Commerce City Council
March 8, 2022

CITY OF COMMERCE
Commerce, California
Comprehensive Annual Financial Report
Year ended June 30, 2021
Prepared by

FINANCE DEPARTMENT
Josh Brooks
Director of Finance
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CITY OF COMMERCE
Comprehensive Annual Financial Report
Year ended June 30, 2021

TABLE OF CONTENTS
Page

INTRODUCTORY SECTION
Letter of Transmittal i
Organizational Chart vi
Directory of Officials vii
Certificate of Achievement for Excellence in Financial Reporting – GFOA viii

FINANCIAL SECTION
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Required Supplementary Information) 5 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position 16
Statement of Activities 17
Fund Financial Statements:

Governmental Funds:

Balance Sheet 19
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 22
Statement of Revenues, Expenditures and Changes in Fund Balances 23 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 25 Proprietary Funds:

Statement of Net Position 26
Statement of Revenues, Expenses and Changes in Net Position 27 Statement of Cash Flows 28
Fiduciary Funds:

Statement of Fiduciary Net Position 29
Statement of Changes Fiduciary in Net Position 30
Notes to the Basic Financial Statements 32

CITY OF COMMERCE
Comprehensive Annual Financial Report
Year ended June 30, 2021
TABLE OF CONTENTS, (Continued)
REQUIRED SUPPLEMENTARY INFORMATION:

Schedule of Changes in Net Pension Liability and Related Ratios During the Measurement Period
Schedule of Pension Plan Contributions
Schedule of Changes in Net OPEB Liability and Related Ratios During the Measurement Period
Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual - General Fund
Notes to Required Supplementary Information

SUPPLEMENTARY SCHEDULES:

Non-Major Governmental Funds:

Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Special Revenue Funds:

Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Budgetary Comparison Schedules:

Supplemental Law Enforcement Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Proposition A Local Return Tax Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
State Gas Tax Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Community Development Block Grant (CDBG) Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Air Quality Management District (AQMD) Fund:

Page
73 74
75 76
77 81
82 83
85 87
88 89
90 CITY OF COMMERCE
Comprehensive Annual Financial Report
Year ended June 30, 2021
TABLE OF CONTENTS, (Continued)
Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Housing Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Art in Public Places Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Community Benefits Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Stormwater Management Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Debt Service Funds:

Budgetary Comparison Schedules:

Community Center Debt Service Fund:

Schedule of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual
Capital Projects Funds:

Budgetary Comparison Schedules:

Measure AA Fund:

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

General City Capital Projects Fund:

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

Fiduciary Funds:

Private Purpose Trust Fund:

Combining Statement of Fiduciary Net Position
Combining Statement of Changes in Fiduciary Net Position Page
91 92
93 94
95 96
97 98
100
101

CITY OF COMMERCE
Comprehensive Annual Financial Report
Year ended June 30, 2021
TABLE OF CONTENTS, (Continued)
Page

STATISTICAL SECTION
Net Position by Component 103
Changes in Net Position 105
Fund Balances of Governmental Funds 110
Changes in Fund Balances of Governmental Funds 111
Assessed Value and Estimated Actual Value of Taxable Property 113 Direct and Overlapping Property Tax Rates 114
Principal Property Tax Payers 115
Property Tax Levies and Collections 116
Card Club License Fee by Category 117
Direct and Overlapping Card Club Rates 118
Principal Card Club Remitter 120
Ratios of Outstanding Debt by Type 121
Ratios of General Bonded Debt Outstanding 123
Direct and Overlapping Debt 124
Legal Debt Margin Information 125
Demographic and Economic Statistics 127
Principal Employers 128
Full-time and Part-time City Employees 130
Capital Asset Statistics 131
February 25, 2022
i
component of the financial section of this report.
fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first that the City of Commerce, California’s financial statements for the fiscal year ended June 30, 2021, are concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion management; and evaluating the overall financial statement presentation. The independent auditor the financial statements; assessing the accounting principles used and significant estimates made by independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in Commerce, California for the fiscal year ended June 30, 2021, are free of material misstatement. The of the independent audit was to provide reasonable assurance that the financial statements of the City of and qualified to perform audits of the State and local governments within the State of California. The goal The City’s financial statements have been audited by Davis Farr, LLP, a public accounting firm fully licensed this financial report is complete and reliable in all material respects. free from material misstatement. As management, we assert that, to the best of our knowledge and belief, been designed to provide reasonable rather than absolute assurance that the financial statements will be controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the the City has established a comprehensive internal control framework that is designed both to protect the presented in this report. To provide a reasonable basis for making these representations, management of management assumes full responsibility for the completeness and reliability of all of the information management’s representations concerning the finances of the City of Commerce, California. Consequently, as promulgated by the Government Accounting Standards Board (GASB). This report consists of The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) accordance with generally accepted auditing standards by a firm of licensed certified public accountants. statements presented in conformity with generally accepted accounting principles (GAAP) and audited in local governments publish within six months of the close of each fiscal year a complete set of financial reader to gain an understanding of the City’s financial affairs. State law requires that all general-purpose financial position and results of operations of the City, and contains all disclosures necessary to enable the opinion, the data is accurate in all material aspects, is presented in a manner designed to fairly set forth the and the completeness and fairness of the presentation, including all disclosures, rests with the City. In our Commerce for the fiscal year ended June 30, 2021. Responsibility for the accuracy of the presented data It is our professional pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of To the Honorable Mayor, Members of the City Council and Citizens of the City of Commerce:

GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors in the financial section of the ACFR.

Profile of the City of Commerce
The City of Commerce, incorporated in 1960 is located within the east-central portion of the County of Los Angeles, approximately 6 miles southeast of downtown Los Angeles and 20 miles northeast of the City of Long Beach and the Pacific Ocean. The City is oriented to industrial uses with industrially-zoned land comprising approximately 85% of all land in the City. Residentially-zoned property consists almost entirely of five separate neighborhoods with approximately 3,430 residential units. The City is a regional center of employment in the Los Angeles basin, with the business employee population of approximately 60,000 persons considerably exceeding a residential population of approximately 12,830. The City’s land mass encompasses 6.6 square miles.

The City of Commerce, a general law city, was incorporated on January 28, 1960. The City operates under the Council-City Manager form of municipal government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City. Policymaking and legislative authority are vested in the City Council, which consists of the Mayor and four Council members. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and appointing the City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the government. The fivemember City Council is elected on a biennial cycle subject to four-year alternating terms, at large, on a non-partisan basis. The Mayor is selected by the City Council from among its members, serving a one-year term.

The City of Commerce, as a contract city, provides a full range of services, including police (as a contract member of the Los Angeles County Sheriff’s Department), fire protection (as a contract member of the Los Angeles County Fire Department), water service, street and infrastructure maintenance and construction, recreational and cultural services, planning and community development and general administration. The City of Commerce also is financially accountable for the legally separate Governing Body of the Successor Agency to the Commerce Community Development Commission. On January 31, 2012, the City of Commerce elected to serve as the Successor Agency to the Commerce Community Development Commission; the Commission acted as the City’s redevelopment agency. The Successor Agency has been responsible for the winding down of the Commission’s obligations subject to the monitoring by and approval of the independent County of Los Angeles First District Oversight Board established by State law to oversee the dissolution process. The City has accounted for the Successor Agency as ii
“blended” component units and therefore they have been included as an integral part of the City of Commerce’s financial statements.

The annual budget serves as the foundation for the City of Commerce’s financial planning and control. All departments of the City of Commerce are required to submit requests for appropriation to the City Manager and Finance Director each year. The City Manager and Finance Director use these requests as the starting point for developing a proposed budget. The City Manager and Finance Director then present this proposed budget to the City Council for review. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than June 30, the close of the City of Commerce’s fiscal year. The appropriated budget is prepared by fund (e.g., general), department (e.g., public works), and program (e.g., engineering). Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments within the same fund require the City Manager’s approval.

Supplemental appropriations during the year and/or transfers between funds, however, require approval of the City Council. The City utilizes an encumbrance accounting system, whereby commitments such as purchase orders are recorded during the year.

Unexpended or unencumbered appropriations lapse at the end of the fiscal year.

Encumbered appropriations are re-appropriated in the ensuing year’s budget. Budget-toactual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted.

Local Economy
The City of Commerce local economic environment has experienced difficult times due to the global pandemic caused by the COVID-19 virus. The City’s primary revenue source is the Commerce Casino which was closed or partially closed during different time periods since late March of 2020. The impact of the various stay at home orders and the change in consumer behaviors negatively impacted sales tax and other revenue sources for the City.

While the pandemic has created many challenges, the City has strived to continue to offer essential services to the community while implementing various cost savings measures including staffing reductions and employee wage concessions. Measure VS (Vital Services) recently passed and will provide an additional ¼ cent sales tax to help fund various programs and services that the City provides the community. The City also used significant amounts of reserve funds to finance essential services during the pandemic.

The City has also put in place a budgetary plan to restore the reserves used while also restoring services in a measured and pragmatic way as revenues recover.

Making the most of the City’s resources for the benefit of the entire community continues to be at the heart and soul of the City Council’s commitment to fiscal management and to economic development. The City Council seeks to build Commerce’s revenue base by attracting jobs and businesses to the City. Clearly, the ongoing emphasis is on iii
sustainability, investment, and reinvestment. These objectives will continue to build a strong healthy community and improve the quality of life for Commerce residents, businesses, and visitors.

The City and Successor Agency have approved tax abatement programs that provide long term benefits to the City in the form of additional revenues and local job creation.

Long-term financial planning
The City’s financial forecast for operating revenues and expenditures is based primarily on anticipated commercial, industrial and residential development. The forecast produces an evaluation of the City’s financial position as projected growth triggers increased service demands. The forecast is currently being adjusted on a regular basis to take into account the dramatic impact of the COVID-19 pandemic on the City’s revenue sources.

Our current projections anticipate that the City will experience a surplus for the fiscal year ended 6/30/2022. The Council has adopted a budget plan that, among several priorities, incorporates the replenishment of City reserves as a keystone to the plan. While recovery from the economic damage caused by the COVID-19 pandemic is the City’s primary challenge, the City anticipates additional future challenges and opportunities such as:
• Continue development of mixed use development along Washington Blvd. • Continued development of the Telegraph corridor
• Expansion of the Citadel outlets
• Management of the City’s cannabis industry and collaboration with overcoming industry or program obstacles to maximize collective success while identifying and implementing the best use of cannabis related revenue for the benefit of the community
• Advocate for the City of Commerce to ensure that City and Successor Agency property sales provide the greatest benefit to the community • Leverage Measure AA funding to provide the greatest value possible for City infrastructure projects
As a result of these future challenges and opportunities, the Financial Forecast becomes even more of an important tool going forward. This document will continue to be a framework in the annual budget preparation, as well as throughout the fiscal year, to assess any state and local economic/political action that might impact the City of Commerce.

Pension and other postemployment benefits
The City of Commerce is a member of the California Public Employees Retirement System (CalPERS). CalPERS sets the contribution rates for the City’s represented and noniv represented employee groups. Participants are required to contribute 7% of their annual covered salary – up until July 1, 2015; the City was making a portion of the contributions required of City employees on their behalf and for their account. The City employees now contribute the entire 7%. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The contribution requirements of the plan members are established by State law. The employer contribution rate is established and may be amended by CalPERS.

In early 2018 the City Council approved the establishment of an irrevocable trust for employee pension benefits. The pension trust fund allows the City to set aside funds for future employee pension costs and potentially earn a higher rate of return on these funds. To date $2.6 million has been deposited in the trust to fund future pension costs.

Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Commerce for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2020. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized ACFR. The 2020 report satisfied both GAAP and applicable legal requirements.

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

The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. Each member of the department has our sincere appreciation for the contribution made in the preparation of this report.

In closing, without the leadership and support of the City Council, preparation of this report would not have been possible.

Respectfully submitted,

Edgar P. Cisneros Josh Brooks
City Manager Director of Finance
v
City of Commerce Organization Chart
Recruitment &
Selection
Classification &
Compensation
Employee &
Retiree Benefits
Employee Labor
Relations
Organizational
Development &
Training
Employee Records
Management
Workers
Compensation &
Employee Safety
Administrative
Services
Adult Services
Support
Services
Technical Services
Children's
Services
Literacy
Branches
Fixed Route
Medi-Ride
Recreational
Transit
Garage
Accounting
Information
Technology
Purchasing
Warehouse
Business License
City Treasury
Animal Control
Crossing Guards
Community Safety
Specialists
Emergency
Preparedness
Social Services
Code Enforcement
L.A. Co. Sheriff’s
Dept.

L.A. Co. Probation
L.A. Co. Fire Dept.

M.U.S.D.

Independent
Studies
Environmental Services/
Compliance
Refuse Collection
Tree Maintenance
Water Utility
Street Sweeping
Street Maintenance
Storm Drain Maintenance
Traffic & Lighting
Planning/Zoning
Building and Safety
Economic Development
Housing
Environmental Reviews
Industrial Waste
Capital Improvement Program
Traffic Engineering
Construction Management
Development Review
Permits
Community
Centers
Brenda Villa Aquatic Center
Facility Maintenance
Special Events
Park Maintenance
Food Services
Camp Commerce
Recreation
Operations/Activities
Sports Programs
Teen Center
Senior Center
Preschool
Kids Club
Day Camp
Public
Information
Office
Media Relations
Cable TV
Graphics/Printing
Mayor
&
City Council
City
Attorney
City
Administrator
Deputy City
Administrator
City Clerk
Human Library Transportation Finance Public Safety & Community Services
Public Works
and
Development
Services
Parks and
Recreation
vi
City of Commerce
Directory of Officials
June 30, 2021

CITY COUNCIL
Leonard Mendoza, Mayor
Oralia Y. Rebollo, Mayor Pro Tem
Ivan Altamirano, Councilmember
Hugo A. Argumedo, Councilmember
John Soria, Councilmember

ADMINISTRATION
Edgar P. Cisneros, City Manager
Vilko Domic, Assistant City Manager
Lena Shumway, Director of Administrative Services/City Clerk Josh Brooks, Director of Finance
Ela Pappo, Director of Human Resources
Beatriz Sarmiento, Director of Library Services
Greg Alaniz, Director of Parks and Recreation
Claude McFerguson, Director of Transportation
Daniel Hernandez, Director of Public Works and Development Services vii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Commerce
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
viii
Independent Auditor’s Report
Honorable Mayor and City Council
City of Commerce
Commerce, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Commerce (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 Opinions
In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2021 and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As described further in note 15 to the financial statements, during the year ended June 30, 2021, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 84. Our opinion is not modified with respect to this matter.

Report on Summarized Comparative Information
We have previously audited the City of Commerce’s 2020 financial statements, and we expressed an unmodified opinion on those audited financial statements in our report dated December 11, 2020. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of Changes in Net Pension Liability and Related Ratios During the Measurement Period, Schedule of Pension Plan Contributions, Schedule of Changes in Net OPEB Liability and Related Ratios during the Measurement Period, Schedule of OPEB Plan Contributions and the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Commerce’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules, the introductory section and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
2 The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2022 on our consideration of the City of Commerce'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 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 City of Commerce’s internal control over financial reporting and compliance.

Irvine, California
February 25, 2022
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4 MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ended June 30, 2021
As management of the city of Commerce, California, we offer readers a narrative overview and analysis of the City’s financial statements. This reflects the City’s financial activities for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on page i of this report.

FINANCIAL HIGHLIGHTS
 The City’s net position, the amount by which total assets exceed total liabilities, equals $87,034,044.
 The City’s total assets for the FY20-21 period equaled $200,273,758, a decrease of $2,515,381 from prior year. This decrease is split between receivable from successor agency and depreciable net assets.
 Deferred outflows of resources equaled $10,096,830, a decrease of $1,922,172 from prior year.

This decrease is due primarily to market fluctuations of investments in trust funds and actuarial assumptions for benefits.
 The City’s liabilities equaled $112,838,278, a decrease of $544,377 from prior year. This decrease is due primarily to a decrease in accounts payables as a result of COVID-19 impacting operations.
 Deferred inflows of resources equaled $10,498,266, an increase of $1,445,022 from prior year.

This increase is due primarily to market fluctuations of investments in trust funds and actuarial assumptions for benefits.
 The City’s total net position decreased by $5,338,198. The decrease is primarily due to a decrease in revenues as a result of the COVID-19 pandemic.  At the close of the current fiscal year, the City’s major governmental funds reported combined fund balances of $81,471,183, a decrease of $164,613 from the prior year. This decrease is primarily due to a decrease in revenues as a result of the COVID-19 pandemic.  At the end of the current fiscal year, unassigned fund balance for the General Fund was $37,888,039, or 69% of total General Fund expenditures.  Total government funds revenue from all sources in FY 2020-21 equaled $64,555,889.  Total costs for all governmental funds expenses in FY 2020-21 equaled $68,892,521.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) Governmentwide financial statements 2) Fund financial statements and 3) Notes to the financial statements. This report also contains (i) required supplementary information and (ii) supplementary information in support of the basic financial statements.
5 Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to disclosures for a private-sector business.

The statement of net position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Over time, increases and decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information designed to show how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will impact cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities). The governmental activities of the City include general government operations, community development, public safety, public works, library, and parks and recreation services. The City’s business-type activities include operations from transit, water and cable television. The government-wide financial statements can be found on pages 14 through 16.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and show compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.

Governmental Funds - Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financial requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide statements.

Most of the City’s basic services are included in governmental funds. The basis of accounting is different between the governmental fund statements and the government-wide financial statements. The governmental funds focus on near term revenues/financial resources and expenditures, while the government-wide financial statements include both near term and long-term revenues/financial resources and expenses. The information in the governmental fund statements can be used to evaluate the City’s near term financing requirements and immediate fiscal health. By comparing the 6 governmental fund statements with the government-wide financial statements, the reader gains a better understanding of the long-term impacts of the City’s current year financing decisions. To assist in this comparison, reconciliations between the governmental fund statements and the government-wide financial statements are included with the governmental fund balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances. The governmental fund financial statements can be found on pages 17 through 23.

Proprietary Funds - Proprietary funds are used by governments to account for their business-type activities. Business-type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services received.

Enterprise funds of the City are used to report the same functions presented as business-type activities in the government-wide statements with the fund statements providing more detail than is reported in the government-wide statements. The City has three major enterprise funds, the Transit Fund, CNG Fund and Water Fund.

The proprietary fund financial statements can be found on pages 24 through 26.

Fiduciary funds
Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. Fiduciary funds are not included in the government-wide financial statements because their assets are not available to support the City’s activities. The City has one Cash Deposits Agency Fund.

The fiduciary fund financial statements can be found on page 27 through 28.

Notes to the financial statements
The notes to the financial statements provide additional information that is important to a full understanding of the data in the government-wide and fund financial statements. The notes are located immediately following the basic financial statements.

Other information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. Required supplementary information may be found immediately following the notes to the financial statements.

The combining statements for other governmental funds, the individual fund schedules, the non-major enterprise funds, and the internal service funds statements are presented immediately following the required supplementary information.
7 GOVERNMENT-WIDE FINANCIAL ANALYSIS
The City has presented its financial statements under the reporting model required by the Governmental Accounting Standards Board Statement No. 34 (GASB 34), Basic Financial Statements – and Management’s Discussion and Analysis (MD&A) – for State and Local Governments. A comparative analysis of government-wide data will be included in this report.

