Commerce City Council
July 8, 2025

City of Commerce
Commerce, California
Annual Comprehensive
Financial Report
For the Year Ended June 30, 2024
Prepared by:

Finance Department

City of Commerce
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Letter of Transmittal ........................................................................................................................................................ i Organization Chart ....................................................................................................................................................... vii Officials of the City of Commerce, California ............................................................................................................ viii

FINANCIAL SECTION
Independent Auditors’ Report on the Audit of the Financial Statements ............................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ........................... 7 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ................................................................................................................................ 20 Statement of Activities .................................................................................................................................... 22 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ............................................................................................................................................ 29 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position .......................................................................... 30 Statement of Revenues, Expenditures, and Changes in Fund Balances .................................................... 31 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-Wide Statement of Activities ........................................................................................ 32 Proprietary Fund Financial Statements:

Statement of Net Position ......................................................................................................................... 35 Statement of Revenues, Expenses, and Changes in Net Position ............................................................. 36 Statement of Cash Flows ........................................................................................................................... 37 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position ......................................................................................................... 41 Statement of Changes in Fiduciary Net Position ...................................................................................... 42 Index to Notes to the Basic Financial Statements .............................................................................................. 45 Notes to the Basic Financial Statements ............................................................................................................. 47 City of Commerce
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Budgetary Comparison Schedule – General Fund ........................................................................................................ 91 Notes to the Budgetary Comparison Schedule ............................................................................................................. 93 Schedule of Changes in Net Pension Liability and Related Ratios .............................................................................. 94 Schedule of Contributions – Pensions .......................................................................................................................... 96 Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................................. 98 Schedule of Contributions – Other Postemployment Benefits ................................................................................... 100 Supplementary Information:

General Funds:

Combining Balance Sheet ............................................................................................................................ 107 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 108 Budgetary Comparison Schedule - General Operating Fund ....................................................................... 109 Budgetary Comparison Schedule - Measure AA General Fund ................................................................... 110 Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................................ 113 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 114 Nonmajor Special Revenue Funds:

Combining Balance Sheet ............................................................................................................................ 115 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 118 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Local Jurisdiction Assistance Program Special Revenue Fund ............................................................. 121 Supplemental Law Enforcement Special Revenue Fund ....................................................................... 122 State Gas Tax Special Revenue Fund .................................................................................................... 123 Community Development Block Grant Special Revenue Fund ............................................................. 124 Air Quality Management District Special Revenue Fund ...................................................................... 125 Housing Special Revenue Fund ............................................................................................................. 126 Art in Public Places Special Revenue Fund ........................................................................................... 127 Community Benefits Special Revenue Fund ......................................................................................... 128 Stormwater Management Special Revenue Fund .................................................................................. 129 Community Center Debt Service Fund .................................................................................................. 130 Pension Obligation Bonds Debt Service Fund ....................................................................................... 131 City Capital Projects Fund ..................................................................................................................... 132 Private Purpose Trust Funds Financial Statements:

Combining Statement of Fiduciary Net Position .......................................................................................... 135 Combining Statement of Changes in Fiduciary Net Position ....................................................................... 136 City of Commerce
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
STATISTICAL SECTION (Unaudited)
Net Position by Component ....................................................................................................................................... 140 Changes in Net Position ............................................................................................................................................ 142 Fund Balances of Governmental Funds ..................................................................................................................... 146 Changes in Fund Balances of Governmental Funds .................................................................................................. 148 Assessed Value and Estimated Actual Value of Taxable Property ........................................................................... 151 Direct and Overlapping Property Tax Rates .............................................................................................................. 152 Principal Property Tax Payers ................................................................................................................................... 154 Property Tax Levies and Collections ......................................................................................................................... 155 Card Club License Fee by Category .......................................................................................................................... 157 Direct and Overlapping Card Club Rates .................................................................................................................. 158 Principal Card Club Remitter .................................................................................................................................... 159 Ratios of Outstanding Debt by Type ......................................................................................................................... 161 Ratio of General Bonded Debt Outstanding .............................................................................................................. 162 Direct and Overlapping Debt ..................................................................................................................................... 163 Legal Debt Margin Information................................................................................................................................. 164 Demographic and Economic Statistics ...................................................................................................................... 167 Principal Employers .................................................................................................................................................. 168 Full-time and Part-time City Employees ................................................................................................................... 169 Capital Asset Statistics .............................................................................................................................................. 170 This page intentionally left blank.
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June 30, 2025

CITY OF COMMERCE
Ernie Hernandez
City Manager
To the Honorable Mayor, Members of the City Council and Citizens of the City of Commerce:

It is our professional pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Commerce (City) for the fiscal year ended June 30, 2024. Responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. In our opinion, the data is accurate in all material aspects, is presented in a manner designed to fairly set forth the financial position and results of operations of the City and contains all disclosures necessary to enable the reader to gain an understanding of the City's financial affairs. State law requires that all general-purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants.

The financial statements are prepared in accordance with GAAP as promulgated by the Government Accounting Standards Board (GASB). This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The City's financial statements have been audited by The Pun Group, LLP, a public accounting firm fully licensed and qualified to perform audits of the State and local governments within the State of California. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2024, are free of material misstatement. The independent audit involved examining on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City financial statements for the fiscal year ended June 30, 2024, are fairly presented in conformity with GAAP. The independent report is presented as the first component of the financial section of this report. 2535 Commerce Way• Commerce, California 90040 • (323) 722-4805 • FAX (323) 726-6231 • www.ci.commerce.ca.us ii
GAAP requires 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, a general law City, 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. Residentiallyzoned 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 people considerably exceeding a residential population of approximately 12,124. The City's land mass encompasses 6.6 square miles.

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 conducting the policies and ordinances of the City Council, for overseeing the day-to-day operations of the government. The five-member 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, 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 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 elected to serve as the Successor Agency to the Commerce Community Development Commission; the Commission functioned as the City's redevelopment agency. The Successor Agency has been responsible for winding down 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 "blended" component units and therefore they have been included as an integral part of the City of Commerce's financial statements. iii
The annual budget serves as the foundation for the City financial planning and control. All departments of the City 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 end of the City 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-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted.

Local Economy
The City is located within the Los Angeles Metropolitan area, recognized as the second-highest producing metro area in the United States based on Gross Metropolitan Product. With its proximity to the City of Los Angeles, the City serves as a major hub for commerce and transportation. The City is home to approximately 3,000 plus businesses, with its top 25 businesses accounting for 50.0% of the total sales tax revenue. The City’s economy is supported by a diverse financial foundation, with revenues primarily generated through taxes and card club revenues. Among tax revenues, the largest contributors are Property Tax and Sales Tax, which includes the standard Bradley-Burns tax and an additional 0.75% add-on sales tax.

The City, strategically located at the intersection of Santa Ana and I-710 Freeways, will witness some major transformation in the near future: the Citadel is working towards a 25-acre expansion project along the Telegraph Corridor, and Comstock Reality Partners is seeking to complete a 17- acre mixed-use project (Modelo), inclusive of 850 residential units sprouting up at the southern end of the city.

Commerce is home to the California Commerce Card Club and the Citadel Outlets (LA’s premier outlet shopping center, housing more than 130 global brands) and serves as the headquarters for several prominent companies, including Parsec, Inc., Acco Engineered Systems, American International Industries, Mission Foods, Japan Pulp and Paper Co., Unified Grocers and Porto’s Food Products.

Over the past two years, the City has experienced an extraordinary recovery and return to economic normalcy after the initial economic impacts associated with the pandemic. The City's General Fund closed FY 2023/24 with a net $155.8 million surplus due to a variety of factors discussed in the MD&A.
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General Fund revenues (not including transfers in) decreased by 5.5% from the prior year. Card Club revenues remain the largest and most consistent source of support for General Fund operations, comprising approximately 33.0% of General Fund revenues in FY 2023/24. For FY 2023/24, card club receipts of $31.44 million were slightly lower ($136,874) than the prior year's collection, reflecting the continued rebound and continuity in the cardroom gaming industry.

