authority
RECOMMENDED ACTION: Approve the Auditor's
Communication Report for FY 22-23.

4.8 Consideration of the Annual Audited Basic Financial Statements for the Year Ending June 30, 2023, with Independent Auditors' Report, for the Successor Agency to the Industry Urban-Development Agency RECOMMENDED ACTION: Approve the Annual
Audited Financial Statements for FY 22-23.

4.9 Consideration of the Independent Auditor's Report on Internal Control Over Financial Reporting and Compliance and On Compliance and Other Matters for the Year Ending June 30, 2023, for the Successor Agency to the Industry Urban-Development Agency
RECOMMENDED ACTION: Approve the Independent
Auditor's Report for FY 22-23.

CITY OF INDUSTRY JOINT SPECIAL MEETING AGENDA
MARCH 14, 2024
PAGE NO. 3

4.10 Consideration of the Auditor's Communications with the Chair and Board Members for the Year Ending June 30, 2023, for the Successor Agency to the Industry Urban-Development Agency
RECOMMENDED ACTION: Approve the Auditor's
Communication Report for FY 22-23.

CITY COUNCIL CLOSED SESSION

5.1 CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation; Pursuant to Government Code Section 54956.9(d)(2) One potential case

6. Adjournment

CITY OF INDUSTRY JOINT SPECIAL MEETING AGENDA
MARCH 14, 2024
PAGE NO. 4

CITY OF INDUSTRY
MARCH 14, 2024
ITEM 4.1

BUT OF DUSTRY
* CITY OF INDUSTRY
1957
Incorporated June 18, 1957

MEMORANDUM
TO: City Council
FROM: Joshua Nelson, City Manager
STAFF: Yamini Pathak, Director of Finance
DATE: March 14, 2024
SUBJECT: Annual Financial Reports for the City of Industry, Year Ending June 30, 2023

RECOMMENDATION
Receive and file the City of Industry (the "City") annual financial reports for the year ending June 30, 2023, and instruct Staff to present a summary of the year ending June 30, 2023 Annual Financial Reports to the City Council.

City of Industry

1. Annual Audited Basic Financial Statements for the Year Ending June 30, 2023 with Independent Auditors' Report

2. Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters for the Year Ending June 30, 2023

3. Auditors' Communications with the City Council for the Year Ending June 30, 2023

4. Independent Auditors' Report on Agreed-Upon Procedures Applied to the Appropriations Limit Worksheets for the Year Ending June 30, 2023

EXECUTIVE SUMMARY
The City's independent auditors, Rogers, Anderson, Malody & Scott, LLP, have completed their annual audit of the City's financial statements which include the financial activities of year ending June 30, 2023. The financial statements received an unqualified (or clean) opinion. No material weakness in internal control was noted by the Auditors.

DESCRIPTION OF REPORTS
The financial reports and management compliance letter for the year ending June 30, 2023 are briefly described below:

Annual Financial Report
The annual financial statement is a comprehensive document reflecting the financial position of the City and its component units. The Auditors issued an unqualified (or clean) opinion on these financial statements.

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards No material weakness in internal control was noted by the Auditors.

The Auditors' Communications with the City's Audit Committee and City Council Statement of Auditing Standards (SAS) No. 114 requires more and documented communications between the auditors and the City's Audit Committee and City Council.

This letter provides an opportunity for the auditors to report on any difficulties or major concerns discovered during the audit and to further define their role. They provide commentary on management's responsibilities for accounting policies and estimates that no significant difficulties were encountered in performing the audit, and no disagreements occurred with management. They point out that management has corrected all known material misstatements.

Independent Accountant's Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheets
Section 1.5 of Article XIII-B of the California Constitution requires that the City follow the procedures agreed upon by the State of California and the League of California Cities (as presented in the League publication entitled Article XIII-B Appropriations Limitation Uniform Guidelines) to determine the annual appropriations limit. The auditors provide this Fiscal Impact
There is no fiscal impact as result of this action.

City of Industry
Financial Statements and Supplementary Information
For the year ended June 30, 2023
City of Industry
Financial Statements
For the Year Ended June 30, 2023

TABLE OF CONTENTS
Independent Auditor's Report
Management's Discussion and Analysis ...

Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position . 18
Statement of Activities .. .20
Fund Financial Statements:

Governmental Funds:

Balance Sheet ... 22
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position 24
Statement of Revenues, Expenditures, and Changes in Fund Balances. ....25 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide
Statement of Activities 27
Proprietary Funds:

Statement of Net Position 28
Statement of Revenues, Expenses, and Changes in Net Position 29 Statement of Cash Flows 30
Fiduciary Funds:

Statement of Fiduciary Net Position 32
Statement of Changes in Net Position 33
Notes To Financial Statements 34
Required Supplementary Information:

Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and Related Ratios (Unaudited) .... 85
Schedule of Contributions - Pension (Unaudited). 87
Schedule of Changes in Net Other Postemployment Benefits Liability (Asset) and Related Ratios (Unaudited) 89
Budgetary Comparison Schedule - General Fund (Unaudited) 90 Note To Required Supplementary Information 91
Supplementary Information:

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual:

City Capital Projects Fund ...... 92
City Debt Service Fund 93
Tax Override Debt Service Fund 94
Industry Public Facilities Authority Debt Service Fund 95 City of Industry
Financial Statements
For the Year Ended June 30, 2023

TABLE OF CONTENTS (CONTINUED)
Supplementary Information (Continued):

Nonmajor Governmental Funds:

Combining Balance Sheet ..... 96
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..... . 98
Schedule of Revenues, Expenditures, And Changes in Fund Balances - Budget And Actual:

Gas Tax Special Revenue Fund ... 100
Measure R Local Return Special Revenue Fund ... 101
Proposition A Sales Tax Special Revenue Fund 102
Proposition C Sales Tax Special Revenue Fund ... 103
Measure M Special Revenue Fund ... 104
Measure W Special Revenue Fund .. 105
CARB Tax Special Revenue Fund ... 106
CRIA Capital Projects Fund ... 107
Schedule of Long-Term Debt - City of Industry Only:
$336,570,000 Taxable Sales Tax Retunding Bonds, Series 2015A .. 108 $51,460,000 Taxable Sales Tax Refunding Bonds, Series 2017... ... 109 $34,340,000 Taxable Sales Tax Refunding Bonds, Issue of 2017 ...110

R ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
Independent Auditor's Report
735 E. Carnegie Dr. Suite 100 To the Honorable Mayor and Members San Bernardino, CA 92408 of the City Council of the
909 889 0871 T
909 889 5361 F City of Industry
ramscpa.net Industry, California
Report on the Audit of the Financial Statements

PARTNERS
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA Opinions
Bradferd A. Welebir, CPA, MBA, CGMA
Jenny W. Liu, CPA, MST We have audited the financial statements of the governmental Gardenya Duran, CPA, CGMA activities, the business-type activities, each major fund, and the Brianna Schultz, CPA. CGMA
aggregate remaining fund information of the City of Industry (the Brenda L. Odle, CPA, MST (Partner Emeritus)
City), as of and for the fiscal year ended June 30, 2023, and the Terry P. Shea, CPA (Partner Emeritus)
related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to

MANAGERS / STAFF
above present fairly, in all material respects, the respective financial Seong-Hyea Lee, CPA, MBA
position of the governmental activities, the business-type activities, Evelyn Morentin-Barcena, CPA
Veronica Hernandez, CPA each major fund, and the aggregate remaining fund information of the Laura Arvizu, CPA City, as of June 30, 2023, and the respective changes in financial John Maldonado, CPA, MSA position and where applicable, cash flows thereof for the year then Julia Rodriguez Fuentes, CPA, MSA ended in accordance with accounting principles generally accepted in Demi Hite, CPA the United States of America.

Jeffrey McKennan, CPA
Monica Wysocki, CPA
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government MEMBERS Auditing Standards, issued by the Comptroller General of the United American Institute of
Certified Public Accountants States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the CPS The AICPA Alliance Financial Statements section of our report. We are required to be or CPA Firm:
independent of the City and to meet our other ethical responsibilities, Quat end Muti. in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is Called Socie countanis sufficient and appropriate to provide a basis for our audit opinions.

Other Matters
As discussed in Note 1 to the financial statements, in the year ended the City adopted new accounting guidance unde
Proud Member of
AlliottGlobalAlliance™ 96, Subscription-Based Information Technology Arrangements. Our opinions are not modified with respect to this matter.
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STABILITY. ACCURACY. TRUST.

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.

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining on a test basis, the evidence regarding • 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.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

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

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplementary information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The budgetary comparison schedules and the combining nonmajor fund financial statements are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information contain therein is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2024 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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.

Rogers, Anderson, Malody e leott, LP.

San Bernardino, California
March 12, 2024
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City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
As management of the City of Industry and its component units (City"), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with the City's financial statements.

Financial Highlights
• The assets and deferred outflows of the City's governmental activities exceeded its liabilities and deferred inflows at June 30, 2023 by $913.0 million (Net Position). Of this amount, $421.2 million is invested in capital assets, and $480.0 million in unrestricted net position. Net Position reflects an increase of $129.4 million from prior period and is mainly attributable to increase in public work's capital grants and contributions and offset mainly by a decrease in property tax.
• The assets of the City's business-type activities exceeded its liabilities at June 30, 2023 by $77.2 million (Net Position). Of this amount, $62.6 million is invested in capital assets, net of related debt, and $14.6 million in unrestricted net position. Net position increased by $21.1 million due to a positive effect of net transfers and contributions, offset by a net loss from operations during the year ended June 30, 2023. • The City's total debt and liabilities decreased by $54.4 million, of which is primarily attributed to reductions in long-term liabilities due in more than one year as a result of early redemption principal payments on long-term debts. • In the General Fund, the net change in fund balance was an increase of $25.7 million.

The increase in fund balance was attributed mostly to an increase in taxes and increase in revenues from use of money and property, and a decrease in general administration and capital outlay. At June 30, 2023, the General Fund's ending fund balance was $698.9 million with an unassigned balance of $620.5 million.

General Overview of the Financial Statements
This annual report consists of four parts - management's discussion and analysis, the basic financial statements, required supplementary information, and other supplementary information section that presents combining financial statements and debt amortization schedules. The basic financial statements are comprised of 3 parts - (1) the government-wide financial statements, (2) the fund financial statements and (3) the notes to the financial statements. The government-wide financial statements, the Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a long-term view of the City's finances. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government- wide statements by providing information about the City's most significant funds. -5-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Government-Wide Statements
The Statement of Net Position and the Statement of Activities The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities. These statements include all assets, deferred outflows of resch is sites, e detered used by rest priest sing or are or one., year's revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the City's Net Position and changes thereto. Net Position, the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources are one way to measure the City's financial health or financial position.

Over time, increases or decreases in Net Position are an indicator of whether the financial health is improving or deteriorating.

However, it is important to consider other non-financial factors such as changes in the City's property tax base or condition of the City's roads to accurately assess the overall health of the The Statement of Net Position and the Statement of Activities, present information about the following:

Governmental Activities - All of the City's basic services are considered to be governmental activities, including general government, community development, public safety, public works, and community services. Property taxes, transient occupancy taxes, sales taxes, and franchise fees finance most of these activities.

Proprietary Activities/Business Type Activities - The City charges a fee to customers to cover all or most of the cost of the services provided. The Industry Public Utilities Commission (the "IPUC"), the Industry Hills Expo Center, and the Industry Property and Housing Authority (the "Housing Authority") are reported in this category.

Component Units - The City's government-wide financial statements include the blending with the City of the following entities: The Civic-Recreational-Industrial Authority ("CRIA"), the Industry Public Utilities Commission, the City of Industry Public Facilities Authority (the "PFA") and the Industry Property and Housing Management Authority (the "Housing Authority").

Although legally separate, these "component units" are important because the City is financially -6-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Reporting the City's Most Significant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds - not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes many other funds that aid in the administration of resources for particular purposes or meet legal responsibilities associated with the usage of certain taxes, grants, and other money. The City's three kinds of funds, governmental, proprietary and fiduciary, use different accounting approaches as explained below.

Governmental Funds - Most of the City's basic services are reported in governmental funds.

Governmental funds focus on how resources flow in and out with balances remaining at year- end that are available for spending. These funds are reported using an accounting method called modified accrual, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information shows whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs.

We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds through a reconciliation following the fund financial statements.

Proprietary Funds - The City maintains four enterprise funds. The enterprise funds are classified as proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government- wide financial statements. The City uses enterprise funds to account for the IPUC, Industry Hills Expo Center, and Housing Authority. These funds use the full accrual method of accounting.

Fiduciary Funds - Agency Funds are used to account for assets held by the City as an agent for individuals, other governments and/or other funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement or results of operations. The Private- Purpose Trust Fund is a fiduciary fund used by the City to report trust arrangements under which the principal and income benefits other governments. This fund reports the assets, liabilities and activities of the Successor Agency of the Industry Urban-Development Agency.

The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, and others. These fiduciary activities are reported in Private-Purpose Trust Fund. The City is responsible for ensuring that the assets are used for their intended purposes. Therefore, fiduciary activities are excluded from the City's other financial statements because the assets cannot be used to finance operations.
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City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The City as a Whole
Our analysis focuses on the net position (Tables 1 and 3) and changes in net position (Tables 2 and 4) of the City's governmental and business activities.

Table 1
Net Position
Governmental Activities
2023 2022 Change
Current and other assets $ 850,807,890 $ 920,763, 138 $ (69,955,248) Capital assets, net 427,217,570 283,207,034 144,010,536 Total assets 1,278,025,460 1,203,970,172 74,055,288
Deferred outflows of resources:

Deferred loss on refunding, net 520,210 604,471 (84,261) Deferred outflows of resources - pension 5,098,065 3,591,092 1,506,973 Deferred outflow of resources - OPEB 2,049,672 1,388,904 660,768 Total deferred outflows of resources 7,667,947 5,584,467 2,083,480 Long-term liabilities 330,583,557 373,625,272 (43,041,715) Other liabilities 31,515,745 42,913,583 (11,397,838)
Total liabilities 362,099,302 416,538,855 (54,439,553)
Deferred inflows of resources:

Deferred inflow of resources - leases 8,036,236 5,557,288 2,478,948 Deferred inflows of resources - pension 1,656,000 839,544 816,456 Deferred inflows of resources - OPEB 860,973 3,064,128 (2,203,155) Total deferred inflow of resources 10,553,209 9,460,960 1,092,249 Net position:

Net investment in capital assets 427,217,570 101,422,456 325,795,114 Restricted for:

Transportation and road 3,096,394 2,600,202 496,192
Debt service 3,589,831 (3,589,831)
Pension benefits : 22,533,095 (22,533,095)
Other postemployment benefits 2,762,662 5,482,179 (2,719,517) Unrestricted 479,964,270 647,927,061 (167,962,791)
Total net position $ 913,040,896 $ 783,554,824 $ 129,486,072 As noted above, Net Position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities for governmental activities by approximately $913.0 million at June 30, 2023.
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City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The largest portion of the Net Position, amounted to approximately $480.0 is unrestricted by external sources on how the funds may be used. Approximately $427.2 million is the City's net investment in its capital assets. In addition, $3.1 million are restricted for transportation and road projects.

The City's total Net Position under governmental activities increased over the prior year by $129.5 million mainly attributable to transfer of capital assets in public works and offset mainly by a decrease in property tax.

Total liabilities decreased by approximately $54.4 million primarily attributable to reductions in long-term liabilities due in more than one year, as a result of regular early redemption principal payments on long-term debts.

Governmental Activities - Changes in Net Position
Table 2
Change in Net Position
Governmental Activities
2023 2022 Change
General revenues:

Taxes $ 58,208,523 $ 103,543,416 $ (45,334,893)
Revenues from use of money and property 33,235,070 7,073,413 26,161,657 Other revenues 1,480,907 2,650,164 (1,169,257)
Total general revenues 92,924,500 113,266,993 (20,342,493) Expenses in excess of program revenues:

General government 9,542,089 1,208,705 8,333,384
Support services 8,594,915 3,810,462 4,784,453
Community developmen 4,218,503 48,248,897 (44,030,394)
Community services 9,618,659 8,655,172 963,487
Public safety 14,536,698 13,310,820 1,225,878
Public works (115,464,995) 15,873,396 (131,338,391)
Interest expense and fiscal charges 27,193,644 26,559,338 634,306 Total expenses in excess of program revenues (41,760,487) 117,666,790 (159,427,277) Change in net position before other items 134,684,987 (4,399,797) 139,084,784 Transfers, net (5,198,915) (4,908,130) (290,785)
Change in net position 129,486,072 (9,307,927) 138,793,999 Net position, beginning of year 783,554,824 792,862,751 (9,307,927) Net position, end of year $ 913,040,896 $ 783,554,824 $ 129,486,072 -9-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The total revenues, reported as governmental activities, decreased by approximately $20.3 million. This was due to a decrease in revenue from tax due to the decrease of RPTTF remittances, offset by use of money and property attributable to an increase in interest income and an increased gain in the fair market value of City's investment.

The increase in net position was mainly due to transfer of capital assets in public works.

Business-Type Activities - Net Position
Table 3
Net Position
Business-Type Activities
2023 2022 Change
Current and other assets $ 23,114,732 $ 23,957,098 $ (842,366) Capital assets, net 62,591,257 41,742,123 20,849,134
Total assets = 85,705,989 65,699,221 20,006,768
Liabilities 8,149,074 9,610,171 (1,461,097)
Total liabilities 8,149,074 9,610,171 (1,461,097)
Deferred inflows of resources - leases 333,500 333,500
Total deferred inflows of resources 333,500 333,500
-
Net position
Net investment in capital assets 62,591,257 41,742,123 20,849,134 Unrestricted 14,632,158 14,346,927 285,231
-
Total net position 77,223,415 $ 56,089,050 $ 21,134,365 Total net position for the City's business type activities increased by approximately $21.1 million as compared to the prior year. The increase was primarily attributable to transfer of capital assets.
-10-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The change in Net Position for business type activities is summarized as follows:

Table 4
Change in Net Position
Business-Type Activities
2023 2022 Change
Revenues
Charges for services 10,765,502 9,004,097 1,761,405
Capital grants and contributions 22,039,657 22,039,657
Other revenues 428,108 67,609 360,499
Total revenues 33,233,267 9,071,706 24,161,561
Expenses
Water transmission and distributions 3,769,585 3,136,306 633,279 Purchased electricity 7,095,044 4,687,432 2,407,612
Cost of expo operations 4,988,850 3,211,552 1,777,298
Cost of housing authority operations 1,444,338 890,600 553,738 Total expenses 17,297,817 11,925,890 5,371,927
Income (loss) from operations before transfers 15,935,450 (2,854,184) 18,789,634 Transfers and contributions 5,198,915 4,908,130 290,785 Change in net position 21,134,365 2,053,946 19,080,419
Net position, beginning of year 56,089,050 54,035,104 2,053,946 Net position, end of year $ 77,223,415 $ 56,089,050 $ 21,134,365 Revenues increased by $24.2 million over the prior year, primarily due to transfer of capital assets.
-11-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Financial Analysis of the City's Funds
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the City's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. Below is a summary of the general fund revenues and expenditures compared to the prior year.

Table 5
General Fund Comparison
Governmental Activities
2023 2022 Change
Revenues
Taxes $ 51,369,319 $ 47,051,238 $ 4,318,081
Intergovernmental 289,861 2,492,815 (2,202,954)
Charges for services 290,511 523,690 (233,179)
Licenses and permits 2,189,604 2,510,262 (320,658)
Fines, forfeitures and penalties 300,996 364,595 (63,599) Use of money and property 24,190,693 4,139,439 20,051,254 Other revenue 2,396,367 3,461,674 (1,065,307)
Total revenues 81,027,351 60,543,713 20,483,638
Expenditures
Current:

Legislative 870,077 859,210 10,867
General administration 5,831,027 7,008,462 (1,177,435)
Support services 5,631,104 2,606,965 3,024,139
Community development 6,327,188 7,917,124 (1,589,936)
Community services 8,875,345 12,283,269 (3,407,924)
Public safety 13,153,974 15,328,460 (2,174,486)
Public works 14,187,850 4,213,701 9,974,149
Capital outlay 6,870,398 (6,870,398)
Total expenditures 54,876,565 57,087,589 (2,211,024)
Excess of revenues over expenditures 26,150,786 3,456,124 22,694,662 Other financing sources (uses):

Net transfers (434,309) (40,880,399) 40,446,090
Proceeds from sale of assets 26,800 1,284,384 (1,257,584) Total other financing sources (uses) (407,509) (39,596,015) 39,188,506 Change in fund balance $ 25,743,277 $ (36,139,891) $ 61,883,168 -12-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The General Fund is the main operating fund of the City. At the end of the current fiscal year, the General Fund reflects a fund balance of $698.9 million, which is an increase from the prior year of $25.7 million. The increase was attributed mostly to an increase in revenues from use of money and property of $20.1 million, and a decrease of capital outlay.

Other Financing Uses decreased by $39.2 million over the prior year, mainly due to the absence of transfer for debt services.

General Fund Budgetary Highlights
The City adopts a budget every fiscal year. Differences between the budget and actual expenditures for the general fund are shown below:

Table 6
General Fund Budget to Actual Comparison
Original Revised
Budget Budget Actual Variance
Legislative $ 934,000 $ 934,000 870,077 $ 63,923
General administration 8,725,900 13,023,900 5,831,027 7,192,873 Support services 4,040,000 5,077,284 5,631,104 (553,820) Community development 2,085,000 2,085,000 6,327,188 (4,242,188) Community services 8,117,000 8,180,209 8,875,345 (695,136) Public safety 13,245,000 13,260,000 13,153,974 106,026
Public works 15,178,000 14,568,000 14,187,850 380,150
Total expenditures $ 52,324,900 57,128,393 54,876,565 2,251,828 Overall, total actual expenditures for the City were under the budgeted amounts, mainly due to lowered than expected general administration.
-13-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Capital Asset and Debt Administration
Capital Assets
Net capital assets for governmental activities as of June 30, 2023 and 2022 are summarized as follows:

Table 7
Net Capital Assets at Year-End
Governmental Activities
2023 2022 Change
Capital assets not being depreciated:

Land $ 110,604,835 $ 110,604,835 $
Construction in progress 43,586,811 37,338,942 6,247,869 Total capital assets, not being depreciated 154,191,646 147,943,777 6,247,869 Capital assets being depreciated:

Buildings and improvements 120,670,145 120,670,145
:

Equipment, furniture and fixtures 6,508,578 6,508,578
Infrastructure 332,113,528 175,230,189 156,883,339
Total capital assets, being depreciated 459,292,251 302,408,912 156,883,339 Less accumulated depreciation (186,266,327) (164,145,655) (22,120,672) Total capital assets being depreciated, net 273,025,924 138,263,257 134,762,667 Total governmental activities $ 427,217,570 $ 286,207,034 $ 141,010,536 As of June 30, 2023, the City's governmental activities had approximately $427.2 million invested in capital assets including buildings, land, roads, and other general infrastructure, net of accumulated depreciation. This amount represents a net increase of $141.0 million from prior year and it was due to additional capital improvement projects, transfer of capital assets from Successor Agency of the Industry Urban-Development Agency, as well as the City placing in service completed construction in progress projects for infrastructure, buildings and improvements. Accumulated depreciation increased by $22.1 million, including a transfer of $14.8 million.
-14-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Net capital assets for business-type activities as of June 30, 2023 and 2022 are summarized as follows:

Table 8
Net Capital Assets at Year-End
Business-Type Activities
2023 2022 Change
Capital assets not being depreciated:

Land 6,764,880 $ 6,764,880 $
Water rights 441,200 441,200 :

Construction in progress 9,681,877 8,039,874 1,642,003
Total capital assets, not being depreciated 16,887,957 15,245,954 1,642,003 Capital assets being depreciated:

Buildings and improvements 55,193,845 55,037,294 156,551 Equipment, furniture and fixtures 1,322,648 1,322,648
Infrastructure 31,824,258 9,571,703 22252,555
Source of supply - electric 4,495,494 4,495,494
-
Total capital assets, being depreciated 92,836,245 70,427,139 22,409,106 Less accumulated depreciation (47,132,945) (43,930,970) (3,201,975) Total capital assets being depreciated, net 45,703,300 26,496,169 19,207,131 Total business-type activities $ 62,591,257 $ 41,742,123 $ 20,849,134 Capital assets in the Business-Type Activities belong to IPUC and the Industry Hills Expo Center. The increase in net capital assets of $20.8 million was primarily due to transfers of capital assets from Successor Agency of the Industry Urban-Development Agency and contributions of capital assets from the City.