The statement of net position can serve as a useful indicator of the City’s financial position. The city of Commerce’s net position at June 30, 2021 total $87,034,044. Following is a condensed version of the government-wide statement of net position.
2021 2020 2021 2020 2021 2020
Assets:

Current and other asset 90,446,250$ 88,946,874$ 4,169,934 4,024,385 94,616,184 92,971,259 Internal balances 4,525,703 5,622,413 (4,525,703) (5,622,413) - - Capital assets, net 92,072,836 96,750,962 13,584,738 13,066,918 105,657,574 109,817,880 Total Assest 187,044,789 191,320,249 13,228,969 11,468,890 200,273,758 202,789,139 Deferred outflows of resources:

Pension related 4,090,477 4,630,516 331,626 734,864 4,422,103 5,365,380 OPEB related 4,766,733 5,742,315 907,994 911,307 5,674,727 6,653,622 8,857,210 10,372,831 1,239,620 1,646,171 10,096,830 12,019,002 Liabilities:

Current Liabilities 7,716,557 8,339,814 856,693 976,596 8,573,250 9,316,410 Long-term Liabilities 91,279,464 90,989,401 12,985,564 13,076,844 104,265,028 104,066,245 Total Liabilities 98,996,021 99,329,215 13,842,257 14,053,440 112,838,278 113,382,655 Deferred inflows of resources:

Pension related 435,298 745,667 917,990 118,338 1,353,288 864,005 OPEB related 7,681,721 7,067,607 1,463,257 1,121,632 9,144,978 8,189,239 8,117,019 7,813,274 2,381,247 1,239,970 10,498,266 9,053,244 Net Position:

Net investment in
capital assets 83,964,506 87,603,633 13,584,738 13,066,918 97,549,244 100,670,551 Restricted 2,098,713 2,038,137 - - 2,098,713 2,038,137
Unrestricted 2,725,740 4,908,821 (15,339,653) (15,245,267) (12,613,913) (10,336,446) Total Net Position $ 88,788,959 $ 94,550,591 (1,754,915) (2,178,349) 87,034,044 92,372,242 Net Position
Governmental Activities Business-type Activities Total
The largest portion of the City’s net position is attributable to the net investment in capital assets. The majority of the liabilities are attributable to the net other post-employment benefit liability and the net pension liability.
8 Changes in net position
The changes in net position illustrate the increase or decrease in net position of the City resulting from its operating activities. The city of Commerce’s net position decreased $5,338,198 in the fiscal year ended June 30, 2021. The decrease was split between the governmental activities of $5,761,632 and partially offset by an increase in business-type activities of $423,434. Following is a condensed version of the City’s changes in net position. The table shows the revenues, expenses, and related changes in net position for governmental and business-type activities. 2021 2020 2021 2020 2021 2020
Revenues:

Program revenues
Charges for services $ 8,715,342 $ 7,366,008 4,060,859 3,716,693 12,776,201 11,082,701 Operating grants & contributions 4,632,926 5,477,203 4,931,427 3,396,603 9,564,353 8,873,806 Capital grants & contributions 9,999 295,545 - 351,849 9,999 647,394 General revenues:

Casino license tax 8,848,685 20,260,767 - - 8,848,685 20,260,767 Property tax 5,184,180 4,548,892 - - 5,184,180 4,548,892 Sales tax 29,411,394 27,005,166 - - 29,411,394 27,005,166 Franchise taxes 1,114,535 1,055,508 - - 1,114,535 1,055,508 Transient occupancy taxes 1,717,154 2,613,232 - - 1,717,154 2,613,232 Motor vehicle in-lieu 9,438 10,306 - - 9,438 10,306
Investment income 481,994 495,961 6,272 15,470 488,266 511,431 Miscellaneous revenue (expense) 3,020,230 1,819,994 - - 3,020,230 1,819,994 Special Items (See Footnote 15) 1,410,012 - - - 1,410,012 - Total revenues 64,555,889 70,948,582 8,998,558 7,480,615 73,554,447 78,429,197 Expenses:

General government 19,230,660 14,923,956 - - 19,230,660 14,923,956 Community development 3,626,129 2,444,173 - - 3,626,129 2,444,173 Public safety 23,367,758 22,513,602 - - 23,367,758 22,513,602 Public works 12,613,431 16,343,439 - - 12,613,431 16,343,439 Library 3,067,205 4,719,709 - - 3,067,205 4,719,709
Parks recreation and culture 6,659,835 12,836,798 - - 6,659,835 12,836,798 Interest on long-term debt 327,503 347,944 - - 327,503 347,944 Transit - - 7,059,103 7,123,822 7,059,103 7,123,822
CNG - - 2,725,050 2,283,888 2,725,050 2,283,888
Water - - 215,971 482,240 215,971 482,240
Total expenses 68,892,521 74,129,621 10,000,124 9,889,950 78,892,645 84,019,571 Excess (deficiency) before transfers (4,336,632) (3,181,039) (1,001,566) (2,409,335) (5,338,198) (5,590,374) Transfers (1,425,000) (1,425,000) 1,425,000 1,425,000 - - Change in net position (5,761,632) (4,606,039) 423,434 (984,335) (5,338,198) (5,590,374) Net position - beginning of year 94,550,591 99,156,630 (2,178,349) (1,194,014) 92,372,242 97,962,616 Net position - end of year $ 88,788,959 94,550,591 (1,754,915) (2,178,349) 87,034,044 92,372,242 Change in Net Position
Governmental Activities Business-type Activities Total
The total net position of the City was $87,034,044 as of June 30, 2021. This represents a decrease of $5,338,198 over the prior year. This change is primarily due to a decrease in revenues as a result of the COVID-19 pandemic.
9 Additional financial highlights are shown below:

The City’s total revenues were $73,554,447. A significant portion of the Governmental revenues came from Sales tax (45.56%), Casino License tax (13.71%), and Property tax (8.03%) of the total governmental revenues of $64,555,889. A significant portion of the Business-type Activities revenues were collected from Operating Grants & Contributions (54.80%) and Charges for Services (45.13%) of the total businesstype revenues of $8,998,558.

The total cost of all city programs and services during fiscal year ended June 30, 2021 was $78,892,645.

The break down by activity as a percentage of total expenses for selected programs are as follows:

Public safety (police and fire) 29.62%, General Government 24.38%, Public works 16%, Parks and Recreation 8.44%, and Business-type activities accounted for 12.68%. The remaining three areas, all less than 5% each, comprise the balance.

Change in net position represents a decrease of $5,338,198 for the year, as compared to last year's change, representing a decrease of $5,590,374. Total net position at the end of the year was $87,034,044. The City has ample amounts to provide for its outstanding indebtedness.

Governmental activities experienced a decrease in net position of $5,761,632. This is primarily due to a drop in Commerce Casino tax revenues: casino operations were heavily impacted by COVID-19 closures and restrictions.

Business-type activities consist of the Transit, Water, and CNG Funds. The financial goal of the City’s business-type activities is to operate on a more or less “break-even” basis without making significant profit or needing general tax subsidies. For fiscal year ended June 30, 2021, this goal was achieved with the City’s total business-type activities having realized an overall increase in net position of $423,434.

This increase in net position is primarily due to CARES Act relief grants and other COVID-19 related grants used to fund operations such as Transit services and CNG vehicles.

FINANCIAL ANALYSIS OF GOVERNMENT FUNDS
Below is an analysis of the City’s major governmental fund activities for the year:
2021 2020
Amount Increase
(Decrease)
Percent
Increase
(Decrease)
Total Fund Equity:

General Fund $ 61,427,979 $ 64,415,324 (2,987,345) -4.6% Measure AA 20,922,336 18,617,305 2,305,031 12.4%
General City Capital Projects Fund (879,132) (1,396,833) 517,701 37.1% Total Fund Equity $ 81,471,183 $ 81,635,796 (164,613) -0.2% Governmental Funds
10 The General fund balance decreased by $2,987,345. The decrease in revenue due to the COVID-19 global pandemic was the primary driver of the decrease in fund balance.

Measure AA fund balance increased by $2,305,031 due to revenues exceeding expenditures on various projects.

General City Capital Projects fund balance increased by $517,701, which is consistent with capital projects in the City.

FINANCIAL ANALYSIS OF THE CITY’S MAJOR PROPRIETARY FUNDS Below is an analysis of the fund equity of the City’s proprietary funds:
2021 2020
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Net Position:

Transit $ (6,024,358) $ (5,321,682) (702,676) -13.2%
CNG 4,264,866 3,772,458 492,408 13.1%
Water 4,577 (629,125) 633,702 100.7%
Total Net Position $ (1,754,915) $ (2,178,349) 423,434 19.4% Unrestricted Net Position:

Transit $ (15,409,198) $ (14,341,156) (1,068,042) -7.4% CNG 1,144,194 528,533 615,661 116.5%
Water (1,074,649) (1,432,644) 357,995 25.0%
Total Unrestricted Net Position $ (15,339,653) $ (15,245,267) (94,386) -0.6% Proprietary Funds
The Transit Fund net position decreased $702,676 and unrestricted net position decreased by $1,068,042. The key factor in the decrease of net position is due to the drop in revenue from the COVID19 global pandemic.

The Water Fund net position increased $633,702 and unrestricted net position increased by $357,995.

The increase in net position is primarily due to current year leased water system rights revenues exceeding the operating expenses.
11 General Fund Budgetary Highlights
The General Fund receives the most public attention since it is where local tax revenues are accounted for and where the most popular municipal services such as police and public works are funded.

The General Fund is the chief operating fund of the City, which is used to account for all discretionary revenues and expenditures necessary to carryout basic government functions that are not accounted for through other special revenue and grant funds. Year-to-date revenues, including transfers-in, totaled $53,483,741. This is a 9.12% decrease when compared to last year’s revenue total of $58,852,313. The largest revenue source was Taxes, which includes both sales taxes and property taxes at $29,787,684 which increased 6.95% or $1,935,549 compared to the prior year. Casino license tax totaled $9,049,147, down by $11,011,158 or 55% when compared to the prior year. This decrease is due to the Casino being shut down in response to the COVID-19 pandemic. General Fund expenditures totaled $56,471,086, including transfer out, and were over budgeted totals for the fiscal year by $1,451,152, due primarily to higher-than-anticipated public safety expenditures.

Debt Administration
Below is a schedule of the changes to the City’s long-term debt:

Balance at July
1, 2020 Additions Reductions
Balance at
June 30, 2021
Governmental Activities:
2014 Lease Revenue Bonds 8,285,000 - (390,000) 7,895,000 Premium on bond 863,344 - (60,234) 803,110
Compenstated absences 3,389,160 971,308 (1,023,821) 3,336,647 Total Long-Term Obligations - Governmental Activities 12,537,504 971,308 (1,474,055) 12,034,757 Business Activities:

Compensated Absences 538,448 269,847 (306,449) 501,846
Total Long-Term Obligations $ 13,075,952 1,241,155 (1,780,504) 12,536,603 As can be seen from the table above, the City has stabilized its debt financing strategy in support of projects. In fiscal 2018, the City’s 2007 JPFA bonds were refinanced and the resulting new issuance is recorded solely in the Successor Agency. Information on the long-term liabilities is discussed further in Note 5 of the Financial Statements.
12 Capital Assets
Below is a schedule of the City’s capital assets, net of accumulated depreciation:

June 30, June 30, Amount Increase Precent Increase
2021 2020 (Decrease) (Decrease)
Governmental Activities:

Land $ 10,547,874 10,975,002 (427,128) -3.9%
Construction in progress - 161,400 (161,400) -100.0%
Buildings 43,210,992 43,210,992 - 0.0%
Improvements other than buildings 20,719,853 20,719,853 - 0.0% Infrastructure 136,885,793 136,885,793 - 0.0%
Machinery and equipment 7,029,987 7,123,425 (93,438) -1.3% Less accumulated depreciation (126,321,663) (122,325,503) (3,996,160) -3.3% Net capital assets $ 92,072,836 96,750,962 (4,678,126)
June 30, June 30, Amount Increase Precent Increase
2021 2020 (Decrease) (Decrease)
Business Activities:

Land $ 2,755,498 2,755,498 - 0.0%
Machinery and equipment 11,997,468 12,512,810 (515,342) -4.1% Water rights 2,141,222 2,141,222 - 0.0%
Building and improvements 12,118,828 12,118,828 - 0.0%
Less accumulated depreciation (15,428,278) (16,461,440) 1,033,162 6.3% Net capital assets $ 13,584,738 13,066,918 517,820
Governmental capital assets decreased as depreciation of assets grew at a steady amount. Construction in progress decreased and Infrastructure remained the same as prior year due to the completion of infrastructure projects. Business-type activity capital assets increased due primarily to depreciation.

See note 4 for further details on capital assets.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The city of Commerce’s economy is clearly linked to the national, state, and regional economy. While the City is moving forward with a transformation in its economical base, its local economy is impacted by the global economy, with resultant recurring revenue fluctuations. Most forecasters are predicting an economic slow-down in 2022 with the potential for a recession in the next two to five years. Detailed information about the economic analysis, revenue assumptions, and other budgetary process parameters utilized in the preparation of the annual budget, can be obtained from the 2021-2022 citywide budget.
13 REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Commerce finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director at the City of Commerce, 2535 Commerce Way, Commerce, CA 90040. 14 (This page intentionally left blank)
15 Statement of Net Position
June 30, 2021
(with comparative information for the prior year)
Governmental Business-type
Assets: Activities Activities 2021 2020
Cash and investments (note 2) $ 46,074,749 3,551,523 49,626,272 50,141,785 Restricted cash for PARS 115 trust (note 2) 3,309,427 - 3,309,427 2,913,821 Cash and investments with fiscal agent (note 2) 1,251 - 1,251 125 Interest receivable 17,739 - 17,739 78,608
Accounts receivable 3,721,732 530,594 4,252,326 2,939,461 Due from other governments 9,149,025 32,899 9,181,924 6,514,307 Internal balances 4,525,703 (4,525,703) - -
Receivable from Successor Agency 307,008 54,918 361,926 2,846,409 Loans and leases receivable 478,930 - 478,930 478,960
Prepaid items and deposits 723,505 - 723,505 394,899
Property held for resale 26,662,884 - 26,662,884 26,662,884 Capital assets (note 4):

Nondepreciable 10,547,874 2,755,498 13,303,372 13,891,900 Depreciable, net 81,524,962 10,829,240 92,354,202 95,925,980 Total assets 187,044,789 13,228,969 200,273,758 202,789,139 Deferred outflow of resources:

Pension related (note 8) 4,090,477 331,626 4,422,103 5,365,380 OPEB related (note 9) 4,766,733 907,994 5,674,727 6,653,622 Total deferred outflow of resources 8,857,210 1,239,620 10,096,830 12,019,002 Liabilities:

Accounts payable 4,519,699 515,097 5,034,796 6,627,177
Accrued salaries and benefits 1,019,505 199,430 1,218,935 1,057,041 Interest payable 95,716 - 95,716 100,591
Deposit payable 492,723 - 492,723 18,680
Unearned revenue 250,000 - 250,000 -
Noncurrent liabilities:

Due within one year:

Bonds payable (note 5) 470,234 - 470,234 450,234
Compensated absences (note 5) 868,680 142,166 1,010,846 1,062,687 Due in more than one year:

Bonds payable (note 5) 8,227,876 - 8,227,876 8,698,110
Compensated absences (note 5) 2,467,967 432,884 2,900,851 2,864,921 Net pension liability (note 8) 31,164,518 3,212,258 34,376,776 32,564,886 Net OPEB liability (note 9) 49,419,103 9,413,626 58,832,729 59,938,328 Total liabilities 98,996,021 13,915,461 112,911,482 113,382,655 Deferred inflow of resources:

Pension related (note 8) 435,298 917,990 1,353,288 864,005 OPEB related (note 9) 7,681,721 1,463,257 9,144,978 8,189,239 Total deferred inflow of resources 8,117,019 2,381,247 10,498,266 9,053,244 Net position:

Net investment in capital assets 83,964,506 13,584,738 97,549,244 100,670,551 Restricted for:

Housing 1,715,139 - 1,715,139 1,700,194
Public safety 221,350 - 221,350 221,501
Transportation 162,224 - 162,224 116,442
Unrestricted 2,725,740 (15,412,857) (12,687,117) (10,336,446) Total net position (deficit) $ 88,788,959 (1,828,119) 86,960,840 92,372,242 Totals

CITY OF COMMERCE
See accompanying notes to the basic financial statements. 16 Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Governmental activities:

General government $ 19,230,660 - 158,883 -
Community development 3,626,129 536,975 54,023 9,999
Public safety 23,367,758 1,392,108 156,726 -
Public works 12,613,431 6,422,295 2,986,285 -
Library 3,067,205 - 54,398 -
Parks, recreation and culture 6,659,835 363,964 1,222,611 - Interest on long-term debt 327,503 - - -
Total governmental activities 68,892,521 8,715,342 4,632,926 9,999 Business-type activities:

Transit 7,132,307 - 4,931,427 -
CNG 2,725,050 3,215,859 - -
Water 215,971 845,000 - -
Total business-type activities 10,073,328 4,060,859 4,931,427 - Total $ 78,965,849 12,776,201 9,564,353 9,999
General revenues:

Taxes:

Casino license tax
Property taxes
Sales taxes
Franchise taxes
Transient occupancy taxes
Motor vehicle in lieu, unrestricted
Investment income
Miscellaneous
Gain on sale of property
Transfers
Total general revenues and transfers
Change in net position
Net position (deficit) at beginning of year
Net position (deficit) at end of year
(with comparative information for the prior year)

CITY OF COMMERCE
Statement of Activities
Year ended June 30, 2021
Program Revenues
See accompanying notes to the basic financial statements. 17 Governmental Business Totals
Activities Activities 2021 2020
(19,071,777) - (19,071,777) (14,923,956)
(3,025,132) - (3,025,132) (1,985,507)
(21,818,924) - (21,818,924) (21,043,839)
(3,204,851) - (3,204,851) (7,537,763)
(3,012,807) - (3,012,807) (4,651,655)
(5,073,260) - (5,073,260) (10,500,201)
(327,503) - (327,503) (347,944)
(55,534,254) - (55,534,254) (60,990,865)
- (2,200,880) (2,200,880) (3,727,219)
- 490,809 490,809 939,654
- 629,029 629,029 362,760
- (1,081,042) (1,081,042) (2,424,805)
(55,534,254) (1,081,042) (56,615,296) (63,415,670)
8,848,685 - 8,848,685 20,260,767
5,184,180 - 5,184,180 4,548,892
29,411,394 - 29,411,394 27,005,166
1,114,535 - 1,114,535 1,055,508
1,717,154 - 1,717,154 2,613,232
9,438 - 9,438 10,306
481,994 6,272 488,266 511,431
3,020,230 - 3,020,230 1,819,994
1,410,012 - 1,410,012 -
1,425,000 (1,425,000) - -
49,772,622 1,431,272 51,203,894 57,825,296
(5,761,632) 350,230 (5,411,402) (5,590,374)
94,550,591 (2,178,349) 92,372,242 97,962,616
$ 88,788,959 (1,828,119) 86,960,840 92,372,242
Changes in Net Position
Net (Expense) Revenue and
See accompanying notes to the basic financial statements. 18 General City
Capital
Measure Projects
General AA Fund
Assets:

Cash and investments $ 22,266,059 19,853,567 -
Restricted cash for PARS 115 trust 3,309,427 - -
Cash and investments with fiscal agent - - -
Interest receivable 17,739 - -
Accounts receivable 3,338,062 61,670 -
Due from other governments 5,499,619 2,125,218 1,434,495 Due from other funds (note 6) 11,698,966 - -
Receivable from Successor Agency 307,008 - -
Loans and leases receivable - - -
Prepaid items and deposits 723,505 - -
Property held for resale 19,200,000 - 6,409,884
Total assets $ 66,360,385 22,040,455 7,844,379
Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 3,171,285 1,056,449 154,046
Accrued salaries and benefits 1,018,398 - -
Deposits payable 492,723 - -
Unearned revenue 250,000 - -
Due to other funds (note 6) - - 7,134,970
Total liabilities 4,932,406 1,056,449 7,289,016
Deferred inflows of resources:

Unavailable revenue - 61,670 1,434,495
Total deferred inflows of resources - 61,670 1,434,495
Fund balances (deficit):

Nonspendable:

Prepaid items and deposits 723,505 - -
Receivable from Successor Agency 307,008 - -
Property held for resale 19,200,000 - -
Restricted for:

Community development - - -
Debt service - - -
Housing - - -
Law enforcement - - -
Transportation - - -
Pensions 3,309,427 - -
Assigned for:

Capital projects - 20,922,336 -
Unassigned 37,888,039 - (879,132)
Total fund balances (deficit) 61,427,979 20,922,336 (879,132) Total liabilities, deferred inflows
of resources and fund balances $ 66,360,385 22,040,455 7,844,379

CITY OF COMMERCE
Governmental Funds
(with comparative information for the prior year)
June 30, 2021
Balance Sheet
See accompanying notes to the basic financial statements. 19 Non-Major
Governmental
Funds 2021 2020
3,955,123 46,074,749 48,060,937
- 3,309,427 2,913,821
1,251 1,251 125
- 17,739 78,608
322,000 3,721,732 1,514,533
89,693 9,149,025 6,434,126
- 11,698,966 13,265,947
- 307,008 2,414,620
478,930 478,930 478,960
- 723,505 388,260
1,053,000 26,662,884 26,662,884
5,899,997 102,145,216 102,212,821
137,919 4,519,699 5,946,120
1,107 1,019,505 892,724
- 492,723 18,680
- 250,000 -
38,293 7,173,263 7,643,534
177,319 13,455,190 14,501,058
478,928 1,975,093 2,113,916
478,928 1,975,093 2,113,916
- 723,505 388,260
- 307,008 2,414,620
- 19,200,000 19,200,000
3,238,957 3,238,957 2,001,175
414,346 414,346 412,491
1,243,711 1,243,711 1,221,235
221,350 221,350 221,501
162,224 162,224 116,442
- 3,309,427 2,913,821
20,922,336 18,617,305 -
(36,838) 36,972,069 38,090,997
86,714,933 5,243,750 85,597,847
5,899,997 102,145,216 102,212,821
Totals
See accompanying notes to the basic financial statements. 20 (This page intentionally left blank)
21 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2021
Fund balances of governmental funds $ 86,714,933
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, net of depreciation, have not been included as financial resources in governmental fund activity.