The City also relies heavily on sales tax revenues to support General Fund operations, comprising approximately 40.6% of General Fund revenues in FY 2023/24. For FY 2023/24 sales tax receipts of $38.6 million decreased $1.84 million from the prior year's collection. Sales tax revenues, which draw most of its support from Citadel sales, witnessed a considerable decrease across all categories. In addition, the City's 1/2 cent Measure AA Sales Tax, which is exclusively allotted towards the City's Capital Improvement Program, continued to perform well - generating approximately $9.74 million.

As with most municipalities, services are provided directly by employees to the City's residents, businesses, and visitors. As a service delivery enterprise, the cost of salaries and benefits are a significant portion of the City's expenditures. Salaries are largely dictated by regional market forces as evidenced by fierce competition for talent in the Los Angeles Basin Area, and inflationary pressures nationwide.

FY 2023/24 denoted the initial year of a three-year Memorandum of Understanding between the and the bargaining units. While important for the consistent delivery of high-quality services for the City, the final year wage increase (scheduled to take effect July 1, 2025) of 4.0% will impact on the existing positive balance between revenues and expenditures.

On a positive note, the City stayed the course with a pragmatic budgetary plan for fiscal year 2024/25 and has effectively added to the reserves that were used during the pandemic while, at the same time, also rebuilding services that were curtailed during the pandemic. The challenge continues to be how to prudently and effectively rebuild and reimagine the delivery of City services in this new post-pandemic inflationary environment.

Despite healthy revenues, City continues to be mindful of how quickly things can turnaround. City Council continues to seek Commerce's growth in revenue base by strategizing, investing and reinvesting to ensure that this organization and community are sustainable today, and in the future.

Long-term financial planning
Long-term financial planning is an integral part of the City’s fiscal management as it ensures sustainable growth, resilience, and effective governance. It is even more critical now given the current and projected economic uncertainty. The City is projected to implement a formal longterm financial model for the General Fund in the upcoming fiscal year. This model will be aimed as a five-year planning forecast, due to the volatile nature of tax revenues linked to retail/gambling-based: this economy makes it very difficult to predict revenues with any certainty beyond five years. Nonetheless, the financial model will be invaluable in the development of the operating budget. The hope is that the financial model would incorporate recession and more aggressive economic scenarios to understand the potential additional impact on General Fund reserves.
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This model will continue to be refined in FY 2025/26 leading into the future years operating budgets to articulate fiscally pragmatic assumptions for revenues.

Another modification to the budget process will be the City transition from a one-year budget cycle to a two-year financial plan. The first year will represent the adopted annual budget and the second year will serve as a financial plan and a starting point for the following year. Two-year financial plans take more time to produce in the first year, but it forces the organization and staff to take a longer-term view of its operations at a more detailed level than a financial model that they might not otherwise do. Staff are hoping that the concept will be embraced and additional discipline required to incorporate a second year into its budget/planning documents.

The City's current 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 consider the impacts of the threeyear MOU's that will be entering its final year effective July 1, 2025, and current inflationary impacts on the City's revenue sources.

Our current projections anticipate that the City will experience another surplus for the fiscal year ending 6/30/2025. Again, the Council was very mindful as it adopted the FY 2024-25 budget plan that, among several priorities, incorporates the growth of City reserves as a keystone to the plan.

Currently, the City’s General Fund reserve is over $100 million, which comfortably exceeds the policy of 60 days of annual operating expense.

In addition, the City's Capital Improvement Program (CIP) is a component of the annual budget process that addresses the City's short and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard, as well as providing new facilities to support current growth and complement new development.

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.

FINANCIAL CONTROLS
As mentioned, the City's management is responsible for establishing and maintaining a system of internal controls designed to ensure that the City's assets are protected from loss, theft, or misuse. The City’s system of internal controls must also ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. The City's system of internal controls is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. We believe that the City's system of internal control adequately safeguards assets and provides reasonable assurance as to the proper recording of financial transactions.
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The City's internal controls are subject to periodic evaluation by the City's management.

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 non-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 both pension stabilization and other 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, and if necessary, the trust funds have accumulated approximately $7.6 million to fund future pension costs.

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

Respectfully submitted,

Ernie Hernandez
City Manager
City of Commerce

PAYROLL

DIAL-A-RIDE

SPECIAL EVENTS

TEEN CENTER
MEDIA

BUILDING & SAFETY

PLANNING

ENGINEERING

CAPITAL PROJECTS
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CITY OF COMMERCE, CALIFORNIA
Officials of the City of Commerce
June 30, 2024

CITY COUNCIL
Hugo A. Argumedo – Mayor
Ivan Altamirano – Vice Mayor
Mireya Garcia – Councilmember
Kevin Lainez – Councilmember
Oralia Y. Rebollo– Councilmember

ADMINISTRATION AND DEPARTMENT HEADS
City Manager – Ernie Hernandez
Director of Administrative Services and City Clerk – Lena Sofia Shumway City Attorney – Noel Tapia
Director of Human Resources – Ela Pappo
Director of Public Works – Gina Nila
Acting Director of Economic Development and Planning – Louis Morales Director of Parks and Recreation – Gregory Alaniz
Director of Library Services – Sonia Bautista
Director of Transportation – Claude McFerguson
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Commerce
Commerce, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Commerce, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

Other Matter
Report on Summarized Comparative Information
We have previously audited the City’s 2023 financial statements, and we expressed unmodified opinions on the respective financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information in our report dated August 19, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2023, is consistent, in all material respects, with the audited financial statements from which it has been derived.

The financial statements include summarized prior-year comparative information. Such information does not include all of the information required or sufficient detail to constitute a presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the City’s financial statements for the year ended June 30, 2023, from which such summarized information was derived.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.

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

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Schedules, the Schedules of Changes in Net Pension Liability and Related Ratios, and the Schedules of Contributions - Pensions, the Schedule of Changes in Net OPEB Liability and Related Ratios and Schedule of Contributions – Other Postemployment Benefits, be presented to supplement the basic financial statements.

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

3 Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
June 30, 2025
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5 MANAGEMENT’S DISCUSSION

AND ANALYSIS
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City of Commerce
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
7 As management of the City of Commerce (the “City”), 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 ending June 30, 2024.

We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, found on page i. of this report.

FINANCIAL HIGHLIGHTS
 The City’s net position is $170,995,308. Net position is the difference between assets plus deferred outflows of resources, and liabilities plus deferred inflows of resources.  The City’s total assets for the FY 2023-2024 period equaled $305,921,856, an increase of $16,234,944 from the prior year. This growth is due primarily to an increase in cash as a result of a net surplus.  Deferred outflows of resources equaled $12,846,692, a decrease of $2,639,322 from the 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 $133,301,296, an increase of $3,687,966 from the prior year. The major impact is in the increase of net pension and other post-employment benefits liability. This increase represents actuarial assumptions for pension and other post-employment benefits liabilities.  Deferred inflows of resources equaled $14,471,994, a decrease of $5,005,829 from the prior year. This decrease is due primarily to market fluctuations of investments in trust funds and actuarial assumptions for benefits.
 The City’s total net position increased by $14,913,485. The major impacts are an increase in total assets, primarily cash as noted above, and the decrease in net benefits liabilities, as compared to the prior year. This increase in net position is offset by the decrease in the deferred outflow of resources.  At the close of the current fiscal year, the City’s net position of governmental activities were $173,911,636, an increase of $18,266,289 from the prior year. This increase is primarily due to the items noted above.  Total governmental activities revenues from all sources in FY 2023-24 equaled $98,097,452.  Total costs for all governmental activities expenses in FY 2023-24 equaled $79,831,163.  At the end of the current fiscal year, unassigned fund balance for the General Fund was $105,918,791, or 136% of total General Fund expenditures.