Long-term Liabilities
As of June 30, 2023, the City had total long term debt and other non-current liabilities of approximately $334.1 million which is a decrease of $63.8 million from prior year. The reduction is primarily due to principal payments on and early redemption of outstanding debt. -15-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
Below is a summary of the outstanding long-term liabilities at June 30, 2023:

Table 9
Outstanding Debt, at Year-End
Governmental Activities
2022 Change
General obligation bonds $ 338,630,00 $ 37,310,000 $ (37,310,000) Revenue bonds 344, 150,000 (5,520,000)
Tax allocation bonds 21,145,000 (21,145,000)
Original issue premium (4,.771,245) (4,936,219) 164,974 Compensated absences 209,281 181,465 27,816
Total outstanding debt $ 334.068,036 $ 397,850,246 $ (63,782,210) Economic Factors and Next Year's Budgets and Rates
The City continuously strives and plans infrastructure investments to maximize development opportunities, streamline goods movement and link the workforce to their workplaces. In the meantime, the City expands its efforts to provide services and programs that promote the well- being of the San Gabriel Valley.

The City's General Fund has adopted an operating budget of $74.8 million in revenues and $55.2 million in expenses. Additionally, approximately $71.4 million in capital project expenditures is budgeted for several funds in the 2023-2024 fiscal year. The following is a summary of the major capital improvement projects for citywide.

Table 10
Capital Projects for FY 2023-2024
Budget
Project Description 2023-2024
1 GRADE SEPARATION PROJECTS 2,375,000
STREET WIDENING, RECONSTRUCTION, RESURFACING AND SLURRY SEAL 32,995,000 STORM DRAIN IMPROVEMENTS 2,115,000
4 TRAFFIC SIGNAL IMPROVEMENTS 8,715,000
BRIDGE WIDENING, SEISMIC RETROFIT AND MAINTENANCE IMPROVEMENTS 355,000 250,000
7 INDUSTRY HILLS GOLF & CONVENTION FACILITIES 95,000
8 EL ENCANTO C.I.P. 725,000
9 EXPO CENTER AT INDUSTRY HILLS 2,860,000
10 OPEN SPACES/ TONNER CANYON/TRES HERMANOS 1,220,000
11 TRES HERMANOS RANCH PROPERTY 800,000
12 PROPERTY REDEVELOPMENT & DEMO 30,000
13 IPUC - WATER UTILITY (IPU) 2,820,000
14 IPUC - ELECTRIC UTILITY (IPU) 6,465,000
15 MISCELLANEOUS 640,000
16 3,445,000
17 FACILITIES IMPROVEMENTS 4,485,000
18 IPHMA CAPITAL IMPROVEMENTS 1,000,000
71,390,000
-16-
City of Industry
Management's Discussion and Analysis
For the Year Ended June 30, 2023
The Operating Budget for Fiscal Year 2023-24 is a well-balanced budget that reflects the City's commitment to the betterment of the community and stay within the City's financial constraint.

Budget documents are available online at www.cityofindustry.org. Questions or requests for information regarding the City of Industry's budget should be sent to the Finance Department at the address below.

Request for Information
This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any information provided ir this report or request for additional financial information should be directed to the Finance Department at the City of Industry, 15625 Mayor Dave Way, City of Industry, California 91744. -17-
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City of Industry
Statement of Net Position
June 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash $ 5,219,543 $ 3,088,826 $ 8,308,369
Investments 358,063,149 17,759,713 375,822,862
Investment in Section 115 Trust 5,000,000 5,000,000
Investments with fiscal agent - unrestricted 294,511,328 : 294,511,328 Accounts receivable, net 6,429,656 1,252,263 7,681,919
Accrued interest 3,609,338 139,133 3,748,471
Lease receivable, current portion 1,841,940 291,629 2,133,569 Internal balances (159,815) 159,815 396,184
Inventory of materials and supplies 351,060 45,124
Prepaid items 3,479,280 374,569 3,853,849
Deposits 3,000
678,345.479 20,14.0000 701,459,551
Total Current Assets
Noncurrent assets:

Investments with fiscal agent - restricted 142,164,509 142,164,509 Lease receivable 6,307,626 6,307,626
Notes receivable 21,227,614 21,227,614
Net OPEB asset 2,762,662 2,762,662
Capital assets:

Not being depreciated 154,191,646 16,887,957 171,079,603 Being depreciated (net of accumulated depreciation) 273,025,924 45,703,300 318,729,224 Total Noncurrent Assets 599,679,981 62,591,257 662,271,238 Total Assets 1,278,025,460 85,705,329 1,363,730,789

DEFERRED OUTFLOWS OF RESOURCES
Loss on refunding 520,210 520,210
Deferred amounts from pension plans 5,098,065 ... 5,098,065 Deferred amounts from OPEB 2,049,672 2,049,672
Total Deferred Outflows of Resources 7,667.947 7,667,947 The accompanying notes are an integral part of these financial statements.

City of Industry
Statement of Net Position (Continued)
June 30, 2023
Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable $ 13,817,758 $ 1,940,104 $ 15,757,862
Accrued liabilities 1,909,861 1,909,861
Deposits 9,257 2,377,832 2,387,089
Interest payable 10,069,964 10,069,964
Unearned revenue 18,905 3,830,478 3,849,383
Long-term liabilities, current portion 5,690,000 5,690,000 Total Current Liabilities 31.515.745 8.148.414 339,664,159 Noncurrent liabilities:

Net pension liability 2,205,521 : 2,205,521
Long-term liabilities, net of current portion 328,378,036 328,378,036 Total Noncurrent Liabilities 330,583,557 330583,557
Total Liabilities 362,099.302 8,148.414 370,247.716

DEFERRED INFLOWS OF RESOURCES
Deferred amounts from leases 8,036,236 333,500 8,369,736 Deferred amounts from pension plans 1,656,000 1,656,000 Deferred amounts from OPEB 860,973 860,973
Total Deferred Inflows of Resources 10,553,209 333,500 10,886.709

NET POSITION
Net investment in capital assets 427,217,570 62,591,257 489,808,827 Restricted for:

Transportation and road 3,096,394 3,096,394
2,762,662 : 2,762,662
Other postemployment benefits
Unrestricted 479,964,270 14.632,158 494,596,428
Total Net Position $ 913,040,896 $ 77.223,415 $ 990,264,311 The accompanying notes are an integral part of these financial statements.

City of Industry
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
Operating Capital
Charges for Grants and Grants and
- Expenses Services Contributions Contributions

FUNCTIONS/PROGRAMS
Governmental activities:

General government $ 10,815,551 $ 1,249,301 $ 24,161 $
8,594,915
6,693,927 2,475,424 : :
9,618,659
15,019,662 296,446 186,518
35,647,632 6,843,630 144,268,997
Interest expense and fiscal charges 27,193,644
Total Governmental Activities 113,583,990 4,021,171 7,054,309 144.268,997 Business-type activities:

Industry Public Utilities Commission:

Water utility 3,769,585 3,845,545 7,038,276
Electric utility 7,095,044 5,264,824 13,930,653
Industry-Hill Expo Center 4,988,850 1,436,507 1,070,728 Property and Housing Management Authority 1,444,338 218,626 Total Business-Type Activities 17,297,817 10,765,502 22,039,657 Total Functions/Programs $ 130,881,807 $ 14,786,673 $ 7,054,309 $ 166,308,654 The accompanying notes are an integral part of these financial statements. -20-
City of Industry
Statement of Activities (Continued)
For the Year Ended June 30, 2023
Net Revenue (Expense)
and Change in Net Position
Governmental Business-Type
- Activities Activities Total

FUNCTIONS/PROGRAMS
$ (9,542,089) $ $ (9,542,089)
(8,594,915) (8,594,915)
(4,218,503) - (4,218,503)
(9,618,659) (9,618,659)
(14,536,698) (14,536,698)
115,464,995 115,464,995
Interest expense and fiscal charges (27,193,644) (27.193,644) = 41,760,487 41,760,487
Business-type activities:

Industry Public Utilities Commission:

Water utility 7,114,236 7,114,236
Electric utility 12,100,433 12,100,433
Industry-Hill Expo Center ..... (2,481,615) (2,481,615) roperty and Housing Management Authori (1,225,712) (1,225,712) otal Business-Type Activitie 15,507,342 15,507,342
Total Functions/Programs 41,760,487 15,507,342 57,267,829 -

GENERAL REVENUES AND TRANSFERS
Taxes:

Property tax 15,389,009 15,389,009
Sales tax 38,090,384 38,090,384
Franchise tax 3,764,451 3,764,451
Documentary transfer tax 359,448 359,448
Transient occupancy tax 605,231 605,231
- 58,208,523
Total Taxes 58,208,523
Investment income 33,235,070 426,284 33,661,354
Gain on sale of capital assets 26,800 26,800
1,454,107 1.824 1,455,931
Transfers (5,198,915) 5,198.915
Total General Revenues and Transfers 87,725,585 5,627,023 93.352,608 Change in Net Position 129,486,072 21,134,365 150,620,437 Net position, beginning of year 783,554,824 56,089,050 839,643,874 Net Position, end of year $ 913,040,896 $ 77,223,415 $ 990,264,311 The accompanying notes are an integral part of these financial statements. -21-
City of Industry
Balance Sheet
June 30, 2023
General Capital City Debt Tax
Fund Projects Funds Service Fund Override Fund
ASSETS
Cash $ 1,668,84 $ 1,378,962 $ 1,233 $ 2,161
Investments 22,674,552 33,670,045
Investment in Section 115 Trust 5,000,000
Investments with fiscal agent - unrestricted 294,511,328 Accounts receivable, net 5,981,950 164,587
Accrued interest 1,837,707 264,355
Lease receivable 8,149,566
351,060 :

Prepaids and deposits 282,271 3, 197,009
Due from other funds 800,523 112,049
Notes receivable 21,227,614
Investments with fiscal agent - restricted 95,171,512 46,992,997 Investments in City bonds
Advances to other funds 56,538,262
Total Assets $ 719.023,680 $ 130,761,510 $ 50,191,239 2,161

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

LIABILITIES
Accounts payable $ 10,045,997 $ 3,249,018 $ : $
Accrued liabilities 1,909,861
Deposits 9,257
Unearned revenue 18,905 :

Due to other funds 76,985 435,376
Advance from other funds 6,773,139
Total Liabilities 12,061,005 10,457,533

DEFERRED INFLOWS OF RESOURCES
Deferred inflows in leases 8,036,236
Total Deferred Inflows of Resources 8,036,236

FUND BALANCES (DEFICIT)
Nonspendable:

Prepaids and deposits 282,271
Inventory 351,060
Notes receivable 21,227,614 :

Advances to other funds 56,538,262
Restricted:

Capital projects 120,303,977
Debt service 50.191.239 2,161
Transportation and roads :

Unassigned 620,527,232
Total Fund Balances 698,926,439 120,303,977 50,191,239 2,161 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 719,023,680 $ 130,761,510 $ 50,191,239 2,161 (continued)
The accompanying notes are an integral part of these financial statements. -22-
City of Industry
Balance Sheet (Continued)
June 30, 2023
Industry Public Governmental
Facilities Authority Funds Total
ASSETS
Cash $ $ 2,168,340 $ 5,219,543
Investments 1,718,552 358,063,149
Investment in Section 115 Trust 5,000,000
Investments with fiscal agent - unrestricted 294,511,328 Accounts receivable, net 283,119 6,429,656
Accrued interest 1,500,124 7,152 3,609,338
Lease receivable 8,149,566
Inventory : 351,060
Prepaids and deposits 3,479,280
Due from other funds - 912,572
Notes receivable 21,227,614
Investments with fiscal agent - restricted 142,164,509
Investments in City bonds 41,372,544 : 41,372,544
Advances to otherfunds 56,538,262
Total Assets 42,872,668 $ 4,177,163 $ 947,028,421

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

LIABILITIES
Accounts payable $ 2,000 $ 520,743 $ 13,817,758
Accrued liabilities 1,909,861
Deposits : : 9,257
Unearned revenue 18,905
Due to other funds 560,026 1,072,387
Advance from other funds 49,765,123 56,538,262
Total Liabilities 49,767,123 1,080,769 73,366,430

DEFERRED INFLOWS OF RESOURCES
Deferred inflows in leases 8,036,236
Total Deferred Inflows of Resources - 8,036,236

FUND BALANCES (DEFICIT)
Nonspendable:

Prepaids and deposits 282,271
Inventory 351,060
Notes receivable : 21,227,614
Advances to other funds 56,538,262
Restricted:

Capital projects 120,303,977
Debt service : 50,193,400
Transportation and roads 2,903,285 2,903,285
Unassigned (6,894,455) 193,109 613,825,886
Total Fund Balances (6,894,455) 3.096,394 865,625,755
Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 42,872,668 $ 4,177,163 $ 947,028,421 (concluded)
The accompanying notes are an integral part of these financial statements. -23-
City of Industry
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position
June 30, 2023
Fund balances of governmental funds $ 865,625,755
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not current financial resources and, are not included in the funds. These assets consist of:

Capital assets $ 613,483,897
Accumulated depreciation (186,266,327)
Total 427,217,570
Long-term liabilities applicable to governmental activities are not due and payable in the period and, accordingly, are not reported as fund liabilities. Long-term liabilities are included in the statement of net position as follows:

City of Industry:

Bonds payable (386,895,000)
(Premium) discount, net 4,771,245
Compensated absences (209,281)
Deferred loss on refunding, net 520,210
Total (381,812,826)
Accrued interest payable for the current portion of interest due on bonds are not reported governmental funds. (10,069,964)
Internal activities are eliminated in the governmental activities:

Investment In City bonds (41,372,544)
Bonds payable 48.265,000
Total 6,892,456
Pension related liabilities applicable to the City's governmental activities are not due and in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as the changes in these amounts affect only the government-wide statements for governmental activities:
5,098,065
(1,656,000)
(2,205,521)
1,236,544
OPEB related liabilities applicable to the City's governmental activities are not due and le current period and accordingly are not reported as fund liabilities. Deferred outflov i resources and deferred inflows of resources related to OPEB are only reported in th statement of net position as the changes in these amounts affect only the government- wide statements for governmental activities:

Deferred outflows of resources 2,049,672
(860,973)
2,762,662
3,951,361
Net Position of Governmental Activities $ 913.040,896
The accompanying notes are an integral part of these financial statements. -24-
City of Industry
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
City Debt Service Funds
General Capital City Debt Tax
Fund Projects Funds Service Fund Override Fund

REVENUES
Taxes $ 51,369,319 $ 1,503,005 $ 5,345,065
Intergovernmental 289,861 1,931,808
Charges for services 290,511 :
2,189,604 :
300,996 • ..
24,190,693 3,614,116 1,700,799
2,396,367 3,147,402
Total revenues 81.027,351 8,693,326 3,203,804 5,345.065

EXPENDITURES
Current:

Legislative 870,077 :

General administration 5,831,027 17,200
Support services 5,631,104
Community development 6,327,188 ....

Community services 8,875,345
Public safety 13,153,974 .....

Public works 14,187,850
Capital outlay 19,512,953
Debt service:

Principal retirement : 43,415,000
Interest and fiscal charges - 21,218,546
Total expenditures 54,876,565 19.512,953 64,650,746
Excess (deficiency) of revenues over
(under) expenditures 26,150,786 (10,819,627) (61,446,942) 5,345,065

OTHER FINANCE SOURCES (USES)
Transfers in 18,438,800 43,960,114 23,224,789 21,578
Transfers out (18,873,109) (22,356,090) (985,029) (8,173,317) Proceeds from sale of capital assets 26,800
Total other financing sources (uses) (407,509) 21.604.024 22,239,760 (8,151,739) Net change in fund balances 25,743,277 10,784,397 (39,207,182) (2,806,674)

FUND BALANCES (DEFICIT)
Beginning of year 673,183,162 109,519,580 89,398,421 2,808,835 End of year $ 698.926,439 120,303,977 $ 50,191,239 $ 2,161 (continued)
The accompanying notes are an integral part of these financial statements. -25-
City of Industry
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2023
Debt Service
Fund Nonmajor
Industry Public Governmental
Facilities Authority Funds Total

REVENUES
Taxes $ $ 6,980 $ 58,224,369
Intergovernmental 2,005,751 4,227,420
Charges for services 290,511
2, 189,604
300,996
40,808 31,328,374
250,623 418 5,794,810
Total revenues 2.032,581 2,053,957 102,356,084

EXPENDITURES
Current:

Legislative 870,077
General administration 5,848,227
Support services 5,631,104
Community development 6,327,188
Community services 8,875,345
Public safety 13,153,974
Public works 4,064,947 18,252,797
Capital outlay 19,512,953
Debt service:
rincipal retiremen 21,145,000 : 64,560,000
nterest and fiscal charge: 6.785,339 28,003,885
Total expenditures 27,930,339 4,064,947 171,035,550
Excess (deficiency) of revenues over
(under) expenditures (25,897,758) (2,010,990) (68,679,466)

OTHER FINANCE SOURCES (USES)
Transfers in 10,740 6,730,334 92,386,355
Transfers out (42,974,573) (4,223,152) (97,585,270)
Proceeds from sale of assets 26,800
Total other financing sources (uses) (42,963,833) 2,507,182 (5,172,115) Net change in fund balances (68,861,591) 496,192 (73,851,581)

FUND BALANCES (DEFICIT)
Beginning of year 61.967,136 2,600,202 939.477,336
End of year (6,894,455) 3,096,394 865,625,755
(concluded)
The accompanying notes are an integral part of these financial statements. -26-
City of Industry
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statements of Activities For the Year Ended June 30, 2023
Net change in fund balances of governmental funds 5 173,851,581) Amount reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. This is the amount by which capital outlay exceeded depreciation and disposals in the current period
Capital outlay expense 4,364,108
Contributed capital assets 143,940,972
Depreciation expense (7.294,544)
Total 141,010,536
The issuance of long term debt provides current financial resources to governmental while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance cost, discounts and similar items when the debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. These amounts are the net effect of these differences in the treatments of long-term debt and related items.

Principal repayments 64,560,000
Interest payments (164,974)
Bond premium and discount amortization (84,261)
Total 64,310,765
Accrued interest for long-term liabilities. This is the net change in accrued interest in the current period. 1,059,476
Net effect of internal activities are eliminated in the statement of activities. 1,945,121 Compensated absences expenses reported in the statement of activities do not require use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (27,816)
Pension expenditures reported in the governmental funds includes the annual required contributions. In the statement of activities, pension expense includes the change in the net pension liability, and related change in pension amounts for deferred outflows of resources and deferred inflows of resources. (5,104,835) OPE expenditures reported in the governmental funds includes the actual premium payments. In the statement of activities, OPEB expense includes the change in the ne PEB liability and related change in OPE amounts for deferred outflows deferre inflows of resources. 144,406
Change in Net Position of Governmental Activities 129,486,072 The accompanying notes are an integral part of these financial statements. -27-
City of Industry
Statement of Net Position
Proprietary Funds
June 30, 2023
Civic
Recreational
Industrial
Industry Public Authority Property
Utilities Commission Industry and Housing
Water Electric Hills Expo Management
Fund Fund Center Fund Authority Fund Total
ASSETS
Current assets:

Cash and investments $ 1,936,264 792,558 245,367 114,637 $ 3,088,826 Investments 6,561,629 11,194,761 17,759,713
Accounts receivable, net 1,252,263
Accrued interest
Lease receivable 291,629
Inventory of materials and supplies 10,000 35,124 45,124 Prepaid items 354,511 11,064 8,994 374,569
Due from other funds 149,085 10,730 160,475
Deposits 3,000
Total Current Assets 9,422,295 12,941,522 328,902. 422,013 23,114,732 Noncurrent assets:

Capital assets:

Capital assets not being depreciated 641,606 6,323,672 3,193,299 6,729,380 16,887,957 Capital assets being depreciated, net 14,369,929 15,628,609 12,394,575 3.310,187 45,703,300 Total Noncurrent Assets 15,011,535 21.952,281 15,587,874 10.039,567 62,591,257 Total Assets 24,433,830 34,893,803 15,916,776 10,461,580 85,705,989

LIABILITIES
Current liabilities:

Accounts payable 785,962 790,205 228,296 135,641 1,940,104 Deposits 23,950 2,306,332 46,250 1,300 2,377,832
Unearned revenue 3,713,710 116,768 3,830,478
Due to other funds 660 660
Total Current Liabilities 4.523622 3,096,537 391,974 136,941 8,149,074

DEFERRED INFLOWS OF RESOURCES
Deferred amounts from leases 333,500 333,500
Total deferred inflows of resources 333,500 333,500

NET POSITION (DEFICIT)
Net investment in capital assets 15,011,535 21,952,281 15,587,874 10,039,567 62,591,257 Unrestricted 4,898,673 9,844,985 (63,072) (48,428) 14,632,158 Total Net Position $ 19,910,208 $ 31,797,266 $ 15,524,802 $ 9,991,139 $ 77,223,415 The accompanying notes are an integral part of these financial statements. -28-
City of Industry
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023
Civic
Recreational
Industrial
Industry Public Authority Property
Utilities Commission Industry and Housing
-
Water Electric Hills Expo Management
Fund Fund Center Fund Authority Fund Total

OPERATING REVENUES
Water sales and service $ 3,684,510 $ $ $ $ 3,684,510
Electric and solar energy sales 5,117,152 5,117,152
Event and rental revenues 1,435,183 218,120 1,653,303
Other revenue 161,035 147,672 1,324 506 310,537
Total Operating Revenues 3,845,545 5.264,824 1.436.507 218.626 10,765,502

OPERATING EXPENSES
Purchased water 248,705 248,705
Purchased electricity 4,788,865 : 4,788,865
General administration 2,974,528 2,184,503 1,290,767 36,740 6,486,538 Expo Center operations 3,232,744 3,232,744
Housing Authority operations 1,259,166 1,259,166
Depreciation 546,352 121,676 465,339 148,432 1,281,799
Total Operating Expenses 3,769,585 7,095.044 4,988,850 1.444,338 17,297,817 Operating Income (Loss) 75,960 (1,830,220) (3,552,343) (1,225,712) (6.532,315)

NONOPERATING REVENUES
Investment income 145,381 280.826 77 426,284
Lease income 1,824 1,824
Total Nonoperating Revenues 145,381 280,826 1,901 428,108 Income (Loss) Before Transfers and Contributions 221,341 (1,549,394) (3.552,343) (1,223,811) (6,104,207)

TRANSFERS AND CAPITAL CONTRIBUTIONS
Transfers in 258,289 1,308,770 3,442,284 1,141,564 6,150,907 Transfers out (31,198) (852,963) (548) (67,283) (951,992) Capital contributions 7,038,276 13,930,653 1,070,728 22,039,657 Total Transfers and capital contributions 7.265.367 14,386,460 4,512,464 1.074.281 27,238,572 Changes in Net Position 7,486,708 12,837,066 960,121 (149,530) 21,134,365

NET POSITION
Beginning of year 12.423,500 18,960,200 14.564,681 10,140,669 56,089.050 End of year $ 19,910,208 $ 31,797,266 $ 15,524,802 $ 9,991,139 $ 77,223,415 The accompanying notes are an integral part of these financial statements. -29-.

City of Industry
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Civic
Recreational
Industrial
Industry Public Authority Property
Vilties Commission - Industry and Housing
Water Electric Hills Expo Management
Fund Fund Center Fund Authority Fund Total

CASH FLOWS FROM OPERATING ACTIVITIES
3,393,721 $ 5,128,781 $ 1,525,450 $ 218,526 $ 10,266,478 (265,902) (265,902)
(5,350,900) (5,350,900)
(2,974.528) (2,184,503) (4.940,898) (1.263,261) (11,363.190) 153,291 (2,406,622) (3.415,448) (1.044.735) (6,713,514)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash received from other funds 258,289 1,308,770 3,442,284 1,141,564 6,150,907 Cash paid to other funds (31,198) (852,963) (548) (67,283) (951,992) Cash Ne cash Proyery Node toltom other funds (191,331) (1,035) (192,366) Financing Activities 227,091 264,476 3.441,736 1,073,246 5.006,549

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets (91,276) (91,276) Lease receipts : 43,695 43.695
acao Prane by used to Captal and (91,276) 43,695 (47,581)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 109,682 210,138 319,877
Net Cash Provided by Investing Activities 109,682 210,138 319.877 Net Change in Cash and Cash Equivalents 398,788 (1,932,008) 26,288 72,263 (1,434,669) Cash and cash equivalents, beginning of year 8,099,105 13.919,327 219.079 45,697 22.283,208 Cash and cash equivalents, end of year 8,497,893 $ 11,987,319 $ 245,367 $ 117,960 $ 20,848,539

CASH AND CASH EQUIVALENTS
Cash $ 1,936,264 245,367 114,637 $ 3,088,826
Investments 6,561,629 17,759,713
Total Cash and Cash Equivalents 8,497,893 245,367 3 5 $ 20,848,539 The accompanying notes are an integral part of these financial statements.