Capital assets 218,394,499
Accumulated depreciation (126,321,663)
Long-term debt and compensated absences that have not been included in the governmental fund activity.

Bonds payable (8,698,110)
Compensated absences (3,336,647)
Net pension liability (31,164,518)
OPEB liability (49,419,103)
Accrued interest payable for the current portion of interest due on bonds payable has not been reported in the governmental funds. (95,716) Revenues that are measurable but not available. Amounts are recorded as unavailable revenue under the modified accrual basis of accounting. 1,975,093 Deferred inflows and outflows associated with pension and OPEB obligations are not reported in the governmental funds.

Deferred outflows of resources 8,857,210
Deferred inflows of resources (8,117,019)
Net position of governmental activities $ 88,788,959

CITY OF COMMERCE
See accompanying notes to the basic financial statements. 22 Measure
General AA
Revenues:

Taxes 29,787,684$ 7,649,017
Casino license tax 9,049,147 -
Licenses and permits 4,416,572 -
Intergovernmental 656,013 560,523
Fines and forfeitures 1,392,108 -
Investment income 439,927 35,062
Activity fees 43,829 -
Charges for services 1,268,381 -
Rental income 703,573 -
Miscellaneous 4,644,948 -
Total revenues 52,402,182 8,244,602
Expenditures:

Current:

General government 15,284,117 -
Community development 3,367,607 -
Public safety 23,228,666 3,428
Public works 5,380,197 5,553,692
Library 2,921,776 -
Parks, recreation and culture 4,930,744 -
Debt service:

Principal - -
Interest and fiscal charges - -
Total expenditures 55,113,107 5,557,120
Excess (deficiency) of revenues
over (under) expenditures (2,710,925) 2,687,482
Other financing sources (uses):

Transfers in (note 7) 1,081,559 -
Transfers out (note 7) (1,357,979) (382,451)
Total other financing sources (uses) (276,420) (382,451) Net change in fund balances (2,987,345) 2,305,031
Fund balances (deficit) at beginning of year 64,415,324 18,617,305 Fund balances (deficit) at end of year $ 61,427,979 20,922,336

CITY OF COMMERCE
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2021
(with comparative information for the prior year)
See accompanying notes to the basic financial statements. 23 General City
Capital Non-Major
Projects Governmental
Fund Funds 2021 2020
- 37,436,701 35,233,104 -
- - 9,049,147 20,060,305
- 1,244,215 5,660,787 3,937,691
- 2,195,978 3,412,514 5,779,860
- - 1,392,108 1,367,724
- 29,806 504,795 495,961
- - 43,829 231,657
- - 1,268,381 110,177
- 987,355 1,690,928 1,770,027
17,703 - 4,662,651 1,750,094
17,703 4,457,354 65,121,841 70,736,600
- 211,469 15,495,586 17,482,692
- 82,932 3,450,539 3,328,344
- 157,268 23,389,362 22,513,602
74,262 - 11,008,151 17,680,994
- - 2,921,776 4,185,953
- 600,985 5,531,729 11,220,212
390,000 390,000 370,000 -
- 392,612 392,612 412,803
74,262 1,835,266 62,579,755 77,194,600
(56,559) 2,622,088 2,542,086 (6,458,000)
574,260 783,719 2,439,538 5,520,251
- (2,124,108) (3,864,538) (6,945,251)
574,260 (1,340,389) (1,425,000) (1,425,000)
517,701 1,281,699 1,117,086 (7,883,000)
(1,396,833) 3,962,051 85,597,847 93,480,847
(879,132) 5,243,750 86,714,933 85,597,847
Totals
See accompanying notes to the basic financial statements. 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities
Year ended June 30, 2021
Net changes in fund balances - total governmental funds $ 1,117,086 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense.

Depreciation (4,089,598)
Other capital related items (588,528)
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.

Amortization of premiums and discounts are recorded as an adjustment to longterm liabilities in the statement of net position. Proceeds of bonds and refundings are recorded as other financing sources and uses in governmental funds.

Principal expense 390,000
Amortization of premium 60,234
Changes in net pension liability and related deferred outflows and inflows are not recorded in governmental funds. (3,289,522)
Changes in net OPEB liability and related deferred outflows and inflows are not recorded in governmental funds. 720,131
The statement of net position includes accrued interest on long term debt. 4,875 To record as an expense the net change in compensated absences in the statement of activities. 52,513
Revenues that are measurable but not available. Amounts are not recorded as revenue under the modified accrual basis of accounting. (138,823) Change in net position of governmental activities $ (5,761,632)

CITY OF COMMERCE
See accompanying notes to the basic financial statements. 25 Transit CNG Water 2021 2020
Assets:

Current assets:

Cash and investments $ - 905,607 2,645,916 3,551,523 2,080,848 Accounts receivable, net 10,906 519,688 - 530,594 1,424,928 Due from other governments 32,899 - - 32,899 80,181
Prepaid items and deposits - - - - 6,639
Total current assets 43,805 1,425,295 2,645,916 4,115,016 3,592,596 Noncurrent assets:

Receivable from Successor Agency - - 54,918 54,918 431,789 Capital assets:

Nondepreciable 2,421,399 334,099 - 2,755,498 2,755,498
Depreciable, net 6,963,441 2,786,573 1,079,226 10,829,240 10,311,420 Total noncurrent assets 9,384,840 3,120,672 1,134,144 13,639,656 13,498,707 Total assets 9,428,645 4,545,967 3,780,060 17,754,672 17,091,303 Deferred outflows of resources:

Pension related 331,626 - - 331,626 734,864
OPEB related 907,994 - - 907,994 911,307
Total deferred outflows
of resources 1,239,620 - - 1,239,620 1,646,171
Liabilities:

Current liabilities:

Accounts payable 220,827 281,101 13,169 515,097 681,057 Accrued salaries and benefits 199,430 - - 199,430 164,317 Due to other funds (note 6) 763,389 - 3,762,314 4,525,703 5,622,413 Compensated absences (note 5) 142,166 - - 142,166 131,222 Total current liabilities 1,325,812 281,101 3,775,483 5,382,396 6,599,009 Noncurrent liabilities:

Compensated absences (note 5) 359,680 - - 359,680 407,226 Net pension liability (note 8) 3,212,258 - - 3,212,258 4,460,220 Net OPEB liability (note 9) 9,413,626 - - 9,413,626 8,209,398 Total liabilities 14,311,376 281,101 3,775,483 18,367,960 13,076,844 Deferred inflows of resources:

Pension related 917,990 - - 917,990 118,338
OPEB related 1,463,257 - - 1,463,257 1,121,632
Total deferred inflows
of resources 2,381,247 - - 2,381,247 1,239,970
Net Position:

Investment in capital assets 9,384,840 3,120,672 1,079,226 13,584,738 13,066,918 Unrestricted (15,409,198) 1,144,194 (1,074,649) (15,339,653) (15,245,267) Total net position (deficit) $ (6,024,358) 4,264,866 4,577 (1,754,915) (2,178,349) Totals

CITY OF COMMERCE
Proprietary Funds
Statement of Net Position
June 30, 2021
(with comparative information for the prior year)
Enterprise Funds
See accompanying notes to the basic financial statements. 26 Transit CNG Water 2021 2020
Operating revenues:

Charges for services $ - 3,215,859 - 3,215,859 2,871,693 Leased water rights - - 845,000 845,000 845,000
Total operating revenues - 3,215,859 845,000 4,060,859 3,716,693 Operating expenses:

General and administrative 1,976,574 - 11,699 1,988,273 1,152,351 Operations 2,207,574 - 104,059 2,311,633 4,431,818
Maintenance 2,302,702 2,601,797 - 4,904,499 3,607,730
Depreciation and amortization 572,253 123,253 100,213 795,719 698,051 Total operating expenses 7,059,103 2,725,050 215,971 10,000,124 9,889,950 Operating income (loss) (7,059,103) 490,809 629,029 (5,939,265) (6,173,257) Non-operating revenues (expenses):

Intergovernmental 4,931,427 - - 4,931,427 3,396,603
Interest income - 1,599 4,673 6,272 15,470
Total non-operating
revenue (expenses) 4,931,427 1,599 4,673 4,937,699 3,412,073 Income before capital
contributions and transfers (2,127,676) 492,408 633,702 (1,001,566) (2,761,184) Transfers:

Capital contributions - - - - 351,849
Transfers in (note 7) 1,425,000 - - 1,425,000 1,425,000 Total transfers 1,425,000 - - 1,425,000 1,776,849
Changes in net position (702,676) 492,408 633,702 423,434 (984,335) Net position (deficit) at beginning
of year (5,321,682) 3,772,458 (629,125) (2,178,349) (1,194,014) Net position (deficit) at end of year $ (6,024,358) 4,264,866 4,577 (1,754,915) (2,178,349) Totals
Enterprise Funds

CITY OF COMMERCE
Proprietary Funds
Statement of Revenues, Expenses and Changes in Net Position Year ended June 30, 2021
(with comparative information for the prior year)
See accompanying notes to the basic financial statements. 27 Transit CNG Water 2021 2020
Cash flows from operating activities:

Cash received from other customers $ - 4,121,099 845,000 4,966,099 2,422,441 Cash payments to suppliers for goods and services (1,943,184) (2,651,105) (275,300) (4,869,589) (3,421,348) Cash payments to employees for services (2,992,182) - (10,256) (3,002,438) (4,091,483) Net cash provided by (used for)
operating activities (4,935,366) 1,469,994 559,444 (2,905,928) (5,090,390) Cash flows from noncapital financing activities:

Intergovernmental noncapital grants 4,978,709 - - 4,978,709 3,951,896 Cash received from (paid to) other funds 894,276 (565,986) 376,871 705,161 2,309,090 Net cash provided by (used for) non-capital
financing activities 5,872,985 (565,986) 376,871 5,683,870 6,260,986 Cash flows from capital and related activities:

Acquisition and construction of capital assets (937,619) - (375,920) (1,313,539) - Cash flows from investing activities:

Interest received on investments - 1,599 4,673 6,272 15,470 Net increase (decrease) in cash
and cash equivalents - 905,607 565,068 1,470,675 1,186,066 Cash and cash equivalents at beginning of year - - 2,080,848 2,080,848 894,782 Cash and cash equivalents at end of year $ - 905,607 2,645,916 3,551,523 2,080,848 Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities: $ 490,809 629,029 (5,939,265) (7,059,103) (6,173,257) Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:

Depreciation 572,253 123,253 100,213 795,719 698,051
Adjustments:
(Increase) decrease in prepaid items
and deposits 6,639 - - 6,639 7,419
(Increase) decrease in accounts receivable (10,906) 905,240 - 894,334 (1,294,252) (Increase) decrease in deferred outflows 406,551 - - 406,551 (633,547) Increase (decrease) in accounts payable 53,146 (49,308) (169,798) (165,960) 310,522 Increase (decrease) in accrued salaries 35,113 - - 35,113 3,784 Increase (decrease) in net pension liability (1,247,962) - - (1,247,962) 587,333 Increase (decrease) in net OPEB liability 1,204,228 - - 1,204,228 1,616,706 Increase (decrease) in compensated absences (36,602) - - (36,602) 15,485 Increase (decrease) in deferred inflows 1,141,277 - - 1,141,277 (228,634) Net cash provided by (used for) operating activities $ (4,935,366) 1,469,994 559,444 (2,905,928) (5,090,390) There were no noncash investing, capital and financing activities during the year ended June 30, 2021.

Totals
Entreprise Funds

CITY OF COMMERCE
Proprietary Funds
Statement of Cash Flows
Year ended June 30, 2021
(with comparative information for the prior year)
See accompanying notes to the basic financial statements. 28 Private Purpose
Custodial Fund Trust Funds
Assets:

Cash and investments (note 2) $ 230,999 16,239,928
Cash and investments with fiscal agent (note 2) - 56,766 Loans receivable - 17,442
Property held for resale - 44,407,092
Total assets 230,999 60,721,228
Deferred loss on refunding - 4,547,019
Liabilities:

Accounts payable 4,778 1,827,817
Accrued salaries and benefits - 2,591
Interest payable - 898,003
Long-term liabilities:

Due within one year (note 5) - 5,972,978
Due in more than one year (note 5) - 49,843,495
Total liabilities 4,778 58,544,884
Net Position:

Held in trust for Successor Agency - 6,723,363
Restricted for individuals and organizations 226,221 -
Total net position
$ 226,221 6,723,363

CITY OF COMMERCE
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2021
Deferred Outflow of Resources:

See accompanying notes to the basic financial statements. 29 Private Purpose
Custodial Fund Trust Funds
Additions:

Property taxes $ - 8,743,763
Investment income 408 28,710
Membership dues 30,056 -
Rental income - 819,979
Miscellaneous income 236,814 443,482
Transfers in (note 7) - 9,271,493
Total additions 267,278 19,307,427
Deductions:

Administrative expenses 41,057 2,091,178
Interest and fiscal charges - 2,181,243
Payments under pass-through obligations - 1,698,210
Transfers out (note 7) - 9,271,493
Total deductions 41,057 15,242,124
Changes in net position 226,221 4,065,303
Net position, beginning of year - 2,658,060
Net position, end of year $ 226,221 6,723,363

CITY OF COMMERCE
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
Year ended June 30, 2021
See accompanying notes to the basic financial statements. 30 (This page intentionally left blank)
31 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
The City of Commerce (“the City”) was incorporated in 1960 under the general laws of the State of California. The City operates under the Council – City Administrator form of government.

The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, which are entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete.

All of the City’s component units are considered to be blended component units.

Blended component units, although legally separate entities, are, in substance, part of the government’s operations and so data from these units are reported with the interfund data of the primary government.

The following organizations are considered to be component units of the City:

City of Commerce Joint Powers Financing Authority
The City of Commerce Joint Powers Financing Authority (“JPFA”) was established pursuant to a Joint Exercise of Powers Agreement dated January 1, 1988 between the City of Commerce and the Community Development Commission of the City of Commerce (Commission). The purpose of the JPFA is to provide financing necessary for the construction of various public improvements through the issuance of debt.

Activities of the JPFA are included in the Successor Agency and the Community Center Debt Service Funds and the Water Enterprise Fund of the City. Although the JPFA is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the JPFA. Separate financial statements of the JPFA are not prepared.
32 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) (b) Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
 Government-wide financial statements
 Fund financial statements
 Notes to the basic financial statements
Government-wide Financial Statements
Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government (including its blended component units). The City of Commerce has no discretely presented component units. Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by function to which they were allocated). However, general governmental expenses have not been allocated as indirect expenses to the various functions of the City.

Government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements.

Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33.

Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program.

Amounts paid to acquire capital assets are capitalized as assets in the governmentwide financial statements, rather than reported as expenditure.

Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.
33 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity.

The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental 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’s governmental, proprietary, and fiduciary funds 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 fiduciary funds.

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. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a sixty-day availability period.

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

Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met.

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 reported fund balance (net current assets) is considered to be a measure of “available spendable resources.” Governmental fund operating statements present 34 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.

Special reporting treatments are used to indicate, however, that they should not be considered “available spendable resources,” since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of other long-term receivables are offset by fund balance reserve accounts.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities.

Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of longterm debt are recorded as other financing sources rather than as a fund liability.

Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

When both restricted and unrestricted resources are combined in a fund, expenditures are considered to be paid first from restricted resources, and then from unrestricted resources.

Proprietary Funds and Private Purpose Trust Funds
Proprietary funds and private purpose trust funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. Proprietary funds and private purpose trust funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets.

Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

Amounts paid to acquire capital assets are capitalized as assets rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability rather than as an other financing source. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liability, rather than as an expenditure. (c) Major Funds
35 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) The City’s major governmental funds are as follows:

General Fund – The primary fund of the City is used to account for all revenue and expenditures of the City not legally restricted as to use.

Measure AA Fund – To account for revenues collected through sales tax to be used for purposes in accordance with Measure AA requirements.

General City Capital Projects Fund – This fund is used to account for the bond proceeds, interest and other funding that will be used for development, planning and construction and land acquisition within the general city.

The City’s major proprietary funds are as follows:

Transit Fund – This fund is used to account for the activities necessary to provide transportation service to the citizens and the industrial community.

Compressed Natural Gas/Liquefied Natural Gas Fund – This fund is used to account for the City’s Compressed Natural Gas (CNG)/Liquefied Natural Gas (LNG) operations.

Water Fund – This fund is used to account for the water operations service provided to a portion of the residents.

Additionally, the government reports the following fund types:

Private Purpose Trust Funds – These funds are used to account for the activities of the Successor Agency of the former Community Development Commission.

Custodial Fund – This fund is used to account for activity related to the Southeast Water Coalition Joint Powers Agreement.
(d) Investments
For financial reporting purposes, investments are adjusted to their fair value whenever the difference between fair value and the carrying amount is material.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments.