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) Government-wide 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.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
8 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 like disclosures for a private-sector business.

The statement of net position presents information on all 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 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, parks and recreation services.

The City’s business-type activities include operations from transit, water, and compressed natural gas (CNG). The government-wide financial statements can be found on pages 20 through 23.

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 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 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 29 through 32.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
9 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 35 through 37.

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 fiduciary fund financial statements can be found on page 41 through 42.

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.

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.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
10 The statement of net position can serve as a useful indicator of the City’s financial position. The City’s net position on June 30, 2024, total $170,995,305. Following is a condensed version of the government-wide statement of net position.
2023 2023 2023
2024 (as restated) 2024 (as restated) 2024 (as restated) Assets:

Current and other asset $ 175,353,373 $ 154,937,907 $ 11,727,010 $ 15,665,659 $ 187,080,383 $ 170,603,566 Internal balances 6,804,311 9,039,201 - - 6,804,311 9,039,201 Capital assets, net 94,357,845 90,754,567 17,679,317 19,289,578 112,037,162 110,044,145 Total assets 276,515,529 254,731,675 29,406,327 34,955,237 305,921,856 289,686,912 Deferred outflows of resources:

Pension related 7,070,532 8,182,471 2,382,051 2,718,770 9,452,583 10,901,241 OPEB related 2,538,793 3,441,331 855,316 1,143,442 3,394,109 4,584,773 Total deferred outflows of resources 9,609,325 11,623,802 3,237,367 3,862,212 12,846,692 15,486,014 Liabilities:

Current Liabilities 13,365,190 10,157,784 7,612,050 9,991,042 20,977,240 20,148,826 Long-term Liabilities 92,868,465 91,168,426 19,455,591 18,296,078 112,324,056 109,464,504 Total liabilities 106,233,655 101,326,210 27,067,641 28,287,120 133,301,296 129,613,330 Deferred inflows of resources:

Pension related 500,675 1,063,243 168,677 353,281 669,352 1,416,524 OPEB related 4,669,522 6,676,938 1,573,154 2,218,530 6,242,676 8,895,468 Lease related 809,366 1,643,739 6,750,550 7,522,042 7,559,916 9,165,781 Total deferred inflows of resources 5,979,563 9,383,920 8,492,381 10,093,853 14,471,944 19,477,773 Net Position:

Net investment in
capital assets 85,825,193 82,888,633 17,679,317 19,289,578 103,504,510 102,178,211 Restricted 16,561,635 15,752,493 - - 16,561,635 15,752,493 Unrestricted 71,524,808 57,004,221 (20,595,645) (18,853,102) 50,929,163 38,151,119 Total net position (deficit) $ 173,911,636 $ 155,645,347 $ (2,916,328) $ 436,476 $ 170,995,308 $ 156,081,823 Governmental Activities Business-type Activities Total
Net Position
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 total net position of the City was $170,995,308 as of June 30, 2024. The City’s net position increased $14,913,485 in the fiscal year ended June 30, 2024. The increase was split between an increase in the governmental activities of $18,266,289 and a decrease in the business-type activities of ($3,352,804). This City’s net position increased as a result of a net surplus for the fiscal year, reflecting positive financial performance and prudent management of revenues and expenditures.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
11 The 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. 2023 2023 2023
2024 (as restated) 2024 (as restated) 2024 (as restated) Revenues:

Program revenues
Charges for services $ 9,734,469 $ 11,452,040 $ 3,667,239 $ 4,128,058 $ 13,401,708 $ 15,580,098 Operating grants & contributions 5,144,051 5,129,104 6,874,935 6,467,805 12,018,986 11,596,909 Capital grants & contributions 7,825 5,997 - 2,662,122 7,825 2,668,119 General revenues:

Casino license tax 31,436,082 31,572,956 - - 31,436,082 31,572,956 Property tax 5,110,125 4,627,743 - - 5,110,125 4,627,743 Sales tax 38,642,346 40,480,501 - - 38,642,346 40,480,501 Franchise taxes 1,613,037 1,598,267 - - 1,613,037 1,598,267 Transient occupancy taxes 3,164,668 3,139,541 - - 3,164,668 3,139,541 Motor vehicle in-lieu 15,289 12,688 - - 15,289 12,688
Investment income 2,441,907 4,792,554 156,062 1,591,670 2,597,969 6,384,224 Miscellaneous revenue (expense) 787,653 809,831 - 25,206 787,653 835,037 Gain on sale of property - 1,186,724 - - - 1,186,724
Total revenues 98,097,452 104,807,946 10,698,236 14,874,861 108,795,688 119,682,807 Expenses:

General government 16,528,267 17,061,923 - - 16,528,267 17,061,923 Community development 5,308,728 4,965,052 - - 5,308,728 4,965,052 Public safety 27,821,008 24,304,792 - - 27,821,008 24,304,792 Public works 14,532,596 16,442,212 - - 14,532,596 16,442,212 Library 3,890,316 3,532,582 - - 3,890,316 3,532,582
Parks recreation and culture 10,843,894 9,579,307 - - 10,843,894 9,579,307 Interest on long-term debt 906,354 1,065,145 - - 906,354 1,065,145 Transit - 10,904,732 - 10,440,610 10,904,732 10,440,610 CNG/LNG - - 2,934,201 4,179,857 2,934,201 4,179,857
Water - - 212,107 128,393 212,107 128,393
Total expenses 79,831,163 76,951,013 14,051,040 14,748,860 93,882,203 91,699,873 Change in net position 18,266,289 27,856,933 (3,352,804) 126,001 14,913,485 27,982,934 Net position - beginning of year (as restated) 155,645,347 127,788,414 436,476 310,475 156,081,823 128,098,889 Net position - end of year $ 173,911,636 $ 155,645,347 $ (2,916,328) $ 436,476 $ 170,995,308 $ 156,081,823 Governmental Activities Business-type Activities Total
Change in Net Position
Additional financial highlights are shown below:

The City’s total revenues were $108,795,688. A significant portion of governmental revenues came from charges for services (9.92%), casino license tax (32.05%), and sales tax (39.39%) of the total governmental revenues of $98,097,452. A significant portion of the business-type revenues were collected from charges for services (34.28%) and operating grants & contributions (64.26%) of the total business-type revenues of $10,698,236.

The total cost of all city programs and services during the fiscal year ended June 30, 2024, was $93,882,203. The break down by activity as a percentage of total expenses for selected programs are as follows: Public safety (police and fire) 29.63%; General Government 17.61%; Public works 15.48%; Parks and Recreation 11.55%; and Businesstype activities accounted for 14.97% of total costs. The remaining three areas, all less than 6% each, comprise the balance.

Change in net position represents an increase of $14,913,485 for the year, as compared to last year's change, representing an increase of $27,982,934. Total net position at the end of the year was $170,995,308. The City has ample amounts to provide for its outstanding indebtedness.

Governmental activities experienced an increase in net position of $18,226,289. This is primarily due to an increase in governmental revenues as highlighted above.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
12 Business-type activities consist of the Transit, Water, and CNG/LNG 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 the fiscal year ended June 30, 2024, this goal was not met, with the City’s total business-type activities having realized an overall decrease in net position of $3,352,804. This decrease in net position is primarily due to a decrease in charges for services and a decrease in capital grants and contributions. This represents less revenue from CNG/LNG fuel sales and the California State Trade Expansion Program no longer received to offset capital expenditures and labor costs.