City of Industry
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Civic
Recreational
Industrial
Industry Public Authority Property
Utilities Commission Industry and Housing
Water Electric Hills Expo Management
Fund Fund Center Fund Authority Fund Total

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY
(USED FOR) OPERATING ACTIVITIES
Operating income (loss) 75,960 $ (1.830,220) $ (3.552,343) $ (1,225,712) $ (6.532,315) Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation 546,352 121,676 465,339 148,432 1,281,799
Changes in operating assets and liabilities:
(Increase) decrease in:

Accounts receivable 60,119 (136,043) 75,651 (100) (373) Prepaid items 2,610 2,610

2.597 (5,775) (300) (3,478)
Inventory
Increase (decrease) in:

Accounts payable (21,648) 227,937 (429,647) 33,015 (190,713) Customer deposits 1,854 (784,197) 9,950 (772,393)
Unearned revenues (511,943) 13,292 (498,651)
Total Adjustments 77,331 (576,402) 136,895 180,977. (181,199) Net Cash Provided by (Used for)
Operating Activities 153,291 $ (2,406.622). § (3.415,448) s (1.044.735) (6.713.514)

SCHEDULE OF NON-CASH CAPITAL AND

RELATED FINANCING ACTIVITIES
Contributed capital $ 7.038,276 $ 13.930,653 $ 1.070,728 § 22.039.657 The accompanying notes are an integral part of these financial statements.

City of Industry
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
Private-Purpose
Trust Fund
ASSETS
Cash $ 2,680,138
Investments 87,292,432
Accounts, net 5,165,216
Accrued interest 1,082,190
Property held for sale or disposition 50,064,421
Restricted assets:

Investments 42,751,768
Investments with fiscal agent 11,023,937
Capital assets, net of depreciation 190,603,084
Total Assets 390,663,186

LIABILITIES
Current liabilities:

Accounts payable 19,524,884
Total Current Liabilities 19,524,884

NET POSITION
Restricted for Successor Agency 371,138,302
Total Net Position $ 371,138,302
The accompanying notes are an integral part of these financial statements. -32-
City of Industry
Statement of Changes in Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
Private-Purpose
Trust Fund

ADDITIONS
Interest income $ 3,819,700
Rental and other income 21,836,673
Other revenues 10,896
Total Additions 25,667,269

DEDUCTIONS
General administration 215,863
Project expenses 194,895,804
Bond interest expense 119,944
Total Deductions 195,231,611
Change in Net Position (169,564,342)
Net Position, beginning of year 540,702,644
Net Position, end of year $ 371,138,302
The accompanying notes are an integral part of these financial statements. -33-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Industry (the City), California, have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.

A) Description of the Reporting Agency
The City is a municipal corporation governed by an elected five-member council of which the mayor is appointed by the members of the city council. The accompanying financial statements present the financial activities of the City, which is the primary government, and the financial activities of its component units, which are entities for which the City is financially accountable. Although legally separate entities, blended component units are in substance, part of the City's operations and are reported as an integral part of the City's financial statements. Blended component units, include the Civic-Recreational-Industrial Authority (CRIA), the Industry Public Utilities Commission (IPUC), the Industry Public Facilities Authority (IPFA), and the Industry Property and Housing Management Authority (the Housing Authority). They are reported as blended for the following reasons: (1) the governing board is substantively the same as the primary government, and there is a financial benefit or burden relationship between the primary government and the component unit; and (2) the component unit provides services entirely, or almost entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the primary government even though it does not provide services directly to it.

Blended Component Units
CRIA was established to develop and finance projects within the City and is governed by a commission of five members. Four members are appointed by the City Council and one member by the Council of the City of La Puente. The City transfers funds to CRIA to fund operations and capital projects. CRIA is represented by capital projects and proprietary IPUC was established to provide reliable utility service at reasonable rates to the residents and to assist in the promotion and stability for business owners in the City. IPUC manages the Industry Waterworks System and the Industry Electric System. The board that governs the IPUC consists of the council members of the City. The IPUC is reported as a proprietary IPFA was established for the purpose of establishing a vehicle to reduce local borrowing costs, accelerate construction, repair and maintenance of needed public capital improvements. The Board consists of all members of the City Council. IPFA receives all of its funding from payments received on bonds issued by the City and Successor Agency (SA) to the Industry Urban-Development Agency (IUDA) which IPFA owns as investments. IPFA is reported as part of the debt service fund.
-34-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A) Description of the Reporting Agency (Continued)
The Housing Authority was established to manage the property and housing rental activity in the City. The Board consists of five members who are appointed by the City Council. The Housing Authority is reported as proprietary funds.

Fiduciary Component Unit
The City has elected to become the Successor Agency to the Industry Urban- Development Agency (SA to IUDA). The City and the SA to IUDA have separate Boards of Directors.

However, individuals serving on the City's Council also serve on the SA to IUDA Board. The SA to IUDA is reported as private-purpose trust fund of the City that is fiduciary in nature and is reported in the statements of fiduciary net position and changes in fiduciary net position within the City's fiduciary funds.

Complete financial statements of CRIA, SA to IUDA and IPFA may be obtained from the finance department, which is located at 15625 Mayor Dave Way, City of Industry, California 91744. Separate financial statements are not prepared for IPUC and Housing Authority.

B) Government-Wide Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

As a general rule, the effect of interfund activity has been eliminated from the government- wide financial statements. 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.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The types of transactions reported as program revenues for the City are reported in three categories:

1. Charges for services,

2. Operating grants and contributions, and

3. Capital grants and contributions.

Charges for services include revenues from customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function. Grants and contributions include revenues restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.
-35-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C) Fund Financial Statements
The accounts of the City are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts, which are comprised of each fund's assets, deferred outflows of resources. liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate.

Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund financial statements for the primary government are governmental and proprietary funds, which are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for private purpose trust funds and custodial funds. Fiduciary funds of the City primarily represent assets held by the City in a trust or custodial capacity for other individuals or organizations.

The City reports the following major governmental funds:

General Fund - This is the City's primary operating fund. It accounts for all activities of the general government, except those required to be accounted for in another fund.

City Capital Projects Funds - The Capital Projects Funds are used to account for financial resources to be used for the acquisition and construction of major capital projects (other than those financed by Proprietary Funds).

City Debt Service Fund - The Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt, principal, interest, and related costs.

Tax Override Debt Service Fund - Pursuant to Resolution No. CC 2013-25, the City has established a segregated fund in the treasury designated the Agency Override Fund and shall deposit all Agency Override Portion received by the City into the Agency Override Fund. Upon notification by the SA to IUDA of the debt service shortfall, the City shall apply the necessary amount (but only to the extent available) from the Agency Override Fund to pay the bond trustee or, to the extent that there is no trustee for any bond issue, the bondholders directly, to cover the debt service shortfall.

Industry Public Facilities Authority Debt Service Fund - The Industry Public Facilities Authority Debt Service Fund is used to account for the accumulation of resources for, and the payment of the Authority 's long-term debt, principal, interest, and related costs. -36-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C) Fund Financial Statements (Continued)
The City reports the following major proprietary funds:

Water Enterprise Fund - This fund accounts for activities of providing water services to the public.

Electric Enterprise Fund - This fund accounts for activities of providing limited electrical services to the public.

Civic-Recreational-Industrial Authority Industry Hills Expo Center Enterprise Fund - This fund accounts for space rentals for events and equestrian activities to the general public.

Industry Property and Housing Management Authority Enterprise Fund - This fund accounts for property and housing rental activity.

Additionally, the City reports the following fund types:

Governmental Fund Types
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects), that are restricted to expenditures for special purposes.

Fiduciary Fund Types
The Private-Purpose Trust Fund is a fiduciary fund type used by the City to report trust arrangements under which the principal and income benefits other governments. This fund reports the assets, liabilities and activities of the Successor Agency of the Industry Urban-Development Agency.

The Custodial Fund is used to account for assets held by the City as an agent for individuals, other governments and/or other funds. The assets, liabilities, and activities of the Assessment District are reported in the Custodial Fund D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary funds.
-37-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Under the economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their statements of net position.

Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange include property taxes, grants, entitlements, and donations. On an accrual basis, property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund 's principal ongoing operations.

The principal operating revenues of the proprietary funds are utility charges for service and event revenues. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and
Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Noncurrent portions of long-term receivables are reported on the funds' balance sheets in spite of their spending measurement focus.

Under the modified accrual basis of accounting revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on general long-term liabilities, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long- term liabilities are reported as other financing sources. -38-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Property taxes, franchise fees, licenses, 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. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

E) New Accounting Pronouncements
Governmental Accounting Standards Board (GASB) Statement 96 GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements.

The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for these arrangements by governments. This Statement increases the usefulness of governments' financial statements by requiring recognition of certain subscription assets and liabilities for arrangements that previously were recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that subscriptions are financings of the right to use an underlying asset and a liability.

F) Cash and Investments
For purposes of the statement of cash flows, the City considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents.

Short-term investments are reported at amortized cost, which approximates fair value.

Investments that exceed more than one year in maturity and that are traded on a national exchange are valued at their quoted market price. Certain investments that exceed more than one year in maturity may be valued by pricing models that require inputs to the valuation methodology that include quoted prices of similar assets and certain observable inputs.

G) Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding balances. A receivable balance is charged off in the period in which the receivable is deemed uncollectible. Management evaluates uncollectible amounts based on its assessment of the current status of individual accounts. -39-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H) Interfund Transactions
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as due to/from other funds (i.e., current portion of interfund loans) and advances from/to other funds (i.e., noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances.
1) Inventories
Inventories of the Industry Hills Expo Center Enterprise Fund consist of food and beverages.

Inventories of IPUC Enterprise Fund consist of materials and supplies. Inventories of operating supplies, including fuel are maintained and accounted for in the General Fund The inventories are carried at the lower of cost or net realizable value on the first-in, first-out basis of accounting.

J) Prepaid Items
Prepaid items are payments made to vendors for services or insurance premiums that will benefit periods beyond the fiscal year ended.

K) Property Held for Sale or Disposition
Property held for sale or disposition is reported in the fiduciary fund financial statements at the lower of cost or net realizable value.

L) Restricted Assets
Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets in the financial statements because their use is limited by applicable bond covenants.

M) Deferred Outflows and Inflows of Resources
In addition to assets, the statement of net position and governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has the following items that qualify for reporting in this category:
• Unamortized loss on bond defeasance reported in the government-wide statement of net position and the fiduciary funds financial statements. An unamortized loss on bond defeasance results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the life of the refunding -40-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M) Deferred Outflows and Inflows of Resources (Continued) • Deferred outflow related to pensions equal to employer contributions made after the measurement date of the net pension liability. These amounts will be recognized in the next fiscal year.
• Deferred outflow related to OPEB for change in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with OPEB through the plan. • Deferred outflow related to OPEB for differences between actual and expected experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with OPEB through the plan.
• Deferred outflow related to pensions resulting from the difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years.
• Deferred outflows related to pensions for the changes in employer 's proportion and differences between the employer 's contributions and the employer's proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

In addition to liabilities, the statement of net position and governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
• Deferred inflow related to OPEB resulting from the difference in projected and actual earnings on investments of the OPEB plan fiduciary net position. These amounts are amortized over five years.
• Deferred inflow related to pension and OPE for differences between actual and expected experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pension and OPEB through the plans.
• Deferred inflows related to pensions for the changes in employer's proportion and differences between the employer's contributions and the employer's proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
-41-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N) Capital Assets and Depreciation
Capital assets, including infrastructure, are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Donated capital assets are reported at acquisition value on the date of donation. Generally capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of two years or more. Capital assets include public domain (infrastructure) general capital assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains.

If a cost does not extend an asset's useful life, increase its productivity or improve its operating efficiency the cost is regarded as repairs and maintenance and recognized as an expense as incurred; if it does, the cost is regarded as major renewals and betterments and capitalized.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of the proprietary fund types. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective statement of net position.

The SA to IUDA has capital assets that are not depreciated as they will be transferred to another entity that will be responsible for the maintenance of the capital assets at which time depreciation will commence.

The range of lives used for depreciation purposes for each capital asset class is as follows:

Buildings and improvements 45 years
Equipment 3 to 10 years
Infrastructure 20 to 50 years
O) Unearned Revenue and Unavailable Revenue
Unavailable revenues arise when revenue susceptible to accrual does not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues also arise when resources are received by the government before it has a legal claim to them. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, unearned revenue reported as liabilities and unavailable revenue reported as deferred inflows of resources are removed from the balance sheet and revenues are recognized
-42-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) P) Property Taxes
The valuation of property is determined as of March 1 each year and equal installments of taxes levied upon secured property become delinquent on the following 10th of December and April. Taxes on unsecured property are due when billed and become delinquent after August 31. If taxes are not paid on or before the date and time they become delinquent, a penalty of 10% is added. Unsecured property accrues an additional penalty of 1% per month beginning the first day of the third month following the delinquency date.

An initiative Constitutional Amendment, commonly known as the "Jarvis-Gann Initiative," providing for, among other things, certain property tax limitations, was approved as Proposition 13 on the June 6, 1978, statewide election. The principal thrust of Proposition 13 is to limit the amount of ad valorem taxes on real property to 1% of "full cash value," to define "full cash value" as the 1975-76 full cash value, to limit annual increases to two percent and to provide for reassessment after sale, transfer, or construction.

Q) Bond Issuance Costs and Premiums/Discounts
Bond premiums and discounts in the government-wide and fiduciary funds financial statements are deferred and amortized over the life of the bonds usina the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are recognized as expense in the period incurred in the statement of changes in net position. In the governmental fund financial statements, governmental funds report bond premiums and discounts as other financial sources. Bond issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

R) Defined Benefit Pension Plan
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. 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.

S) Other Postemployment Benefits (OPEB) Plan
For purposes of measuring the net OPEB liability (asset), deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB 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. 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 -43-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) T) Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave (compensated absences). All vacation pay and eligible sick leave pay is accrued when incurred in the government-wide financial statements. Compensated absences are reported in governmental funds only if they matured (i.e., unused reimbursable leave still outstanding following an employee's termination from employment). Typically, the General Fund has been used in prior years to liquidate the liability for compensated absences.

U) Net Position
Net position in the government-wide and proprietary fund financial statements is classified as following:

Net Investment in Capital Assets - This component of net position consists of capital assets, net of accumulated depreciation, and reduced by outstanding debt attributed to the acquisition of these assets, net of unspent debt proceeds, related deferred outflows and inflows of resources, and retention payable.

Restricted - This component of net position consists of assets, net of any related liabilities, which have had restrictions imposed on them by external creditors, grantors, contributors, or laws or regulations of other governments or laws through constitutional provisions or enabling legislations.

Unrestricted - This component of net position consists of amounts that do not meet the definition of net investment in capital assets or restricted net position.

When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first and then unrestricted resources, as they are needed.

V) Fund Balance
In the governmental fund financial statements, fund balances are classified in the following categories:

Nonspendable - items that cannot be spent because they are not in spendable form or items that are legally or contractually required to be maintained intact.

Restricted - restricted fund balances are amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; (b) imposed by law by constitutional provisions or enabling legislation.
-44-
City of Industry
Notes to Financial Statements
June 30, 2023
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) V) Fund Balance (Continued)
Committed - committed fund balances encompass the portion of net fund resources, the Ise of which is constrained by limitations that the City imposes upon itself at its highes level of decision-making authority (the City Council) through resolutions and that remair binding unless removed in the same manner.

Assigned - assigned fund balances are amounts that are constrained by the City's intent to be used for specific purposes. The intent can be established at either the highest level of decision making, or by a body or an official designated for that purpose. The City Council is authorized for this purpose.

Unassigned - includes the residual balance for the government's general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.

When both restricted and unrestricted resources are available in a fund, expenditures are to be paid first from restricted resources, and then unrestricted resources in the order of committed, assigned, then unassigned.

W) Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period Actual results could differ from those estimates.
-45-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS
As of June 30, 2023, cash and cash investments are classified in the accompanying financial statements as follows:

Government-Wide Fiduciary
Statement Fund Statement
of Net Position of Net Position Total
Cash and investments:

Unrestricted cash and investments:

Cash $ 8,308,369 $ 2,680,138 $ 10,988,507
Investments 375,822,862 87,292,432 463,115,294
Investments with fiscal agent 294,511,328 294,511,328
Restricted cash and investments:

Investment 42,751,768 42,751,768
Investment in Section 115 Trust 5,000,000 5,000,000
Investment with fiscal agent 142,164,509 11,023,937 153,188,446 Total Cash and Investments $ 825,807,068 143,748,275 $ 969,555,343 As of June 30, 2023, cash and investments consisted of the following:

Cash and investments:

Cash on hand $ 18,800
Deposits with financial institutions 10,969,707
Investments 505,867,062
Investment in Section 115 Trust 5,000,000
Investments with fiscal agent 447,699,774
Total Cash and Investments $ 969,555,343
A) Demand Deposits
The carrying amount of the City's cash deposits was $10,969,707 as of June 30, 2023. Bank balances are insured or collateralized with securities held by the pledging financial institutions in the City's name as 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 (FDIC). The City, however, has not waived the collateralization requirements. As of June 30, 2023, City's deposits are federally insured or collateralized.
-46-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
B) Investments Authorized by the City's Investment Policy and California Government Code Under provision of the City's Investment Policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments:

Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity Allowed in One Issuer U.S. Treasury Obligations 5 years None None
U.S. Government Sponsored Enterprise
Securities 5 years None None
Money Market Funds (Composed Entirely of
Security of U.S. Government and Agencies) N/A 20% None
Bankers Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years None None
Non-Negotiable Certificates of Deposit 5 years None None Local Agency Investment Fund (LAIF) N/A None None
Repurchase Agreements 1 year None None
Los Angeles County Investment Pool N/A None None
Local Agency Bonds 5 years None None
U.S. Corporate Bonds/Notes 5 years 30% None
-47-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
C) Investments Authorized by Debt Agreements
Investments of debt proceeds held by a bond trustee 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 a bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity Allowed in One Issuer U.S. Treasury Obligations None None None
U.S. Government Sponsored Enterprise Securities None None None Money Market Funds
Certificates of Deposit None None None
Commercial Paper None None None
Banker's Acceptances 18 Months None None
U.S. Corporate Bonds/Notes None None None
Municipal Bonds None None None
Noninvestment Grade Bonds None 10% None
Exchange Traded Funds None None None
Mortgage-Backed Securities None None None
Investment Contracts None None None
LAIF None None None
Foreign Government Bonds None None None
Foreign Corporate Bonds/Notes None None None
D) Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk of changes in market interest rates that will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in the market interest rates. One of the ways that the City and its component units manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. -48-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
D) Risk Disclosures (Continued)
The City and its component units and fiduciary funds monitor the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio.

Weighted
Average
Investment Type Amounts Maturity
Investments - unrestricted:

Money market funds $ 115,037,774 N/A
Certificates of deposit 60,000,000 1.17 months
U.S. Treasury obligation 35,473,855 0.71 months
Commercial paper 119,998,611 12.26 Months
LAIF 127,623,949 N/A
Investments - restricted:

Money market funds 42,751,768 N/A
Section 115 Trust 5,000,000 N/A
Investment held by fiscal agent:

Money market funds 363,563,863 N/A
Certificates of deposit 10,000,000 0.08 months
U.S. Treasury obligation 60,911,045 0.41 Months
Commercial paper 18,205,971 1.39 Months
Total $ 958,566,836
-49-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
D) Risk Disclosures (Continued)
Credit Risk
Credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is Minimum Exempt Total as of
Investment Type Legal Rating Aaa/P-1 from Rating Not Rated June 30, 2023 Investments - unrestricted:

Money market funds Aaa/P-1 $ $ $ 115,037,774 $ 115,037,774 N/A : 60,000,000 60,000,000
Certificates of deposit
U.S. Treasury obligation N/A - 35,473,855 35,473,855
Commercial paper A- 1/AA 111,690,681 8,307,930 119,998,611 LAIF N/A 127,623,949 127,623,949
Investments - restricted:

Money market funds Aaa/P-1 42,751,768 42,751,768
: : 5,000,000
Section 115 Trust N/A 5,000,000
Investment held by fiscal agent:

Money market funds N/A 363,563,863 363,563,863
Certificates of deposit Aaa/P-1 10,000,000 10,000,000
U.S. Treasury obligation A-1 60,911,045 60,911,045
Commercial paper A-1/AA 18.205,971 18,205,971
$ 129,896,652 $ 127.623,949 $ 701,046,235 $ 958,566,836 Total
-50-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
D) Risk Disclosures (Continued)
Concentration of Credit Risk
The investment policy of the City and its component units contain no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The investments subjected to 5% concentration credit risk disclosure and represent 5% or more of the total investments of the City are $70,000,000 in certificates of deposit. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement.

E) State of California Local Agency Investment Fund
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro- rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF. Currently, LAIF does not have an investment rating.

LAIF has a minimum $5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits and withdrawals) per month. LAIF requires a one- day prior notice for deposits and withdrawals of $10 million or more.

F) Investment in City Bonds
As of June 30, 2023, the IPFA has investments in City bonds in the amounts totaling $41,372,544. These investments are reported in the Industry Public Facilities Authority Debt Service Fund. These assets arise from interfund activity and have been eliminated from the government-wide financial statements.

G) Fair Value Measurement
The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are valued using a matrix pricing technique in where investments are valued based on the investments' relationship to benchmark quoted prices, and Level 3 inputs are significant unobservable inputs. -51-
City of Industry
Notes to Financial Statements
June 30, 2023
2) CASH AND INVESTMENTS (Continued)
G) Fair Value Measurement (Continued)
The City has the following recurring fair value measurements as of June 30, 2023:

Measurement Input
Investment Type Level 1 Level 2 Level 3 Uncategorized Total Investments - unrestricted:

Money market funds $ $115,037,774 $ 115,037,774
Certificates of deposit 60,000,000 60,000,000
U.S. Treasury obligation 35,473,855 - 35,473,855
Commercial paper 119,998,611 119,998,611
: 127.623,949 127,623,949
LAIF
Investments - restricted:

Money market funds 42,751,768 42,751,768
: : : 5,000,000 5,000,000
Section 115 Trust
Investment held by fiscal agent:

Money market funds 363,563,863 363,563,863
Certificates of deposit 10,000,000 : 10,000,000
U.S. Treasury obligation 60,911,045 60,911,045
Commercial paper 18,205,971 18.205,971
Total $ $ 304,589,482 $ $ 653.977.354 $958,566,836
3) ACCOUNTS RECEIVABLE
As of June 30, 2023, accounts receivable for governmental funds consisted of the following:

Nonmajor
General City Debt Governmental
Fund Service Fund Funds Total
Sales tax receivable $ 5,530,137 $ 5,530,137
Property tax receivable 173,518 30,423 203,941
Other 278,295 134,164 695,578
Total $ 5,981,950 164,587 6,429,656
4) NOTES RECEIVABLE
As of June 30, 2023, notes receivable consisted of the following:

Governmental
Activities
Notes receivable:

City of La Puente $ 1,227,614
San Gabriel Valley Water and Power LLC 20,000,000
Total Notes Receivable 21,227,614
-52-
City of Industry
Notes to Financial Statements
June 30, 2023
4) NOTES RECEIVABLE (Continued)
A) City of La Puente Loan
In October 2015, The City entered into an agreement with the City of La Puente to mitigate noise, traffic and railroad impact and for other public purposes. As part of the agreement, the City of Industry agreed to lend to the City of La Puente, and the City of La Puente agreed to borrow and repay to the City, the loan in the amount of $5,952,908 for La Puente to use in constructing a sound wall along the north side of Valley Boulevard and the railroad tracks on the south side of Valley Boulevard along with other public improvements. The City of La Puente has borrowed a total of $1,801,762 of the original amount of the loan. The project has been completed and the City of La Puente does not plan on borrowing any additional funds. In October 2019, the loan agreement has been modified to pay off the remaining $1,422,945 over 28 years. Beginning November 1, 2019, the annual payment will be $53,287 including interest at 0.33%.

B) San Gabriel Valley Water and Power, LLC
The City entered into master lease agreement (the Lease) with San Gabriel Valley Water and Power, LLC (SGVWP) and leased properties to SGVWP for a period of twenty-five years for the development of solar projects. As part of the Lease, as further amended, the City agreed to advance $20,000,000 for funding of the project development costs. At June 30, 2023, the outstanding balance of the advance was in the amount of $20,000,000. Also refer to Note 17 for more contingency disclosures.
-53-
City of Industry
Notes to Financial Statements
June 30, 2023
5) LEASE RECEIVABLE
The City, acting as lessor, leases land and buildings under long-term, noncancelable lease agreements. The leases expire at various dates through 2026 and provide various renewal options ranging from three months to six years. During the year ended June 30, 2023, the City recognized $1,613,261 and $230,038 in lease revenue and interest revenue, respectively, pursuant to these contracts.