The City pools cash and investments of all funds, except for assets held by fiscal agents.
36 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance.
(e) Property Held for Resale
Property held for resale is reported at the lower of cost or estimated net realizable value. Estimated net realizable value is determine upon entering into a contact for sale.
(f) Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist.

Contributed capital assets are valued at their estimated acquisition value at the date of the contribution. Capital asset purchases in excess of $25,000 to $250,000, depending on the type of asset, are capitalized if they have an expected useful life of one year or more.

Capital assets include public domain (infrastructure) general capital assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains.

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 internal service funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet.

The following schedule summarizes capital asset useful lives:

Buildings 10-40 years
Improvements other than buildings 20-30 years
Distribution system 20-30 years
Machinery and equipment 5-13 years
Infrastructure 20-40 years
(g) Employee Leave Benefits
The City has accrued in the accompanying financial statements the estimated liability for compensated absences earned and not yet taken. Those employees who retire from the City are entitled to 100% of accrued vacation and sick leave. Employees otherwise terminated are entitled to 100% of accrued vacation and 10% of accrued sick leave in excess of 240 hours.
37 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) (h) Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
(i) Interfund Transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (short-term interfund loans) or “advances to/from other funds” (long-term 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”. The portion of fund balance associated with amounts that have been disbursed to other funds in the form of long-term interfund advances have been classified as nonspendable unless the funds associated with repayment of the advances are otherwise restricted for specific purposes. (j) Fund Balances
Fund balances are reported in the fund statements in the following classifications:

Nonspendable Fund Balance – this includes amounts that cannot be spent because they are either not spendable in form (such as inventory) or legally or contractually required to be maintained intact (such as endowments).

Restricted Fund Balance – this includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation. If the Council action limiting the use of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted.

Committed Fund Balance – this includes amounts that can be used only for the specific purposes determined by a formal action of the Council. It includes legislation (Council action) that can only be overturned by new legislation requiring the same type of voting consensus that created the original action. Therefore, if the Council action limiting the use of the funds is separate from the action (legislation) that created (enables) the funding source, then it is committed, not restricted. The City considers a resolution to constitute a formal action of City Council for the purposes of establishing committed fund balance.

Assigned Fund Balance – this includes amounts that are designated or expressed by the Council but does not require a formal action like a resolution or ordinance. The delegation of authority has not yet been granted to persons or bodies other than City Council.
38 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) Unassigned Fund Balance – this includes the remaining spendable amounts which are not included in one of the other classifications.

It is the City’s policy that restricted resources will be applied first, followed by (in order of application) committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the Council.
(k) Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the City of Commerce. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
(l) Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan), the assets of which are held by the Public Agencies Post-Retirement Health Care Plan Trust (PARS), and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date (VD) June 30, 2020
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
39 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) (m) Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position 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 position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has three items that qualify for reporting in this category, the deferred loss on refunding and deferred outflows related to pensions and OPEB.

In addition to liabilities, the statement of net position 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 position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has three types of items, one which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from multiple sources: lease revenue, grant revenue and loan program revenue. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The others are deferred inflows relating to pensions and OPEB.

(n) Net Position
For government-wide reporting as well as in proprietary funds, the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources is called net position. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted.

Net investment in capital assets – consist of capital assets, net of accumulated depreciation/amortization and reduced by outstanding balances of bonds, notes, and other debt that are attributable to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are included in this component of net position.

Restricted net position - consist of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either by external parties or by law through constitutional provision or enabling legislation.

Unrestricted net position – is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that does not meet the definition of the two preceding categories.
40 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) (o) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
(p) Fair Value Measurements
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
 Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities in markets that are inactive;
o Inputs other than quoted prices that are observable for the asset or liability;
 Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.
41 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(1) Summary of Significant Accounting Policies, (Continued) (q) Prior Year Data
Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government’s prior year financial statements, from which this selected financial data was derived.
(2) Cash and Investments
Cash and investments as of June 30, 2021, are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $ 49,626,272
Restricted cash for PARS 115 trust 3,309,427
Cash and investments with fiscal agent 1,251
Statement of Fiduciary Net Position:

Cash and investments 16,470,927
Cash and investments with fiscal agent 56,766
Total cash and investments $ 69,464,643
Cash and investments as of June 30, 2021, consist of the following:

Cash on hand $ 3,063
Deposits with financial institutions 44,367,108
Investments 25,094,472
Total cash and investments $ 69,464,643
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
42 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments, (Continued)
Investment * Maximum
Types Authorized by * Maximum Investment
Authorized Investment * Maximum Percentage In One
By State Law Policy Maturity Of Portfolio Issuer

U.S. Treasury Obligations Yes 5 years None None
U.S. Agency Securities Yes 5 years None 40%
Banker's Acceptances Yes 180 days 40% 10%
Commercial Paper Yes 270 days 40% 10%
Certificates of Deposit Yes 5 years 30% 10%
Repurchase Agreements Yes 10 days None None
Medium-Term Notes Yes 5 years 30% 10%
Mutual Funds Yes N/A 20% None
Money Market Mutual Funds Yes N/A 20% None
Local Agency Investment
Fund (LAIF) Yes N/A None None
* Based on state law requirements or investment policy requirements, whichever is more restrictive.

Investments Authorized by Debt Agreements
Investment of debt proceeds held by 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 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
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed In One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 360 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Medium-Term Notes None None None
Investment Agreements None None None
Negotiable Certificates of Deposit 360 days None None
43 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments, (Continued)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value will be to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of short-term and long-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.

Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Remaining
Maturities
(in Months)
12 Months
Investment Type Total Or Less
State investment pool $ 21,725,778 21,725,778
Mutual funds 3,309,427 3,309,427
Money market funds 59,267 59,267
Total $ 25,094,472 25,094,472
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of yearend for each investment type.

Minimum
Investment Type Total
Legal
Rating AAA Not Rated

State investment pool $ 21,725,778 N/A - 21,725,778
Mutual funds 3,309,427 N/A - 3,309,427
Money market funds 59,267 AAA 59,267 -
Total $ 25,094,472 59,267

25,035,205
44 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments, (Continued)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code, except for U.S. Agency Securities (limited to a face value of $10 million) and Commercial Paper and Medium-Term Notes (limited to a face value of $3 million).

Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).

The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code 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.

Investment in Public Agency Retirement Services
The City established an Internal Revenue Service Section 115 irrevocable trust with the Public Agency Retirement Services (PARS) for the purposes of funding pension obligations. PARS is not rated and is not registered with the Securities Exchange Commission. The City selects the investment strategy and the pool is managed by the PARS Board.
45 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(2) Cash and Investments, (Continued)
Fair Value Measurement
The City categorizes certain assets within the fair value hierarchy established by generally accepted accounting principles. The City did not have any investments with recurring fair value measurements as of June 30, 2021.
(3) Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool and are then allocated to the cities based on complex formulas. Accordingly, the City of Commerce accrues only those taxes that are received from the County within sixty days after year-end.

Lien date January 1
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
The Community Development Commission (“the Commission”) of the City of Commerce’s primary source of revenue comes from property taxes. Property taxes allocated to the Commission are computed in the following manner:
(a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan.
(b) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Commission; all taxes on the “frozen” assessed valuation of the property are allocated to the City and other districts.

The Commission has no power to levy and collect taxes and any legislative property tax shift might reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on, debt. Broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. 46 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(4) Capital Assets
Capital asset activity for governmental activities for the year ended June 30, 2021, is as follows:

Depreciation expense was charged in the following functions in the Statement of Activities:

General government $ 2,652,344
Public works 624,134
Parks, recreation, and culture 813,120
Total governmental activities $ 4,089,598
The government has no active construction project as of June 30, 2021.

Balance at Balance at
July 1, 2020 Additions Deletions June 30, 2021
$ - - 43,210,992 43,210,992
- - 20,719,853 20,719,853
- - 136,885,793 136,885,793
7,123,425 - (93,438) 7,029,987
Total costs of
depreciable assets 207,940,063 - (93,438) 207,846,625
Less accumulated depreciation:

Buildings (28,341,872) (1,104,677) - (29,446,549)
Improvements other than buildings (8,695,889) (586,340) - (9,282,229) Infrastructure (80,331,001) (1,885,976) - (82,216,977)
Machinery and equipment (4,956,741) (512,605) 93,438 (5,375,908) Total accumulated depreciation (122,325,503) (4,089,598) 93,438 (126,321,663) Net depreciable assets 85,614,560 (4,089,598) - 81,524,962 Capital assets not depreciated:

Land 10,975,002 - (427,128) 10,547,874
Construction in progress 161,400 - (161,400) - Total assets not being depreciated 11,136,402 - (588,528) 10,547,874 Capital assets, net 96,750,962$ (4,089,598) (588,528) 92,072,836 Infrastructure
Machinery and equipment
Buildings
Improvements other than buildings
47 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(4) Capital Assets, (Continued)
Capital asset activity for business-type activities for the year ended June 30, 2021, is as follows:

Depreciation expense was charged in the following functions in the Statement of Activities:

Transit $ 572,253
CNG 123,253
Water 100,213
Total business-type activities $ 795,719
Balance at Balance at
July 1, 2020 Additions Deletions June 30, 2021
$ - - 2,141,222 2,141,222
- - 12,118,828 12,118,828
1,313,539 12,512,810 (1,828,881) 11,997,468
Total costs of
depreciable assets 26,772,860 1,313,539 (1,828,881) 26,257,518 Less accumulated depreciation:

Water rights (1,562,211) (30,474) - (1,592,685)
Buildings and improvements (5,580,517) (328,514) - (5,909,031) Machinery and equipment (9,318,712) (436,731) 1,828,881 (7,926,562) Total accumulated depreciation (16,461,440) (795,719) 1,828,881 (15,428,278) Net depreciable assets 10,311,420 517,820 - 10,829,240
Capital assets not depreciated:

Land 2,755,498 - - 2,755,498
Total assets not being depreciated 2,755,498 - - 2,755,498 Capital assets, net 13,066,918$ 517,820 - 13,584,738
Water rights
Buildings and improvements
Machinery and equipment
48 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(5) Long-Term Liabilities
Changes in governmental long-term liabilities for the year ended June 30, 2021, were as follows:
*Compensated absences are generally liquidated by the general fund.

Changes in business-type long-term liabilities for the year ended June 30, 2021, were as follows:

Changes in Private Purpose Trust Fund long-term liabilities for the year ended June 30, 2021, were as follows:

Balance at Balance at Due Within
July 1, 2020 Additions Deletions June 30, 2021 One Year $ - (40,000) 150,000 45,000 190,000
- (1,930,000) 31,605,000 2,370,000 33,535,000
- (3,390,000) 20,460,000 3,115,000 23,850,000
- (72,708) 1,017,902 72,704 1,090,610
- (370,236) 2,221,645 370,274 2,591,881
- 2,846,409 (2,484,483) 361,926 -
Total long-term liabilities $ - 64,103,900 (8,287,427) 55,816,473 5,972,978 2016 Tax Allocation Bonds
2018 Tax Allocation Bonds
Premium on bond (2016 TABs)
Premium on bond (2018 TABs)
Advances to City
Refunding Bonds
Bonds payable:
1994 Tax Allocation
Balance at Balance at Due Within
July 1, 2020 Additions Deletions June 30, 2021 One Year Compensated absences $ 269,847 538,448 (306,449) 501,846 142,166 49 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(5) Long-Term Liabilities, (Continued)
1994 Tax Allocation Refunding Bonds
In June 1994, the JPFA issued $1,685,000 in revenue bonds at an average interest rate of 6.4%. The bonds were issued for the purposes of refunding the $740,000 of Project No. 3 bonds, as well as to generate additional funds to sustain certain activities of Project No. 3.

These bonds are secured by the 1994 JPFA loan with the Commission. The loan payments from the project area to the JPFA coincide with the bond debt service payments. The bonds mature in various amounts ranging from $70,000 to $105,000 through the year 2024. The amount outstanding at June 30, 2021 is $150,000.

Future principal and interest payments on the 1994 tax allocation refunding bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2022 $ 45,000 8,175 53,175
2023 50,000 5,137 55,137
2024 55,000 1,763 56,763
$ 150,000 15,075 165,075
2014 Lease Revenue Bonds
In September 2014, the City of Commerce Joint Powers Financing Authority issued $10,000,000 in Community Center Lease Revenue Bonds. The bonds are limited obligations of the JPFA payable from and secured by Revenues, consisting of Base Rental Payment to be made by the City to the JPFA pursuant to a Facility Lease, dated as of September 1, 2014. The bonds were composed of $7,200,000 serial bonds with interest rates ranging from 2% to 5% and maturity dates from 2015 through 2030, $2,800,000 term bonds with an interest rate of 5.00% maturing in 2034. The bonds were issued to refund the JPFA’s outstanding Community Center Lease Revenue Bonds, Series 2004. This difference between the cash flows required to service the old debt and the cash flows required to service the new debt was $3.4 million. The amount outstanding at June 30, 2021, is $7,895,000. 50 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(5) Long-Term Liabilities, (Continued)
Future principal and interest payments on the 2014 Lease Revenue Bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2022 $ 410,000 372,613 782,613
2023 425,000 351,738 776,738
2024 450,000 329,863 779,863
2025 470,000 306,862 776,862
2026 495,000 282,737 777,737
2027-2031 2,845,000 1,043,594 3,888,594
2032-2035 2,800,000 288,750 3,088,750
$ 7,895,000 2,976,157 10,871,157
2016 Tax Allocation Bonds
In March 2016, the Successor Agency to the Commerce Community Development Commission issued $41,625,000 in Tax Allocation Refunding Bonds. The bonds were issued for the purpose of refunding certain obligations of the former Commerce Community Development Commission’s 2003 Series A-1 Tax Allocation Bonds, 2003 Series A-H Tax Allocation Bonds, 2003 Series A-E Tax Allocation Bonds, and the Series 1998A Tax Allocation Bonds. As a result, the refunded bonds are considered to be defeased and the liabilities have been removed from the Statement of Fiduciary Net Position. The reacquisition price exceeded the net carrying amount of the old debt by $585,557. This amount is being amortized over the remaining life of either the old or new the debt, whichever has a shorter life. Interest on the bonds accrues at rates between 3.0% and 5.0% and are payable on February 1 and August 1.

Bonds mature in various amounts ranging from $755,000 to $6,960,000 through 2035. At June 30, 2021, the amount outstanding was $31,605,000.

Future principal and interest payments on the 2016 Tax Allocation Bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2022 $ 2,370,000 1,091,063 3,461,063
2023 3,695,000 1,010,631 4,705,631
2024 2,080,000 928,625 3,008,625
2025 6,960,000 793,025 7,753,025
2026 755,000 654,328 1,409,328
2027-2031 9,475,000 2,032,781 11,507,781
2032-2036 6,270,000 491,260 6,761,260
$ 31,605,000 7,001,713 38,606,713
51 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(5) Long-Term Liabilities, (Continued)
2018 Tax Allocation Bonds
In March 2018, the Successor Agency to the Commerce Community Development Commission (CDC) issued $29,720,000 in Tax Allocation Refunding Bonds. The bonds were issued for the purpose of refunding certain obligations of the former Commerce Community Development Commission’s 2007 Tax Allocation Bonds and 2007 JPFA Revenue Bonds.

As a result, the refunded bonds are considered to be defeased and the liabilities have been removed from the Statement of Net Position. The reacquisition price exceeded the net carrying amount of the old debt by $6,846,417. This amount is recorded as a deferred loss on refunding and being amortized over the remaining life of either the old or new the debt, whichever has a shorter life. Interest on the bonds accrues at

5.0% and are payable on February 1 and August 1. Bonds mature in various amounts ranging from $1,845,000 to $5,035,000 through 2027. At June 30, 2021, the amount outstanding was $20,460,000.

Future principal and interest payments on the 2018 Tax Allocation Bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2022 $ 3,115,000 1,023,000 4,138,000
2023 2,030,000 867,250 2,897,250
2024 3,805,000 765,750 4,570,750
2025 - 575,500 575,500
2026 4,630,000 575,500 5,205,500
2027-2028 6,880,000 574,771 7,454,771
$ 20,460,000 4,381,771 24,841,771

Successor Agency Advances from City
Advances to
Successor Agency Advances from City Amount
General Fund Successor Agency Private
Purpose Trust Fund $ 307,008 (a)
Water Fund
Successor Agency Private
Purpose Trust Fund 54,918 (b)
$ 361,926
52 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(5) Long-Term Liabilities, (Continued)
(a) As of June 30, 2021, the amount due to the General Fund from the Successor Agency was $307,008. This consists of several outstanding advances with amounts ranging from $100,000 to $6,000,000. The largest advance is in the amount of $6,000,000 loaned to the CDC was entered into on March 3, 1992 and accrues interest at 7.5% per annum. The other material outstanding advances of $5,000,000 and $3,000,000 were loaned to the CDC on November 2, 1999 and April 16, 2002, respectively, at original interest rates at 7.5% and 6.5% per annum. (b) As of June 30, 2021, the amount due to the Water Enterprise Fund from the Successor Agency was $54,918. The advance was entered into on April 16, 2002 with six-month maturity. The advance has been extended each year thereafter, with an original interest rate of 6.5% per annum.

The advances from the Successor Agency to the City have been approved by the California State Department of Finance. The City of Commerce believes the principal amounts to be payable in full. However, after the dissolution of the Redevelopment Agency on January 31, 2013, no interest is being accrued or paid on the advances.

Management believes the Successor Agency will eventually have the funds to repay the advances
(6) Interfund Receivables and Payables
Current interfund receivables and payables balances at June 30, 2021, are as follows:
(a) Short-term borrowing to cover temporary cash shortfalls. (b) Certain portions of these balances have been outstanding for more than a year.

There are currently no formal agreements or repayment terms for these interfund borrowings.

Due from other funds Due to other funds Amount
General Fund
General City Capital Projects
Fund $ 7,134,970 (b)
Other Governmental Funds 38,293 (a)
Transit Fund 763,389 (a)
Water Fund 3,762,314 (b)
$ 11,698,966
53 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(7) Interfund Transfers
Interfund transfers were as follows for the year ended June 30, 2021:

The following describes the major transfers in and transfers out included in the financial statements:
(a) $510,000 was transferred from State Gas Tax to the General Fund to provide funding for eligible street and alley maintenance repairs. (b) $382,451 was transferred from Measure AA to the General Fund for administrative costs relating to ongoing projects.
(c) $2,458 was transferred from AQMD Ride Share to the General Fund for various clear air initiatives.
(d) $186,650 was transferred from the Community Benefits Fund to the General Fund for various administrative and overhead costs.
(e) $1,425,000 was transferred from the Prop A Local Tax Fund to the Transit Fund for ongoing transportation services.
(f) $783,719 was transferred from the General Fund to the Community Center Debt Service Fund to cover debt service payments.
(g) $574,260 was transferred from the General Fund to the General City Capital Projects Fund to fund certain projects.
(h) $9,271,493 was transferred from the Redevelopment Property Tax Trust Fund to the Successor Agency Trust Fund to make payments for enforceable obligations approved on the ROPS.