FINANCIAL ANALYSIS OF GOVERNMENT FUNDS
Below is an analysis of the City’s major governmental fund activities for the year:

Balance at
Balance at June 30, 2023 Amount Increase Precent Increase June 30, 2024 (as restated) (Decrease) (Decrease)
Total Fund Balances:

General Fund 155,757,029 $ 138,446,520 $ $ 17,310,509 12.5% Nonmajor Governmental Funds 14,842,099 14,490,141 351,958 -2.4% Total Fund Balances $ 170,599,128 $ 152,936,661 $ 17,662,467 11.5% Governmental Funds
The General fund balance increased by $17,310,509. The general fund balance increased as a result of the net surplus generated during the fiscal year. The net surplus was driven by overall revenues exceeding expenses. Main revenue drivers include, taxes, license & permits, and casino tax revenue.

The Nonmajor Governmental fund balance increased by $351,958 which is consistent with grant and loan receivables and capital projects expenditures in the City.

FINANCIAL ANALYSIS OF THE CITY’S MAJOR PROPRIETARY FUNDS Below is an analysis of the net position of the City’s proprietary funds:

Balance at
Balance at June 30, 2023 Amount Increase Precent Increase June 30, 2024 (as restated) (Decrease) (Decrease)
Net Position (Deficit):

Transit $ (10,698,819) $ (6,669,022) $ (4,029,797) -60.4% CNG/LNG 4,011,986 4,044,979 (32,993) -0.8%
Water 3,770,505 3,060,519 709,986 -23.2%
Total Net Position $ (2,916,328) $ 436,476 $ (3,352,804) 768.2% Unrestricted Net Position (Deficit):

Transit $ (24,786,713) $ (22,174,673) $ (2,612,040) -11.8% CNG/LNG 1,199,149 1,139,851 59,298 5.2%
Water 2,991,919 2,181,720 810,199 -37.1%
Total Unrestricted Net Position (Deficit) $ (20,595,645) $ (18,853,102) $ (1,742,543) -9.2% Proprietary Funds
City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
13 The Transit Fund net position decreased by $4,029,797 and unrestricted net position decreased by $2,612,040. The key factor in the decrease of nets assets is due to the recognition of the Transit Funds portion of the other postemployment benefit liability and decrease in capital assets.

The Water Fund net position increased $709,986 and unrestricted net position increased by $810,199. The increase in net position is primarily due to the current year leased water system rights revenues exceeding the operating expenses and an increase in interest income.

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 carry out basic government functions that are not accounted for through other special revenue and grant funds. Year-to-date revenues, including transfers-in and issuance of debt totaled $97,102,871. This is a 4.75% decrease when compared to last year’s revenue total of $101,942,975. The largest revenue source was taxes, which includes both sales taxes and property taxes at $48,530,176 which decreased 2.64% or $1,207,814 compared to the prior year. Casino license tax totaled $31,436,082, down by $136,874 or .43% when compared to the prior year. This decrease is due to the Casino reporting slightly less revenue growth than the prior year. Overall, the City’s revenue came in over budget by $12,243,236, above expectations for property and sales tax, casino tax, charges for services, and lease revenue and interest income.

General Fund expenditures totaled $79,792,362, including transfer out, and were over budgeted totals for the fiscal year by $487,036, due primarily to an overall increase in operational expenses from wages and benefits to maintenance and repairs, supplies, partially offset by less transfer-out than anticipated. Overall increase in operational expenses are notably seen in general government, public works, parks, recreation and culture.

Capital Assets
Below is a schedule of the City’s capital assets, net of accumulated depreciation and amortization:

Balance at
Balance at June 30, 2023 Amount Increase Precent Increase June 30, 2024 (as restated) (Decrease) (Decrease)
Governmental Activities:

Land 12,946,340 $ 12,946,340 $ - $ 0.0%
Construction in progress 7,979,927 3,228,383 4,751,544 147.2% Buildings 43,210,991 43,210,991 - 0.0%
Improvements other than buildings 21,174,610 20,719,853 454,757 2.2% Infrastructure 137,427,822 136,885,795 542,027 0.4%
Right to use assets 1,817,541 391,143 1,426,398 364.7%
Machinery and equipment 8,451,671 8,022,958 428,713 5.3% Less accumulated depreciation and amortization (138,651,057) (134,650,896) (4,000,161) 3.0% Net capital assets 94,357,845 $ 90,754,567 $ 3,603,278 $ 4.0% City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
14 Balance at
Balance at June 30, 2023 Amount Increase Precent Increase June 30, 2024 (as restated) (Decrease) (Decrease)
Business Activities:

Land $ 2,755,498 $ 2,755,498 $ - 0.0%
Machinery and equipment 19,635,165 19,635,165 - 0.0%
Water rights 2,141,222 2,141,222 - 0.0%
Building and improvements 13,112,526 13,112,526 - 0.0%
Less accumulated depreciation and amortization (19,965,094) (18,354,833) (1,610,261) 8.8% Net capital assets $ 17,679,317 $ 19,289,578 $ (1,610,261) -8.3% Governmental capital assets increased primarily as construction in progress increased due to project progress and addition of new projects. Capital assets are offset by depreciation while infrastructure, right to use assets, machinery and equipment, and accumulated depreciation increased respectively from completion of projects. Business-type activity capital assets saw no activity other than an increase in depreciation, as primary projects were completed in the prior fiscal year. See Note 6 for further details on capital assets.

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

Balance at
June 30, 2023 Balance at
(as restated) Additions Reductions June 30, 2024
Governmental Activities:
2014 Lease Revenue Bonds 7,060,000 $ - $ (450,000) $ 6,610,000 $ Premium on bond 682,642 - (60,234) 622,409
2021 Pension Obligation Bond 27,875,000 - - 27,875,000
Lease Liability 123,292 1,140,385 (165,749) 1,097,928
Subscription Liability - 286,013 (83,697) 202,316
Compensated absences 2,971,762 1,691,305 (1,444,263) 3,218,804 Claims Payable 865,296 417,462 (423,521) 859,237
Total Long-Term Obligations - Governmental Activities 39,577,992 3,535,165 (2,627,464) 40,485,693 Business Activities:

Compensated Absences 628,965 310,500 (269,096) 670,369
Claims Payable 111,262 - (45,583) 65,679
Total Long-Term Obligations - Business-Type Activities 740,227 310,500 (314,679) 736,048 Total Long-Term Obligations 40,318,219 $ 3,845,665 $ (2,942,143) $ 41,221,741 $ 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 7 of the Financial Statements.

City of Commerce
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
15 ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The adopted General Fund budget for fiscal year 2024-25 reflects projected revenues in excess of operating expenditures by $5.0 million and includes the addition of significant budget enhancements largely in the following three areas: Wage & Benefit increase, support of public safety initiatives, and continuing to restore programs that were impacted during the COVID era. In addition, the City continues to inject significant investment in capital and infrastructure projects. Based on the City's continued practice of forecasting revenues conservatively, the overall result projects a fiscal year 2024-25 General Fund surplus of $7.5 million. Major City tax revenues have recovered from pandemic-depressed levels and projected large development activity in the City will bring in significant onetime and ongoing revenues for several years to come. Nonetheless, expenditure continues to mount with the growing cost of goods, services and personnel, enhanced public safety measures, improvements and maintenance of infrastructure, and other Council priorities. Financial forecasts indicate that General Fund operating expenditures and transfers are anticipated to exceed operating revenue sometime in the future, underscoring the importance of examining expenditure reduction and revenue generation opportunities to mitigate the use of reserves to balance the budget. As it has historically, the City will work to ensure that adequate ongoing revenue can support recurring expenditures, and that one-time inflows of funds are only relied upon for one-time costs. The overall goals underlying the city’s financial policies include fiscal responsibility, flexibility, and adherence to the highest accounting and management practices.