Certain leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases.

Total future minimum lease payments to be received under lease agreements are as follows:

Year Ending
June 30, Principal Interest Total
2024 $2,133,569 $276,970 $2,410,539
2025 2,243,670 196,871 2,440,541
2026 1,602,207 120,573 1,722,780
2027 1,169,523 72,737 1,242,260
2028 785,188 29,572 814,760
2029 to 2033 507,038 32,369 539,407
Total $ 8,441,195 $729,092 $ 9,170,287
6) INDUSTRY CONVALESCENT HOSPITAL
During 1992, the City Council passed a resolution stating that periodic advances made to Industry Convalescent Hospital dba: El Encanto Healthcare and Habilitation Center in the past, as well as currently, are treated as loans. The note is payable on demand with simple interest at 6% per annum on the unpaid balance. As of June 30, 2023, the unpaid note balance amounted to $27,114,364 and accrued interest amounted to $32,671,069. As the collectability of this note and accrued interest is uncertain, the loan amounts are offset with allowance for doubtful account in the financial statements; and the City will recognize the collections on the note receivable as revenue as the amounts are collected
The Hospital leased property from the Successor Agency (SA) to IUDA for $1 a year, which was renewed annually, and at the time of renewal the lease may be terminated or the lease payment renegotiated by SA to IUDA. In November 2018, the SA to IUDA sold the property to the City.

The City is currently working with the Hospital on the new lease agreement. During the June 30, 2023, the City incurred expenses on behalf of the Hospital totaling $963,878 relating to contract labor, security, and repairs and maintenance.
-54-
City of Industry
Notes to Financial Statements
June 30, 2023
7) PREPAID ITEMS
As of June 30, 2023, government-wide financial statements report the following prepaid items:

Governmental Business-Type
Activities Activities Total
Prepaid bond insurance $ 3,197,009 $ $ 3,197,009
Other prepaid items 282,271 374,569 656,840
Total 3,479,280 $ 374,569 $ 3,853,849
As of June 30, 2023, fund financial statements reported the following prepaid items:

Governmental Funds Enterprise Funds.

Prepaid bond insurance $ 3,197,009 $ 3,197,009 center Fund Other prepaid items 8,994 374,569
$ 3,197,009 $ 3,479,280 354,511 8,994 374,569
8) INTERFUND TRANSACTIONS
All interfund assets, liabilities, fund equity, revenues, expenditures, and operating transfers have been eliminated in the statement of net position and the statement of activities.

A) Due to/from Other Funds
Due to/from other funds consisted of the following at June 30, 2023:

Due from Other Funds
Governmental Funds Enterprise Funds
City Capital
General Projects IPUC Electric Expo Center IPHM/
Due to Other Fund Fund Fund Fund Fund Fun Total
Governmental funds:

General Fund $ $ 66,630 $ $ 660 $ 9,695 $ 76,985
City Capital Projects Func 435,376 435,376
Nonmajor Funds 364,487 45,419 149,085 1,035 560,026
Enterprise funds:

Expo Center Fund 660 660
Total $ 800,523 = 112,049 149,085 $ 660 $ 10,730 $ 1,073,047 The majority of the interfund balances were a result of routine short-term borrowing or reimbursement of expenditures.
-55-
City of Industry
Notes to Financial Statements
June 30, 2023
8) INTERFUND TRANSACTIONS (Continued)
B) Advances to/from Other Fund
Advances to/from other funds consisted of the following as of June 30, 2023:

Advance to
Other Funds
Governmental
Fund
Advance from Other Funds General Fund
Governmental fund:

Industry Public Facilities Authority
Debt Service Fund $ 49,765,123
City Capital Projects Fund 6,773,139
Total $ 56,538,262
On December 1, 2015, the IPFA entered into loan agreement with the City to borrow 651,460,000 for the purchase of City of Industry Subordinate Sales Tax Revenue Bonds Series 2015B (Taxable). The loan bears interest ranging from 2.75% to 7.75% annually, due February 1 and August 1 each year. The principal payments are due on February 1 each year and range from $520,000 to $3,905,000.

As of June 30, 2023, the total outstanding balance amounted to $49,765,123 (principal of $48,265,000 and accrued interest of $1,500,123). Interest revenue for the City and interest expense for the IPFA in the amount of $3,620,298 is eliminated in the statement of activities.

The repayment schedule for the advances is as following:

Year Ending
June 30, Principal Interest Total
2024 615,000 3,592,510 $ 4,207,510
2025 645,000 3,561,760 4,206,760
2026 680,000 3,527,898 4,207,898
2027 715,000 3,490,158 4,205,158
2028 755,000 3,448,330 4,203,330
2029 to 2033 4,610,000 17,968,852 22,578,852
2034 to 2038 6,505,000 14,283,734 20,788,734
2039 to 2043 9,330,000 10,406,006 19,736,006
2044 to 2048 13,515,000 7,520,212 21,035,212
2049 to 2051 10,895,000 1,730,577 12,625,577
Total $ 48,265,000 $ 69,530,037 $ 117,795,037
-56-
City of Industry
Notes to Financial Statements
June 30, 2023
8) INTERFUND TRANSACTIONS (Continued)
C) Transfers
Transfers in and transfers out for the year ended June 30, 2023, consisted of the following:

Transfers Out
Governmental Funds
City City Tax Override IPUC Nonmajor
General Capital Debt Debt Debt Governmental
Fund Projects Funds Service FundService Fund Service Fund Funds $ $ 15,630,356 $ (1,603,394) $ (9,892) $ 4,223,152
10,233,503 2,566,845 8,183,209 22,908,726
127,250 3,031.692 20,065,847
Tax Override Debt Service Fund 10,740 21,578
IPFA Debt Service Fund ... :

Nonmajor Governmental Funds 6,730,334
Proprietary funds:

IPUC Water Fund 227,091
IPUC Electric Fund 654,385 • • • : :

Expo Center Fund 697,000 2,745,284
IPHMA Fund 1,074,282 67,282 3 42,974.573
Total • 18,873,109 $ 22,356.090 985,029 8.173,317 $ 4.223.152 Transfers Out
Proprietary Funds
IPUC IPUC Expo Center IPHMA
Transfers in Water Fund Electric Fund Fund Fund Total
Governmental funds:

General Fund $ $ 198,578 $ $ $ 18,438,800
Capital Projects Funds : 67,283 43,960,114
City Debt Service Fund 23,224,789
Tax Override Debt Service Fund : : 21,578
IPFA Debt Service Fund : 10,740
Nonmajor Governmental Funds 6,730,334
Proprietary funds:

IPUC Water Fund 31,198 258,289
IPUC Electric Func 654,385 : : 1,308,770
Expo Center Func 3,442,284
IPHMA Fund 1,141.564
Total $ 31,198 = 852,963 548. 67,283 $ 98.537,262
The following transfers were made:
• $10,233,503 Transfer to CIP fund project expenditures. • $22,908,726 Remaining tax override transferred for special projects in CIP fund. • $20,065,847 Transfer from IPFA to fund sales tax revenue bond payment. • $3,031,692 Interest income earned on bond proceeds for projects funds transferred to Debt Service.
• $1,141,564 Transfer to IPHMA Fund to cover housing project costs. $3,442,284 Transfer to CRIA Fund to cover project costs. • $15,630,354 Capital projects funds to reimburse General Fund for project costs. -57-
City of Industry
Notes to Financial Statements
June 30, 2023
9) CAPITAL ASSETS
A) Governmental Activities
A summary of changes in capital asset activity for the year ended June 30, 2023, is as follows:

Balance at Transfer and Balance at
Capital Asset: July 1, 2022 Additions Deletions Reclassification June 30, 2023 Primary government.
$ 110,604,835 $ 110,604,835
Construction in progress 37,338.942 22.749.769 (2.559.533) (12,942,367) 43,586,811 Total capital assets, not being
depreciated 147,943,777 22.749,769 (3,559,533) (12,942,367) 154,191.646 Capital assets, being depreciated:

Buildings and improvements 120,670,145 120,670,145
Machinery and equipment 1,926,746 - 1,926,746
Furniture and fixtures 4,581,832 4,581,832
Infrastructure 175.230,189 143.940.972 12,942,367 332,113,528 Total capital assets, being depreciated 302,408.912 143.940.972 12,942,367 459,292,251 Less accumulated depreciation:

Buildings and improvements (74,392,772) (2,675,306) (77,068,078) Machinery and equipment (1,913,423) (32,775) : (1,946, 198) Furniture and fixtures (4,546,569) (4,546,569)
Infrastructure (83,292,891) 4,586,463) (14,826,128) (102,705,482) Total accumulated depreciation (164,145,655) (7,294,544) (14,826,128) (186,266,327) Total capital assets, being
depreciated, net 138,263,257 136,646,428 (1,883,761) 273,025,924 Total Governmental Activities 286,207,034 $ 159.396.197 5(3,559.533) $ (14,826,128) 427,217,570 Depreciation expense was charged to the primary government in the governmental activities in the amount of $7,294,544 to the following functions:

General government $ 614,200
Support services 1,749,233
Community development 121,819
Community services 743,314
Public safety 1,819,988
Public works 2,245,990
Total depreciation expense $ 7,294,544
-58-
City of Industry
Notes to Financial Statements
June 30, 2023
9) CAPITAL ASSETS (Continued)
B) Business-Type Activities
A summary of changes in capital asset activity for the year ended June 30, 2023, is as follows:

Balance at Transfer and Balance at
Capital Assets July 1, 2022 Additions Deletions Reclassification June 30. 2023 Business-type activities:

Capital assets, not being depreciated:

Land $ 6,764,880 $ $ $ $ 6,764,880
Water rights 441,200 : 441,200
Construction in progress 8.039,874 1.920,817 (278,814) 9.681,877 Total capital assets, not being
depreciated 15,245,954 1.920,817 (278,814) 16,887,957
Capital assets, being depreciated:
uildings and improvemen 55,037,294 156,551 55,193,845
trastruct furniture and fixture 1,322,648 1,322,648
9,571,703 22,252,555 31,824,258
Source of supply - electric 4,495,494 4.495,494
Total capital assets, being depreciated 70,427,139 22,252,555 156,551 92,836,245 Less accumulated depreciation:

Euine and marventures (40,148,670) (901,736) (22,626) (41,073,032) (1,308,080) (4,856) (1,312,936)
Infrastructure (445,848) (253,531) (1,897,550) (2,596,929) Source of supply - electric (2,028,372) (121,676) (2,150,048) Total accumulated depreciation (43,930,970) 1,281,799) ((1.920,176) (47,132,945) Total capital assets, being
lepreciated, ne 26.496,169 ((1.763,625) 45,703,300
otal Business-type Activitie 41.742,123 (2.042.439) 3 62,591,257 Depreciation expenses for business activities in the amount of $1,281,799 were charged to the following activities:

Water $ 546,352
Electric 121,676
CRIA Expo Center 465,339
IPHMA 148,432
Total Depreciation Expense $ 1,281,799
C) Private-Purpose Trust Fund
The SA to IUDA has the following assets held for sale or disposition.

Balance at Balance at
July 1,2022 _Transfer Additions Deletions June 30, 2023 Property held for sale or disposition:
$50,064,421 $- $ 50,064,421
-59-
City of Industry
Notes to Financial Statements
June 30, 2023
9) CAPITAL ASSETS (Continued)
C) Private-Purpose Trust Fund (Continued)
In addition, the SA to IUDA has the following capital assets as of June 30, 2023.

Balance at Balance at
July 1, 2022 Transfer Additions Deletions June 30,2023
Capital assets, being depreciated:

Land 7,151,286 $ (351,286) $ (6,800,000) $
179,961,287 10,480,284 (2,969,734) 190.441.571
2,969,734
: (204.479,372) 166,310
Infrastructure 204,294,396 351,286
Less accumulated depreciation: (20,828,169) 20,823,372 (4,797) Capital Assets, Net 373,548,534 $10,480,284 $ (193,425,734) s 190503732 10) UNEARNED REVENUE
Reclaimed Water Sales
The City purchases 10,000-acre feet of reclaimed water from LA County Sanitation District annually. The City also entered into separate joint use and development agreements with the Rowland Water District (RWD) and the Upper San Gabriel Valley Water District (SGVWD). The purpose of the agreements is to sell 3,400- and 2,500-acre feet of reclaimed water to RWO and SGVWD, respectively. Under the agreements, RWD and SGVWD had the option to pay their allocated shares of cost in advance or over 20 years. On July 15, 2009, RWD paid its allocated share of cost in advance in the amount of $5,958,516. Subsequently, SGVWD also paid its allocable share of cost in advance in the amount of $4,280,345 on November 10, 2012. Both advances are to be amortized and recognized as revenue over 20 years. As of June 30, 2023, total unearned revenue from the sale of reclaimed water to RWD and SGVWD was in the amount of $3,713,710.

Civic-Recreational-Industrial Authority
Unearned revenue for CRIA are for event rental fees collected prior to the event. As of June 30, 2023, unearned revenue for CRIA was in the amount of $116,768. -60-
City of Industry
Notes to Financial Statements
June 30, 2023
11) LONG-TERM LIABILITIES
A summary of changes in the governmental activities long-term liabilities for the year ended June 30, 2023, is as follows:

Amount Due
Balance at Balance at Amount Due in More
July 1, 2022 Additions Deletions June 30, 2023 in One Year Than One Year $ 37,310,00l $ $ (37,310,000 $ $
344,150,00đ : (5,520,000 338,630,000 5,690,000 332,940,000 21,145,000 (21,145,000)
402,605,000 (63,975,000) 338,630,000 5,690,000 332,90,000 Deferred amounts:

Unamortized premium/discounts (4.936.219) 164,974
397,668,781 359. 75.15. 5,690,000 228.78,215)
Total bonds payable (63,810,026)
Compensated absences 181,465 7.816 209,281 209,281
Total long-term liabilities 397,850,246 $ 27,816 $ (63,810,026) S 334,068,036 5,690.000 : 328.378,036 A) City of Industry General Obligation Bonds
Amount Due
Balance at Balance at in More
July 1, 2022 Additions Deletions June 30, 2023 Than One Year General obligation bonds:
2010 GO refunding bonds (18,670,000)
2014 GO refunding bonds 18,640,000 (18,640,000)
Total general
obligation bonds 37,310,000 (37,310,000)
2010 General Obligation Refunding Bonds
On August 31, 2010, the City issued $43,340,000 of General Obligation Refunding Bonds (the 2010 GO Refunding Bonds). Proceeds from the 2010 GO Refunding Bonds were used to refund the $27,245,000 2004 GO Refunding Bonds, Series A, and the $29,015,000 2004 GO Refunding Bonds, Series B. These bonds were paid off during the current fiscal year. 2014 General Obligation Refunding Bonds
In May 2014, the City issued $28,985,000 of General Obligation Refunding Bonds, Series 2014 (Federally Taxable) (the 2014 GO Refunding Bonds). Proceeds from the 2014 GO Refunding Bonds, along with other funds, were used to refund the $35,000,000 Taxable General Obligation Bonds, Issue of 2002. In addition to the funds received, the City used approximately $1,764,000 from other funds to fund the redemption of the 2002 bonds.

These bonds were paid off during the current fiscal year. -61-
City of Industry
Notes to Financial Statements
June 30, 2023
11) LONG-TERM LIABILITIES (Continued)
B) City of Industry Sales Tax Revenue Bonds
Balance at Balance at Amount Due
July 1, 2022 Additions Deletions June 30, 2023 in One Year Sales tax research bonds:
refunding bonds, Series A $ 326,125,000 $ (2,130,000) $ 323,995,000 2,200,000 2015 Sales tax revenue
efunding bonds, Series
017 Sales tax refundi
revenue bonds (3,390,000) 14,635,000
Elimination of City bonds
(48,265,000)
Total sales tax revenue bonds $ 344,150,000 $ (5.520,000) $ 338,630,000 2015 Taxable Sales Tax Revenue Refunding Bonds, Series A On December 3, 2015, the City issued $336,570,000 Senior Sales Tax Revenue Refunding Bonds, Series A (Taxable) to: (1) refund its 2005 and 2008 Sales Tax Revenue Bonds, (2) to finance certain improvements and expenditures of the City, (3) purchase a surety for the reserve fund for the bonds, (4) purchase a municipal bond insurance policy for the bonds, and (5) pay certain costs of issuance of the bonds. The 2005 Taxable Sales Tax Revenues Bonds and 2008 Taxable Sales Tax Revenue Bonds were fully redeemed on December 13, 2015.

Principal ranges from $2,200,000 to $21,875,000 maturing annually through January 1, 2051. The bonds bear interest at rates ranging from 3.250% to 5.125%, due semiannually on January 1 and July 1. Debt service requirement to maturity is as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 2,200,000 $ 16,061,913 $ 18,261,913
2025 2,270,000 15,990,412 18,260,412
2026 2,345,000 15,910,963 18,255,963
2027 2,435,000 15,825,956 18,260,956
2028 7,270,000 15,728,556 22,998,556
2029 to 2033 41,205,000 73,781,938 114,986,938
2034 to 2038 51,860,000 63,129,388 114,989,388
2039 to 2043 66,520,000 48,464,306 114,984,306
2044 to 2048 85,410,000 29,578,938 114,988,938
2049 to 2051 62,480,000 6,510,800 68,990,800
Total $ 323,995,000 $ 300,983,170 $ 624,978,170
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City of Industry
Notes to Financial Statements
June 30, 2023
11) LONG-TERM LIABILITIES (Continued)
B) City of Industry Sales Tax Revenue Bonds (Continued) 2015 Taxable Sales Tax Revenue Refunding Bonds, Series B On December 3, 2015, the City issued $51,460,000 Subordinate Sales Tax Revenue Bonds, Series 2015B (Taxable) to finance working capital expenditures and/or project costs.

Principal ranges from $615,000 to $3,905,000 maturing annually through February 1, 2051.

The bonds bear interest at rates ranging from 5.000% to 7.750%, due semiannually on January 1 and July 1.

Debt service requirement to maturity is as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 615,000 $ 3,592,510 $ 4,207,510
2025 645,000 3,561,760 4,206,760
2026 680,000 3,527,898 4,207,898
2027 715,000 3,490,158 4,205,158
2028 755,000 3,448,330 4,203,330
2029 to 2033 4,610,000 17,968,852 22,578,852
2034 to 2038 6,505,000 14,283,734 20,788,734
2039 to 2043 9,330,000 10,406,006 19,736,006
2044 to 2048 13,515,000 7,520,212 21,035,212
2049 to 2051 10,895,000 1,730,577 12,625,577
Total $ 48,265,000 69,530,037 117,795,037
2017 Senior Taxable Sales Tax Revenue Refunding Bonds
On April 11, 2017, the City issued $34,340,000 Senior Sales Tax Revenue Refunding Bonds (Taxable) to: (1) defease its 2010 Sales Tax Revenue Bonds, (2) purchase a surety for the reserve fund for the bonds, (3) purchase a municipal bond insurance policy for the bonds, and (4) pay certain costs of issuance of the bonds.
-63-
City of Industry
Notes to Financial Statements
June 30, 2023
11) LONG-TERM LIABILITIES (Continued)
B) City of Industry Sales Tax Revenue Bonds (Continued) Principal ranges from $3,390,000 to $3,835,000 maturing annually through January 1, 2027.

The bonds bear interest at rates ranging from 2.750% to 3.500%, due semiannually on January 1 and July 1. Debt service requirement to maturity is as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 3,490,000 $ 485,506 3,975,506
2025 3,595,000 376,444 3,971,444
2026 3,715,000 259,606 3,974,606
2027 3,835,000 134,226 3,969,226
Total 14,635,000 1,255,782 15,890,782
Revenue Pledged
The sales tax revenue bonds are secured by sales tax revenues received by the City until the bonds are paid off in fiscal year 2051. Principal and interest payments outstanding at June 30, 2023, on the bonds amounted to $758,663,989. Annual principal and interest payments on the sales tax revenue bonds are expected to require 68% of the sales tax revenues. For the year ended June 30, 2023, total sales tax revenues received to pay for these bonds amounted to $38,090,384. Principal and interest paid on the bonds during the year ended June 30, 2023, amounted to $26,443,642
C) Public Facilities Authority Tax Allocation Revenue Bonds Balance at Amount Du
ulv 1. 2022 Additions Deletions June 30, 2023 in One Yea Direct borrowings:

Tax allocation revenue bonds:
2015 Tax Allocation Revenue
$ 21,145,000 $ (21,145,000)
$ 21,145,000 $ (21,145,000)
-64-
City of Industry
Notes to Financial Statements
June 30, 2023
11) LONG-TERM LIABILITIES (Continued)
C) Public Facilities Authority Tax Allocation Revenue Bonds (Continued) 2015 Tax Allocation Revenue Refunding Bonds, Series A (Project No. 1) On July 1, 2015, the IPFA issued the $239,525,000 Tax Allocation Revenue Refunding Bonds, Series 2015A (Civic-Recreational-Industrial Redevelopment Project No. 1) (Taxable) for the purpose of acquiring the SA to IUDA's Project No. 1 2015 A Bonds, which was issued to defease all IUDA Project No. I's 2002 Tax Allocation Refunding Bonds Series B, 2003 Tax Allocation Bonds, Series A, 2003 Tax Allocation Bonds, Series B, 2003 Subordinate Lien Tax Allocation Refunding Bonds, 2005 Subordinate Lien Tax Allocation Refunding Bonds, 2007 Subordinate Lien Tax Allocation Refunding Bonds, and 2008 Subordinate Lien Tax Allocation Refunding Bonds. The IPFA has funded its debt service bond reserve requirement by purchasing insurance in the amount of $23,952,000. Principal ranges from $1,335,000 to $10,105,000 maturing annually through January 1, 2025. The bonds bear interest at rates ranging from 4.044% to 4.344%, due semiannually on January 1 and July 1. These bonds were paid off during the current fiscal year.

D) Compensated Absences
As of June 30, 2023, compensated absences totaled to $209,281, which will be liquidated by the General Fund
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-65-
City of Industry
Notes to Financial Statements
June 30, 2023
12) SUCCESSOR AGENCY BONDS PAYABLE
A summary of changes in the Successor Agency to IUDA's bonds payables for the year ended June 30, 2023, is as follows:

Balance at Balance at Amount Due
July 1, 2022 -Additions Deletions June 30, 2023 in One Year Direct placements:

Project Area 1:
2015 Tax Allocation Revenue
Refunding Bonds, Series A $ 21,145,000 $ $ (21,145,000) $ - $ Total bons payable $ 21,145,000s _ $ (21,145,000) $ $
2015 Tax Allocation Revenue Refunding Bonds, Series A (Project No. 1) On July 1, 2015, the SA to IUDA issued the $239,525,000 Tax Allocation Revenue Refunding Bonds, Series 2015A (Civic-Recreational-Industrial Redevelopment Project No. 1) (Taxable) for the purpose to defease all IUDA Project No. 1 outstanding 2002 Tax Allocation Refunding Bonds Series B, 2003 Tax Allocation Bonds, Series A, 2003 Tax Allocation Bonds, Series B, 2003 Subordinate Lien Tax Allocation Refunding Bonds, 2005 Subordinate Lien Tax Allocation Refunding Bonds, 2007 Subordinate Lien Tax Allocation Refunding Bonds, and 2008 Subordinate Lien Tax Allocation Refunding Bonds. Principal ranges from $1,335,000 to $10,105,000, maturing annually through January 1, 2025. The bonds bear interest at rates ranging from 4.044% to 4.344%, due semiannually on January 1 and July 1. The bonds were paid off during the current fiscal year.

Prior to the dissolution of the Industry Urban-Development Agency, the IUDA undertook a program to redevelop each Project Area pursuant to the Community Redevelopment Law. The IUDA issued bonds discussed in the note and secured the bonds by a pledge of tax increment revenues allocated and paid to the IUDA pursuant to HSC Section 33670(b). In 1978, the City's voters authorized the City to levy an ad valorem tax (the Property Tax Override) and the City continues to levy the Property Tax Override on taxable properties in the City, including properties within three Project Areas.

Since the Property Tax Override was authorized in 1978, the tax increment revenues allocated and paid to the IUDA before its dissolution in 2012 included a portion of the Property Tax Override. Pursuant to the IUDA bond indentures, the tax increment revenues pledged to the IUDA bonds included the Property Tax Override. Pursuant to the mandate set forth in HSC Section 34175, the pledge of property tax revenues for the IUDA bonds must not be affected and pledged revenues must continue to include the Agency Override Portion. However, the Los Angeles Auditor-Controller in administering the allocation of property taxes pursuant to AB XI 26, is disbursing the Agency Override Portion to the City of Industry, instead of depositing the Agency Override Portion into the Successor Agency's RPTTF fund. -66-
City of Industry
Notes to Financial Statements
June 30, 2023
12) SUCCESSOR AGENCY BONDS PAYABLE (Continued)
In recognition of the above the SA to IUDA has adopted resolution no. SA 2013-10 on September 25, 2013, authorizing the Executive Director to do as follows, if during each six month ROPS period the moneys received by the SA to IUDA from the Los Angeles Auditor- Controller's RPTTF disbursement is insufficient to pay the principal and interest payments with respect to the IUDA bonds coming due during the ROPS period, the Executive Director shall notify the City of the shortfall.