Transfer In Transfer Out Amount
General Fund State Gas Tax 510,000$ (a)
Measure AA 382,451 (b)
AQMD Rideshare 2,458 (c)
Rent Subsidy 186,650 (d)
1,081,559
Transit Prop A Local Tax 1,425,000 (e)
Community Center General Fund 783,719 (f)
General City Capital Projects General Fund 574,260 (g)
Total primary governmental interfund transfers 3,864,538$ Successor Agency - RPTTF Successor Agency Trust Fund 9,271,493$ (h) 54 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Local Government’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS 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. The Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:

Miscellaneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 1.0% to 2.5%
Required employee contribution rates 7% 6.946%
Required employer contribution rates 10.396% 10.396%
Employees Covered
As of June 30, 2019 (actuarial valuation date), the following employees were covered by the benefit terms for each Plan:

Inactive employees or beneficiaries currently receiving benefits 277 Active employees 153
Total 430
55 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan, (Continued)
Contribution Description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

Actuarial Methods and Assumptions used to determine Total Pension Liability The June 30, 2019 valuation was rolled forward to determine the measurement period ending June 30, 2020 (the measurement date), the total pension liability was determined using the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB Statement No. 68
Actuarial Assumptions
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table1 Derived using CalPERS’ Membership Data for all Funds
Post Retirement Benefit
Increases
Contract COLA up to 2.50% until Purchasing
Power Protection Allowance Floor on
Purchasing Power applies, 2.50% thereafter
1The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required 56 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan, (Continued)
rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make 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.

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, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows.

Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and longterm (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses The expected real rates of return by asset class are as followed:

Asset Class1 Assumed asset
allocation
Real Return
Years 1 – 102
Real Return
Years 11+3
Global equity 50.0% 4.80% 5.98%
Fixed income 28.0 1.00 2.62
Inflation assets - 0.77 1.81
Private equity 8.0 6.30 7.23
Real assets 13.0 3.75 4.93
Liquidity 1.0 - (0.92)
1In the System’s CAFR, Fixed Income included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
2An expected inflation of 2.00% used for this period
3An expected inflation of 2.92% used for this period
57 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan, (Continued)
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

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
projected and actual earnings
on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all
members that are provided with benefits (active,
inactive, and retired) as of the beginning of the
measurement period.
58 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan, (Continued)
Changes in Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period:

Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at: 6/30/2019 (VD) $ 118,468,410 85,903,524 32,564,886 Changes Recognized for the
Measurement Period:

Service Cost 1,971,408 - 1,971,408
Interest on the Total
Pension Liability 8,283,613 - 8,283,613
Differences between
Expected
and Actual Experience (470,235) - (470,235)
Contributions from
Employer - 3,010,008 (3,010,008)
Contributions from
Employees - 826,978 (826,978)
Investment Income - 4,257,013 (4,257,013)
Administrative Expense - (121,103) 121,103
Benefit Payments, including
Refunds of Employee
Contributions

(6,258,294)

(6,258,294) -
Other Miscellaneous
Income/(Expense) - - -
Net Changes during 2019-20 3,526,492 1,714,602 1,811,890 Balance at: 6/30/2020 (MD) $ 121,994,902 87,618,126 34,376,776 Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2019-20, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68).

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 7.15 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 (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
59 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(8) Defined Benefit Pension Plan, (Continued)
Discount Rate -
1% (6.15%)
Current Discount
Rate (7.15%)
Discount Rate +
1% (8.15%)
Plan’s Net Pension
Liability – Misc. $ 49,860,121 34,376,776 21,491,505
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the measurement period ending June 30, 2020 (the measurement date), the City of Commerce recognized a pension expense of $5,475,733 for the Plan.

As of the June 30, 2020 measurement date, the City of Commerce reports other amounts for the Plan as deferred outflow and deferred inflow of resources related to pensions as follows:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to
measurement date $ 2,245,668 -
Differences between Expected and Actual
Experience 638,303 (335,881)
Changes of Assumptions - (144,284)
Additional Deferral 873,123 (873,123)
Net Difference between Projected and Actual
Earnings on Pension Plan Investments 665,009 -
Total $ 4,422,103 (1,353,288)
Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date in the amount of $2,245,668 will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2022. 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 Year
ended June
30:

Deferred
Outflows/(Inflows) of
Resources
2022 $ (230,086)
2023 323,141
2024 373,447
2025 356,644
2026 -
Thereafter -
60 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Other Post-Employment Benefits (OPEB)
Plan Description
The City administers an agent multiple employers defined benefit plan with medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements. After age 65, Medicare automatically becomes the primary provider of health coverage. The City’s defined benefit plan becomes the secondary provider. Eligible retirees will have no noticeable change in health benefits or plan administration; however, there is a reduction in the City’s cost of health coverage as the secondary provider. The City’s defined benefit plan administrator establishes the cost of secondary provider rates annually. The City will pay 100% for eligible retirees’ health coverage.

Employees Covered
Employees are eligible for retiree health benefits if they retire from the City on or after age 50 with at least 5 years of service and are eligible for a PERS pension. As of the June 30, 2020 measurement date, the following participants were covered by the benefit terms:

Active employees 152
Inactive employees or beneficiaries currently receiving benefits 141 Inactive employees entitled to, but not yet receiving benefits 14 Total 307
Contributions Description
The contribution requirements of plan members and the City are established and may be amended by City Council. The contribution required to be made under City Council and labor agreement requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). In fiscal year 2014-15, the City opened an irrevocable trust with PARS for funding the obligation. For fiscal year 2020-21, the City contributed $1,712,607 for current premiums. 61 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Other Post-Employment Benefits (OPEB), (Continued)
Actuarial Methods and Assumptions used to determine Total OPEB Liability The City’s net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2020, based on the following actuarial methods and assumptions:

Actuarial Cost Method: Entry Age Normal
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Investment Rate of Return

2.88%

2.50% annually

2.75% annually, in aggregate

5.50%
Municipal Bond Rate 2.21%
Mortality, Retirement, Derived using CalPERS 1997-2015
Disability, Termination Experience Study
Medical Trend Non-Medicare – 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076
Medicare – 4.45% for 2023, decreasing to an
ultimate rate of 3.75% in 2076
Expected Long-Term Rate of Return
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class
Target Allocation*
PARS-Moderate
Expected Real
Rate of Return
Global Equities 50.00% 4.56%
Fixed Income 45.00% .78%
Cash 5.00% -0.50%
Assumed Long-Term Rate of Inflation 2.50%
*Expected Long-Term Rate of Return 5.50%
Discount Rate
The discount rate used to measure the total OPEB liability was 2.88 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and 62 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Other Post-Employment Benefits (OPEB), (Continued)
inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Changes in the OPEB Liability
The changes in the net OPEB liability for the City are as follows:

Increase (Decrease)
Total OPEB
Liability
(a)
Plan Fiduciary
Net position
(b)
Net OPEB
Liability
(c) = (a) - (b)
Balance at: 6/30/2020 $ 63,021,084 3,082,756 59,938,328 Changes recognized for the
Measurement period:

Service cost 2,529,281 - 2,529,281
Interest 2,361,171 - 2,361,171
Differences between
Expected and Actual
Experience (2,772,589) - (2,772,589)
Changes of assumptions (1,405,720) - (1,405,720)
Contributions - employer - 1,724,623 (1,724,623)
Net investment income - 103,963 (103,963)
Benefit payments (1,721,539) (1,721,539) -
Administrative expense - (10,844) (10,844)
Net Changes (1,009,396) 96,203 (1,105,599)
Balance at: 6/30/2021 $ 62,011,688 3,178,959 58,832,729 Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City as of the Measurement Date, calculated using the discount rate of 2.88 percent, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower (1.88 percent) or 1 percentage-point higher (3.88 percent) than the current rate, for measurement period ended June 30, 2020:
1% Decrease
(1.88%)
Current Discount
Rate (2.88%)
1% Increase
(3.88%)
Net OPEB Liability $ 69,863,480 58,832,729 50,080,095
63 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Other Post-Employment Benefits (OPEB), (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City as of the Measurement Date, calculated using the health care cost rate, as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower or 1 percentage-point higher than the current rate, for measurement period ended June 30, 2020:

OPEB Plan Fiduciary Net Position
The PARS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the Public Agency Retirement Services, PARS, 4350 Von Karman Ave, Newport Beach, CA 92660.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $2,573,627. As of fiscal year, ended June 30, 2021, the City reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to
measurement date $ 1,744,592 -
Differences between Expected and
Actual Experience - (4,419,577)
Changes of assumptions 3,880,276 (4,725,401)
Net difference between projected and
actual earnings on OPEB plan
investments

49,859 -
Total $ 5,674,727 (9,144,978)
Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date in the amount of $1,744,592 will be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 2022. Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows:
1% Decrease
Current
Healthcare Cost
Trend Rates 1% Increase
Net OPEB Liability $ 49,083,352 58,832,729 71,403,631
64 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(9) Other Post-Employment Benefits (OPEB), (Continued)
Fiscal Year
ended June 30:

Deferred
Outflows/(Inflows)
of Resources
2022 $ (2,140,937)
2023 (1,652,936)
2024 (977,425)
2025 4,134
2026 (447,679)
Thereafter -
-
(10) Self-Insurance Pooling and Purchased Insurance
Risk Pool Membership

The City is a member of the California Joint Powers Insurance Authority (Authority).

The Authority is composed of 118 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The Authority arranges and administers programs for the pooling of self-insured losses, purchases excess insurance and reinsurance, and arranges for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Authority’s Board of Directors. The Board operates through a nine-member Executive Committee.

Excess Liability Program

Liability coverage includes auto liability, employment practices liability, public officials’ errors and omissions, bodily injury, personal injury, third party property damage, advertising injury, and employee benefit administration liability. The City has a retained limit of $250,000 per occurrence. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risksharing-pools/.

Primary Workers’ Compensation Program

For 2020-21 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law.

Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s 65 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(10) Self-Insurance Pooling and Purchased Insurance, (Continued) Liability losses from $5 million to $10 million are pooled among members. There is no retained limit under this program (first dollar coverage).

Purchased Insurance
The City also participates in the following coverage programs provided by the Authority:
(a) All-Risk Property Protection Program
This insurance protection is underwritten by several insurance companies. The City’s property is currently insured according to a schedule of covered property submitted by the City to the Authority. The total insured value of scheduled City property is $136,670,251. There is a $10,000 deductible per occurrence except for nonemergency vehicle insurance which has a $2,500 deductible. (b) Earthquake and Flood Insurance
This coverage is part of the Property Protection Program. The City has total insured values of $4,619,820 scheduled for coverage under this program. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. (c) Pollution Legal Liability Insurance Program
The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million for the 1- year period from July 1, 2021 through July 1, 2022. Each member of the Authority has a $5 million sub-limit during the 1-year policy term. (d) Crime Insurance Program
Formerly called Blanket Fidelity Bond, this policy covers faithful performance, depositor’s forgery, theft of money and securities, and computer fraud related to the transfer of money. The policy limit is $1,000,000, and the deductible is $2,500. (e) Special Event Tenant User Liability Insurance

This coverage protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on City property. The insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays the insurance broker and/or carrier.

The insurance is facilitated by the Authority.
66 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(11) Contingencies
Litigation

Various claims and suits have been filed against the City in the normal course of operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of management, the resolution of these matters will not have a material adverse effect on the financial position of the City.

Tax Abatement
The City enters into various tax abatement agreements for the purpose of attracting or retaining businesses within the City’s jurisdiction. The Successor Agency has also entered into various tax abatement agreements that was also for the purpose of attracting or retaining businesses within the jurisdiction of the former Redevelopment Agency of the City of Commerce.

The City has an agreement with a transportation/logistics company to pay that company a percentage of all sales tax revenue generated in excess of $40,000,000.

During the fiscal year, the City abated sales tax revenue of $970,023 to that fuel distributor.

The Successor Agency has an agreement with a retailer to repay the retailer a loan based on sales tax and property tax revenue generated. During the fiscal year, the City repaid approximately $126,219 to that retailer based on sales and property tax revenue generated.
(12) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Section 457 of the Internal Revenue Code. The plan is available to all employees and permits them to defer a portion of their salary until future years.

Participation in the plan is optional and compensation, once deferred, is not available to employees until termination, retirement, death, or unforeseeable emergency.

The ICMA Retirement Corporation, one of the City’s two deferred compensation plan administrators, holds all plan assets in a trust account for the exclusive benefit of the plan participants. Aetna Life Insurance and Annuity Company, the other plan administrator, maintains all of the plan assets in an annuity contract for the exclusive benefit of the plan participants. The amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts are held in such account for the exclusive benefit of the City employee participant and their beneficiaries.
67 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(12) Deferred Compensation Plan, (Continued)
While the City has the power and authority to administer and adopt rules and regulations for the plan, all investment decisions under the plan are the responsibility of the plan participants. The assets of the plan are not owned by the City and the City has no liability for losses under the plan.

(13) Joint Powers Agreement
Southeast Water Coalition
On July 1, 1991 the City, along with more than ten public agencies, entered into a joint powers agreement to form the Southeast Water Coalition (Coalition). The Coalition’s purpose is to jointly exercise their powers for the purpose of improving and protecting the quality and quantity of potable water in the Southeast Area of Los Angeles County. The legislative body of each of the participating parties shall appoint one board member. Contributions are required upon arrival of a majority of all members of the Board. The City of Commerce may withdraw from the Coalition upon 30 day written notice and payment of any previously unpaid contributions.

Upon termination of the Coalition, all of its then existing assets shall be divided equally among the then remaining member agencies. This joint venture is not currently experiencing financial stress or accumulating significant resources. The City does not have a measurable material equity interest in the joint venture.

Separate financial statements for the Southeast Water Coalition are available at the City of Commerce, 2535 Commerce Way, Commerce, CA 90040. (14) Fund Deficits
As of June 30, 2021, deficits were reported in the following funds:

Transit Fund $ (6,024,358)
Successor Agency Trust Fund (9,516,565)
General City Capital Projects Fund (879,132)
CDBG Fund (36,838)
Transit Fund deficit will be eliminated through transfers in the next fiscal year.

Successor Agency Trust Fund deficit will be eliminated in future years with revenue received from the Redevelopment Property Tax Trust Fund.

General City Capital Projects Fund deficit will be eliminated when current project expenditures do not exceed intergovernmental revenues.

CDBG Fund deficit will be eliminated through future intergovernmental revenues. 68 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(14) Fund Deficits, (Continued)
As of June 30, 2021, expenditures in excess of appropriations were reported in the following funds:

General Fund:

General Government $ (372,298)
Community development (449,952)
Public safety (1,508,406)
Public works (190,432)
Measure AA Fund:

Public safety (3,428)
Public works (368,766)
General City Capital Projects Fund:

Public works (74,262)
Supplemental Law Enforcement Fund:

Public safety (57,268)
Housing Fund:

Parks, recreation, and culture (665)
Community Benefits Fund:

General Government (969)
Parks, recreation, culture (431,376)
Stormwater Management Fund:

Parks, recreation, and culture (30,914)
Community Debt Service Fund:

Principal payments (75,000)
(15) Implementation of New Accounting Standard
During the fiscal year ended June 30, 2021, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 84 related to Fiduciary Activities. As a result of that implementation, the previously reported Cash Deposits Fund is now reported within the General Fund and cash received for use by the Southeast Water Coalition is reported in a Custodial Fund.
69 CITY OF COMMERCE
Notes to the Basic Financial Statements
Year ended June 30, 2021
(16) COVID-19
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closings of businesses and shelter in place orders for all but those deemed essential services. While the business disruption is currently expected to be temporary, there is considerable uncertainty around the duration of the closings and shelter in place orders. As a result, the outbreak has caused uncertainty in the financial markets. Although many of the City’s services are considered essential, City Hall was temporarily closed to the public, certain other services transitioned to online-only. The City of Commerce major revenue sources, including businesses that collect taxes, are directly impacted by these events, it is probable that this matter will negatively impact the City.

However, the ultimate financial impact and duration cannot be estimated at this time.
(17) Subsequent Event
On August 1, 2021, the City of Commerce issued $27,875,000 Taxable Pension Obligation Bonds to pay all or a portion of the City’s unfunded accrued actuarial liability to the California Public Employee’s Retirement System with respect to the City’s defined benefit retirement plans for City employees. The interest rate on the bonds varies from .667% to 2.839% and mature August 1, 2036.

REQUIRED SUPPLEMENTARY INFORMATION
71 (This page intentionally left blank)
72 Measurement Period 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14

TOTAL PENSION LIABILITY
Service Cost 1,971,408$ 2,088,263 2,000,050 1,989,007 1,662,850 1,550,187 1,460,709 Interest 8,283,613 8,029,232 7,644,908 7,385,664 7,177,076 6,869,505 6,545,470 Difference between Expected and
Actual Experience (470,235) 1,265,886 299,589 (490,554) 512,205 1,062,228 - Changes of Assumptions - - (762,647) 6,078,010 - (1,650,414) - Benefit Payments, Including
Refunds of Employee Contributions (6,258,294) (5,803,808) (5,355,765) (5,226,953) (4,997,904) (4,937,517) (4,938,877) Net Change in Total Pension Liability 3,526,492 5,579,573 3,826,135 9,735,174 4,354,227 2,893,989 3,067,302 Total Pension Liability – Beginning 118,468,410 112,888,837 109,062,702 99,327,528 94,973,301 92,079,312 89,012,010 Total Pension Liability – Ending (a) 121,994,902 118,468,410 112,888,837 109,062,702 99,327,528 94,973,301 92,079,312

PLAN FIDUCIARY NET POSITION
Contributions – Employer 3,010,008 2,665,962 2,265,421 2,034,184 1,895,010 1,515,782 1,435,188 Contributions – Employee 826,978 989,676 847,735 756,795 788,933 720,100 694,273 Investment Income 4,257,013 5,407,865 6,641,333 7,980,374 364,679 1,670,372 11,658,199 Administrative Expense (121,103) (59,018) (122,573) (108,109) (45,842) (84,670) (83,334) Benefit Payments, Including
Refunds of Employee Contributions (5,226,953) (4,997,904) (4,937,517) (4,938,877) Other Changes in Net Fiduciary Position - 193 (232,961) - - - - Net Change in Fiduciary Net Position 1,714,602 3,200,870 4,043,190 5,436,291 (1,995,124) (1,115,933) 8,765,449 Plan Fiduciary Net Position – Beginning 85,903,524 82,702,654 78,659,464 73,223,173 75,218,297 76,334,230 67,568,781 Plan Fiduciary Net Position – Ending (b) 87,618,126 85,903,524 82,702,654 78,659,464 73,223,173 75,218,297 76,334,230 Plan Net Pension Liability – Ending (a) - (b) $ 34,376,776 32,564,886 30,186,183 30,403,238 26,104,355 19,755,004 15,745,082 Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 71.82% 72.51% 73.26% 72.12% 73.72% 79.20% 82.90% Covered Payroll $ 12,462,034 12,258,791 11,672,945 10,861,205 9,961,216 10,161,824 9,389,402 Plan Net Pension Liability as a
Percentage of Covered Payroll 275.85% 265.65% 258.60% 279.93% 262.06% 194.40% 167.69% Notes to Schedule:

Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2019 valuation.

However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the June 30, 2019 valuation date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary. (5,355,765)
*Historical information is required only for measurement periods for which GASB 68 is applicable. Future years’ information will be displayed up to 10 years as information becomes available.

Changes of Assumptions: None in 2019 or 2020. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expenses) to

7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.