As mentioned earlier, the city stayed the course with a pragmatic budgetary plan for fiscal year 2024/25 and has effectively restored (and exceeded) the level of reserves that existed pre-pandemic while, at the same time, also rebuilding services that were curtailed during the pandemic. The challenge continues to be how to prudently and effectively rebuild and reimagine the delivery of City services in this new post-pandemic inflationary environment.

Options and strategies to navigate these challenges will be discussed as we move forward.

Despite healthy revenues, City continues to be mindful how quickly things can turnaround – meaning, the City Council continues to seek in expanding Commerce’s revenue base by strategizing, investing and reinvesting to ensure that this organization and community are sustainable today, and in the future.

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.
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BASIC FINANCIAL STATEMENTS
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18 GOVERNMENT-WIDE FINANCIAL STATEMENTS
19 Governmental Business-Type 2023
Activities Activities 2024 (as restated)
ASSETS
Current assets:

Cash and investments 126,532,532 $ 3,349,214 $ 129,881,746 $ 112,476,244 $ Receivables:

Accounts 4,268,321 370,644 4,638,965 4,356,141
Interest 545,508 - 545,508 247,096
Lease receivable, current 1,207,549 740,946 1,948,495 1,363,855 Due from other governments 8,623,201 650,469 9,273,670 9,424,864 Due from other funds 6,804,311 - 6,804,311 9,039,201
Due from Successor Agency 2,557,410 457,285 3,014,695 3,014,695 Prepaid items and deposits 296,422 - 296,422 534,590
Total current assets 5,568,558 150,835,254 156,403,812 140,456,686 Noncurrent assets:

Restricted cash and investments:

Cash with fiscal agent 5,146,628 - 5,146,628 5,146,630
PARS 115 trust 3,267,339 - 3,267,339 3,024,041
Lease receivable, noncurrent - 6,158,452 6,158,452 8,106,947 Loans receivable, net 207,783 - 207,783 207,783
Property held for resale 22,700,680 - 22,700,680 22,700,680 Capital assets:

Nondepreciable 20,926,267 2,755,498 23,681,765 18,930,221 Depreciable, net 72,109,383 14,466,704 86,576,087 90,509,330 Amortizable, net 1,322,195 457,115 1,779,310 604,594
Total capital assets 94,357,845 17,679,317 112,037,162 110,044,145 Total noncurrent assets 23,837,769 125,680,275 149,518,044 149,230,226 Total assets 276,515,529 29,406,327 305,921,856 289,686,912

DEFERRED OUTFLOWS OF RESOURCES
Pension related 7,070,532 2,382,051 9,452,583 10,901,241 OPEB related 2,538,793 855,316 3,394,109 4,584,773
Total deferred outflows of resources 9,609,325 3,237,367 12,846,692 15,486,014 (with comparative information for the prior year)
City of Commerce
Statement of Net Position
June 30, 2024
Primary Government Total
See accompanying Notes to the Basic Financial Statements. 20 Governmental Business-Type
Activities Activities 2024 2023

LIABILITIES
Current liabilities:

Accounts payable 7,624,884 409,696 8,034,580 6,976,494
Salaries and benefits payable 642,980 165,129 808,109 740,919 Deposits payable 725,535 - 725,535 736,970
Unearned revenue 157,816 - 157,816 246,106
Due to other funds - 6,804,311 6,804,311 9,039,201
Accrued interest 341,049 - 341,049 343,714
Compensated absences - due within one year 1,054,630 211,257 1,265,887 935,792 Claims payable - due within one year 463,603 21,657 485,260 536,097 Long-term debt - due within one year 2,354,693 - 2,354,693 593,533 Total current liabilities 7,612,050 13,365,190 20,977,240 20,148,826 Noncurrent liabilities:

Compensated absences - due in more than one year 2,164,174 459,112 2,623,286 2,664,935 Claims payable - due in more than one year 395,634 44,022 439,656 440,461 Long-term debt - due in more than one year 34,052,959 - 34,052,959 35,147,401 Net pension liability 11,801,768 3,975,999 15,777,767 13,271,085 Net OPEB liability 44,453,930 14,976,458 59,430,388 57,940,622 Total noncurrent liabilities 19,455,591 92,868,465 112,324,056 109,464,504 Total liabilities 27,067,641 106,233,655 133,301,296 129,613,330

DEFERRED INFLOWS OF RESOURCES
Pension related 500,675 168,677 669,352 1,416,524
OPEB related 4,669,522 1,573,154 6,242,676 8,895,468
Lease related 809,366 6,750,550 7,559,916 9,165,781
Total deferred inflows of resources 5,979,563 8,492,381 14,471,944 19,477,773

NET POSITION
Net investment in capital assets 85,825,193 17,679,317 103,504,510 102,178,211 Restricted for:

Community development projects 2,165,838 2,165,838 - 1,971,043 Public safety 207,977 - 207,977 206,348
Low and moderate housing 2,197,365 2,197,365 - 2,166,321 Transportation 675,448 - 675,448 282,084
Capital projects 8,044,943 8,044,943 - 8,099,929
Debt service 2,725 - 2,725 2,727
Pension 3,267,339 3,267,339 - 3,024,041
Total restricted 16,561,635 16,561,635 - 15,752,493
Unrestricted (deficit) 71,524,808 (20,595,645) 50,929,163 38,151,119 Total net position (deficit) $ (2,916,328) 173,911,636 $ 170,995,308 $ 156,081,823 $ (with comparative information for the prior year)
Primary Government Total
City of Commerce
Statement of Net Position (Continued)
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 21 Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues Governmental activities:

General government $ 16,528,267 $ 606,771 $ 12,337 $ 619,108 - $ Community development 5,308,728 473,057 312,321 785,378 - Public safety 27,821,008 1,422,520 187,339 7,825 1,617,684 Public works 14,532,596 5,999,141 2,884,575 8,883,716 - Library 3,890,316 16,118 152,901 169,019 -
Parks, recreation and culture 10,843,894 1,216,862 1,594,578 2,811,440 - Interest and fiscal charges 906,354 - - - -
Total governmental activities 79,831,163 9,734,469 5,144,051 7,825 14,886,345 Business-type Activities:

Transit 10,904,732 6,874,935 - 6,874,935 -
CNG/LNG 2,934,201 2,895,747 - 2,895,747 -
Water 212,107 771,492 - 771,492 -
Total business-type activities 14,051,040 3,667,239 6,874,935 10,542,174 - Total primary government $ 13,401,708 93,882,203 $ 12,018,986 $ 7,825 $ 25,428,519 $ (with comparative information for the prior year)
City of Commerce
Statement of Activities
For the Year Ended June 30, 2024
Program Revenues
See accompanying Notes to the Basic Financial Statements. 22 Governmental Business-Type 2023
Functions/Programs Activities Activities 2024 (as restated) Governmental activities:

General government $ (15,909,159) $ (15,909,159) - $ $ (16,880,634) Community development (4,523,350) (4,523,350) - (4,338,754) Public safety (26,203,324) (26,203,324) - (22,006,210)
Public works (5,648,880) (5,648,880) - (6,180,700)
Library (3,721,297) (3,721,297) - (3,414,326)
Parks, recreation and culture (8,032,454) (8,032,454) - (6,478,103) Interest and fiscal charges (906,354) (906,354) - (1,065,145) Total governmental activities (64,944,818) (64,944,818) - (60,363,872) Business-type Activities:

Transit (4,029,797) - (4,029,797) (1,188,350)
CNG/LNG (38,454) - (38,454) (174,132)
Water 559,385 - 559,385 (128,393)
Total business-type activities (3,508,866) - (3,508,866) (1,490,875) Total primary government (3,508,866) (64,944,818) (68,453,684) (61,854,747) General revenues and transfers:

General revenues:

Taxes:

Property taxes 5,110,125 - 5,110,125 4,627,743
Sales taxes 38,642,346 - 38,642,346 40,480,501
Franchise taxes 1,613,037 - 1,613,037 1,598,267
Transient occupancy taxes 3,164,668 - 3,164,668 3,139,541 Casino license tax 31,436,082 - 31,436,082 31,572,956
Total taxes 79,966,258 - 79,966,258 81,419,008
Vehicle license - unrestricted 15,289 - 15,289 12,688
Investment income 2,441,907 156,062 2,597,969 6,384,224 Miscellaneous 787,653 - 787,653 835,037
Gain on sale of property - - - 1,186,724
Total general revenues 156,062 83,211,107 83,367,169 89,837,681 Changes in net position (3,352,804) 18,266,289 14,913,485 27,982,934 Beginning of year, as previously
presented as of June 30, 2023 (16,198) 154,761,102 154,744,904 126,761,970 Error corrections 452,674 884,245 1,336,919 1,336,919
Beginning of year, as restated (Note 17) 436,476 155,645,347 156,081,823 128,098,889 Net position (deficit) - end of year $ (2,916,328) 173,911,636 $ 170,995,308 $ 156,081,823 $ Total
(with comparative information for the prior year)
City of Commerce
Statement of Activities (Continued)
For the Year Ended June 30, 2024
Changes in Net Position
Net (Expense) Revenue and
See accompanying Notes to the Basic Financial Statements. 23 This page intentionally left blank.
24 FUND FINANCIAL STATEMENTS
25 This page intentionally left blank.
26 GOVERNMENTAL FUND FINANCIAL STATEMENTS
27 This page intentionally left blank.
28 Major Fund
Nonmajor
General Governmental 2023
Fund Funds 2024 (as restated)
ASSETS
Cash and investments 119,863,208 $ 6,669,324 $ 126,532,532 $ 106,223,894 $ Restricted cash and investment 3,267,339 3,267,339 - 3,024,041 Cash and investments with fiscal agents 5,146,628 - 5,146,628 5,146,630 Receivables:

Accounts 4,211,071 57,250 4,268,321 3,948,498
Interest 260,085 285,423 545,508 266,971
Loans, net 207,783 - 207,783 207,783
Leases 1,207,549 1,207,549 - 1,842,108
Due from other governments 7,046,713 1,576,488 8,623,201 8,485,301 Due from other funds 6,861,214 6,861,214 - 9,047,166
Due from Successor Agency 2,557,410 2,557,410 - 2,557,410 Prepaid items and deposits 296,422 296,422 - 534,590
Land held for development 19,535,000 3,165,680 22,700,680 22,700,680 Total assets $ 165,106,011 $ 17,108,576 $ 182,214,587 $ 163,985,072

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable $ 7,009,327 $ 615,557 $ 7,624,884 $ 6,390,792 Salaries and benefits payable 641,274 1,706 642,980 579,129 Deposits payable 725,535 725,535 - 736,970
Due to other funds 56,903 - 56,903 7,965
Unearned revenue 157,816 - 157,816 246,106
Total liabilities 8,376,136 831,982 9,208,118 7,960,962 Deferred inflows of resources:

Unavailable revenue 163,480 1,434,495 1,597,975 1,443,711 Lease related 809,366 809,366 - 1,643,738
Total deferred inflows of resources 972,846 1,434,495 2,407,341 3,087,449 Fund balances:

Nonspendable 19,831,422 19,831,422 - 20,069,590
Restricted 3,267,339 11,696,321 14,963,660 14,317,533
Committed 26,739,477 3,145,778 29,885,255 34,246,929
Unassigned 105,918,791 105,918,791 - 84,302,609
Total fund balances 155,757,029 14,842,099 170,599,128 152,936,661 Total liabilities, deferred inflows of
resources, and fund balances $ 165,106,011 $ 17,108,576 $ 182,214,587 $ 163,985,072 Total Governmental Funds
City of Commerce
Balance Sheet
Governmental Funds
June 30, 2024
(with comparative information for the prior year)
See accompanying Notes to the Basic Financial Statements. 29 Total Fund Balances - Total Governmental Funds $ 170,599,128 Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, not being depreciated 20,926,267 $
Capital assets, depreciable 72,109,383
Intangible assets, being amortized 1,322,195 94,357,845 (341,049)
Bonds payable (35,107,408) $
Lease and subscription liabilities (1,300,244)
Compensated absences (3,218,804)
Claims payable (859,237) (40,485,693)
$ 7,070,532
(11,801,768)
(5,231,911) (500,675)
$ 2,538,793
(44,453,930)
(46,584,659) (4,669,522)
1,597,975
Net position of governmental activities $ 173,911,636
Pension related deferred inflows of resources
OPEB related deferred outflows of resources
Net OPEB liabilities
Revenues earned but not available to pay for current expenditures for governmental funds are unavailable.

OPEB related deferred inflows of resources
City of Commerce
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Capital assets used in governmental activities are not financial resources and are not reported in the funds:

Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds' Balance Sheet.

Interest is recognized when due, and therefore, interest payable is not reported in the governmental funds.

Amount reported in government-wide statement of position:

Net pension liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Net other postemployment benefits liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Pension related deferred outflows of resources
Net pension liabilities
See accompanying Notes to the Basic Financial Statements. 30 Formerly
Major Fund Major Fund
Nonmajor Measure AA
General Governmental Speacial Revenue 2023
Fund Funds Fund 2024 (as restated)
REVENUES:

Taxes 48,530,176 $ - $ 48,530,176 $ 49,846,052 $
Casino license tax 31,436,082 - 31,436,082 31,572,956
Licenses and permits 5,954,753 619,985 6,574,738 7,693,813 Intergovernmental 1,214,421 1,892,185 3,106,606 3,726,875 Charges for services 2,562,317 - 2,562,317 2,756,672
Activity fees 527,460 - 527,460 359,118
Fines, forfeitures, and penalties 1,438,638 - 1,438,638 2,204,638 Use of money and property 2,592,057 260,134 2,852,191 4,754,686 Miscellaneous 914,980 - 914,980 839,260
Total revenues 95,170,884 2,772,304 97,943,188 103,754,070 EXPENDITURES:

Current:

General government 14,880,371 - 14,880,371 15,151,561
Community development 4,741,253 394,174 5,135,427 4,791,751 Public safety 27,635,843 185,710 27,821,553 24,308,966
Public works 10,485,633 1,439,462 11,925,095 14,616,394 Library 3,482,413 - 3,482,413 3,029,171
Parks, recreation and culture 8,754,461 435,661 9,190,122 7,097,239 Capital outlay 7,601,755 1,684 7,603,439 5,361,900
Debt service:

Principal retirement 249,446 450,000 699,446 472,776
Interest and fiscal charges 18,615 950,638 969,253 975,630 Total expenditures 77,849,790 3,857,329 81,707,119 75,805,388

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 17,321,094 (1,085,025) 16,236,069 27,948,682 OTHER FINANCING SOURCES (USES):

Transfers in 505,589 1,942,572 2,448,161 2,600,078
Transfers out (1,942,572) (505,589) (2,448,161) (2,600,078) Proceeds from sale of assets - - 1,186,724 -
Issuance of lease liabilities 1,140,385 - 1,140,385 -
Issuance of subscription liabilities 286,013 - - 286,013 Total other financing sources (uses) (10,585) 1,436,983 1,426,398 1,186,724 NET CHANGES IN FUND BALANCES 17,310,509 351,958 17,662,467 29,135,406 FUND BALANCES:

Beginning of year, as previously
reported as of June 30, 2023 110,866,778 14,501,187 25,818,962 151,186,927 122,051,521 Changes within the finacial reporting entity
(reclass to General Fund) 25,818,962 (25,818,962) - - - Error corrections 1,760,780 (11,046) 1,749,734 - 1,749,734 Beginning of year, as restated (Note 17) 138,446,520 14,490,141 152,936,661 - 123,801,255 End of year $ 14,842,099 155,757,029 $ - $ 170,599,128 $ 152,936,661 $ Total Governmental Funds
City of Commerce
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
(with comparative information for the prior year)
See accompanying Notes to the Basic Financial Statements. 31 Net change in fund balances - total governmental funds: $ 17,662,467 Amounts reported for governmental activities in the Statement of Activities are different because:
$ 7,603,439
3,603,278 (4,000,161)
(247,042)
6,059
141,179
(2,389,863)
Principal repayments of long-term debt $ 699,446
Interest accrual on loans payables 2,665
Amortization of bond premium 60,234
Issuance of lease liabilities (1,140,385)
Issuance of subscription liabilities (664,053) (286,013) 154,264
Change in net position of governmental activities $ 18,266,289 Depreciation and amortization
Unavailable revenue is not recognized as revenue in the governmental funds since the revenue is not available to fund expenditures of the current year.