On September 26, 2013, pursuant to resolution no. CC 2013-25, the City has established a segregated fund in the treasury designated the Agency Override Fund and shall deposit all Agency Override Portion received by the City into the Agency Override Fund. Upon notification by the SA to IUDA of the Debt Service Shortfall, the City shall apply the necessary amount (but only to the extent available) from the Agency Override Fund to pay the bond trustee or, to the extent that there is no trustee for any bond issue, the bondholders directly, to cover the Debt Service Shortfall. The City subsequently assigns, and covenants and agrees to transfer to the IPFA and only to the IPFA as and when received by the City, all such override revenues for deposit in the revenue fund, to the extent permitted by law, as consideration to IPFA for refunding all SA to IUDA debts by the IPFA
The SA to IUDA did not receive any RPTTF Funds for the year ended June 30, 2023.

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-67-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN
A) General Information About the Pension Plan
Plan Description
The City contributes to CalPERS, a cost-sharing multiple-employer defined benefit pension plan, for its miscellaneous employees. CaPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. ›alPERS acts as a common investment and administrative agent tor participating publi entities within the State of California. Benefit provisions and all other requirements ar established by State statute and City ordinance. Copies of CaPERS's annual financial report may be obtained from its executive office at 400 P Street, Sacramento, California 95814.

Benefits Provided
CaPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.

The Plans' provisions and benefits in effect as of June 30, 2023, are summarized as follows:

Classic Classic
Tier 1 Tier 2 PEPRA
Benefit formula 2% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years of 5 years of 5 years of service service service
Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 to 63 50 to 63 52 to 67
Monthly benefits, as a
percentage of eligible
compensation 1.426% to 2.418% 1.426% to 2.418% 1.000 to 2.500% Required employee
contribution rates 8.00% 7.00% 7.50%
Required employer
contribution rates:

Normal cost rate 15.90% 10.48% 8.19%
Payment of unfunded liability $88,889 $3,158 $5,207
-68-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
A) General Information About the Pension Plan (Continued) Contributions
Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CaPERS's annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2023 were $388,074. The actual employer payments of $308,625 made to CaPERS by the City during the measurement period ended June 30, 2022 differed from the District's proportionate share of the employer's contributions of $1,577,230 by $1,268,605, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.

B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) The City's net pension liability for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows. -69-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The collective total pension liability was based on the following assumptions:

Miscellaneous
Valuation date June 30, 2021
Measurement date June 30, 2022
Actuarial cost method Entry-age normal cost method
Asset valuation method Fair value of assets
Actuarial assumptions:

Discount rate 6.90%
Inflation 2.30%
Salary increases Varies by entry age and service
Mortality rate table Derived using CaPERS' membership
data for all funds
Post retirement benefit increase The lessor of contract COLA or 2.30% until purchasing power protection
allowance floor of purchasing power
applies, 2.30% there after
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which 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, CaPERS took into account both short- term and long-term market return expectations. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. -70-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) The expected real rates of return by asset class are as follows:

Assumed
Asset
Asset Class Allocation Real Return 1,2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-weighted 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%
Leverage 5.00% -0.59%
Total 100.00%
An expected inflation of 2.30% used for this period
2 Figures are based on the 2021 Asset Liabity Management study Change of Assumptions
Effective with the June 30, 2021, valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CaPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CaPERS Experience Study and Review of Actuarial Assumptions.
-71-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of ampages vil made salary at al, deal steamed aed on mare. assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events
On July 12, 2021, CaPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CaPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from

7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes.

This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CaPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
-72-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Pension Plan Fiduciary Net Position
Information about the pension plan's assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CaPERS' audited financial statements, which are publicly available reports that can be obtained at CaPERS' website, at www.calpers.ca.gov. The plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.

Proportionate Share of Net Pension Liability
The following table shows the City's proportionate share of the Plan's net pension liability over the measurement period.

Proportionate share of Miscellaneous Plan
Total Fiduciary Net Pension
Pension Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2021 (VD) 31,643,882 $ 35,233,713 $ (3,589,831) Balance at: 6/30/2022 (MD) 32,612,426 30,406,905 2,205,521 Net change $ (968,544) $ 4,826,808 $ (5,795,352)
The City's proportion of the net pension liability was determined by CaPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CaPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CaPERS' website, at www.calpers.ca.gov. The City's proportionate share of the net pension liability for the miscellaneous Plan as of the Miscellaneous
Proportion - June 30, 2021 -0.18906%
Proportion - June 30, 2022 0.04713%
Change - increase 0.23619%
-73-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred 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 pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:

Current
Discount Rate Discount Rate Discount Rate
- 1% (5.90%) (6.90%) +1% (7.90%)
Net pension liability/(asset) 6,651,183 2,205,521 (1,452,155) Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources 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:

Net difference between 5-year straight-line amortization projected and actual earnings
on pension plan investments
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that
are provided with benefits (active, inactive and retired) as of the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C). -74-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) The EARSL for PERF C for the measurement period ending June 30, 2022 is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (the total number of participants:
active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.

As of the start of the measurement period (July 1, 2021), the City's net pension liability/(asset) was ($3,589,831). For the measurement period ending June 30, 2022 (the measurement date), the City incurred a pension expense of $5,492,758.

As of June 30, 2023, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Deferred
Outflows Inflows
of Re200s of Resources
Changes in assumptions 226,002 -
Differences between actual and expected
14,627
Net differences between projected and
actual earnings on Plan investments 403,993
Change in proportionate share of contributions 1,656,000 Change in employers proportion 4,065,369
Pension contributions subsequent to
388,074
$ 5,098,065 $ 1.656,000
-75-
City of Industry
Notes to Financial Statements
June 30, 2023
13) DEFINED BENEFIT PENSION PLAN (Continued)
B) Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) The amount of $388,074 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Fiscal Deferred
Year Ending Outflows/(Inflows)
June 30 of Resources
2024 $ 1,007,829
2025 1,086,520
2026 712,547
2027 247,095
2028
Thereafter
Total $ 3.053.991
C) Payable to the Pension Plan
As of June 30, 2023, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2023.
14) DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. Participation in the plan is optional. The deferred ompensation is not available to employees until termination, retirement, death or al inforeseeable emergency. All amounts of compensation deferred under the plan, all propert and rights purchased with those amounts, and all income attributable to those amounts, property or rights (until paid or made available to the employees or other beneficiary) are solely the property and rights of the participant and are not subject to the claims of the City's general creditors.

Investments are managed by the plan's trustee under one of several investment options, or a combination thereof. The choice of the investment options is made by the participants. Plan assets are held in trust for the exclusive benefit of participant and their beneficiaries; and therefore, are not included in the accompanying financial statements. As of June 30, 2023, the plan had investments in the amount of $2,377,329.
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City of Industry
Notes to Financial Statements
June 30, 2023
15) OTHER POSTEMPLOYMENT BENEFITS
A) General Information about the OPEB Plan
Plan Description
The City provides other postemployment benefits (OPEB) through the California Employer's Retiree Benefit Trust Fund (CERBT), an agent multiple-employer defined benefit plan to provide postemployment medical benefits. Specifically, the City offers postretirement medical, dental and vision benefits to all employees who retire from the City. The plan does not provide a publicly available financial report.

Benefits provided by the plan are as follows:

General
Employees Management
Benefit types provided Medical, dental and vision Medical, dental and vision Duration of benefits Lifetime Lifetime
Required services 15 years** 15 years*
50 50
Dependent coverage Yes Yes
City contribution percentage 100.00% 100.00%
City cap None None
* Elected and appointed officials qualify for City-paid coverage after eight or more years. *25 years for those hired April 26, 1990 to June 30, 2012; 10 years for those hired prior to April 26, Employees Covered by Benefit Term
At the June 30, 2021, valuation date, the following employees were covered by the benefit term:

Active employees 27
Inactive employees receiving benefits 29
Total 56
-77-
City of Industry
Notes to Financial Statements
June 30, 2023
15) OTHER POSTEMPLOYMENT BENEFITS (Continued)
A) General Information about the OPEB Plan
Contribution
The obligation of the City to contribute to the plan is established and may be amended by the City Council. Employees are not required to contribute to the plan.

B) Net OPEB Liability (Asset)
The City's net OPEB liability (asset) was measured as of June 30, 2022, and the total OPEB liability used to calculate the net OPEB liability (asset) was determined by an actuarial valuation as of June 30, 2021.

Actuarial Assumptions
Total OPEB liability in the June 30, 2021, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified.

Actuarial cost method Entry age actuarial cost method
Actuarial assumptions:

Inflation 2.50%
Discount rate 6.75%
Healthcare cost trend 4.00%
Payroll increase 2.75%
Mortality rate table 2017 CaPERS mortality for
miscellaneous and school employees
Retirement rate:

Hired before January 1, 2013 2017 CaIPERS 2.7% @ 55 rates for miscellaneous employees
Hired before December 31, 2012 2017 CaPERS 2.0% @ 62 rates for miscellaneous employees
Service requirement:

General employees:

Hired before April 26, 1990 100% at 10 years of service Hired April 26, 1990 to June 30, 2012 100% at 25 years of service Hired July 1, 2012 or Later 100% at 15 years of service Elected and appointed officials 100% at 8 years of service Management 100% at 15 years of service
Participation rate:
< 65 non-Medicare participation % at 100%
> 65 Medicare participation % at 100%
Turnover 2009 CaPERS turnover for
miscellaneous employees
-78-
City of Industry
Notes to Financial Statements
June 30, 2023
15) OTHER POSTEMPLOYMENT BENEFITS (Continued)
B) Net OPEB Liability (Asset) (Continued)
Discount Rate
The discount rate of 6.75% was used in the valuation. It was assumed that contributions would be sufficient to fully fund the obligation over a period not to exceed 30 years. The City used historic 27-year real rates of return for each asset class along with the assumed long- term inflation assumption to set the discount rate. The City offset the expected investment return by investment expenses of 25 basis points. The following is the assumed asset allocation and assumed rate of return:

Percentage Assumed
Asset Class of Portfolio Gross Return
All equities 59.000% 7.545%
All fixed income 25.000% 4.250%
Real estate investment trusts 8.000% 7.250%
All commodities 3.000% 7.545%
Treasury Inflation Protection Securities (TIPS) 5.000% 3.000% 100.000%
The City looked at rolling periods of time for all asset classes in combination to appropriately reflect correlation between asset classes. That means that the average returns for any asset class don't necessarily reflect the averages over time individually, but reflect the return for the asset class for the portfolio average. The City used geometric means.

C) Change in the Net OPEB Liability (Asset)
Increase (Decrease)
- Net OPEB
Total Plan Fiduciary
OPEB Liability Net Position Liability (Asset)
Balance at June 30, 2021
(measurement date) $ 8,305,982 $ 13,788.161 $ (5,482,179) Changes recognized for
the measurement period:

Service cost 292,496 292,496
Interest on total OPEB liability 552,005 (1.38.972) 2,390,977 Change in assumptions
Difference between expected
and actual experience 46,166 46,166
Contributions-employer 13,631 (13,631)
Investment income
Administrative expenses (3,509) 3,509
Benefit payments (594,910) (594,910)
Net change during measurement
period 2021 to 2022 295,757 (2,423,760) 2,719,517
-
Balance at June 30, 2022
(measurement date) 8,601,739 $ 11,364,401 $ (2,762,662) -79-
City of Industry
Notes to Financial Statements
June 30, 2023
15) OTHER POSTEMPLOYMENT BENEFITS (Continued)
C) Change in the Net OPEB Liability (Asset) (Continued) Sensitivity of the Net OPEB Asset to Changes in the Discount Rate The following presents the net OPEB asset of the City, as well as what the City's net OPEB asset would be if it were calculated using a discount rate that is one percentage point lower (6.0%) or one percentage point higher (8.0%) than the current discount rate:

Current
Discount Rate Discount Rate Discount Rate
-1% (5.75%) (6.75%) +1% (7.75%)
Net OPEB (asset) $ (1,800,298) $ (2,762,662) $ (3,569,518) Sensitivity of the Net OPEB Asset to Changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability (asset) of the City, as well as what the City's net OPEB liability (asset) would be if it were calculated using healthcare cost trend rates that are one percentage point lower (4.0% decreasing to 3.0%) or one percentage point higher (4.0% increasing to 5.0%) than the current healthcare cost trend rates:

Healthcare Cost Current Healthcare Cost
Trend Rate Healthcare Trend Rate
1% lower Trend Rate 1% higher
Net OPEB asset (3,728,899) $ (2,762,662) $ (1,596,014)
D) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2023, the City recognized OPEB expense in the amount of ($130,775). As of June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from following sources:

Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between actual and expected
experience $ 713,259 $ 860,973
Change in assumptions 388,132 -
Net differences between projected and
actual earnings on Plan investments 948,281
Total $ 2,049,672 860,973
-80-
City of Industry
Notes to Financial Statements
June 30, 2023
15) OTHER POSTEMPLOYMENT BENEFITS (Continued)
D) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
The amounts reported as deferred outflows and deferred inflows of resources related to She amines reported dered unloves a detered
Deferred
Year Ending Outflows/(Inflows)
June 30, of Resources
2024 (51,551)
2025 146,543
2026 386,990
2027 702,521
2028 4,196
Thereafter
Total 1,188,699
16) SELF-INSURANCE PLAN
The City established a Self-insurance Plan (the Plan) to pay for liability claims against the City and its component units. The Plan is administered by an insurance committee which is responsible for approving all claims of $25,000 or less and for making provision to have sufficient funds available to pay approved claims and legal and investigative expenses. The insurance committee has vested this responsibility to the City Manager. Potential liability for liabilities of the general fund in the governmental balance sheet. Based on information presently available, the City believes that there are substantial defenses to such litigation and disputes and that, in any event, the ultimate liability, if any, resulting there from will not have a material effect on the financial position of the City and its component units.

Changes in the liability since June 30, 2021, resulted from the following:

Liability
Liability at June 30, 2021 728,314
Estimates during the year 36,608
Claim payments during the year
Liability at June 30, 2022 764,922
Estimates during the yea 1,141,474
Claim payments during the yea
Liability at June 30, 2023 $ 1,906,396
-81-
City of Industry
Notes to Financial Statements
June 30, 2023
17) COMMITMENTS AND CONTINGENCIES
San Gabriel Valley Water and Power, LLC
On or about May 17, 2016, the City entered into the Lease with SGVWP. The Lease was ratified by the City Council on or about October 12, 2017. Among the Lease's various provisions, the City provided SGVWP with a $20 million loan (Note 4) for SGVWP to analyze the feasibility of constructing a "solar farm" and other necessary public infrastructure improvements. The Lease potentially included two separate and adjacent properties. Under Section 25.3 of the Lease, repayment on the loan would be triggered "upon commencement of construction of the first project pursuant to the Lease." In January 2018, SGVWP failed to comply with certain material provisions of the Lease. The City gave SGVWP written notice of its obligations under the Lease and requested immediate compliance. On or about May 23, 2018, under Section 17.2.1 of the , because SGVWP had failed to cure its default, the City informed SGVWP that the lease was null and void and of no further force or effect. During the year ended June 30, 2020, the City filed the lawsuit against SGVWP. At this time, given the termination of the Lease and the litigation, it is unknown whether SGVWP will repay the loan. 18) JOINT GOVERNED ORGANIZATION - TRES HERMANOS CONSERVATION AUTHORITY The Tres Hermanos Ranch (the Ranch) consists of approximately 2,445 acres of largely undeveloped property. Approximately 1,750 acres are within the City of Chino Hills (Chino Hills) and 695 acres are within the City of Diamond Bar (Diamond Bar). The Ranch was acquired by the IUDA in 1978 and owned by SA to IUDA due to the dissolution of the IUDA. On January 19, 1999, Chino Hills and Diamond Bar entered into a certain Joint Exercise of Powers (1999 Agreement) for the purpose to coordinate the overall development and conservation of the Ranch. The City was made an ex-officio nonvoting member in 1999. As previously discussed in Note 4B, the City entered into a master lease agreement with SGVWP for the development of the solar project located at the Ranch with the plan to purchase the Ranch from SA to IUDA.

Litigation was brought against the development of the solar project by Chino Hills and Diamond Bar. The three cities later entered into a settlement agreement dated February 4, 2019, where:
(1) Chino Hills and Diamond Bar collectively contribute 10% of the City's $41,650,000 purchase price for the Ranch from SA to IUDA, (2) preserve the Ranch as environmental, scientific, educational, and recreational resources, and (3) transfer the ownership of the Ranch to a re- constituted Tres Hermanos Conservation Authority (the Authority).

On February 6, 2019, the three cities entered into Amended and Restated Tres Hermanos Conservation Authority Joint Powers Agreement (the Agreement) which superseded the 1999 Agreement in its entirety. The general purpose of the Authority is to coordinate the overall conservation, use and potential improvement of the Ranch through collaboration by its members. The board consist of seven voting directors where three appointed by the City and two each appointed by Chino Hills and Diamond Bar. Each member city pays an equal one-third share of the cost for the reasonable annual and recurring maintenance of the Ranch. Any costs over the annual maintenance cost will be allocated and invoiced separately to the member cities based on the benefits provided.
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City of Industry
lotes to rinancial statement
lune 30. 202
18) JOINT GOVERNED ORGANIZATION - TRES HERMANOS CONSERVATION AUTHORITY (Continued)
In addition, the City is responsible for a onetime remediation work for the Arnold Reservoir dam.

After the completion of the one-time remediation work, the City will not be responsible for any future repair, maintenance or other work to the Arnold Reservoir dam.

In February 2019, Chino Hills and Diamond Bar collectively contributed $4, 165,000, and the City contributed the remaining $37,485,000 toward the purchase of the Ranch for the Authority. The financial statement of the Authority can be obtained at 14000 City Center Drive, Chino Hills, California.
19) TRANSACTIONS WITH RELATED PARTIES
The related party transactions of the City are summarized as follows:

Expenditures
Year Ended
Service Provided by Vendor Related Parties June 30, 2023 Landscaping services City Council Member 447,556
Amount for the
Other Related Year Ended
Party Transactions Related Parties June 30, 2023
Tenant of the City's (Housing City Council Members,
Authority) properties Commissioners, and
Board Members 51,095
-83-
City of Industry
Notes to Financial Statements
June 30, 2023
20) EXCESS OF EXPENDITURES OVER APPROPRIATIONS
During the year ended June 30, 2023, expenditures in excess of appropriations are as follows:

Appropriation Expenditures Variance
General Fund:

Support services 5,077,284 5,631,104 (553,820)
Community development 2,085,000 6,327,188 (4,242,188)
Community services 8,180,209 8,875,345 (695,136)
Debt Service Fund:

General administration 16,700 17,200 (500)
Interest and fiscal charges 20,962,000 21,218,546 (256,546) Industry Public Facilities
Authority Debt Service Fund:

Interest and fiscal charges 5,459,900 6,785,339 (1,325,439) Measure R
Special Revenue Fund:

Public works 6,000 6,980 (980)
Proposition C Sales Tax
Special Revenue Fund:

Public works 8,000 9,310 (1,310)
Measure M
Special Revenue Fund:

Public works 7,000 7,896 (896)
-84-
City of Industry
Required Supplementary Information
Schedule of the City's Proportional Share of the Plan's Net Pension Liability and Related Ratios (Unaudited)
Last Ten Years*
California Public Employees' Retirement System
(CalPERS) Miscellaneous Classic Plan
Measurement period June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Reporting period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Plan's proportion of the net pension liability (asset) 0.047134% -0. 189058% 0.006036% 0.000381% -0.001493% Plan's proportionate share of the net pension
liability (asset) $ 2,205,521 $ (3,589,831) $ 656,759 $ 39,088 $ (143,883) Plan's covered payroll $ 2,840,527 $ 2,615,700 $ 2,376,701 $ 1,730,895 $ 1,680,481 Plan's proportionate share of the net pension
liability (asset) as a percentage of its
covered payroll 77.64% -137.24% 27.63% 2.26% -8.56%
Plan's proportionate share of the fiduciary net
position as a percentage of the Plan's total
pension liability 93.24% 111.34% 97.84% 99.87% 100.49%
Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30 2015 to June 30 2016:

GASB 68, paragraph 68, states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014, measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015, measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30 2016 to June 30 2017:

There were no changes in assumptions.

From fiscal year June 30 2017 to June 30 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30 2018 to June 30 2019:

There were no significant changes in assumptions.

From fiscal year June 30 2019 to June 30 2020:

There were no changes in assumptions.

From fiscal year June 30 2020 to June 30 2021:

There were no changes in assumptions.

From fiscal year June 30 2021 to June 30 2022:

There were no changes in assumptions.

From fiscal year June 30 2022 to June 30 2023:

Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%.

In determining the long-term expected rate of return, CaPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CaPERS Experience Study and Review of Actuarial Assumptions. *Historical information is presented only for measurement periods for which GASB 68 is applicable. Additional years of information will be presented as they become available.
-85-
City of Industry
Required Supplementary Information
Schedule of the City's Proportional Share of the Plan's Net Pension Liability and Related Ratios (Unaudited) (Continued)
Last Ten Years*
California Public Employees' Retirement System
(CaPERS) Miscellaneous Classic Plan
Measurement period June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Reporting period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Plan's proportion of the net pension liability (asset) 0.090690% 0.090886% 0.092292% 0.076870% Plan's proportionate share of the net pension
liability (asset) $ 8,994,206 $ 7,864,480 $ 6,331,815 $ 4,782,916 Plan's covered payroll $ 2,072,156 1,936,492 $ 1,988,262 $ 1,779,595 Plan's proportionate share of the net pension
liability (asset) as a percentage of its
covered payroll 434.05% 406.12% 318.46% 268.76%
Plan's proportionate share of the fiduciary net
position as a percentage of the Plan's total
pension liability 69.70% 70.65% 77.21% 83.03%
-86-
City of Industry
Required Supplementary Information
Schedule of Contributions - Pension (Unaudited)
Last Ten Years
California Public Employees' Retirement System
(CaPERS) Miscellaneous Classic Plan
Fiscal Year Ended June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Actuarially determined contribution $ 388,074 $ 308,625 $ 291,851 245,590 $ 195,741 Contribution in rotion to the actuataly (308,625) (245,590) (388,074) (291,851) (195,741)
Contribution Deficiency (Excess) $ $ $ $
Covered payroll $ 3,071,627 $ 2,840,527 $ 2,615,700 $ 2,376,701 $ 1,730,895 Contributions as a percentage of covered payroll 12.63% 10.87% 11.16% 10.33% 11.31% Notes to Schedule:

Valuation date June 30, 2021 June 30,2020 June 30, 2019 June 30, 2018 June 30, 2017.