CITY OF COMMERCE
Schedule of Changes in Net Pension Liability and Related Ratios During the Measurement Period Last Ten Fiscal Years*
(6,258,294) (5,803,808)
73 Fiscal Year 2020-21 2019-20 2018-19 2017-18
Actuarially Determined Contribution $ 3,009,881 3,024,399 2,665,962 2,059,096 Contributions in Relation to the
Actuarially Determined Contribution (3,009,881) (3,024,399) (2,665,962) (2,059,096) Contribution Deficiency (Excess) $ - - - -
Covered Payroll 11,580,216 12,462,034 12,258,791 11,672,945 Contributions as a
Percentage of Covered Payroll 25.99% 24.27% 21.75% 17.64% Fiscal Year 2016-17 2015-16 2014-15 2013-14
Actuarially Determined Contribution $ 2,135,197 1,677,005 1,515,782 1,435,188 Contributions in Relation to the
Actuarially Determined Contribution (2,135,197) (1,667,005) (1,515,782) (1,435,188) Contribution Deficiency (Excess) $ - - - -
Covered Payroll 10,861,205 9,961,216 10,161,824 9,389,402 Contributions as a
Percentage of Covered Payroll 19.66% 16.73% 14.92% 15.29% Notes to Schedule:

Actuarial Cost Method: Entry Age Normal
Amortization Method/Period For details, see June 30, 2018 Funding Valuation Report.

Asset Valuation Method
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.75%
Investment Rate of Return
Retirement Age
Mortality

CITY OF COMMERCE
Schedule of Pension Plan Contributions
Last Ten Fiscal Years*
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

Changes of Assumption: On December 21, 2016, the CalPERS Board of Administration lowered the discount rate from 7.50 percent to 7.00 percent using a three year phase-in beginning with the June 30, 2016 actuarial valuations. The minimum employer contributions for Fiscal Year 2019-20 determined in this valuation were calculated using a discount rate of 7.15 percent. *Historical information is required only for measurement periods for which GASB 68 is applicable. Future years’ information will be displayed up to 10 years as information becomes available.

7.00% Net of Pension Plan Investment and Administrative Expenses; includes Inflation.

Fair Value of Assets. For details, see June 30, 2018 Funding Valuation Report The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021 were from the June 30, 2018 actuarial valuation.

On December 19, 2017, the CalPERS Board of Administration adopted new actuarial assumptions based on the recommendations in the December 2017 CalPERS Experience Study and Review of Actuarial Assumptions. This study reviewed the retirement rates, termination rates, mortality rates, rates of salary increases and inflation assumption for Public Agencies. In addition, the Board adopted a new asset portfolio as part of its Asset Liability Management. The new asset mix supports a 7.00 percent discount rate. The reduction of the inflation assumption will be implemented in two steps in conjunction with the decreases in the discount rate. For the June 30, 2017 valuation an inflation rate of 2.625 percent will be used and a rate of 2.50 percent in the following valuation. 74 Measurement Period 2019-20 2018-19 2017-18 2016-17

TOTAL OPEB LIABILITY
Service Cost 2,529,281$ 2,029,528 2,300,649 2,234,000
Interest 2,361,171 2,386,306 2,509,423 2,294,000
Difference between Expected and Actual Experience (2,772,589) - (4,522,194) - Changes in Assumptions (1,405,720) 5,977,722 (6,043,482) (3,068,000) Benefit Payments (1,721,539) (1,676,840) (1,698,028) (1,666,000) Net Change in Total Pension Liability (1,009,396) 8,716,716 (7,453,632) (206,000) Total Pension Liability – Beginning 63,021,084 54,304,368 61,758,000 61,964,000 Total Pension Liability – Ending (a) 62,011,688 63,021,084 54,304,368 61,758,000

PLAN FIDUCIARY NET POSITION
Contributions – Employer 1,724,623 1,679,352 1,698,028 2,166,402 Contributions – Employee - - 172,173 225,000
Investment income 103,963 168,198 - -
Benefit Payments (1,721,539) (1,676,840) (1,698,028) (1,666,000) Administrative Expense (10,844) (7,348) (7,181) (6,000) Net change in Plan Fiduciary Net Position 96,203 163,362 164,992 719,402 Plan Fiduciary Net Position - Beginning 3,082,756 2,919,394 2,754,402 2,035,000 Plan Fiduciary Net Position - Ending (b) 3,178,959 3,082,756 2,919,394 2,754,402 Plan Net Pension Liability – Ending (a) - (b) 58,832,729$ 59,938,328 51,384,974 59,003,598 Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 5.13% 4.89% 5.38% 4.46% Covered Payroll 13,641,362$ 13,377,980 13,074,368 13,175,000 Plan Net OPEB Liability as a Percentage of Covered-Employee Payroll 431.28% 448.04% 393.02% 447.85% Notes to Schedule:

City of Commerce
Schedule of Changes in Net OPEB Liability and Related Ratios During the Measurement Period
Changes in assumptions: The discount rate was changed from 3.97 percent (net of administrative expense) to 4.30 percent for the measurement period ended June 30, 2018. The discount rate changed from 4.30 percent to 3.65% for the measurement period ended June 30, 2019. The discount rate was updated based on current crossover test and Municipal Bond Rate. The discount rate was changed from 3.65% to 2.88% for the measurement period ended June 30, 2020. *Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
75 Variance with
Final Budget
Original Final Actual Positive (Negative)
Revenues:

Taxes $ 21,803,000 21,803,000 29,787,684 7,984,684
Casino license tax 16,440,000 16,440,000 9,049,147 (7,390,853) Licenses and permits 4,074,250 4,074,250 4,416,572 342,322 Intergovernmental 284,500 284,500 656,013 371,513
Fines and forfeitures 1,475,000 1,475,000 1,392,108 (82,892) Investment income 50,000 50,000 439,927 389,927
Activity fees 198,466 198,466 43,829 (154,637)
Charges for services 1,037,625 1,037,625 1,268,381 230,756 Rental and lease income 38,760 38,760 703,573 664,813
Miscellaneous 1,253,000 1,253,000 4,644,948 3,391,948
Total revenues 46,654,601 46,654,601 52,402,182 5,747,581 Expenditures:

Current:

General government 14,911,819 14,911,819 15,284,117 (372,298) Community development 2,917,655 2,917,655 3,367,607 (449,952) Public safety 21,720,260 21,720,260 23,228,666 (1,508,406) Public works 5,189,765 5,189,765 5,380,197 (190,432)
Library 2,999,636 2,999,636 2,921,776 77,860
Parks, recreation and culture 5,900,799 5,900,799 4,930,744 970,055 Total expenditures 53,639,934 53,639,934 55,113,107 (1,473,173) Excess (deficiency) of
revenues over (under)
expenditures (6,985,333) (6,985,333) (2,710,925) 4,274,408 Other financing sources (uses):

Transfers in 811,000 811,000 1,081,559 270,559
Transfers out (1,380,000) (1,380,000) (1,357,979) 22,021 Total other financing
sources (uses) (569,000) (569,000) (276,420) 292,580
Net change in fund balance (7,554,333) (7,554,333) (2,987,345) 4,566,988 Fund balance at beginning of year 64,415,324 64,415,324 64,415,324 - Fund balance at end of year 56,860,991$ 56,860,991 61,427,979 4,566,988 Budget

CITY OF COMMERCE
General Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
See notes to Required Supplementary Information
76 CITY OF COMMERCE
Notes to Required Supplementary Information
Year ended June 30, 2021
(1) Budgets and Budgetary Accounting
The City of Commerce, a general law city in the State of California, does not legally require a budget. However, the City Council annually reviews and adopts a budget in accordance with GAAP as a management control device for all funds except the Joint Powers Financing Authority Debt Service Fund. Each May, the City Administrator submits a proposed budget to the City Council. The City Council holds public hearings and may modify the appropriations by majority approval. Budgets are adopted at the object level. Management may transfer amounts within the function level within a fund without the approval of City Council. Additional appropriations during the year may be submitted to the City Council for review and approval.
77 SUPPLEMENTARY SCHEDULES
78 (This page intentionally left blank)
79 NON-MAJOR SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues (other than expendable trusts and major capital projects) and the related expenditures that are legally required to be accounted for in a separate fund. The City of Commerce has the following Non-Major Special Revenue Funds:

Supplemental Law Enforcement Fund - To account for the City’s allocation from the state under Assembly Bill 3229, which supplements frontline law enforcement costs used to supplement existing police services.

Prop A Local Return Tax Fund - To account for the City’s Prop A local return allocation and Prop A money purchased from other cities with General Fund money. Revenues are to be spent for public transit purposes and are transferred to the Transit Enterprise Fund to be spent accordingly.

State Gas Tax Fund - To account for gasoline allocations made by the State of California.

These revenues are restricted by the State to expenditures for street-related purposes only.

Community Development Block Grant (CDBG) Fund - To account for CDBG allocations received and expenditures incurred for allowable projects; primarily home improvements of eligible households.

Air Quality Management District Fund - To account for clean air fees collected by the State and distributed by the Southern California Air Quality Management District to cities for clean air projects.

Housing Fund - To account for the housing activities of the City that were previously accounted for in the low- and moderate-income housing redevelopment agency fund.

Art in Public Places Fund - To account for the revenues and expenditures designated for public art projects throughout the City.

Community Benefits Fund - To account for unpaid past fees collected from Synergy Business Management to assist the Senior Rent Subsidy Program and provide other discounts for the benefit of the senior residents.

Stormwater Management Fund - To account for the revenues and expenditures associated with stormwater management.

NON-MAJOR DEBT SERVICE FUND
Community Center Debt Service Fund - To account for the payment of principal and interest on the City’s general debt issuances.
2007 JPFA Debt Service Fund - To account for activity related to 2007 JPFA bond issue. 80 Special Community
Revenue Center Debt 2007 JPFA
Funds Service Fund Bonds Totals
Assets
Cash and investments $ 3,542,028 - 413,095 3,955,123
Cash and investments with fiscal agent - 1,251 - 1,251
Accounts receivable 322,000 - - 322,000
Due from other governments 89,693 - - 89,693
Loans receivable 478,930 - - 478,930
Property held for resale 1,053,000 - - 1,053,000
Total assets $ 5,485,651 1,251 413,095 5,899,997
Liabilities:

Accounts payable $ 137,919 - - 137,919
Accrued salaries and benefits 1,107 - - 1,107
Due to other funds 38,293 - - 38,293
Total liabilities 177,319 - - 177,319
Deferred inflows of resources:

Unavailable revenue 478,928 - - 478,928
Total deferred inflows of resources 478,928 - - 478,928 Fund balances:

Restricted for:

Community development 3,238,957 - - 3,238,957
Housing 1,243,711 - - 1,243,711
Law enforcement 221,350 - - 221,350
Transportation 162,224 - - 162,224
Debt service - 1,251 413,095 414,346
Unassigned (36,838) - - (36,838)
Total fund balances 4,829,404 1,251 413,095 5,243,750
Total liabilities, deferred inflows of
resources and fund balances $ 5,485,651 1,251 413,095 5,899,997

CITY OF COMMERCE
Non-Major Governmental Funds
Combining Balance Sheet
June 30, 2021
Liabilities, Deferred Inflows of Resources and Fund Balances 81 Special Community
Revenue Center Debt 2007 JPFA
Funds Service Fund Bonds Totals
Revenues:

Intergovernmental $ 2,195,978 - - 2,195,978
Investment income 29,058 19 729 29,806
Licenses and permits 1,244,215 - - 1,244,215
Charges for services 987,355 - - 987,355
Total revenues 4,456,606 19 729 4,457,354
Expenditures:

Current:

General government 211,469 - - 211,469
Community development 82,932 - - 82,932
Parks, recreation, and culture 600,985 - - 600,985
Public safety 157,268 - - 157,268
Debt service:

Principal payments - 390,000 - 390,000
Interest and fiscal charges - 392,612 - 392,612
Total expenditures 1,052,654 782,612 - 1,835,266
Excess (deficiency) of revenues
over (under) expenditures 3,403,952 (782,593) 729 2,622,088 Other financing sources (uses):

Transfers in - 783,719 - 783,719
Transfers out (2,124,108) - - (2,124,108)
Total other financing
sources (uses) (2,124,108) 783,719 - (1,340,389)
Net change in fund balances 1,279,844 1,126 729 1,281,699 Fund balances beginning of year 3,549,560 125 412,366 3,962,051 Fund balances at end of year $ 4,829,404 1,251 413,095 5,243,750

CITY OF COMMERCE
Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2021
82 Supplemental Proposition
Law A Local State
Enforcement Return Tax Gas Tax CDBG
Cash and investments $ 221,350 - 104,580 -
Accounts receivable - - - -
Due from other governments - - 43,471 46,222
Loans receivable - - - 7,500
Property held for resale - - - -
Total assets $ 221,350 - 148,051 53,722
Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ - - - 43,660
Accrued salaries and benefits - - - 1,107
Due to other funds - - - 38,293
Total liabilities - - - 83,060
Deferred inflows of resources:

Unavailable revenue - - - 7,500
Total deferred inflows of resources - - - 7,500
Fund balances (deficit):

Restricted for:

Community development - - - -
Housing - - - -
Law enforcement 221,350 - - -
Transportation - - 148,051 -
Unassigned - - - (36,838)
Total fund balances (deficit) 221,350 - 148,051 (36,838) Total liabilities, deferred inflows
of resources and fund balances $ 221,350 - 148,051 53,722 Assets:

CITY OF COMMERCE
Non-Major Special Revenue Funds
Combining Balance Sheet
June 30, 2021
83 Air Quality Art in
Management Public Community Stormwater
District Housing Places Benefits Management Totals
14,173 191,854 1,121,786 905,698 982,587 3,542,028
- - - 322,000 - 322,000
- - - - - 89,693
- 471,430 - - - 478,930
- 1,053,000 - - - 1,053,000
14,173 1,716,284 1,121,786 1,227,698 982,587 5,485,651
- 1,145 - 68,703 24,411 137,919
- - - - - 1,107
- - - - - 38,293
- 1,145 - 68,703 24,411 177,319
- 471,428 - - - 478,928
- 471,428 - - - 478,928
- 1,121,786 1,158,995 958,176 3,238,957 -
1,243,711 - - - 1,243,711 -
- - - - 221,350 -
- - - - 162,224 14,173
- - - - - (36,838)
14,173 1,243,711 1,121,786 1,158,995 958,176 4,829,404
14,173 1,716,284 1,121,786 1,227,698 982,587 5,485,651
84 Supplemental Proposition
Law A Local State
Enforcement Return Tax Gas Tax CDBG
Revenues:

Intergovernmental $ 156,726 1,425,000 541,424 56,222
Investment income 391 - 185 -
Charges for services - - - -
Licenses and permits - - - -
Total revenues 157,117 1,425,000 541,609 56,222
Expenditures:

Current:

General government - - - -
Community development - - - 82,267
Parks, recreation, and culture - - - -
Public safety 157,268 - - -
Total expenditures 157,268 - - 82,267
Excess (deficiency) of
revenues over (under)
expenditures (151) 1,425,000 541,609 (26,045)
Other financing sources (uses):

Transfers out - (1,425,000) (510,000) -
Total other financing
sources (uses) - (1,425,000) (510,000) -
Net change in fund balances (151) - 31,609 (26,045)
Fund balances (deficit) at beginning of year 221,501 - 116,442 (10,793) Fund balances (deficit) at end of year $ 221,350 - 148,051 (36,838)

CITY OF COMMERCE
Non-Major Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 2021
85 Air Quality Art In
Management Public Community Stormwater
District Housing Places Benefits Management Totals
16,606 - - - - 2,195,978
25 23,141 1,981 1,600 1,735 29,058
- - - - 987,355 987,355
- - 403,870 840,345 - 1,244,215
16,631 23,141 405,851 841,945 989,090 4,456,606
- - - 211,469 - 211,469
- 665 - - - 82,932
- - - 570,071 30,914 600,985
- - - - - 157,268
- 665 - 781,540 30,914 1,052,654
16,631 22,476 405,851 60,405 958,176 3,403,952
(2,458) - - (186,650) - (2,124,108)
(2,458) - - (186,650) - (2,124,108)
14,173 22,476 405,851 (126,245) 958,176 1,279,844
- 1,221,235 715,935 1,285,240 - 3,549,560
14,173 1,243,711 1,121,786 1,158,995 958,176 4,829,404
86 Special Revenue Funds
Supplemental Law Enforcement Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Intergovernmental $ - 156,726 156,726
Investment income - 391 391
Total revenues - 157,117 157,117
Expenditures:

Current:

Public safety 100,000 157,268 (57,268)
Total expenditures 100,000 157,268 (57,268)
Excess (deficiency) of revenues
over (under) expenditures (100,000) (151) 99,849
Net change in fund balances (100,000) (151) 99,849
Fund balance at beginning of year 221,501 221,501 -
Fund balance at end of year $ 121,501 221,350 99,849

CITY OF COMMERCE
87 Non-Major Special Revenue Funds
Proposition A Local Return Tax Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Intergovernmental $ - 1,425,000 1,425,000
Total revenues - 1,425,000 1,425,000
Other financing sources (uses):

Transfers out (1,300,000) (1,425,000) (125,000)
Total other financing sources (uses) (1,300,000) (1,425,000) (125,000) Net change in fund balances (1,300,000) - 1,300,000
Fund balance at beginning of year - - -
Fund balance at end of year $ (1,300,000) - 1,300,000

CITY OF COMMERCE
88 Non-Major Special Revenue Funds
State Gas Tax Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Intergovernmental $ - 541,424 541,424
Investment income - 185 185
Total revenues - 541,609 541,609
Other financing sources (uses):

Transfers out (350,000) (510,000) (160,000)
Total other financing sources (uses) (350,000) (510,000) (160,000) Net change in fund balances (350,000) 31,609 381,609
Fund balance at beginning of year 116,442 116,442 -
Fund balance at end of year $ (233,558) 148,051 381,609

CITY OF COMMERCE
89 Non-Major Special Revenue Funds
Community Development Block Grant (CDBG) Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Intergovernmental $ - 56,222 56,222
Total revenues - 56,222 56,222
Expenditures:

Current:

Community development 216,832 82,267 134,565
Public safety 14,311 - 14,311
Total expenditures 231,143 82,267 148,876
Excess (deficiency) of revenues
over (under) expenditures (231,143) (26,045) 205,098
Net change in fund balances (231,143) (26,045) 205,098
Fund balance (deficit) at beginning of year (10,793) (10,793) - Fund balance (deficit) at end of year $ (241,936) (36,838) 205,098

CITY OF COMMERCE
90 Non-Major Special Revenue Funds
Air Quality Management District (AQMD) Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Intergovernmental $ - 16,606 16,606
Investment income - 25 25
Total revenues - 16,631 16,631
Other financing sources (uses):

Transfers out (16,000) (2,458) 13,542
Total other financing sources (uses) (16,000) (2,458) 13,542 Net change in fund balances (16,000) 14,173 30,173
Fund balance at beginning of year - - -
Fund balance (deficit) at end of year $ (16,000) 14,173 30,173

CITY OF COMMERCE
91 Non-Major Special Revenue Funds
Housing Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $ - 23,141 23,141
Total revenues - 23,141 23,141
Expenditures:

Current:

Community development - 665 (665)
Total expenditures - 665 (665)
Excess (deficiency) of revenues
over (under) expenditures - 22,476 22,476
Net change in fund balances - 22,476 22,476
Fund balance at beginning of year 1,221,235 1,221,235 - Fund balance at end of year $ 1,221,235 1,243,711 22,476

CITY OF COMMERCE
92 Non-Major Special Revenue Funds
Art In Public Places Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Licenses and permits $ - 403,870 403,870
Investment income - 1,981 1,981
Total revenues - 405,851 405,851
Expenditures:

Current:

Parks, recreation and culture - - -
Total expenditures - - -
Excess (deficiency) of revenues
over (under) expenditures - 405,851 405,851
Net change in fund balances - 405,851 405,851
Fund balance at beginning of year 715,935 715,935 -
Fund balance at end of year $ 715,935 1,121,786 405,851