Proceeds from long-term debt provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal was an expenditure in the governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Compensated absences were reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, compensated absences were not reported as liabilities in the governmental funds.

Other postemployment benefits and pension expenses were reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the changes in other postemployment benefits liability and net pension liabilities were not reported as an expenditure or credit in the governmental funds.

OPEB credit net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as OPEB expenditures in the governmental fund.

Pension expense net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as pension expenditures in the governmental funds.

Certain claims expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Capital outlay
City of Commerce
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2024
Acquisition of capital assets was reported as expenditures in the governmental funds. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over the estimated useful lives as depreciation expense. The following was the amount of capital assets recorded in the current period:

See accompanying Notes to the Basic Financial Statements. 32 PROPRIETARY FUND FINANCIAL STATEMENTS
33 This page intentionally left blank.
34 2023
Transit CNG/LNG Water 2024 (as restated)
ASSETS
Current assets:

Cash and investments - $ 962,264 $ 2,386,950 $ 3,349,214 $ 6,252,350 $ Receivables:

Accounts - 370,644 - 370,644 387,768
Lease receivable, due within one year - - 740,946 740,946 729,295 Due from other governments 650,469 - - 650,469 939,563
Due from Successor Agency - - 457,285 457,285 457,285
Total current assets 1,332,908 650,469 3,585,181 5,568,558 8,766,261 Noncurrent assets:

Lease receivable, due in more than one year - - 6,158,452 6,158,452 6,899,398 Capital assets:

Nondepreciable 2,421,399 334,099 - 2,755,498 2,755,498
Depreciable, net 11,666,495 2,478,738 321,471 14,466,704 16,046,491 Amortizable, net - - 457,115 457,115 487,589
Total noncurrent assets 2,812,837 14,087,894 6,937,038 23,837,769 26,188,976 Total assets 4,145,745 14,738,363 10,522,219 29,406,327 34,955,237

DEFERRED OUTFLOWS OF RESOURCES
Pension related 2,382,051 - - 2,382,051 2,718,770
OPEB related 855,316 - - 855,316 1,143,442
Total deferred outflows of resources - 3,237,367 - 3,237,367 3,862,212

LIABILITIES
Current liabilities:

Accounts payable 274,773 133,759 1,164 409,696 585,702
Salaries and benefits payable 165,129 - 165,129 - 161,790 Due to other funds 6,804,311 - 6,804,311 - 9,039,201
Compensated absences, due within one year 211,257 - - 211,257 195,039 Claims payable, due within one year 21,657 - - 21,657 9,310 Total current liabilities 7,477,127 133,759 1,164 7,612,050 9,991,042 Noncurrent liabilities:

Compensated absences, due in more than one year 459,112 - 459,112 - 433,926 Claims payable, due in more than one year 44,022 - - 44,022 101,952 Net pension liability 3,975,999 - 3,975,999 - 3,309,809 Net OPEB liability 14,976,458 - 14,976,458 - 14,450,391 Total noncurrent liabilities 19,455,591 - 19,455,591 - 18,296,078 Total liabilities 26,932,718 133,759 1,164 27,067,641 28,287,120

DEFERRED INFLOWS OF RESOURCES
Pension related 168,677 - 168,677 - 353,281
OPEB related 1,573,154 - 1,573,154 - 2,218,530
Lease related - 6,750,550 - 6,750,550 7,522,042
Total deferred inflows of resources 1,741,831 6,750,550 - 8,492,381 10,093,853

NET POSITION
Net investment in capital assets 14,087,894 2,812,837 778,586 17,679,317 19,289,578 Unrestricted (deficit) (24,786,713) 1,199,149 2,991,919 (20,595,645) (18,853,102) Total net position (deficit) $ (10,698,819) $ 4,011,986 $ 3,770,505 $ (2,916,328) $ 436,476 Business-Type Activities - Enterprise Funds Total
City of Commerce
Statement of Net Position
Proprietary Funds
June 30, 2024
(with comparative information for the prior year)
See accompanying Notes to the Basic Financial Statements. 35 2023
Transit CNG/LNG Water 2024 (as restated)
OPERATING REVENUES:

Charges for services - $ 2,895,747 $ - $ 2,895,747 $ 4,128,058 $ Intergovernmental revenue 6,874,935 - - 6,874,935 6,467,805 Leased water rights - - 771,492 771,492 774,583
Miscellaneous income - - - - 25,206
Total operating revenues 2,895,747 6,874,935 771,492 10,542,174 11,395,652 OPERATING EXPENSES:

General and administrative 7,241,808 278,748 18,927 7,539,483 6,301,931 Cost of sales and service 2,245,167 2,563,162 92,967 4,901,296 6,836,667 Depreciation and amortization 1,417,757 92,291 100,213 1,610,261 1,610,262 Total operating expenses 2,934,201 10,904,732 212,107 14,051,040 14,748,860 OPERATING INCOME (LOSS) (38,454) (4,029,797) 559,385 (3,508,866) (3,353,208) NONOPERATING REVENUES:

Interest income - 5,461 150,601 156,062 817,087
Total nonoperating revenues 5,461 - 150,601 156,062 817,087

INCOME (LOSS) BEFORE
CONTRIBUTIONS AND TRANSFERS (32,993) (4,029,797) 709,986 (3,352,804) (2,536,121) CONTRIBUTIONS AND TRANSFERS:

Capital contributions - - - - 2,662,122
Total contributions and transfers - - - - 2,662,122
CHANGES IN NET POSITION (4,029,797) (32,993) 709,986 (3,352,804) 126,001 NET POSITION (DEFICIT):

Beginning of year, as previously
reported as of June 30, 2023 (6,557,760) 4,044,979 2,496,583 (16,198) (142,199) Error corrections (111,262) 563,936 - 452,674 452,674
Beginning of year, as restated (Note 17) (6,669,022) 4,044,979 3,060,519 436,476 310,475 End of year $ 4,011,986 (10,698,819) $ 3,770,505 $ (2,916,328) $ 436,476 $ Business-Type Activities - Enterprise Funds
(with comparative information for the prior year)
City of Commerce
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
Total
See accompanying Notes to the Basic Financial Statements. 36 2023
Transit CNG/LNG Water 2024 (as restated)
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers and users 6,874,935 $ 2,912,871 $ 1,500,787 $ 11,288,593 $ $ 12,222,692 Cash payments to suppliers for goods and services (2,721,673) (2,827,156) (883,386) (6,432,215) (10,165,929) Cash payments to employees for services - (5,969,780) (5,969,780) - (5,386,272) Net cash provided by (used in) operating activities 85,715 (1,816,518) 617,401 (1,113,402) (3,329,509)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Intergovernmental noncapital grants
Payment from other funds - 1,816,518 1,816,518 - 2,320,268 Payment to other funds - - (3,762,314) (3,762,314) -
Net cash provided by (used in)
noncapital financing activities - 1,816,518 (3,762,314) (1,945,796) 2,320,268