Methods and assumptions used to determine
contribution rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (a) (a) (a) (a) (a)
Asset valuation method Fair value Fair value Fair value Fair value Fair value Inflation 2.500% 2.500% 2.500% 2.625% 2.750%
Salary increases (b) (b) (b) (b) (b)
Investment rate of return 7.15% (C) 7.15% (c) 7.65% (c) 7.65% (c) 7.65% (C) Retirement age (d) (d) (d)
Mortality (e) (e) (e)
(a) Level percentage of payroll, closed
(b) Depending on age, service, and type of employment
(c) Net of pension plan investment expense, including inflation (d) 50 to 67 years old
(e) Mortality assumptions are based on mortality rates resulting from the most recent CaPERS Experience Study adopted by the CaPERS board. -87-
City of Industry
Required Supplementary Information
Schedule of Contributions - Pension (Unaudited) (Continued) Last Ten Years
California Public Employees' Retirement System
(CaPERS) Miscellaneous Classic Plan
Fiscal Year Ended June 30, 2018 June 30, 2017 June 30, 2016 • June 30,2015 June 30. 2014 Actuarially determined contribution $ 640,586 $ 567,355 $ 534,918 $ 255,850 $ 303,098 Contribution i robation to the actuaily (9.206.926) (567,355) (534,918) (255,850) Contribution Deficiency (Excess) $ (8,566,340)
Covered payroll $ 1,680,481 2,072,156 $ 1,936,492 $ 1,988,262 $ 1,779,595 Contributions as a percentage of covered payroll 38.12% 27.38% 27.62% 12.87% 17.03% Notes to Schedule:

Valuation date June 30, 2016 June 30,2015 June 30, 2014 June 30, 2013 June 30, 2012 Methods and assumptions used to determine
contribution rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (a) (a) (a) (a) (a)
Asset valuation method Fair value Fair value Fair value 15 Year 15 Year Smoothed Smoothed
Market Method Market Method
Inflation 2.750% 2.750% 2.750% 2.750% 2.750%
Salary increases (b) (b) (b)

7.65% (c) 7.50% (c) 7.50% (c) 7.50% (г) 7.50% (г)
Investment rate of return
Retirement age (d) (d) (d)
Mortality (e) (e) (e) (e) (e)
(a) Level percentage of payroll, closed
(b) Depending on age, service, and type of employment
(c) Net of pension plan investment expense, including inflation (d) 50 to 67 years old
(e) Mortality assumplions are based on mortality rates resulting from the most recent CaPERS Experience Study adopted by the CaPERS board. -88-
City of Industry
Required Supplementary Information
Schedule of Changes Net Other Postemployment Benefits Liability (Asset) and Related Ratios (Unaudited)
Last Ten Years*
Measurement Period Ended
June 30, 2022 June 30, 2021 une 30, 2020 June 30, 201 June 30, 2018 June 30. 2017 Reporting period _June 30, 2023 June 30,2022 June 30, 2021 June 30, 20: June 30, 2019 June 30, 2018 Total OPEB liability:

Service cos 292,496 228,121 222,016 $ 268,372 261,189 254,199 Interest on total OPEB liability 552,005 453,854 438,946 638,477 619,722 602,445 Changes in assumptions 609,924
Differences between expected and
actual experience 46,166 975,729 105,870 (3,185,366) 95,803 Changes in benefits (653,626)
Benefit payments (594,910) (560,106) (550,184) (825,116) (579,992) Actual minus expected benefit payments 171,949 95,80 203,018 Net change in Total Pension Liability 295,757 1.707,522 216,648 (2,931,684) 00,91! Total pension liability, beginning of year 8,305,982 6,598,460 6,381,812 9,313,496 9,012,577 8,809,558 Total OPEB liability, end of year 8,601,739 8,305,982 6,598,460 6,381,812 9,313,496 9.012,577 OPEB fiduciary net position:

Investment income (1,838,972) 3,120,564 401,157 715,105 904,934 1,136514 Contributions - employers 13,631 31,285
(594,910) (560,106) (550,184) (825,116) (579,992) (653,626) Benefit payments
Administrative expenses (3,509) (4,270) (5,586) (2,471) (20,767) (9,512) Other 2,09
Net change in OPEB fiduciary net position (2,423,760) 2,587,473 (154,613) (112,482) 306,26 473,476 Total fiduciary net position, beginning of year 13,788,161 11,200,688 11,355.301 11,467,783 11,161,517 10,688,041 Total fiduciary net position, end of year (a) 11,364.401 13,788,161 11,200,688 11,355,301 11.467,783 11,161.517 Net OPEB asset $ (2.762,662) § (5,482,179) (4,602,228) (4.973,489) $ (2,154,287) $ (2,148.940) Plan's fiduciary net position as a percentage of
the total OPEB asset 132.12% 166.00% 169.75% 177.93% 123.13% 123.84% Covered-employee payroll $ 2,754,964 2,615,700 $ 2,376,701 $ 1,730,895 1,680,481 $ 2,072,156 Net OPEB asset as a percentage of
covered-employee payroll 100.28% 209.59% 193.64% 287.34% 128.19% 103.71% Notes to schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30 2017 to June 30 2018:

There were no changes in assumptions.

From fiscal year June 30 2018 to June 30 2019:

There were no changes in assumptions.

From fiscal year June 30 2019 to June 30 2020:

There were no changes in assumptions.

From fiscal year June 30 2020 to June 30 2021:

There were no changes in assumptions.

From fiscal year June 30 2021 to June 30 2022:

There were no changes in assumptions.

From fiscal year June 30 2022 to June 30 2023:

There were no changes in assumptions.
*Historical information is presented only for measurement periods for which GASB 68 is applicable. Additional years of information will be presented as they become available. -89-
City of Industry
Required Supplementary Information
Budgetary Comparison Schedule - General Fund (Unaudited) For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Taxes 53,179,000 $ 53,279,000 $ 51,369,319 $ (1,909,681) 329,000 329,000 289,861 (39,139)
Charges for services 400,000 400,000 290,511 (109,489)
Fines foretires, and penalies 1,977,000 1,982,000 2,189,604 207,604 367,000 367,000 300,996 (66,004)
Use of money and property 7,475,700 13,675,700 24,190,693 10,514,993 1,888,000 1,888,000 2,396,367 508,367
Total Revenues 65,615,700 71,920,700 81.027.351 9.106.651

EXPENDITURES
Current:

Legislative 934,000 934,000 870,077 63,923
General administration 8,725,900 13,023,900 5,831,027 7,192,873 Support services 4,040,000 5,077,284 5,631,104 (553,820) Community development 2,085,000 2,085,000 6,327,188 (4,242,188) Community services 8,117,000 8,180,209 8,875,345 (695,136) Public safety 13,245,000 13,260,000 13,153,974 106,026
Public works 15,178,000 14,568,000 14,187,850 380,150
Total Expenditures 52,324,900 57.128,393 54,876,565 2,251,828 Excess (Deficiency) of Revenues
Over (Under) Expenditures 13,290,800 14.792,307 26,150,786 11,358,479

OTHER FINANCING USES
Transfers in 5,842,000 40,242,000 18,438,800 (21,803,200) Transfers out (44,199,000) (44,670,000) (18,873,109) 25,796,891 Proceeds from sale of capital assets 26,800 26,800
Total Other Financing Uses (38,357,000) (4,428,000) (407,509) 4,020,491 Net Change in Fund Balance (25,066,200) 10,364,307 25,743,277 15,378,970

FUND BALANCE (DEFICIT)
Beginning of year 673,183,162 673,183,162 673,183,162
End of year $ 648,116,962 $ 683,547,469 $ 698,926,439 15,378,970 -90-
City of Industry
Note to Required Supplementary Information
For the Year Ended June 30, 2023
The City Council adopts an annual budget, submitted by the City Manager prior to June 30. The appropriated budget is prepared by fund, function and department. All annual appropriations lapse at the end of the fiscal year. The City Council has the legal authority to amend the budget at any time during the fiscal year. There were no amendments to the budget during the year.

The City Manager has the authority to make adjustments to the operating budget within a fund Transfers of operating budgets between funds or from appropriated reserve accounts, use of unappropriated fund balances, cancellation of appropriation and all changes in capital improvement project budgets require the approval of the City Council. ne annual budget Is prepared on a basis consistent with generally accepted accountin Revenue and rinciples and is adopted for all governmental type funds other than Measure W Specia The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) for the operating budget is at the fund level.

Budgets were adopted for all funds except for Proposition C-AQMD Grant Special Revenue Fund
Excess Expenditures over Appropriations
_Appropriation Expenditures Variance
General Fund:

Support services $ 5,077,284 $ 5,631,104 $ (553,820)
Community development 2,085,000 6,327,188 (4,242,188)
Community services 8,180,209 8,875,345 (695,136)
_91-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
City Capital Projects Fund - Major Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental 2,941,000 2,941,000 1,931,808 (1,009,192) Use of money and property 3,614,116 3,614,116
Other revenue 1,112,000 1.112,000 3.147,402 (1,264,598) Total Revenues 7,353.000 7,353,000 8,693,326 1,340,326

EXPENDITURES
Current:

Community Services 95,000 95,000 95,000
Capital outlay 56,970,000 51.967,500 19.512,953 32,454,547 Total Expenditures 57,065,000 52,062,500 19,512,953 32,549,547 Exer (Deter) Expert Revenues (49,712,000) (44,709,500) (10,819,627) 33,889,873

OTHER FINANCING SOURCES (USES)
Transfers in 22,908,726 43,960,114 21,051,388
Transfers out : (22,356,090) (22.356,090)
Total Other Financing Sources (Uses) 22,908,726 21,604,024 (1.304,702) Net Change in Fund Balance (49,712,000) (21,800,774) 10,784,397 32,585,171

FUND BALANCE (DEFICIT)
Beginning of year 109,519,580 109,519,580 109,519,580
End of year $ 59,807,580 $ 87.718,806 $ 120,303,977 $ 32,585,171 -92-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
City Debt Service Fund - Major Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Taxes $ $ $ 1,503,005 1,503,005
Use of money and property 515,000 1,700,799 1,185,799
Total Revenues 515,000 3,203,804 2,688,804

EXPENDITURES
Current:

General administration 16,700 16,700 17,200 (500)
Debt service: 43.415,000
Principal 43,415,000 43,415,000
Interest and fiscal charges 20,962,000 20,962,000 21,218.546 (256.546) Total Expenditures 64,393,700 64,393,700 64.650,746 (257,046) (64,393,700) (63,878,700) (61.446,942) 2,431,758

OTHER FINANCING SOURCES (USES)
Transfers in 39,500,000 39,500,000 23,224,789 (16,275,211) Transfers out (5,842,000) (40,242,000) (985,029) 39,256,971 Total Other Financing Sources (Uses) 33,658,000 (742,000) 22,239,760 22.981,760 Net Change in Fund Balance (30,735,700) (64,620,700) (39,207,182) 25,413,518

FUND BALANCE (DEFICIT)
Beginning of year 89,398,421 89,398,421 89,398,421
End of year $ 58.662.721 $ 24.777.721 50,191,239 25.413,518 -93-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Tax Override Debt Service Fund - Major Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Taxes $ 20,707,000 $ 20,707,000 $ 5,345,065 $ (15,361,935) Total Revenues 20,707,000 20,707,000 5,345,065 (15,361,935)

OTHER FINANCING SOURCES (USES)
Transfers in 21,578 21,578
Transfers out (20.707,000) (20.707,000) (8,173,317) 12,533,683 Total Other Financing Sources (Uses) (20,707,000) (20,707,000) (8,151,739) 12,555,261 Net Change in Fund Balance (2,806,674) (2,806,674)

FUND BALANCE (DEFICIT)
Beginning of year 2,808,835 2,808,835 2.808,835
End of year 2.808,835 2,808,835 $ 2,161 $ (2,806,674)
-94-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Industry Public Facilities Authority Debt Service Fund - Major Fund For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Use of money and property $ 5,715,850 $ 5,715,850 $ 1,781,958 $ (3,933,892) Other revenues 250,623 250,623
Total Revenues 5,715,850 5,715,850 2,032,581 (3,683,269)

EXPENDITURES
Debt service:

Principal 21,730,000 21,730,000 21,145,000 585,000
Interest and fiscal charges 5,459,900 5.459,900 6,785,339 (1,325,439) Total Expenditures 27,189,900 27,189,900 27.930,339 (740,439) Delier prevenues (21,474,050) (21,474,050) (25,897,758) (4,423,708)

OTHER FINANCING SOURCES (USES)
Transfers in 20,707,000 20,707,000 10,740 (20,696,260)
Transfers out (22,908.726) (42,974,573) (20,065,847)
Total Other Financing Sources (Uses) 20,707,000 (2,201,726) (42,963,833) (40,762,107) Net Change in Fund Balance (767,050) (23,675,776) (68,861,591) (45,185,815)

FUND BALANCE (DEFICIT)
Beginning of year 61.967,136 61,967,136 61,967,136
End of year $ 61,200.086 $ 38,291,360 (6,894,455) . S (45.185.815) -95-
City of Industry
Supplementary Information
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
State easure Proposition A - Proposition C roposition C Gas Tax cal Retu Sales Ta: QMD Gran
ASSETS
Cash $ 65,321 11,065 $
Investments
Accounts receivable, net 7,230 - 471
Accrued interest 284
Total Assets 7,230 65,605 11,065 471

LIABILITIES AND FUND BALANCES

LIABILITIES
counts payabl $
Due to other fund :

Total Liabilities 2,156

FUND BALANCES (DEFICIT)
Restricted for transportation and roads 7,230 8,909 471 Unassigned (13,173) -
Total Fund Balances 7,230 (13,173) 8,909 471
Total Liabilities and Fund Balances $ 7,230 $ $ 65,605 $ 11,065 471 (continued)
-96-
City of Industry
Supplementary Information
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
Authority
CARB Capital
Measure M Measure W Grant Projects Fund Total
ASSETS
Cash $ 1,510,678 328,213 253,063 $ 2,168,340
Investments 843,876 789,393 85,283 1,718,552
Accounts receivable, net 275,418 283,119
Accrued interest 6.198 670 7,152
Total Assets $ $ 2,354,554 $ 1,123,804 614.434 $ 4,177.163

LIABILITIES AND FUND BALANCES

LIABILITIES
Accounts payable $ : 80,267 $ $ 407,117 $ 520,743
Due to other funds 362,331 149,085 1,035 560,026
Total Liabilities 442,598 149,085 408,152 1,080,769

FUND BALANCES (DEFICIT)
Restricted for transportation and roads 1,911,956 974,719 2,903,285 Unassigned 206.282 193,109
Total Fund Balances 1.911,956 974,719 206,282 3.096,394 Total Liabilities and Fund Balances $ 2,354,554 1,123,804 614,434 4,177,163 (concluded)
-97-
City of Industry
Supplementary Information
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
State Measure R Proposition A - Proposition C- Proposition C- Gas Tax Local Return Sales Tax Sales Tax AQMD Grants

REVENUES
Taxes $ 6,980 $ $ $
Intergovernmental 23,663 11,225 9,310
Use of money and property : 1,155
Other
Total Revenues 23,663 6,980 12,380 9,310

EXPENDITURES
Current:

Public works 23,663 6,980 282,646 9,310
Total Expenditures 23,663 6,980 282,646 9,310
Excess (Deficiency) of Revenues
Over (Under) Expenditures - (270,266)

OTHER FINANCING SOURCES (USES)
Transfers in 764 764
Transfers out : (764) (764) :

Total Other Financing Sources (Uses)
Net Change in Fund Balances - (270,266) -

FUND BALANCES (DEFICIT)
Beginning of year 7,230 257,093 8,909 471
End of year 7,230 $ $ (13,173) $ 8,909 $ 471
(continued)
-98-
City of Industry
Supplementary Information
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
Authority
CARB Capital
Measure M Measure W Grant Projects Fund Total

REVENUES
Taxes $ $ $ : 6,980
Intergovernmental 7.896 1.641.223 312,434 2,005,751
Use of money and property 22,095 15,591 1,967 40,808
Other 418 418
Total Revenues 7,896 1,663,318 328,025 2,385 2,053,957

EXPENDITURES
Current:

Public works 7,896 1,180,628 149,085 2.404,739 4,064,947 Total Expenditures 7,896 1,180,628 149,085 2,404,739 4,064,947 Excess (Deficiency) of Revenues
Over (Under) Expenditures 482,690 178,940 (2.402,354) (2,010,990)

OTHER FINANCING SOURCES (USES)
Transfers in : 780,000 5,948,806 6,730,334
Transfers out : (780,000) (3,441,624) (4,223,152)
Total Other Financing Sources (Uses) 2,507,182 2,507,182 Net Change in Fund Balances - 482,690 178,940 104,828 496,192

JND BALANCES (DEFIC
eainnina of ve 1,429,266 795,779 101,454 2,600,202
End of year $ $ 1,911,956 974,719 $ 206,282 3,096,394
(concluded)
-99-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Gas Tax Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental $ 26,000 $ 26,000 $ 23,663 $ (2,337)
Total Revenues 26,000 26,000 23,663 (2,337)

EXPENDITURES
Current:

Public works 26,000 26,000 23,663 2,337
Total Expenditures 26,000 26,000 23,663 2,337
Excess of Revenues
Over Expenditures - - -

FUND BALANCE (DEFICIT)
Beginning of year 7,230 7,230 7,230 -
End of year $ 7,230 $ 7,230 $ 7,230 $
-100-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Measure R Local Return Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Taxes $ 6,000 $ 6,000 $ 6,980 $ 980
Total Revenues 6,000 6,000 6,980 980

EXPENDITURES
Current:

Public works 6,000 6,000 6,980 (980)
Total Expenditures 6,000 6,000 6,980 (980)
Excess of Revenues
Over Expenditures - - - -

FUND BALANCE (DEFICIT)
Beginning of year
End of year $ $ $ $
-101-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Proposition A Sales Tax Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental $ 312,000 312,000 $ 11,225 $ (300,775) Use of money and property 2,000 2,000 1,155 (845)
Total Revenues 314,000 314,000 12,380 (301,620)

EXPENDITURES
Current:

Public works 286,000 286,000 282,646 3,354
Total Expenditures 286,000 286,000 282,646 3,354
ExeS (Defer) Expor Revenues 28,000 28,000 (270,266) (298,266)

OTHER FINANCING SOURCES (USES)
Transfers in 764 (764)
Transfers out : : (764) 764
Total Other Financing Sources (Uses)
Net Change in Fund Balances 28,000 28,000 (270,266) (298,266)

FUND BALANCE (DEFICIT)
Beginning of year 257,093 257,093 257,093
End of year 285,093 285,093 (13,173) $ (298,266)
-102-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Proposition C Sales Tax Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental $ 8,000 $ 8,000 $ 9.310 $ 1,310
Total Revenues 8,000 8,000 9,310 1,310

EXPENDITURES
Current:

Public works 8,000 8,000 9,310 (1,310)
Total Expenditures 8,000 8,000 9,310 1,310
Excess of Revenues
Over Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in 764 (764)
Transfers out : (764) 764
Total Other Financing Sources (Uses)
Net Change in Fund Balances - -

FUND BALANCE (DEFICIT)
Beginning of year 8,909 8,909 8,909
End of year $ 8,909 $ 8,909 $ 8,909 $
-103-
City of Industry
Supplementary Informatiol
chedule of Revenues, Expenditures and Changes in Fund Balances.

Budget and Actual
Measure M Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental $ 7,000 7,000 7,896 $ 896
Total Revenues 7,000 7,000 7,896 896

EXPENDITURES
Current:

Public works 7,000 7,000 7,896 (896)
Total Expenditures 7,000 7,000 7,896 896
Excess of Revenues
Over Expenditures - - -

FUND BALANCE (DEFICIT)
Beginning of year
End of year $ $ $ $
- 104-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Measure W Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental 1,600,000 1,600,000 1,641,223 41,223
Use of money and property 2,000 15,000 22,095 7,095
Total Revenues 1,602,000 1,615,000 1,663,318 48,318

EXPENDITURES
Current:

Public works 1,214,000 1,214,000 1,180,628 33,372
Total Expenditures 1,214,000 1,214,000 1,180,628 33,372 Excess (Deficiency) of Revenues
Over (Under) Expenditures 388,000 401,000 482,690 81,690

FUND BALANCE (DEFICIT)
Beginning of year 1,429,266 1,429,266 1,429,266 -
End of year $ 1,817,266 $ 1,830,266 $ 1,911,956 $ 81,690 -105-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
CARB Tax Special Revenue Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Intergovernmental $ 250,000 $ 250,000 $ 312,434 $ 62,434 Use of money and property 15,591 15,591
Total Revenues 250,000 250,000 328,025 78,025

EXPENDITURES
Current:

Public works 250,000 250,000 149,085 100,915
Total Expenditures 250,000 250,000 149,085 100,915
Net Change in Fund Balance - - 178,940 178,940

FUND BALANCE (DEFICIT)
Beginning of year 795,779 795,779 795,779 -
End of year $ 795,779 795,779 974,719 178,940
-106-
City of Industry
Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
CRIA Capital Projects Fund
For the Year Ended June 30, 2023
Variance with
Final Budget
Original Final Actual Positive
Budget Budget R Amounts (Negative)

REVENUES
Use of money and property $ 1,000 $ 1,000 $ 1,967 $ 967 Other revenue 418 418
Total Revenues 1,000 1,000 2,385 1,385

EXPENDITURES
Current:

Public works 1,897,000 2,415,000 2,404,739 10,261
Total Expenditures 1,897,000 2,415,000 2,404,739 10,261 eficiency of Revenue
nder Expenditure (1,896,000) (2,414,000) (2.402,354) 11,646

OTHER FINANCING SOURCES (USES)
Transfers in 4,109,000 4,397,000 5,948,806 1,551,806
Transfers out (1,463,000) (1,145,700) (3,441,624) (2.295.924) Total Other Financing Sources (Uses) 2,646,000 3,251,300 2,507,182 (744,118) Net Change in Fund Balance 750,000 837,300 104,828 (732,472)

FUND BALANCE (DEFICIT)
Beginning of year 101,454 101,454 101,454
End of year $ 851,454 $ 938,754 $ 206,282 $ (732.472)
-107-
City of Industry
Supplementary Information
Schedule of Long-Term Debt - City of Industry Only
$336,570,000 Taxable Sales Tax Refunding Bonds, Series 2015A For the Year Ended June 30, 2023
Interest Debt Annual
Period Endin Principal Rate Interest Service Debt Senice. uly 1, 202: $ 3.250% $ 8,030,956 8,030,956
anuary 1, 202 2,200,000 3.250% 8,030,956 10,230,956 18,261,912 uly 1, 202 3.250% 7,995,206 7,995,206
January 1, 2025 2,270,000 3.500% 7,995,206 10,265,206 18260412 July 1, 2025 3.500% 7,955,481 7,955,481
January 1, 2026 2,345,000 3.625% 7,955,481 10,300,481 18,255,962 July 1, 2026 3.625% 7,912,978 7,912,978
anuary 1, 202 2,435,000 4.000% 7,912,978 10,347,978 18,260,956 uly 1, 202 4.000% 7,864,278 7,864,278
7,270,000 4.000% 7,864,278 15,134,278 22,998,556

4.000% 7,718,878 7,718,878
7,560,000 4.125% 7,718,878 15,278,878 22,997,756

4.125% 7,562,953 7,562,953
7,870,000 4.250% 7,562,953 15,432,953 22,995,906

4.250% 7,395,716 7,395,716
January 1, 2021 8,205,000 4.625% 7,395,716 15,600,716 22.99.432

4.625% 7,205,975 7,205,975
8,585,000 7,205,975 15,790,975 22,996,900

4.625%

4.625% 7,007,447 7,007,447
January 1, 2033 8,985,000 4.625% 7,007,447 15,992,447 22,999,894 July 1, 2033 4.625% 6,799,669 6,799,669
January 1, 2034 9,400,000 4.625% 6,799,669 16,199,669 22,999,338 July 1, 2034 4.625% 6,582,294 6,582,294
January 1, 2035 9,835,000 5.125% 6,582,294 16,417,294 22,999,588 July 1, 2035 5.125% 6,330,272 6,330,272
January 1, 2036 10,335,000 5.125% 6,330,272 16,665,272 22,995,544 July 1, 2036 5.125% 6,065,438 6,065,438
January 1, 2037 10,865,000 5.125% 6,065,438 16,930,438 22,995,876 July 1, 2037 5.125% 5,787,022 5,787,022
January 1, 2038 11,425,000 5.125% 5,787,022 17,212,022 22,999,044 July 1, 2038 5.125% 5,494,256 5,494,256
January 1, 2039 12,010,000 5.125% 5,494,256 17,504,256 22,998,512 July 1, 2039 5.125% 5,186,500 5,186,500
January 1, 2040 12,625,000 5.125% 5,186,500 17,811,500 22,998,000 July 1, 2040 5.125% 4,862,984 4,862,984
13,270,000 5.125% 4,862,984 18,132,984 22,995,968

5.125% 4,522,941 4,522,941 22,995,882
13,950,000 5.125% 4,522,941 18,472,941
July 1, 2042 5.125% 4,165,472 4,165,472
January 1, 2043 14,665,000 5.125% 4,165,472 18,830,472 22,995,944 July 1, 2043 5.125% 3,789,681 3,789,681
January 1, 2044 15,420,000 5.125% 3,789,681 19,209,681 22,999,362 July 1, 2044 5.125% 3,394,544 3,394,544
January 1, 2045 16,210,000 5.125% 3,394,544 19,604,544 22,999,088 July 1, 2045 5.125% 2,979,163 2,979,163
January 1, 2046 17,040,000 5.125% 2,979,163 20,019,163 22,998,326 July 1, 2046 5.125% 2,542,513 2,542,513
January 1, 2047 17,910,000 5.125% 2,542,513 20,452,513 22.095,026 July 1, 2047 5.125% 2,083,568 2,083,569
January 1, 2048 18,830,000 5.125% 2,083,568 20,913,569 22.997,138 July 1, 2048 5.125% 1,601,050 1,601,050
January 1, 2049 19,795,000 5.125% 1,601,050 21,396,050 22.997,100 July 1, 2049 5.125% 1,093,803 1,093,803
January 1, 2050 20,810,000 5.125% 1,093,803 21,903,803 22997,506 July 1, 2050 5.125% 560,547 560,547
January 1, 2051 21,875,000 5.125% 560,547 22,435,547 22996,094 $ 323,995.000 $ 300,983,170 $ 624.978,172 $ 624.978.172 -108-
City of Industry
Supplementary Information
Schedule of Long-Term Debt - City of Industry Only
$51,460,000 Taxable Sales Tax Refunding Bonds, Series 2017 For the Year Ended June 30, 2023
Interest Debt Annual
Period Ending Principal Rate Interest Service Debt Service August 1, 2023 5.000% 1,796,255 5 1,796,255
August 202244 615,000 5.000% 1,796,255 2,411,255 4,207,510