CITY OF COMMERCE
93 Non-Major Special Revenue Funds
Community Benefits Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $ - 1,600 1,600
Licenses and permits - 840,345 840,345
Total revenues - 841,945 841,945
Expenditures:

Current:

General government 210,500 211,469 (969)
Parks, recreation, and culture 138,695 570,071 (431,376) Total expenditures 349,195 781,540 (432,345)
Excess (deficiency) of revenues
over (under) expenditures (349,195) 60,405 409,600
Other financing sources (uses):

Transfers out (105,000) (186,650) (81,650)
Total other financing sources (uses) (105,000) (186,650) (81,650) Net change in fund balances (454,195) (126,245) 327,950 Fund balance at beginning of year 1,285,240 1,285,240 - Fund balance at end of year $ 831,045 1,158,995 327,950

CITY OF COMMERCE
94 Non-Major Special Revenue Funds
Stormwater Management Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $ - 1,735 1,735
Charges for services - 987,355 987,355
Total revenues - 989,090 989,090
Expenditures:

Current:

Parks, recreation, and culture - 30,914 (30,914)
Total expenditures - 30,914 (30,914)
Excess (deficiency) of revenues
over (under) expenditures - 958,176 958,176
Net change in fund balances - 958,176 958,176
Fund balance at beginning of year - - -
Fund balance at end of year $ - 958,176 958,176

CITY OF COMMERCE
95 Debt Service Fund
Community Center Debt Service Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $ - 19 19
Total revenues - 19 19
Expenditures:

Debt service:

Principal payments 315,000 390,000 (75,000)
Interest and fiscal charges 489,812 392,612 97,200
Total expenditures 804,812 782,612 22,200
Excess (deficiency) of revenues
over (under) expenditures (804,812) (782,593) 22,219
Other financing sources (uses):

Transfers in 781,337 783,719 2,382
Total other financing sources (uses) 781,337 783,719 2,382 Net change in fund balances (23,475) 1,126 24,601
Fund balance (deficit) at beginning of year 125 125 -
Fund balance (deficit) at end of year $ (23,350) 1,251 24,601

CITY OF COMMERCE
96 Capital Projects Fund
Measure AA Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Taxes -$ 7,649,017 7,649,017
Intergovernmental - 560,523 560,523
Investment income - 35,062 35,062
Total revenues - 8,244,602 8,244,602
Expenditures
Current:

Public safety - 3,428 (3,428)
Public works 5,184,926 5,553,692 (368,766)
Total expenditures 5,184,926 5,557,120 (372,194)
Excess (deficiency) of revenues
over (under) expenditures (5,184,926) 2,687,482 7,872,408 Other financing sources (uses):

Transfers in 3,145,000 - (3,145,000)
Transfers out - (382,451) (382,451)
Total other financing sources (uses) 3,145,000 (382,451) (3,527,451) Net change in fund balances (2,039,926) 2,305,031 4,344,957 Fund balance at beginning of year 18,617,305 18,617,305 - Fund balance at end of year $ 16,577,379 20,922,336 4,344,957

CITY OF COMMERCE
97 Capital Projects Fund
General City Capital Projects Fund
Schedule of Revenues, Expenditures and Changes
in Fund Balances - Budget and Actual
Year ended June 30, 2021
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Miscellaneous $ - 17,703 17,703
Total revenues - 17,703 17,703
Expenditures:

Current:

Public works - 74,262 (74,262)
Total expenditures - 74,262 (74,262)
Excess (deficiency) of revenues
over (under) expenditures - (56,559) (56,559)
Net change in fund balances - 517,701 517,701
Fund balance (deficit) at beginning of year (1,396,833) (1,396,833) - Fund balance (deficit) at end of year $ (1,396,833) (879,132) 517,701

CITY OF COMMERCE
98 PRIVATE PURPOSE TRUST FUNDS
Trust Funds are used to account for the activities of the Redevelopment Obligation Retirement Funds, and other Successor Agency funds, which accumulates resources for obligations previously incurred by the former Commerce Redevelopment Agency.

The City of Commerce has the following Private Purpose Trust Funds:

Redevelopment Property Tax Trust Fund - To account for property tax allocated to the Successor Agency to pay the enforceable obligations listed on the ROPS.

Successor Agency Trust Fund - To account for the housing activities of the former community development commission taken over by the Successor Agency. 99 Redevelopment Successor
Property Tax Agency Trust
Trust Fund Fund Totals
Assets
Cash and investments $ 16,239,928 - 16,239,928
Cash and investments with fiscal agents - 56,766 56,766 Loans receivable - 17,442 17,442
Property held for resale - 44,407,092 44,407,092
Total assets 16,239,928 44,481,300 60,721,228
Deferred Outflow of Resources
Deferred loss on refunding - 4,547,019 4,547,019
Liabilities
Accounts payable - 1,827,817 1,827,817
Accrued salaries and benefits - 2,591 2,591
Interest payable - 898,003 898,003
Long-term liabilities - 55,816,473 55,816,473
Total liabilities - 58,544,884 58,544,884
Net Position (Deficit)
Held in trust for Successor Agency $ 16,239,928 (9,516,565) 6,723,363

CITY OF COMMERCE
Private Purpose Trust Funds
Combining Statement of Fiduciary Net Position
June 30, 2021
100
Redevelopment Successor
Property Tax Agency Trust
Trust Fund Fund Totals
Additions:

Property tax $ 8,743,763 - 8,743,763
Investment income 28,678 32 28,710
Rental income - 819,979 819,979
Miscellaneous income - 443,482 443,482
Transfers in - 9,271,493 9,271,493
Total additions 8,772,441 10,534,986 19,307,427
Deductions:

Administrative expenses - 2,091,178 2,091,178
Interest and fiscal charges - 2,181,243 2,181,243
Loss on disposition of fixed assets - 1,698,210 1,698,210 Transfers out 9,271,493 - 9,271,493
Total deductions 9,271,493 5,970,631 15,242,124
Changes in net position (499,052) 4,564,355 4,065,303
Net position (deficit) held in trust, beginning of year 16,738,980 (14,080,920) 2,658,060 Net position (deficit) held in trust, end of year $ 16,239,928 (9,516,565) 6,723,363 Private Purpose Trust Fund
Combining Statement of Changes in Fiduciary Net Position Year ended June 30, 2021

CITY OF COMMERCE
Successor Agency
101

STATISTICAL SECTION
Financial Trends – These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

Revenue Capacity – These schedules contain information to help the reader assess the City’s most significant local revenue source: property tax.

Debt Capacity – These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information – These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.

Operating Information – These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.
102

CITY OF COMMERCE
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2012 2013 2014 2015
Governmental activities:

Net investment in
capital assets 41,949,565 29,678,249 35,963,254 45,509,674 Restricted 2,862,221 6,852,897 4,189,145 (8,770,483)
Unrestricted 44,875,673 32,518,513 49,067,403 54,250,682 Total governmental activities
net position 81,406,819 77,330,299 89,219,802 90,989,873 Business-type activities:

Invested in capital assets,
net of related debt 9,132,834 15,050,922 14,033,290 13,415,492 Restricted - - - -
Unrestricted (4,154,394) (3,475,824) (4,437,236) (7,071,258) Total business-type activities
net position 10,896,528 5,657,010 9,596,054 6,344,234
Primary government:

Invested in capital assets,
net of related debt 51,082,399 44,729,171 49,996,544 58,925,166 Restricted 2,862,221 6,852,897 4,189,145 (8,770,483)
Unrestricted 40,721,279 29,042,689 44,630,167 47,179,424 Total primary government
net position 92,303,347 82,987,309 98,815,856 97,334,107 103
Fiscal Year
2016 2017 2018 2019 2020 2021
69,045,438 82,699,50281,609,38684,719,037 87,603,633 83,964,506 1,695,259 2,048,2611,876,1241,706,688 2,038,137 2,098,713 42,451,641 44,026,277 7,083,848 11,612,066 4,908,821 2,725,740 128,877,366 114,766,974 90,569,358 96,359,829 94,550,591 88,788,959 12,812,420 13,413,12011,644,93412,305,690 13,066,918 13,584,738 - --- - -
(6,948,259) (6,730,545) (16,115,502) (14,607,134) (15,245,267) (15,339,653) 5,357,431 6,081,875 (4,470,568) (1,194,014) (2,178,349) (1,754,915) 81,857,858 96,112,62293,254,32097,024,727 100,670,551 97,549,244 1,695,259 2,048,2611,876,1241,706,688 2,038,137 2,098,713 35,503,382 37,295,732 (9,031,654) (2,995,068) (10,336,446) (12,613,913) 134,234,797 120,848,849 86,098,790 95,165,815 92,372,242 87,034,044 104

CITY OF COMMERCE
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2012 2013 2014 2015
Expenses:

Governmental activities:

General government 18,362,277 16,664,200 18,216,730 18,681,419 Public safety 15,583,635 16,494,702 17,466,237 17,825,986 Public works 6,464,741 6,953,510 6,902,561 9,574,171
Community development 2,269,890 2,205,819 2,084,600 2,582,041 Parks and Recreation 8,808,268 9,122,504 9,743,642 9,298,527 Library 3,001,247 2,799,278 1,361,478 1,201,234
Interest on long-term debt 10,055,429 5,554,206 4,847,305 5,393,909 Total governmental activities expenses 64,545,487 59,794,219 60,622,553 64,557,287 Business-type activities:

Transit 5,571,290 4,417,649 4,982,3214,724,375
CNG - - 2,038,6871,883,647
Water 176,589 491,453 593,822281,869
Cable Television 232,154 250,312 310,004 294,436
Total business-type activities expenses 5,159,414 5,980,033 7,199,895 7,909,266 Total primary government expenses 69,704,901 65,774,252 67,822,448 72,466,553 Program revenues:

Governmental activities:

Charges for services:

General government - 717,712 --
Public safety 1,440,460 729,369 1,670,4731,582,241
Public works 2,488,665 2,042,031 3,336,3772,894,236
Community development - 637,061 48,27070,211
Library 26,781 26,827 22,53323,357
Parks and recreation 562,364 667,379 575,150595,134
Operating grants and contributions 2,343,633 2,484,684 2,254,889 2,517,480 Capital grants and contributions 550,120 2,522,945 1,980,538 9,611,896 Total governmental activities
program revenues 7,714,132 9,525,899 9,400,606 17,782,179 Business-type activities:

Charges for services:

Transit - 1,046,062 - -
CNG - 2,067,5302,160,510 -
Water - - - -
Cable Television 37,817 39,734 40,192 45,541
Operating grants and contributions 2,457,478 3,728,164 1,952,128 2,726,291 Total business-type activities
program revenues 2,495,295 4,813,960 4,152,830 4,839,362 Total primary government
program revenues 10,209,427 14,339,859 13,553,436 22,621,541 Net revenues (expenses):

Governmental activities (56,831,355) (50,268,320) (51,221,947) (46,775,108) Business-type activities (2,664,119) (1,166,073) (3,047,065) (3,069,904) Total net revenues (expenses) (59,495,474) (51,434,393) (54,269,012) (49,845,012) 105
Fiscal Year
2016 2017 2018 2019 2020 2021
16,097,044 22,493,47719,705,68017,143,378 14,923,956 19,230,660 18,994,377 21,457,40321,462,10920,528,705 22,513,602 23,367,758 10,080,047 13,705,53913,955,3877,753,735 16,343,439 12,613,431 4,550,938 2,112,0543,189,4803,111,106 2,444,173 3,626,129 9,917,064 13,083,29312,835,67511,936,131 12,836,798 6,659,835 3,210,975 3,627,2214,275,7313,774,862 4,719,709 3,067,205 4,196,186 1,870,823 2,036,161 365,743 347,944 327,503
67,046,631 66,118,740 77,460,223 76,844,730 74,129,621 68,892,521 5,322,991 5,747,3136,191,0224,919,636 7,123,822 7,059,103 1,564,009 1,941,6852,027,0561,657,378 2,283,888 2,725,050 711,572 611,098637,396695,715 482,240 215,971
301,827 258,221 359,704 - - -
7,856,793 7,574,556 9,215,178 8,300,096 9,889,950 10,000,124 74,903,424 73,693,296 86,675,401 85,144,826 84,019,571 78,892,645 - --- - -
1,481,520 1,639,8541,536,7321,560,967 1,355,125 1,392,108 3,395,581 4,063,3903,027,3052,753,032 4,470,153 6,422,295 20,462 88,88240,00089,950 339,948 536,975
18,940 17,38010,638 5,155 12,581
594,096 2,858,857674,476647,552 1,188,201 363,964
2,208,545 4,106,3682,757,7192,549,722 5,477,203 4,632,926 18,508,737 12,503,266 4,620,744 290,533 295,545 9,999
26,227,881 20,115,127 12,674,356 13,053,039 13,138,756 13,358,267 - --- - -
1,398,775 1,483,5551,930,9261,480,555 2,871,693 3,215,859 845,000 845,000845,000845,000 845,000 845,000
49,402 -53,74853,950 --
3,140,870 2,801,867 3,138,934 6,046,775 3,748,452 4,931,427 5,434,047 5,181,372 5,968,608 8,375,330 7,465,145 8,992,286 31,661,928 25,296,499 18,642,964 21,428,369 20,603,901 22,350,553 (40,818,750) (63,791,691)(64,785,867)(46,003,613) (60,990,865) (55,534,254) (2,422,746) (2,393,184) (3,246,570) 75,234 (2,424,805) (1,007,838) (43,241,496) (48,396,797) (68,032,437) (63,716,457) (63,415,670) (56,542,092) (continued) (continued) (continued) (continued) (continued) 106

CITY OF COMMERCE
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2012 2013 2014 2015
(continued)
General revenues and other changes in net position:

Governmental activities:

Taxes:

Casino license tax 21,181,030 20,600,922 19,654,726 22,240,233 Property taxes 9,423,608 3,972,269 2,511,686 2,819,939
Sales tax 16,459,305 19,795,117 25,900,879 29,360,146
Franchise taxes 1,017,727 968,579 1,035,234 1,128,060
Transient occupancy taxes 2,096,487 2,274,182 2,390,203 2,549,218 Motor vehicle in lieu, unrestricted 1,028,203 1,062,922 1,088,953 1,126,561 Investment income 3,994,512 5,838,632 5,651,173 5,484,438 Intergovernmental, unrestricted - - - -
Miscellaneous revenues (expenses) 2,718,041 1,613,284 2,147,602 3,662,709 Extraordinary gain (loss) 6,696,994 - - -
Transfers - (1,646,982) (1,746,591) (2,504,962)
Total governmental activities 64,615,907 54,478,925 58,633,865 65,866,342 Business-type activities:

Investment income - - - -
Transfers - 1,646,982 1,746,591 2,504,962
Special Items - - - -
Total business-type activities - 1,646,982 1,746,591 2,504,962 Total primary government 64,615,907 56,125,907 60,380,456 68,371,304 Changes in net position
Governmental activities 7,784,552 4,210,605 7,411,918 19,091,234 Business-type activities (2,664,119) 480,909 (1,300,474) (564,942) Total primary government 5,120,433 4,691,514 6,111,444 18,526,292 107
Fiscal Year
2016 2017 2018 2019 2020 2021
25,012,715 27,658,74528,217,26025,780,700 20,260,767 8,848,685 2,322,486 4,563,5604,680,8772,481,617 4,548,892 5,184,180 27,795,167 32,166,10628,702,60026,979,330 27,005,166 29,411,394 1,052,568 1,089,1381,024,506952,432 1,055,508 1,114,535 2,843,656 3,145,4153,269,1643,063,406 2,613,232 1,717,154 1,177,552 6,2726,8771,242,958 10,306 9,438
5,372,963 576,3372,410,3722,413,906 495,961 481,994
- --- - -
1,179,131 1,661,2213,370,780(1,137,872) 1,819,994 3,020,230 - - 6,308,116(8,515,224) - -
(2,160,387) (1,662,472) (1,656,133) (2,000,747) (1,425,000) (1,425,000) 64,595,851 60,114,005 61,511,079 75,174,163 56,384,826 48,362,610 - 8,6895,2196,268 15,470 6,272
2,160,387 1,662,472 1,656,133 2,000,747 1,425,000 1,425,000 - - - 1,191,884 - -
2,160,387 1,668,740 1,661,352 3,201,320 1,440,470 1,431,272 66,756,238 61,782,745 63,172,431 78,375,483 57,825,296 49,793,882 23,777,101 11,382,472(3,274,788)14,110,392 (4,606,039) (7,171,644) (262,359) (724,444) (1,585,218) 3,276,554 (984,335) 423,434 23,514,742 13,385,948 (4,860,006) 14,659,026 (5,590,374) (6,748,210) 108
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109

CITY OF COMMERCE
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2015 2016 2017 2018 2019 2020 2021
General fund:

Nonspendable 15,127,548 11,474,577 9,529,236 9,348,695 17,036,179 22,002,880 20,230,513 Restricted - - - - - 2,913,821 3,309,427
Unassigned 45,493,743 52,400,666 55,268,246 59,647,840 55,618,952 39,498,623 37,888,039 Total general fund 60,621,291 63,875,243 64,797,482 68,996,535 72,655,131 64,415,324 61,427,979 All other governmental funds:

Restricted 105,647,274 59,362,140 55,507,264 18,151,913 28,145,037 22,590,149 26,202,924 Unassigned (12,632,110) (23,495,816) (18,936,253) (11,755,176) (10,116,122) (1,407,626) (915,970) Total all other
governmental funds 93,015,164 35,866,324 36,571,011 6,396,737 18,028,915 21,182,523 25,286,954 Fiscal Year
2012 2013 2014
General fund:

Nonspendable 15,272,801 15,216,754 15,110,492
Unassigned 33,552,248 40,946,024 43,062,013
Total general fund 48,825,049 56,162,778 58,172,505
All other governmental funds:

Restricted 110,139,272 105,913,679 105,980,666
Unassigned (4,368,665) (7,649,689) (9,519,379)
Total all other governmental funds 105,770,607 98,263,990 96,461,287 (a) The City implemented GASB statement No. 54 in the fiscal year ended June 30, 2011.