5.250% 1,780,880 1,780,880
August 1.225 645,000 5.250% 1,780,880 2,425,880 4,206,760

5.550% 1,763,948 1,763,948
680,000 5.550% 1,763,948 2,443,949 4,207,897

5.850% 1,745,078 1,745,078
715,000 5.850% 1,745,078 2,460,079 4,205,157

6.150% 1,724,165 1,724,165
755,000 6.150% 1,724,165 2,479,165 4.203,330

6.450% 1,700,949 1,700,949
February 1, 2029 805,000 6.450% 1,700,949 2,505,949 4,206,898 August 1, 2029 6.750% 1,674,988 1,674,988
February 1, 2030 860,000 6.750% 1,674,988 2,534,988 4,209,976 August 1, 2030 7.000% 1,645,962 1,645,962
February 1, 2031 915,000 7.000% 1,645,962 2,560,963 4,206,925 February 1, 2021 7.250% 1,613,937 1,613,937
February 1, 2032 980,000 7.250% 1,613,938 2,593,938 4,207,875 August 1, 2032 7.250% 1,578,412 1,578,412
February 1, 2033 1,050,000 7.250% 1,578,412 2,628,413 4,206,825 August 1, 2033 7.250% 1,540,350 1,540,350
February 1, 2034 1,125,000 7.250% 1,540,350 2,665,350 4,205,700 August 1, 2034 7.250% 1,499,569 1,499,569
February 1, 2035 1,205,000 1,499,569 2,704,569 4.204,138

7.250%
August 1, 2035 7.250% 1,455,887 1,455,887
1,295,000 1,455,887 4.206.775
February 1, 2036 7.250% 2,750,888
August 1, 2036 7.500% 1,408,943 1,408,943
February 1, 2037 1,390,000 7.500% 1,408,943 2,798,944 4.207.387 August 1, 2037 7.500% 1,356,819 1,356,819
February 1, 2038 1.490.000 7.500% 1,356,819 2,846,819 4.203,638 August 1, 2038 7.500% 1,300,945 1,300,944
February 1, 2039 1,605,000 7.500% 1,300,945 2,905,944 4,206,888

7.500% 1,240,756 1,240,756
February 1, 2040 1,725,000 7.500% 1,240,756 2,965,756 4.206,512 August 1, 2040 7.500% 1,176,068 1,176,068
-ebruary 1, 204 1,855,000 7.500% 1,176,068 3,031,069 4.207.137 August 1, 204- 7.750% 1,106,506 1,106,506
February 1, 2042 1,995,000 7.750% 1,106,506 3,101,506 4.208.012

7.750% 1,029,200 1,029,200
February 1, 2043 2,150,000 7.750% 1,029,200 3,179,200 4,208,400 August 1, 2043 2,315,000 7.750% 945,888 945,888
February 1, 2044 7.750% 945,888 3,260,888 4.206,776
August 1, 2044 7.750% 856,181 856,181
February 1, 2045 2,495,000 7.750% 856,181 3,351,181 4.207,362 August 1, 204E 7.750% 759,500 759,500
February 1, 204€ 2,685,000 7.750% 759,500 3,444,500 4,204,000 August 1, 2046 7.750% 655,457 655,456
February 1, 204 2,900,000 7.750% 655,457 3,555,456 4,210,912 ugust 1, 2041 7.750% 543,082 543,081
February 1, 2048 3,120,000 7.750% 543,082 3,663,081 4.206,162 August 1, 2048 7.750% 422,183 422,181
February 1, 2049 3,365,000 7.750% 422,183 3,787,181 4.209,362 August 1, 2049 7.750% 291,789 291,788
February 1, 2050 3,625,000 7.750% 291,789 3,916,788 4.208,576 August 1, 2050 7.750% 151,321 151,319
February 1, 2051 3,905,000 7.750% 151,321 4.056,319 4,207,638 $ 48,265,000 $ 69.530.037 $ 117,795.028 $ 117,795.028
-109-
City of Industry
Supplementary Information
Schedule of Long-Term Debt - City of Industry Only
$34,340,000 Taxable Sales Tax Refunding Bonds, Series 2017 For the Year Ended June 30, 2023
Debt Annual
Period Ending Principal Interest Service Debt Service
July 1, 2023 3.000% 242,753 $ 242,753 $
January 1, 2024 3,490,000 242,753 3,732,753 3,975,506
188,222 188,222
January 1, 2025 188,222 3,783,222 3,971,444
129,803 129,803
January 1, 2026 3,715,000 129,803 3,844,803 3,974,606
67,113 67,113
January 1, 2027 3,835,000 67.113 3,902,113 3.969.226
$ 14,635,000 $ 1,255,782 $ 15,890,782 $ 15,890,782
-110-

CITY OF INDUSTRY
MARCH 14, 2024
ITEMS 4.2 TO 4.4

R A ROGERS, ANDERSON, MALODY & SCOTT, LLF
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T

REPORT ON INTERNAL CONTROL OVER FINANCIAL
909 889 536 F

REPORTING AND ON COMPLIANCE AND OTHER MATTERS
ramscpa.net

BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
Bradferd A. Welebir, CPA. MBA, CGMA
Jenny W. Liu, CPA, MST Independent Auditor's Report
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CGMA
To the Honorable City Council
Brenda L. Odle, CPA, MST (Partner Emeritus)
City of Industry
Terry P. Shea, CPA (Partner Emeritus)
We have audited, 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 MANAGERS / STAFF by the Comptroller General of the United States, the financial Seong-Hyea Lee, CPA, MBA statements of the governmental activities, the business-type activities, Evelyn Morentin-Barcena, CPA
each major fund, and the aggregate remaining fund information of the Veronica Hernandez, CPA
City of Industry (the City) as of and for the year ended June 30, 2023, Laura Arvizu, CPA
John Maldonado, CPA, MSA and the related notes to the financial statements, which collectively Julia Rodriguez Fuentes, CPA, MSA comprise the City's basic financial statements, and have issued our Demi Hite, CPA report thereon dated March 12, 2024.

Jeffrey McKennan, CPA
Monica Wysocki, CPA
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

MEMBERS
in the circumstances for the purpose of expressing our opinions on the American Institute of
Certified Public Accountants financial statements, but not for the purpose of expressing an opinion CPS The AICPA Alliance on the effectiveness of the City's internal control. Accordingly, we do or CPA Firms 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 Cate Soc comans a control does not allow management or employees in the normal Proud Member of
AlliottGlobalAlliance™
- 1-
STABILITY. ACCURACY. TRUST.

To the Honorable City Council
City of Industry
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.

We noted certain matters that we have reported to management of the City of Industry in a separated letter dated March 12, 2024.

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

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity'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.

Rogers, Andercon, Malody e leott, LP.

San Bernardino, California
March 12, 2024
-2-

R ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T
909 889 536 1 F
lamiscpa.net
March 12, 2024
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
To the Honorable City Council
Bradferd A. Welebir, CPA, MBA, CGMA
Jenny W. Liu, CPA, MST City of Industry
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA. CGMA
Brenda L. Odle, CPA, MST (Partner Emeritus) We have audited the financial statements of City of Industry (the City) as of Terry P. Shea, CPA (Partner Emeritus) and for the year ended June 30, 2023, and have issued our report thereon dated March 12, 2024. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit

MANAGERS / STAFF
Seong-Hyea Lee, CPA, MBA As communicated in our engagement letter dated May 22, 2023, our Evelyn Morentin-Barcena, CPA responsibility, as described by professional standards, is to form and express Veronica Hernandez, CPA opinions about whether the financial statements that have been prepared by Laura Arvizu, CPA management with your oversight are presented fairly, in all material respects, John Maldonado, CPA, MSA in accordance with accounting principles generally accepted in the United Julia Rodriguez Fuentes, CPA, MSA States of America. Our audit of the financial statements does not relieve you Demi Hite, CPA
or management of your respective responsibilities.

Jeffrey McKennan, CPA
Monica Wysocki, CPA
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the MEMBERS circumstances, but not for the purpose of expressing an opinion on the American Institute of effectiveness of the City's internal control over financial reporting.

Certified Public Accountants Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide PCPS The AICPA Alliance
for CPA Firms any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities Colted Socie countants in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to Proud Member of
AlliottGlobalAlliance™
-1-
STABILITY. ACCURACY. TRUST.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, and our firm have complied with all relevant ethical requirements regarding independence.

Significant Risks Identified
We have identified the possibility of the following significant risks:

Management's override of internal controls over financial reporting: Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.

Revenue recognition Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.

These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.

Qualitative Aspects of the City's Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during fiscal year 2023. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments.
-2-
The most sensitive accounting estimates affecting the financial statements are:

Management's estimate of the fair value of investments is based on information provided by inancial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the depreciation expense is based on historical estimates of each capitalized item's useful life. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole.

The estimate of the net pension liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole.

The estimate of the total OPE liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole.

Management's estimate of leases receivable, deferred inflows of resources related to leases, and lease amortization is based on present value calculations using certain terms and assumptions in the lease agreements in accordance with generally accepted accounting principles. We evaluated the key factors and assumptions used to develop the lease related estimates in determining that it is reasonable in relation to the financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to:

The disclosure of the fair value of investments in the notes to the financial statements represents amounts susceptible to market fluctuations.

The disclosure of accumulated depreciation in the notes to the financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.

The disclosure of net pension liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.

The disclosure of net OPEB liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.

The disclosure of leases receivable, deferred inflows of resources related to leases, and lease amortization in the basic financial statements is based on certain terms and assumptions in the lease agreements which could differ from actual amounts.

The financial statement disclosures are neutral, consistent, and clear. -3-
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. We did not identify any uncorrected misstatements.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satistaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated March 12, 2024.

Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, ncluding the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of materia misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City's audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

However, in accordance with such standards:

We applied certain limited procedures to the required supplementary information (RSI) that supplements 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.
-4-
We were engaged to report on the supplementary information, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

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,
Rogers, Anderson, Malody e cott, LLP.

San Bernardino, California
March 12, 2024
March 12, 2024
Rogers, Anderson, Malody & Scott, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, Ca 92408
This representation letter is provided in connection with your audit of the basic financial statements of the City of Industry (the City) as of June 30, 2023, and for the year then ended, ano the related notes to the financial statements, for the purpose of expressing opinions on whethe the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).

Certain representations in this letter are described as being limited to matters that are material.

Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of March 12, 2024:

Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 22, 2023, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility 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. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
• We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.
• We have reviewed, approved and taken responsibility for the financial statements and related notes.
• We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
• The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures, are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of the applicable financial reporting framework.

Rogers, Anderson, Malody & Scott, LLP
• All related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. • All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. • The effects of uncorrected misstatements summarized in the attached schedule and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole. • The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
• All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed. • All funds and activities are properly classified.
• All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, GASB Statement No. 37, Basic Financial Statements-and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. • All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved.
• Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.
• All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
• All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported.
• Special items and extraordinary items have been properly classified and reported • Deposit and investment risks have been properly and fully disclosed. • Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.
• All required supplementary information is measured and presented within the prescribed guidelines.
• We have evaluated all of our lease agreements and have given you our assessment as to whether each lease agreement is subject to GASB Statement No. 87, Leases, and GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

Rogers, Anderson, Malody & Scott, LLP
• With regard to investments and other instruments reported at fair value:
• The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. • The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. • The disclosures related to fair values are complete, adequate, and in accordance with U.S. GAAP.
• There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. • With respect to financial statement preparation, we have performed the following:
- Made all management decisions and performed all management functions; - Assigned a competent individual to oversee the services; - Evaluated the adequacy of the services performed;
Evaluated and accepted responsibility for the result of the service performed; and Established and maintained internal controls, including monitoring ongoing activities.

Information Provided
• We have provided you with:
• Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters;
• Additional information that you have requested from us for the purpose of the audit; and
Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
• The financial statements and any other information included in the annual report are consistent with one another, and the other information does not contain any material misstatements.
• All transactions have been recorded in the accounting records and are reflected in the financial statements.
• We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. • We have provided to you our analysis of the entity's ability to continue as a going concern, including significant conditions and events present, and if necessary, our analysis of management's plans, and our ability to achieve those plans. • We have no knowledge of any fraud or suspected fraud that affects the entity and involves:
• Management;
• Employees who have significant roles in internal control; or • Others where the fraud could have a material effect on the financial statements.

Rogers, Anderson, Malody & Scott, LLP
• We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees, vendors, regulators, or others.
• We are not aware of any pending or threatened litigation, claims, and assessments whose effects should be considered when preparing the financial statements. • We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware.
• There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices.
• The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
• We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable.
• We have disclosed to you all nonexchange financial guarantees, under which we are obligated and have declared liabilities and disclosed properly in accordance with GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, for those guarantees where it is more likely than not that the entity will make a payment on any guarantee.

For nonexchange financial guarantees where we have declared liabilities, the amount of the liability recognized is the discounted present value of the best estimate of the future outflows expected to be incurred as a result of the guarantee. Where there was no best estimate but a range of estimated future outflows has been established, we have recognized the minimum amount within the range.

We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year.

Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.
• We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.
• There are no:
• Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations.

Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.

Rogers, Anderson, Malody & Scott, LLP
• Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
• Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12).
• The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.
• We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
• There have been no changes or updates to legal information disclosed to you by our attorney's since the date of such legal response and now.

Supplementary Information in Relation to the Financial Statements as a Whole With respect to supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America.
• We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America.
• The methods of measurement or presentation have not changed from those used in the prior period.
• We believe any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances.

When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.

We acknowledge our responsibility to include the auditor's report on the supplementary information in any document containing the supplementary information and that indicates the auditor reported on such supplementary information. • We acknowledge our responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.

Required Supplementary Information
With respect to the required supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the required supplementary information in accordance with U.S. GAAP.

Rogers, Anderson, Malody & Scott, LLP
• We believe the required supplementary information, including its form and content, is measured and fairly presented in accordance with U.S. GAAP. • The methods of measurement or presentation have not changed from those used in the prior period.
• We believe the significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. pathet
Signature: Signature:

Tue: Ciky Manager Title: Finance Director

R ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100 Report on Agreed-Upon Procedures Applied San Bernardino, CA 92408
to the Appropriations Limit Worksheet
909 889 0871 T
9098895361 F
Independent Accountant's Report
ramscpa.net
To the Honorable City Council
City of Industry, California
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
Bradferd A. Welebir, CPA. MBA. CGMA We have performed the procedures enumerated below to the Jenny W. Liu, CPA, MST accompanying Appropriations Limit Worksheet of the City of Industry, Gardenya Duran, CPA, CGMA California (the City) for the year ended June 30, 2023. The Brianna Schultz, CPA. CGMA management of the City is responsible for the accompanying Brenda L. Odle, CPA, MST (Partner Emeritus)
Appropriations Limit Worksheet.

Terry P. Shea, CPA (Partner Emeritus)
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 XIlI-B of the California to rio, The sad on 5 trie

MANAGERS / STAFF
Constitution. These procedures, which were suggested by the Seong-Hyea Lee, CPA, MBA
League of California Cities and presented in the publication entitled Evelyn Morentin-Barcena, CPA
Agreed-upon Procedures Applied to the Appropriations Limitation Veronica Hernandez, CPA
Laura Arvizu, CPA Prescribed by Article XIII-B of the California Constitution, were John Maldonado, CPA, MSA performed solely to assist you in meeting the requirements. This Julia Rodriguez Fuentes, CPA, MSA report may not be suitable for any other purpose. The procedures Demi Hite, CPA performed may not address all the items of interest to a user of this Jeffrey McKennan, CPA report and may not meet the needs of all users of this report and, as Monica Wysocki, CPA
such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

MEMBERS 1. We obtained the completed worksheets and compared the American Institute of
Certified Public Accountants limit and annual adjustment factors included in those worksheets to the limit and annual adjustment tactors that PCPS The AICPA Alliance
for CPA Firms were adopted by resolution of the City Council. We also compared the population and inflation options included in the Guary enal Mete aforementioned documents to those that were selected by a recorded vote of the City Council.

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

2. For the accompanying Appropriations Limit Worksheet, we added last year's limit to total adjustments and agreed the Proud Member of esulting amount to this year's limit
AlliottGlobalAlliance™
Finding: No exceptions were noted as a result of our
procedures.
-1-
STABILITY. ACCURACY. TRUST.

3. We agreed the current year information presented in the accompanying Appropriations Limit Worksheet to the other documents referenced in number one above.

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

4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council during the prior year.

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

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, the objective of which would be the expression of an opinion or conclusion, respectively, on accompanying Appropriations Limit Worksheet for the year ended June 30, 2023. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might 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 of Industry, California, and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.

Rogen, Anderson, Malody e deott, LLP.

San Bernardino, California
March 12, 2024
-2-

CITY OF INDUSTRY

APPROPRIATIONS LIMIT WORKSHEET
2022-2023
Change in growth in the non-residential assessed valuation 7.59% Change in city population -0.45%
Change in growth in the non-residential
assessed valuation converted to a ratio 1.0759
Change in city population converted to a ratio 0.9955
Calculation of factor for ratio of change (1.0759 x 0.9955) 1.07106 2021-2022 limit (as amended) $ 973,786,294
Adjustment for inflation and population 69,195,745
2022-2023 limit $ 1,042,982,039
-3-

INDUSTRY PUBLIC

FACILITIES AUTHORITY
MARCH 14, 2024
ITEM 4.5

BUT OF INDUSTRY

INDUSTRY PUBLIC FACILITIES
* 1957

AUTHORITY

MEMORANDUM
TO: Chair and Board Members
FROM: Joshua Nelson, Executive Director
STAFF: Yamini Pathak, Director of Finance
DATE: March 14, 2024
SUBJECT: Annual Financial Reports for the Industry Public Facilities Authority Year Ending June 30, 2023

RECOMMENDATION
Receive and file the following annual financial reports for the year ending June 30, 2023, and instruct Staff to present a summary of the year ending June 30, 2023 Annual Financial Reports to the Chair and Board Members.

City of Industry

1. Annual Audited Basic Financial Statements for the Year Ending June 30, 2023 with Independent Auditors' Report

2. Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters for the Year Ending June 30, 2023

3. Auditors' Communications with the Chair and Board Members for the Year Ending June 30, 2023

EXECUTIVE SUMMARY
The City's independent auditors, Rogers, Anderson, Malody & Scott, LLP, have completed their annual audit of the City's financial statements which include the financial activities of its component units (Successor Agency to the Industry Urban-Development Agency, the Civic-Recreational-Industrial Authority, and the Industry Public Facilities Authority) for the year ending June 30, 2023. The financial statements received an unqualified (or clean)

opinion. No material weakness in internal control was noted by the Auditors.

DESCRIPTION OF REPORTS
The financial reports and management compliance letter for the year ending June 30, 2023 are brietly described below:

Annual Financial Report
The annual financial statement is a comprehensive document reflecting the financial position of the City and its component units. The Auditors issued an unqualified (or clean) opinion on these financial statements.

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards No material weakness in internal control was noted by the Auditors.

The Auditors' Communications with the Audit Committee and the Chair and Board Members
Statement of Auditing Standards (SAS) No. 114 requires more and documented communications between the auditors and the Audit Committee and the Chair and Board Members. This letter provides an opportunity for the auditors to report on any difficulties or major concerns discovered during the audit and to further define their role. They provide commentary on management's responsibilities for accounting policies and estimates that no significant difficulties were encountered in performing the audit, and no disagreements occurred with management. They point out that management has corrected all known material misstatements.

Fiscal Impact
There is no fiscal impact as result of this action.

CITY OF INDUSTRY PUBLIC FACILITIES AUTHORITY
(A COMPONENT UNIT OF THE CITY OF INDUSTRY)

FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2023
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Financial Statements
For the Year Ended June 30, 2023

TABLE OF CONTENTS
Independent Auditor's Report .... 1
Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position
Statement of Activities
Fund Financial Statements
Governmental Fund:

Balance Sheet .

Reconciliation of the Governmental Fund Balance Sheet to the Government-Wide Statement of Net Position.. ...7
Statement of Revenues, Expenditures, and Changes in Fund Balances 8 Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide
Statement of Net Position .. ..9
Notes To Financial Statements .... 10
Required Supplementary Information:

Budgetary Comparison Schedule - General Fund (Unaudited) 20

R A ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
Independent Auditor's Report
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T Honorable City Council
909 88 5361 F
City of Industry Public Financing Authority
ramscpa.net
Industry, California
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA Report on the Audit of the Financial Statements Bradferd A. Welebir, CPA, MBA, CGMA
Jenny W. Liu, CPA, MST Opinions
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CGMA We have audited the financial statements of the governmental activities Brenda L. Odle, CPA, MST (Partner Emeritus)
and the major fund of the City of Industry Public Financing Authority (the Terry P. Shea, CPA (Partner Emeritus)
IPFA), a component unit of the City of Industry, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise IPFA's basic financial statements as listed in the table of contents.

MANAGERS / STAFF
Seong-Hyea Lee, CPA, MBA In our opinion, the accompanying financial statements referred to above Evelyn Morentin-Barcena, CPA
present fairly, in all material respects, the governmental activities and Veronica Hernandez, CPA
Laura Arvizu, CPA the major fund of the IPFA, as of June 30, 2023, and the changes in John Maldonado, CPA, MSA financial position for the year then ended in accordance with accounting Julia Rodriguez Fuentes, CPA, MSA principles generally accepted in the United States of America.

Demi Hite, CPA
Jeffrey McKennan, CPA Basis for Opinions
Monica Wysocki, CPA
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our

MEMBERS
responsibilities under those standards are further described in the American Institute of
Certified Public Accountants Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of IPFA and to PCPS The AICPA Alliance
for CPA Firms meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit Guety end Mute evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Cetired Socie AcCountants
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, Proud Member of implementation, and maintenance of internal control relevant to the AlliottGlobalAlliance™ preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. -1-
STABILITY. ACCURACY. TRUST.

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 IPFA'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.

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the IPFA'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 IPFA'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. -2-
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Management has omitted 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 opinions on the basic financial statements is not affected by this missing information.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2024 on our consideration of the IPFA'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 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 IPFA's internal control over financial reporting and compliance.

Rogers, Anderson, Malody e Scott, LLP.

San Bernardino, California
March 12, 2024
-3-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Statement of Net Position
June 30, 2023
Governmental
Activities
ASSETS
Current assets:

Accrued interest receivable $ 1,500,124
Total current assets 1,500,124
Noncurrent assets:

Investment in City bonds 41,372,544
Total Noncurrent Assets 41,372,544
Total assets 42,872,668

LIABILITIES
Current liabilities:

Accounts payable (508,490)
Interest payable 1,488,610
Total current liabilities 980,120
Long-term liabilities:

Due within one year 615,000
Due in more than one year 47,650,000
Total long-term liabilities 48,265,000
Total liabilities 49,245,120

NET POSITION (DEFICIT)
Unrestricted (6,894,456)
Total net position $ (6,894,456)
The accompanying notes are an integral part of these financial statements.

City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Statement of Activities
For the Year Ended June 30, 2023
Net revenue
Operating (expense)
grants and and changes
contributions in net position
Charges for Governmental
Expenses services Activities

GOVERNMENTAL ACTIVITIES
General administration $ 2,475,033 $ 10,740 $ (2,464,293) Interest and fiscal charges 3,751,188 (3,751,188)
Total Governmental Activities 6,226,221 $ 10,740 (6,215,481)

GENERAL REVENUES
Other revenues 250,623
Investment income (loss) 1,781,958
Transfer out (42,974,573)
Change in net position (47,157,473)

NET POSITION (DEFICIT)
Beginning of year 40,263,017
End of year $ (6,894,456)
The accompanying notes are an integral part of these financial statements. -5-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Balance Sheet
Governmental Fund
June 30, 2023
General
Fund
ASSETS
Investment in City bonds $ 41,372,544
Accrued interest receivable 1,500,124
Total assets $ 42,872,668

LIABILITIES AND FUND BALANCE

LIABILITIES
Accounts payable $ (508,490)

FUND BALANCE
Restricted for debt service 42,859,154
Total fund balance 42,859,154
Total liabilities and fund balance $ 42,350,664
The accompanying notes are an integral part of these financial statements.

City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Reconciliation of the Governmental Fund Balance Sheet to the Government-Wide Statement of Net Position
June 30, 2023
Fund balances of governmental funds $ 42,859,154
Amounts reported for governmental activities in the statement of net position are different because:

Accrued interest payable on outstanding bonds payable does not require the use of current financial resources, and accordingly, is not reported as expenditures in the governmental funds. (1,488,610) Long-term liabilities applicable to governmental activities are not due and payable in the current period, and accordingly, are not reported as fund liabilities. Long-term liabilities are included in the statement of net position as follows:

City loan (48,265,000)
Net position of Governmental Activities $ (6,894,456)
The accompanying notes are an integral part of these financial statements.

City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
General
Fund

REVENUES
Intergovernmental revenue $ 10,740
Use of money and property 1,781,958
Other revenue 250,623
Total revenues 2,043,321

EXPENDITURES
Debt service:

Principal retirement 21,730,000
Interest and fiscal charges 4,321,820
Loss on bond redemption 2,475,033
Total expenditures 28,526,853

OTHER FINANCING SOURCES/(USES)
Transfers out (42,974,573)
Net change in fund balance (69,458, 105)

FUND BALANCE
Beginning of year 112,317,259
End of year $ 42,859,154
The accompanying notes are an integral part of these financial statements. -8-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statements of Net Position For the Year Ended June 30, 2023
Net change in fund balance - governmental fund $ (69,458,105) Amounts reported for governmental activities in the statement of net position are different because:

Repayment of bond principal is an expenditure in the governmental fund, but the repayment reduces long-term liabilities in the statement of net position.

Principal payments 21,730,000
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental fund:

Change in accrued interest payable 570,632
Change in net position of Governmental Activities $ (47,157,473) The accompanying notes are an integral part of these financial statements.

City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Reporting Agency
The City of Industry Public Facilities Authority (the IPFA) was created in 1990 by a joint exercise of power agreement and amended in 2005 between the City of Industry (the City) and the Industry Urban-Development Agency of the City of Industry (the IUDA). The agreement was made pursuant to the provisions of Article 1 through 4, Chapter 5, Division 7, Title 1 of the Government Code of the State of California, Sections 6500, et seq. On December 29, 2011, the California Supreme Court upheld Assembly Bill XI 26 that provides for the dissolution of all redevelopment agencies in the state of California. As a result, the City has elected to be the successor agency to the Industry Urban-Development Agency (the SA to IUDA).

The IPFA exists and acts as a separate entity. The governing board of the IPFA consists of five members, all members of the City Council.

The IPFA was established for the purpose of establishing a vehicle to reduce local borrowing costs, and accelerate construction, repair, and maintenance of needed public capital mprovements. The IPFA was also established to borrow money for the purpose of financing the acuisition and construction of public capital improvements. The IPFA has the power to issue bonds, notes, or other evidence of indebtedness, and to expend their proceeds.

The IPFA is a component unit and an integral part of the City and accordingly has also been included in the basic financial statements of the City issued as of June 30 of each year. Only the funds of the IPFA are included herein; therefore, these financial statements do not purport to represent the financial position or results of operations of the City. Financial statements for the IPFA and the City may be obtained from the Finance Department located at 15625 Mayor Dave Way, City of Industry, California.

Financial Statement Presentation, Basis of Accounting and Measurement Focus The component unit financial statements of the IPFA have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) as applicable to government units. The Governmental Accounting Standards Board is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

Government-Wide Financial Statements
The government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental activities for the IPFA. -10-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial Statement Presentation, Basis of Accounting and Measurement Focus (Continued)
These statements are presented on an economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all economic resources including capital assets and long-term liabilities are included in the accompanying statement of 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.

Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as expenditures. Proceeds of long-term debt are ementide nandi saced recorded as liabilities in the government-wide financial statements, rather than as financing sources. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as expenditures.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The types of transactions reported as program revenues for IPFA are reported in three categories:

1. Charges for services,

2. Operating grants and contributions, and

3. Capital grants and contributions.

Charges for services include revenues from customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function. Grants and contributions include revenues restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Fund Financial Statements
The accounts of the IPFA are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts, which are comprised of each fund's assets, liabilities, fund equity, revenues, and expenditures, as appropriate.

Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements are presented after the governmentwide financial statements.
-11-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial Statement Presentation, Basis of Accounting and Measurement Focus (Continued)
Governmental Funds
In the fund financial statements, governmental funds are presented using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Revenues are considered available if they are collected within 60 days after year-end. Expenditures are generally recognized when the related liability is incurred Exceptions to this general rule include principal and interest on long-term debt which are recognized when due.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. 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.

The proceeds of long-term debt are recorded as other financing sources rather than a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

General Fund
The IPFA's major fund type is the General Fund, which is used to account for the accumulation of resources for, and the payment of, general long-term debt, principal, interest, and related Investments
Investments in the bonds are stated at amortized cost. Short-term investments are reported at amortized cost, which approximates fair value. Investments that exceed more than one year in maturity are valued at fair value.

Investments with fiscal agent are restricted for the use of debt service. -12-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Bond Issuance Costs and Premiums/Discounts
Bond premiums and discounts in the government-wide financial statements are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are recognized as expense in the period incurred. In the governmental fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, at the time the bonds are issued. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Net Position
Net Position, the difference between assets and liabilities is classified as restricted and unrestricted. Restricted net position represents constraints on resources that are restricted by external creditors, grantors, contributors, laws, or regulations of other governments. Unrestricted net position is amounts which do not meet the definition of restricted net position.

When both restricted and unrestricted resources are available for use, it is the IPFA's policy to use restricted resources first and then unrestricted resources, as they are needed.

Fund Balance
In the governmental fund financial statements, fund balances are classified in the following categories:

Nonspendable - items that cannot be spent because they are not in spendable form or items that are legally or contractually required to be maintained intact.

Restricted - restricted fund balances are amounts with constraints placed on their use that are either: (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (b) imposed by law by constitutional provisions or enabling legislation.

Committed - committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the IPFA imposes upon itself at its highest level of decision-making authority (the board of directors) through board resolutions and that remain binding unless removed in the same manner.
-13-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance (Continued)
Assigned - assigned fund balances are amounts that are constrained by the IPFA's intent to be used for specific purposes. The intent can be established at either the Highest level of decision making, or by a body or an official designated for that purpose.

The board of directors is authorized for this purpose.

Unassigned - this category represents fund balances that have not been restricted, committed, or assigned to specific purposes.

When both restricted and unrestricted resources are available in a fund, expenditures are to be paid first from restricted resources, and then unrestricted resources in the order of committed, assigned, then unassigned
Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ from these estimates.

Transfers
The IPFA transferred $20,065,847 to the City's debt service fund and also transferred $22,908,726 to the City's capital project fund. Transfers are not eliminated on the government- wide financial statements since these statements only present the activity of the IPFA and not the City as a whole.

Note 2 INVESTMENTS
Investments as of June 30, 2023, consisted of the following:

Investments in City bonds $ 41,372,544
Total cash and investments $ 41,372,544
Investments with fiscal agents are restricted for future bond principal and interest payments. As of June 30, 2023, the IPFA's carrying value of these funds amounted to $41,372,544. -14-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 INVESTMENTS (Continued)
Investments Authorized by the Authority's Investment Policy Under provision of the IPFA's Investment policy, and in accordance with Section 53601 of the California Government Code, The IPFA may invest in the following types of investments:

Maximum Maximum
Maximum percentage investment
Authorized investment type maturity allowed in one issuer U.S. Treasury obligations 5 Years None None
U.S. Government sponsored
enterprise securities 5 Years None None
Money market funds N/A 20% None
Bankers acceptances 180 Days 40% 30%
Commercial paper 270 Days 25% 10%
Negotiable certificates of deposit 5 Years None None
Non-negotiable certificates of deposit 5 Years None None Local Agency Investment Fund (LAIF) N/A None None
Repurchase agreements 1 Year None None
Los Angeles County investment pool N/A None None
Local agency bonds 5 Years None None
U.S. corporate bonds/notes 5 Years 30% None
The IPFA's Investment policy does not contain any specific provisions intended to limit the IPFA's exposure to interest rate risk, credit risk, and concentration risk other than those specified in the California Government Code.

Fair Value Measurement
The IPFA categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are valued using a matrix pricing technique in where investments are valued based on the investments' relationship to benchmark quoted prices, and Level 3 inputs are significant unobservable inputs. The IPFA has the following recurring fair value measurements as of June 30, 2023:

Fair value
measurement
Investment type Value Level 2 input
Investments - restricted:

City bonds* $ 41,372,544 $ 41,372,544
*Valued based on institutional bond quotes
-15-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 INVESTMENTS (Continued)
Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk of changes in market interest rates that will adversely affect the fair exposure to interest rate risk by purchasing short-term investments and/or by timing cash flows trom maturities so that a portion of the portfolio is maturing, or coming close to maturity, evenly over time as necessary to provide the cash flow and liquidity needed for operations. IPFA's long-term investments in the City bonds have set interest rates between 3.000% and 7.750% over the life of the bonds.

Weighted
average
Investment type Amounts maturity
Investments - restricted:

City bonds $ 41,372,544 81.87 Months
Credit Risk
Credit it heneraly the. 16k this an listed a here it of a ring oil no ne recognized statistical organization.

Total as of Minimum
Investment type June 30, 2023 legal rating Not rated
Investments - restricted:

City bonds $ 41,372,544 None $ 41,372,544
Concentration of Credit Risk
The investment policy of IPFA contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds and external investment pools) that represent 5% or more of total IPFA's investments are as follows: City of Industry municipal bonds of $41,372,544.
-16-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 INVESTMENTS (Continued)
Risk Disclosures (continued)
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and IPFA's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities.

Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investment pools. IPFA's investments in City bonds are held by the trustee and are discussed in further detail under Note 3.

Note 3 INVESTMENT IN CITY BONDS
The following schedule represents the future payments to be paid to the City:
2015 Sales Tax Revenue Subordinate Bonds, Series B
Year ending
June 30, Principal Interest Total
2024 $ 615,000 3,592,510 4,207,510
2025 645,000 3,561,760 4,206,760
2026 680,000 3,527,898 4,207,898
2027 715,000 3,490,158 4,205,158
2028 755,000 3,448,330 4,203,330
2029 to 2033 4,610,000 16,428,502 21,038,502
2034 to 2038 6,505,000 15,824,084 22,329,084
2039 to 2043 9,330,000 10,406,006 19,736,006
2044 to 2048 13,515,000 7,520,212 21,035,212
2049 to 2051 10,895,000 1.730,576 12,625,576
48,265,000 $ 69,530,036 $ 117,795,036
Fair value adjustment (6,892,456)
Total $ 41,372,544
-17-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 4 LONG-TERM LIABILITIES
The changes in long-term liabilities for the year ended was as follows:

Error! Not a valid link.2015 Tax Allocation Revenue Refunding Bonds, Series A (Project No. 1) The 2015 tax allocation bonds were paid off in their entirety during the current fiscal year.

Loans from the City of Industry - direct borrowing
On December 1, 2015, the IPFA entered into a loan agreement with the City to borrow $51,460,000 for the purchase of City of Industry Subordinate Sales Tax Revenue Bonds, Series 2015B (Taxable). The loan bears interest ranging from 3.750% to 7.750% Annually, due February 1 and August 1 each year. The principal payments are due on February 1 each year and range from $5,850,000 to $3,905,000. As of June 30, 2023, debt service requirement to Year ending
June 30, Principal Interest Total
2024 $ 615,000 3,592,510 $ 4,207,510
2025 645,000 3,561,760 4,206,760
2026 680,000 3,527,898 4,207,898
2027 715,000 3,490,158 4,205,158
2028 755,000 3,448,330 4,203,330
2029 to 2033 4,610,000 16,428,502 21,038,502
2034 to 2038 6,505,000 15,824,084 22,329,084
2039 to 2043 9,330,000 10,406,006 19,736,006
2044 to 2048 13,515,000 7,520,212 21,035,212
2049 to 2051 10,895,000 1,730,576 12,625,576
Total $48,265,000 $ 69,530,036 $ 117,795,036
-18-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 5 SELF-INSURANCE PLAN
The City has established a Self-Insurance Plan (the Plan) to pay for liability claims against the City and the IPFA. The Plan is administered by an insurance committee which is responsible for approving all claims of $25,000 or less and for making a provision for having sufficient funds available to pay approved claims and legal and investigative expenses. The insurance committee has given this authority to the City Manager. Potential liabilities of claims in excess of $250,000, up to $10,000,000, are covered by excess liability insurance policies. As of June 30, 2023, there are no pending liability claims outstanding against the IPFA. -19-
City of Industry Public Facilities Authority
(A Component Unit of the City of Industry)
Budgetary Comparison Schedule - General Fund (Unaudited) For the Year Ended June 30, 2023
Original Final Actual Variance with
budget budget amounts final budget

REVENUES
ntergovernmenta $ 20,707,000 $ 20,707,000 $ 10,740 $ (20,696,260) Ise of money and propert 5,715,850 5,715,850 1,781,958 (3,933,892) Other revenue 250,623 250,623
Total revenues 26,422,850 26,422,850 2,043,321 (24,379,529)

EXPENDITURES
Debt service:

Principal 21,730,000 21,730,000 21,730,000
Interest and fiscal charges 5,459,900 5,459,900 4,321,820 1,138,080 Loss on bond redemption 2,475,033 (2,475,033)
Total expenditures 27,189,900 27,189,900 28,526,853 (1,336,953)

OTHER FIANCING SOURCES/(USES)
Transfer out - (22,908,726) (42.974,573) 20,065,847
Net change in fund balance (767,050) (23,675,776) (69,458,105) (45,782,329)

FUND BALANCE
Beginning of year 112,317,259 112,317,259 112,317,259
End of year $ 111,550,209 $ 88,641,483 $ 42,859,154 $ (45,782,329) -20-

INDUSTRY PUBLIC

FACILITIES AUTHORITY
MARCH 14, 2024
ITEMS 4.6 AND 4.7
R A

ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
MS
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T

REPORT ON INTERNAL CONTROL OVER FINANCIAL
909 889 536 I F

REPORTING AND ON COMPLIANCE AND OTHER MATTERS
ramscpa.net

BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH

PARTNERS

GOVERNMENT AUDITING STANDARDS
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
Bradferd A. Welebir, CPA. MBA, CGMA
Jenny W. Liu, CPA, MST Independent Auditor's Report
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CMA To the Honorable City Council Brenda L. Odle, CPA, MST (Partner Emeritus)
City of Industry
Terry P. Shea, CPA (Partner Emeritus)
We have audited, 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 MANAGERS / STAFF by the Comptroller General of the United States, the financial Seong-Hyea Lee, CPA, MBA statements of the governmental activities, the business-type activities, Evelyn Morentin-Barcena, CPA
each major fund, and the aggregate remaining fund information of the Veronica Hernandez, CPA
Laura Arvizu, CPA City of Industry (the City) as of and for the year ended June 30, 2023, John Maldonado, CPA. MSA and the related notes to the financial statements, which collectively Julia Rodriguez Fuentes, CPA, MSA comprise the City's basic financial statements, and have issued our Demi Hite, CPA report thereon dated March 12, 2024.

Jeffrey McKennan, CPA
Monica Wysocki, CPA
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 MEMBERS in the circumstances for the purpose of expressing our opinions on the American Institute of
Certified Public Accountants financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do PCPS The AICPA Alliance not express an opinion on the effectiveness of the City's internal for CPA Firms
control.

Cunty end ret
California Society of A deficiency in internal control exists when the design or operation of Certified Public Accountants a control does not allow management or employees in the normal 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 Proud Member of
AlliottGlobalAlliance™
-1-
STABILITY. ACCURACY. TRUST.

To the Honorable City Council
City of Industry
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.

We noted certain matters that we have reported to management of the City of Industry in a separated letter dated March 12, 2024.

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

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity'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.

Rogers, Anderson, Malody e Scott, LP.

San Bernardino, California
March 12, 2024
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R A

ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T
909 889 536 1 F
ramscpa.net
March 12, 2024

PARTNERS
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
To the Honorable City Council
Bradferd A. Welebir, CPA, MBA. CGMA
Jenny W. Liu, CPA, MST City of Industry
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA. CGMA
Brenda L. Odle, CPA, MST (Partner Emeritus) We have audited the financial statements of City of Industry (the City) as of Terry P. Shea, CPA (Partner Emeritus) and for the year ended June 30, 2023, and have issued our report thereon dated March 12, 2024. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit

MANAGERS / STAFF
Seong-Hyea Lee, CPA, MBA As communicated in our engagement letter dated May 22, 2023, our Evelyn Morentin-Barcena, CPA responsibility, as described by professional standards, is to form and express Veronica Hernandez, CPA opinions about whether the financial statements that have been prepared by Laura Arvizu, CPA management with your oversight are presented fairly, in all material respects, John Maldonado, CPA, MSA in accordance with accounting principles generally accepted in the United Julia Rodriguez Fuentes, CPA, MSA
States of America. Our audit of the financial statements does not relieve you Demi Hite, CPA
or management of your respective responsibilities.

Jeffrey McKennan. CPA
Monica Wysocki, CPA
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the MEMBERS ircumstances, but not for the purpose of expressing an opinion on th American Institute of ffectiveness of the Citv's internal control over financial reportin.

Certified Public Accountants
PCPS The AICPA Alliance
for CPA Firms
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities Celed soko comanes in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Proud Member of
AlliottGlobalAlliance™
- 1-
STABILITY. ACCURACY. TRUST.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, and our firm have complied with all relevant ethical requirements regarding independence.

Significant Risks Identified
We have identified the possibility of the following significant risks:

Management's override of internal controls over financial reporting: Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.

Revenue recognition Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.

These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.

Qualitative Aspects of the City's Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during fiscal year 2023. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and 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 markedly from management's current judgments.
-2-
The most sensitive accounting estimates affecting the financial statements are:

Management's estimate of the fair value of investments is based on information provided by financial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the depreciation expense is based on historical estimates of each capitalized item's useful life. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole.

The estimate of the net pension liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole.

The estimate of the total OPE liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole.

Management's estimate of leases receivable, deferred inflows of resources related to leases, and lease amortization is based on present value calculations using certain terms and assumptions in the lease agreements in accordance with generally accepted accounting principles. We evaluated the key factors and assumptions used to develop the lease related estimates in determining that it is reasonable in relation to the financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to:

The disclosure of the fair value of investments in the notes to the financial statements represents amounts susceptible to market fluctuations.

The disclosure of accumulated depreciation in the notes to the financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.

The disclosure of net pension liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.

The disclosure of net OPE liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.

The disclosure of leases receivable, deferred inflows of resources related to leases, and lease amortization in the basic financial statements is based on certain terms and assumptions in the lease agreements which could differ from actual amounts.

The financial statement disclosures are neutral, consistent, and clear. -3-
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicat em to the appropriate level of management. Further, professional standards require us to als communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. We did not identify any uncorrected misstatements.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated March 12, 2024.

Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, ncluding the application of accounting principles and auditing standards, operating and regulator conditions affecting the entity, and operational plans and strategies that may affect the risks of materia misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City's audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

However, in accordance with such standards:

We applied certain limited procedures to the required supplementary information (RSI) that supplements 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.
-4-
We were engaged to report on the supplementary information, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

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,
Rogers, Andercon, Malody e Scott, LLP.

San Bernardino, California
March 12, 2024
March 12, 2024
Rogers, Anderson, Malody & Scott, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, Ca 92408
This representation letter is provided in connection with your audit of the basic financial statements of the City of Industry (the City) as of June 30, 2023, and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).

Certain representations in this letter are described as being limited to matters that are material.

Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of March 12, 2024:

Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 22, 2023, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility 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. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
• We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.
• We have reviewed, approved and taken responsibility for the financial statements and related notes.
• We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
• The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures, are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of the applicable financial reporting framework.

Rogers, Anderson, Malody & Scott, LLP
• All related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. • All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed • The effects of uncorrected misstatements summarized in the attached schedule and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole. • The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
• All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed. • All funds and activities are properly classified.
• All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, GASB Statement No. 37, Basic Financial Statements-and Management's Discussion and Analysis—-for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. • All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved.
• Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.
• All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
• All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported.
• Special items and extraordinary items have been properly classified and reported • Deposit and investment risks have been properly and fully disclosed. • Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.
• All required supplementary information is measured and presented within the prescribed guidelines.
• We have evaluated all of our lease agreements and have given you our assessment as to whether each lease agreement is subject to GASB Statement No. 87, Leases, and GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

Rogers, Anderson, Malody & Scott, LLP
• With regard to investments and other instruments reported at fair value:
• The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. • The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. • The disclosures related to fair values are complete, adequate, and in accordance with U.S. GAAP.
• There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. • With respect to financial statement preparation, we have performed the following:
- Made all management decisions and performed all management functions; - Assigned a competent individual to oversee the services; - Evaluated the adequacy of the services performed;
Evaluated and accepted responsibility for the result of the service performed; and Established and maintained internal controls, including monitoring ongoing activities.

Information Provided
• We have provided you with:
• Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters;
• Additional information that you have requested from us for the purpose of the audit; and
• Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
• The financial statements and any other information included in the annual report are consistent with one another, and the other information does not contain any material misstatements.
• All transactions have been recorded in the accounting records and are reflected in the financial statements.
• We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. • We have provided to you our analysis of the entity's ability to continue as a going concern, including significant conditions and events present, and if necessary, our analysis of management's plans, and our ability to achieve those plans. • We have no knowledge of any fraud or suspected fraud that affects the entity and involves:
• Management;
• Employees who have significant roles in internal control; or • Others where the fraud could have a material effect on the financial statements.

Rogers, Anderson, Malody & Scott, LLP
• We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees, vendors, regulators, or others.
• We are not aware of any pending or threatened litigation, claims, and assessments whose effects should be considered when preparing the financial statements. • We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware.
• There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices.
• The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
• We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable.
• We have disclosed to you all nonexchange financial guarantees, under which we are obligated and have declared liabilities and disclosed properly in accordance with GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, for those guarantees where it is more likely than not that the entity will make a payment on any guarantee.

For nonexchange financial guarantees where we have declared liabilities, the amount of the liability recognized is the discounted present value of the best estimate of the future outflows expected to be incurred as a result of the guarantee. Where there was no best estimate but a range of estimated future outflows has been established, we have recognized the minimum amount within the range.
• We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year.

Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.
• We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.
• There are no:
• Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations.

Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.

Rogers, Anderson, Malody & Scott, LLP
• Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
• Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12).
• The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.
• We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
• There have been no changes or updates to legal information disclosed to you by our attorney's since the date of such legal response and now.

Supplementary Information in Relation to the Financial Statements as a Whole With respect to supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America.
• We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America.
• The methods of measurement or presentation have not changed from those used in the prior period.
• We believe any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. • When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily avallable to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon. • We acknowledge our responsibility to include the auditor's report on the supplementary information in any document containing the supplementary information and that indicates the auditor reported on such supplementary information. • We acknowledge our responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.

Required Supplementary Information
With respect to the required supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the required supplementary information in accordance with U.S. GAAP.

Rogers, Anderson, Malody & Scott, LLP
• We believe the required supplementary information, including its form and content, is measured and fairly presented in accordance with U.S. GAAP. • The methods of measurement or presentation have not changed from those used in the prior period.
• We believe the significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances.

Signature:_ Pathet
Signature:

The: Ciky Manager Title: Finance Director

SUCCESSOR AGENCY TO THE

INDUSTRY URBAN-

DEVELOPEMENT AGENCY
MARCH 14, 2024
ITEM 4.8

BUT OF INOUSTA SUCCESSOR AGENCY TO THE
* 1957 * INDUSTRY URBAN-DEVELOPMENT
AGENCY

MEMORANDUM
TO: Chair and Board Members
FROM: Joshua Nelson, Executive Director
STAFF: Yamini Pathak, Director of Finance
DATE: March 14, 2024
SUBJECT: Annual Financial Reports for the Successor Agency to the Industry Urban-Development Agency, Year Ending June 30, 2023

RECOMMENDATION
Receive and file the following annual financial reports for the year ending June 30, 2023, and instruct Staff to present a summary of the year ending June 30, 2023 Annual Financial Reports to the Chair and Board Members.

City of Industry

1. Annual Audited Basic Financial Statements for the Year Ending June 30, 2023 with Independent Auditors' Report

2. Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters for the Year Ending June 30, 2023

3. Auditors' Communications with the Chair and Board Members for the Year Ending June 30, 2023

EXECUTIVE SUMMARY
The City's independent auditors, Rogers, Anderson, Malody & Scott, LLP, have completed their annual audit of the City's financial statements which include the financial activities of its component units (Successor Agency to the Industry Urban-Development Agency, the Civic-Recreational- Industrial Authority and the Industry Public Facilities Authority) for the year ending June 30, 2023. The financial statements received an unqualified (or clean) opinion. No material weakness in internal control was noted by the Auditors.