Fiscal Year
110

CITY OF COMMERCE
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2012 2013 2014 2015
Revenues:

Taxes 30,838,722 28,073,069 32,926,955 36,983,924
Casino license tax 21,181,030 20,600,922 19,654,726 22,240,233 Licenses and permits 2,051,387 2,489,592 2,900,240 2,995,798 Fines and forfeitures 756,196 1,467,241 1,605,598 1,693,006 Investment income 7,001,775 5,840,623 5,662,019 5,492,779 Rental income 707,840 12,319 73,324 60,546
Intergovernmental 2,539,595 4,193,761 4,469,864 4,716,798 Charges for services 500,455 163,657 473,358 481,788
Activity Fees 436,868 433,859 414,127 401,567
Other 1,972,515 1,770,546 1,768,877 1,805,765
Total revenues 67,986,383 65,045,589 69,949,088 76,872,204 Expenditures
Current:

General government 16,547,709 15,609,127 16,616,771 18,208,263 Public safety 15,583,635 16,226,042 16,737,125 17,696,949 Public works 5,894,285 11,156,226 10,682,593 14,543,747 Community development 2,140,768 2,171,051 1,975,546 2,566,731 Library 2,775,283 2,860,346 3,222,372 3,593,745
Parks, recreation and culture 7,969,161 8,035,395 8,426,766 8,948,228 Capital outlay - - - -
Debt service:

Principal retirement 7,971,902 4,510,000 5,480,000 4,585,000 Interest and fiscal charges 9,677,103 5,186,151 4,940,642 4,791,759 SERAF Payments - - - -
Bond Issuance Costs - - - -
Payment to bond escrow agent - - - 1,591,812
Pass-through payments 813,392 - - -
Total expenditures 69,373,238 65,754,338 68,081,815 76,526,234 Excess (deficiency) of
revenues over (under)
expenditures (1,386,855) (708,749) 1,867,273 345,970
Other financing sources (uses):

Transfers in 2,331,429 2,331,429 3,368,424 6,824,304
Transfers out (3,710,866) (3,710,866) (5,429,737) (8,560,288) Issuance of bonds - - - -
Proceeds of refunding bonds - - - 10,000,000
Premium on bonds - - - 1,204,670
Payment to bond escrow agent - - - (10,811,993)
Total other financing
sources (uses) (1,379,437) (1,379,437) (2,061,313) (1,343,307) Extraordinary/ Special Items 20,466,590 - - -
Net change in fund balances 17,700,298 (2,088,186) (194,040) (997,337) Ratio of debt service expenditures
to noncapital expenditures 26% 15% 17% 14%
111
Fiscal Year
2016 2017 2018 2019 2020 2021
35,191,429 37,436,70135,233,10440,970,49237,684,02434,719,747 25,012,715 9,049,14720,060,30527,658,74528,217,26025,780,700 3,094,043 5,660,7873,937,6913,533,9992,811,7862,593,315 1,500,460 1,392,1081,367,7241,645,0091,554,1121,571,605 5,376,602 504,795495,961576,3372,410,3722,442,142
65,804 1,690,9281,770,0272,650,024256,456107,310
10,533,532 3,412,5145,779,8605,607,20913,918,48615,151,211 442,178 1,268,381110,177361,727394,724331,457
387,652 43,829231,657458,610433,813433,274
956,288 1,232,109 3,940,461 2,290,119 1,750,094 4,662,651 82,560,703 84,362,870 91,621,494 85,752,271 70,736,600 65,121,841 15,910,208 15,495,58617,482,69219,905,89216,594,32516,416,508 18,717,286 20,010,785 23,389,36222,513,60221,424,47220,871,826 29,308,208 21,221,420 11,008,15117,680,99413,332,46612,614,426 5,510,293 3,015,986 3,450,5393,328,3443,391,3223,084,391 3,640,566 3,764,624 2,921,7764,185,9534,080,5423,808,597 9,563,855 10,613,121 5,531,72911,220,21211,853,18710,804,067 - - ---4,301,838
46,690,000 3,925,000 390,000370,000355,0004,075,000
4,954,788 2,243,768 2,098,092 430,414 412,803 392,612
- - - - - -
- - - - - -
- - 5,050,414 - - -
- - - - - -
134,295,204 81,211,212 83,302,976 74,773,295 77,194,600 62,579,755 (51,734,501) 3,151,658 8,318,518 10,978,976 (6,458,000) 2,542,086 2,259,463 2,439,5385,520,2512,164,6401,535,0531,676,324 (4,419,850) (3,864,538)(6,945,251)(4,262,726)(3,191,186)(3,201,056) - - - - - -
- - - - - -
- - - - - -
- - (32,637,606) - - -
(2,160,387) (1,524,732) (34,293,739) (2,098,086) (1,425,000) (1,425,000) - - - 6,409,884
(53,894,888) 1,626,926 (25,975,221) 15,290,774 (7,883,000) 1,117,086 41% 8% 8% 1% 1% 1%
112

CITY OF COMMERCE
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
City Redevelopment Agency 1
Fiscal Year Taxable Taxable Total
Ended Assessed Assessed Direct Tax
June 30 Secured Unsecured Value Secured Unsecured Value Rate 2012 1,105,952 201,785 1,307,737 2,565,465 428,426 2,993,891 0.068% 2013 3,666,439 630,210 4,296,649 - - - 0.068%
2014 3,851,105 604,103 4,455,208 - - - 0.068%
2015 3,960,810 625,494 4,586,304 - - - 0.068%
2016 4,128,859 663,524 4,792,383 - - - 0.068%
2017 4,411,177 648,456 5,059,633 - - - 0.068%
2018 4,592,262 666,905 5,259,168 - - - 0.068%
2019 4,706,339 702,582 5,408,921 - - - 0.068%
2020 5,054,122 720,534 5,774,656 - - - 0.068%
2021 5,384,842 704,478 6,089,320 - - - 0.068%
1 Redevelopment Agencies were dissolved by the State and are no longer reported separately Source: Hdl 2021 Statistical Package
NOTE:

In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
113

CITY OF COMMERCE
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Basic Levy (1) 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Cerritos Community College District 0.01782 0.02594 0.02502 - - - - - - - County Detention Facilities 1987 Debt - - - - - - - - - - Downey Unified School District 0.06725 0.07132 0.06603 - - - - - - - LA CCD DS 2008 Series F - 0.01119 - - - - - - - -
LA Community College District 0.03530 0.04875 0.04454 0.04017 0.03575 0.03596 0.04599 0.04621 0.02717 0.04016 LA County Flood Control - - - - - -
LAUSD 0.16819 0.17561 0.14644 0.14688 0.12971 0.13110 0.12219 0.12323 0.12552 0.13993 MWD 0.00370 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 Montebello Unified School District 0.10001 0.09630 0.09457 0.08750 0.08715 0.14705 0.13514 0.13921 0.09306 0.09706 Total Direct & Overlapping (2) Tax Rates 1.39227 1.43261 1.38010 1.27805 1.25611 1.31761 1.30682 1.31215 1.24925 1.28065 City's Share of 1% Levy Per Prop 13 (3) 0.06793 0.06793 0.06793 0.06793 0.06793 0.06793 0.06793 0.06793 0.06793 0.06793 Redevelopment Rate (4) 1.00370 - - - - - - - - -
Total Direct Rate (5) 0.45879 0.46863 0.06818 0.06818 0.06817 0.06817 0.06815 0.06832 0.06813 0.06814 (1) In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. (2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. (3) City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. The ERAF portion of the City's Levy has been subtracted where known.
(4) Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABX1 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter.
(5) Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable 114

CITY OF COMMERCE
Principal Property Tax Payers
Current Year and Ten Years Ago
2011/12
Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Taxpayer Value Value
Craig Realty Group Citadel LLC $ 304,354,661 4.99% Craig Realty Group Citadel LLC $ 130,385,746 3.09% Prologis USLV NewCA 6 LLC 153,660,506 2.52% California Commerce Club Inc. 101,678,421 2.41% Rexform Industrial - 5300 Sheila LLC LESSR 118,717,961 1.95% AMB Institutional Alliance Fund 86,671,539 2.06% AMB Institutional Alliance Fund 117,450,903 1.92% LIT Commerce Distribution Center LLC 86,666,498 2.06% California Commerce Club Inc. 106,556,755 1.75% Rreef America Reit II Corporation 75,520,315 1.79% Rreef America Reit II Corporation 1.39%58,476,430 105,091,330 1.72% VON'S Companies Inc LIT Commerce Distribution Center LLC 101,786,273 1.67% TELAC 5500 5600 Inc 57,704,096 1.37% JFC International Inc. 97,106,325 1.59% AMB Property LP 54,296,911 1.29% Liberty Property LP 1.14%48,104,728 96,445,080 1.58% 99 Cents Only Stores Rexford Industrial Realty LP 81,706,475 1.34% Omninet Commerce LP 47,336,599 1.12% $ 1,282,876,269 21.03% $ 746,841,283 17.72%
The amounts shown above include assessed value data for both the City and the Successor Agency.

Source: Los Angeles County Assessor's Office
2020/21
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CITY OF COMMERCE
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy 2012 20,212,223 15,824,853 78.29% 36,888 15,861,741 78.48% 2013* 1,672,673 1,656,783 99.05% 91,973 1,748,756 104.55% 2014 1,704,028 1,660,778 97.46% 42,529 1,703,307 99.96% 2015 1,728,663 1,726,766 99.89% 1,897 1,728,663 100.00% 2016 1,838,006 1,811,369 98.55% 28,534 1,839,903 100.10% 2017 1,814,622 1,792,768 98.80% 50,388 1,843,156 101.57% 2018 1,951,337 1,936,177 99.22% 65,548 2,001,725 102.58% 2019 2,204,661 2,260,554 102.54% 9,655 2,270,209 102.97% 2020 2,028,219 2,010,999 99.15% 26,875 2,037,874 100.48% 2021 2,079,925 2,102,809 101.10% 3,991 2,106,800 101.29% Source: Los Angeles County Auditor Controller's Office NOTE: The amounts presented for 2012 include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. *Due to the dissolution of Redevelopment the availability of levy information from the County of Los Angeles is limited. Amounts shown above for 2013 are for the General Fund only. The amounts that are levied on behalf of the Successor Agency of the Redevelopment Agency are not available at this time.

Information regarding delinquent taxes by levy year to determine which year's taxes remain unpaid by the taxpayer is not available at this time. The Auditor Controller's Office needs more time to make appropriate changes to their tax reporting system to track this information on a agency by agency basis. 116

CITY OF COMMERCE
Card Club License Fee by Category
Last Ten Calendar Years
(in thousands of dollars)
Calendar Year
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Gross Card Room -- Gaming Revenue 21,061 20,481 19,535 22,130 24,883 25,661 28,097 27,539 19,960 8,959 Monthly License Fee 120 120 120 120 120 120 120 120 100 90 Total 21,181 20,601 19,655 22,250 25,003 25,781 28,217 27,659 20,060 9,049 Monthly Percentage applied (a) (a) (a) (a) (a) (a) (a) (a) (a) (a) (a) The percentage varies depending on the monthly gross revenue. Detailed information is available upon request from the City of Commerce Finance Department.

Each licensee (in this case, the Commerce Casino) shall pay to the city a monthly license fee of ten thousand dollars plus an amount based upon the total monthly gross revenue of the card game business licensed, according to the schedule presented on the next page.

Notes: The Tax is based upon the following formula as provided for in the agreement between the City and the Commerce Casino.

Source: City of Commerce - Finance Department
117

CITY OF COMMERCE
Direct and Overlapping Card Club Rates
Last Ten Fiscal Years
Monthly Gross Card Club Revenue 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 First $0 to $1,600,000 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% Next $1,600,001 to $8,500,000 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% Next $8,500,001 to $12,000,000 13.8% 13.8% 13.8% 13.8% 13.8% 13.8% 13.8% 13.8% 13.8% 13.8% Next $12,000,001 to $16,000,000 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% Over $16,000,000 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2% Average Rate 12.9%
Notes: The Tax is based upon the above formula as provided for in the agreement between the City and the Commerce Casino.

Source: City of Commerce - Finance Department
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119

CITY OF COMMERCE
Principal Card Club Remitter
Current Year and Ten Years Ago
2021 2012
Tax Percentage Tax Percentage
Tax Remitter Liability Rank of Total Liability Rank of Total Commerce Casino 8,959,147$ 1 100.00% 21,061,030$ 1 100.00% Total $ 8,959,147 100.00% $ 21,061,030 100.00%
Source: City of Commerce - Finance Department
120

CITY OF COMMERCE
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Fiscal Year General Tax Total
Ended Obligation Allocation Governmental
June 30 Bonds Bonds 1Loans Activities
2012 - 117,395,000 - 117,395,000
2013 - 112,885,000 - 112,885,000
2014 - 107,405,000 - 107,405,000
2015 - 101,859,514 - 101,859,514
2016 - 55,109,280 - 55,109,280
2017 - 51,124,046 - 51,124,046
2018 - 9,993,812 - 9,993,812
2019 - 9,578,578 - 9,578,578
2020 - 9,148,344 - 9,148,344
2021 8,698,110 - 8,698,110
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
1 The City issued over $72 million of tax allocation bonds in 2007 (not all was new monies). 2 These ratios are calculated using personal income and population for the prior calendar year. 121
Business-type Activities
Water Total Total Percentage Debt
Revenue Certificates of Business-type Primary of Personal Per Bonds Participation Activities Government Income 2 Capita 2 - - - $ 117,395,000 58.34% 9,121
- - - 112,885,000 51.56% 8,727
- - - 107,405,000 49.99% 8,260
- - - 101,859,514 49.48% 7,829
- - - 55,109,280 27.18% 4,198
- - - 51,124,046 24.91% 3,913
- - - 9,993,812 4.93% 765
- - - 9,578,578 4.49% 736
- - - 9,148,344 3.94% 711
- - - 8,698,110 3.48% 680
ew monies).
calendar year.
122

CITY OF COMMERCE
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Outstanding General Bonded Debt
Fiscal Year General Tax Percent of
Ended Obligation Allocation Assessed Per
June 30 Bonds Bonds Total Value Capita
2012 - 117,395,000 117,395,000 8.98% 9,121
2013 - 112,885,000 112,885,000 2.63% 8,727
2014 - 107,405,000 107,405,000 2.41% 8,260
2015 - 101,859,514 101,859,514 2.22% 7,829
2016 - 55,109,280 55,109,280 1.15% 4,198
2017 - 51,124,046 51,124,046 1.01% 3,913
2018 - 9,993,812 9,993,812 0.19% 765
2019 - 9,578,578 9,578,578 0.18% 736
2020 - 9,148,344 9,148,344 0.16% 711
2021 - 8,698,110 8,698,110 0.14% 680
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

123
Gross Bonded Debt
Balance
Percent
Applicable
to City
Total Direct Debt $ 7,895,000 100.000%
Metropolitan Water District 13,101,783 0.383%
Los Angeles Unified School District 10,709,685,000 0.042% Los Angeles City Community College District 4,405,250,000 0.633% Montebello Unified School District 162,824,400 30.599%
Total Overlapping Debt 15,290,861,183
Total Direct and Overlapping Debt $ 15,298,756,183
2020/21 Assessed Valuation: $2,981,398,461 After Deducting $3,122,325,897 Incremental Value.

Debt to Assessed Valuation Ratios: Direct Debt 0.26%
Overlapping Debt 2.76%
Total Debt 3.03%
Source: HdL

CITY OF COMMERCE
Direct and Overlapping Debt
June 30, 2021
Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the property taxpayers of the City of Commerce. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account.

However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 124

CITY OF COMMERCE
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
2012 2013 2014 2015

Assessed valuation 1,307,737,000 4,296,649,000 4,455,208,000 4,586,304,000 Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation 326,934,250 1,074,162,250 1,113,802,000 1,146,576,000 Debt limit percentage 15% 15% 15% 15%
Debt limit 49,040,138 161,124,338 167,070,300 171,986,400 Total net debt applicable to limit:

General obligation bonds 2,109,437 2,360,341 2,332,927 2,583,831 Legal debt margin 46,930,701 158,763,997 164,737,373 169,402,569 Total debt applicable to the limit
as a percentage of debt limit 4.3% 1.5% 1.4% 1.5%
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.

Source: City Finance Department
Los Angeles County Tax Assessor's Office
125
Fiscal Year
2016 2017 2018 2019 2020 2021
5,059,632,808 5,259,167,690 5,408,920,657 5,774,656,000 6,089,319,551 4,792,383,000 25% 25% 25% 25% 25% 25%
1,264,908,202 1,314,791,923 1,352,230,164 1,443,664,000 1,522,329,888 1,198,095,750 15% 15% 15% 15% 15% 15%
189,736,230 197,218,788 202,834,525 216,549,600 228,349,483 179,714,363 2,556,417 2,807,321 2,779,907 3,030,811 3,003,397 3,254,301 177,157,946 186,928,909 194,438,881 199,803,714 213,546,203 225,095,182

1.4% 1.5% 1.4% 1.5% 1.4% 1.4%
126

CITY OF COMMERCE
Demographic and Economic Statistics
Last Ten Calendar Years
Personal Per Capita
Calendar Income Personal Unemployment
Year Population (1) (in thousands) (2) Income (3) Rate (4) 2012 12,871 201,225 15,634 22.8%
2013 12,935 218,925 16,925 17.7%
2014 13,003 214,849 16,523 14.8%
2015 13,010 205,857 15,823 12.0%
2016 13,127 202,739 15,444 9.8%
2017 13,064 205,233 15,709 7.7%
2018 13,067 202,639 15,507 6.1%
2019 13,021 213,295 16,380 6.7%
2020 12,868 231,904 18,021 5.3%
2021 12,792 12.8% 250,173 19,556
Sources: (1) HDL 2020-21 CAFR Statistical Reports
(2) State Department of Finance
(3) Office of Economic Development
(4) State of California Employment Development Department (data shown is for the County)
127

CITY OF COMMERCE
Principal Employers
Current Year and Ten Years Ago
2021 2012
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
California Commerce Club, Inc. 1,521 3.16% 2,191 3.81%
Parsec, Inc. 1,036 2.15% 780 1.36%
County of Los Angeles 1,000 2.08% 910 1.58%
Ontrac 772 1.60% n/a n/a
ACCO Engineered Systems 705 1.46% n/a n/a
Mission Foods 589 1.22% n/a n/a
JWCH Institute Inc 521 1.08% n/a n/a
Capstone Logistics LLC 467 0.97% n/a n/a
F3 Foods 450 0.93% n/a n/a
Smart & Final, Inc 399 0.83% 351 0.61%
Monogram Aerospace Fasteners 349 0.72% 395 0.69%
Gibson Overseas, Inc. 349 0.72% n/a n/a
Wine Warehouse 341 0.71% 361 0.63%
Performance Team, LLC 340 0.71% n/a n/a
"Total Employment" as used above represents the total employment of all employers located within City limits.

Source: City of Commerce
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129

CITY OF COMMERCE
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General government 69 69 39 39 39 39 38 38 39 28
Public safety 1
- ----1-- - -
Community services 29 29 28 28 28 29 28 21 11 11
Public Works & Development Services 13 13 17 17 13 17 21 26 55 43 Park & Recreation 105 113122139135136136135 105 135
Library Services 36 42454339393939 36 39
Transportation 35 35 34 34 34 34 34 40 33 35
Total 287 287 292 292 289 295 295 307 305 272
1 Police and fire services were provided by the County.

Source: City Budget Book
130

CITY OF COMMERCE
Capital Asset Statistics
by Function
Last Ten Fiscal Years
Fiscal Year
2012 2013 2014 2015
Police:

Stations - - - -
Fire:

Fire stations 3 3 3 3
Public services:

Streets (miles) 133.80 133.80 133.80 133.80
Streetlights 3,193 3,193 3,193 3,193
Traffic signals 80 80 80 80
Parks and recreation:

Parks 4 4 4 4
Community centers 2 2 2 2
Water:

Water mains (miles) 173.90 173.90 173.90 173.90
Maximum daily capacity
(thousands of gallons) 12,850 12,850 12,850 12,850
Wastewater:

Sanitary sewers (miles) 181.75 181.75 181.75 181.75
Storm sewers (miles) 58.50 58.50 58.50 58.50
Maximum daily treatment capacity
(thousands of gallons) 7,015 7,015 7,015 7,015
Library:

Libraries 4 4 4 4
Source: City of Commerce
131
Fiscal Year
2016 2017 2018 2019 2020 2021
- - - - - -
3 3 3 3 3 3
133.80 133.80 133.80 133.80 133.80 133.80
3,193 3,193 3,193 3,193 3,193 3,193
80 80 80 80 80 80
4 4 4 4 4 4
2 2 2 2 2 2
173.90 173.90 173.90 173.90 173.90 173.90
12,850 12,850 12,850 12,850 12,850 12,850
181.75 181.75 181.75 181.75 181.75 181.75

58.50 58.50 58.50 58.50 58.50 58.50
7,015 7,015 7,015 7,015 7,015 7,015
4 4 4 4 4 4
132