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Receipt from capital grants - - - 2,662,122 -
Acquisition of capital assets - - - - (2,662,122)
Net cash used in capital
and related financing activities - - - - -
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received on investments 5,461 - 150,601 156,062 817,087 Net cash provided by investing activities 5,461 - 150,601 156,062 817,087 Net change in cash and cash equivalents 91,176 (2,994,312) - (2,903,136) (192,154) CASH AND CASH EQUIVALENTS:

Beginning of year 871,088 - 5,381,262 6,252,350 4,760,684 End of year $ 962,264 - $ $ 2,386,950 $ 3,349,214 $ 6,252,350

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

Operating income (loss) (4,029,797) $ (38,454) $ 559,385 $ (3,508,866) $ $ (3,353,208) Adjustments to reconcile operating loss to net cash
provided by (used in) operating activities:

Depreciation and amortization expenses 1,417,757 92,291 100,213 1,610,261 1,610,261 (Increase) decrease in:

Accounts receivable 17,124 - 17,124 - 109,213
Lease receivable - 729,295 - 729,295 717,827
Deferred outflows of resources - pensions 336,719 - 336,719 - (2,042,867) Deferred outflows of resources - OPEB 288,126 - 288,126 - (175,100) Increase (decrease) in:

Accounts payable (190,760) 14,754 (176,006) - (2,360,234) Accrued payroll 3,339 - - 3,339 69,284
Compensated absences 41,406 - 41,406 - 48,869
Claims payable (45,583) - (45,583) - -
Net pension liability 666,188 - 666,188 - (391,874)
Net other postemployment benefits liability - 526,067 526,067 - 3,554,671 Deferred inflows of resources - pensions 1,219,873 - 1,219,873 - 1,100,573 Deferred inflows of resources - OPEB (2,049,853) - (2,049,853) - (1,445,432) Deferred inflows of resources - leases - (771,492) - (771,492) (771,492) Total adjustments 2,213,279 124,169 58,016 2,395,464 23,699 Net cash provided by (used in) operating activities $ 85,715$ (1,816,518) $ 617,401 $ (3,329,509) (1,113,402) $ Business-Type Activities - Enterprise Funds
(with comparative information for the prior year)
City of Commerce
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
Total
See accompanying Notes to the Basic Financial Statements. 37 This page intentionally left blank.
38 FIDUCIARY FUND FINANCIAL STATEMENTS
39 This page intentionally left blank.
40 Private Purpose 2023
Trust Funds 2024 (as restated)
ASSETS
Current assets:

Cash and investments $ 18,891,523 $ 18,891,523 $ 17,596,500 Receivables:

Accounts 7,702 7,702 4,297
Loans, net - - 17,441
Lease receivable, due within one year 9,618 9,618 8,897 Total current assets 18,908,843 18,908,843 17,627,135
Noncurrent assets:

Restricted cash and investments with fiscal agents 9,946 9,946 57,802 Lease receivable, due in more than one year 987,242 987,242 996,860 Property held for resale 44,407,092 44,407,092 44,407,092 Total noncurrent assets 45,404,280 45,404,280 45,461,754 Total assets 64,313,123 64,313,123 63,088,889

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 2,405,260 2,405,260 3,119,180 Total deferred outflows of resources 2,405,260 2,405,260 3,119,180

LIABILITIES
Current liabilities:

Accounts payable 2,297,169 2,297,169 2,417,553
Salaries and benefits payable 1,297 1,297 1,337
Long-term debt, due within one year 8,738,281 8,738,281 8,004,427 Total current liabilities 11,036,747 11,036,747 10,423,317 Noncurrent liabilities:

Due to City of Commerce 3,014,695 3,014,695 3,014,695
Long-term debt, due in more than one year 32,853,226 32,853,226 41,591,507 Total noncurrent liabilities 35,867,921 35,867,921 44,606,202 Total liabilities 46,904,668 46,904,668 55,029,519

DEFERRED INFLOWS OF RESOURCES
Lease related 865,896 865,896 920,015
Total deferred inflows of resources 865,896 865,896 920,015

NET POSITION
Held in trust for Successor Agency $ 18,947,819 18,947,819 $ 10,258,535 $ Total
City of Commerce
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 41 Private Purpose 2023
Trust Funds 2024 (as restated)
ADDITIONS:

Redevelopment property tax trust fund $ 10,081,187 $ 10,081,187 $ 13,750,031 Investment income 247,567 247,567 47,852
Rental income 698,779 698,779 953,441
Miscellaneous income 442,982 442,982 443,482
Total additions 11,470,515 11,470,515 15,194,806
DEDUCTIONS:

Administrative expenses 572,951 572,951 2,204,786
Interest and fiscal charges 2,208,280 2,208,280 7,966,855 Total deductions 2,781,231 2,781,231 10,171,641
CHANGES IN NET POSITION 8,689,284 8,689,284 5,023,165
NET POSITION:

Beginning of year, as previously
reported as of June 30, 2023 19,519,834 19,519,834 14,496,669 Error corrections (9,261,299) (9,261,299) (9,261,299)
Beginning of year, as restated (Note 17) 10,258,535 10,258,535 5,235,370 End of year $ 18,947,819 18,947,819 $ $ 10,258,535
Total
City of Commerce
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 42 43

NOTES TO THE BASIC

FINANCIAL STATEMENTS
44 This page intentionally left blank.

City of Commerce
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
45 Page
Note 1 – Summary of Significant Accounting Policies ........................................................................................... 47 A. Financial Reporting Entity .............................................................................................................................. 47 B. Basis of Accounting and Measurement Focus ............................................................................................... 48 C. Property Taxes ................................................................................................................................................ 50 D. Cash and Investments ..................................................................................................................................... 50 E. Fair Value Measurements ............................................................................................................................... 50 F. Prepaid Items .................................................................................................................................................. 51 G. Lease Receivable ............................................................................................................................................ 51 H. Interfund Transactions .................................................................................................................................... 51 I. Property Held for Resale ................................................................................................................................ 52 J. Capital Assets ................................................................................................................................................. 52 K. Deferred Outflows/Inflows of Resources ....................................................................................................... 53 L. Unearned and Unavailable Revenue ............................................................................................................... 53 M. Long-Term Liabilities..................................................................................................................................... 53 N. Lease Liabilities .............................................................................................................................................. 54 O. Subscription Based Information Technology Arrangements (“SBITA”) Liabilities ...................................... 54 P. Compensated Absences .................................................................................................................................. 55 Q. Self-Insurance Programs................................................................................................................................. 55 R. Pensions .......................................................................................................................................................... 55 S. Other Postemployment Benefits ..................................................................................................................... 56 T. Net Position .................................................................................................................................................... 56 U. Fund Balances ................................................................................................................................................ 57 V. Use of Estimates ............................................................................................................................................. 57 W. Implementation of New GASB Pronouncement ............................................................................................ 58 Note 2 – Cash and Investments ................................................................................................................................ 58 A. Demand Deposits ............................................................................................................................................ 58 B. Investments Authorized by Debt Agreements ................................................................................................ 59 C. Fair Value Measurement Disclosure .............................................................................................................. 60 D. Risk Disclosures ............................................................................................................................................. 60 E. Investment in Local Agency Investment Fund (“LAIF”) ............................................................................... 62 F. Investment held with Public Agency Retirement Services (“PARS”) ........................................................... 62 G. Restricted Cash ............................................................................................................................................... 62 Note 3 – Loans Receivable ........................................................................................................................................ 62 Note 4 – Lease Receivable and Lease-Related Deferred Inflows of Resources .................................................... 63 A. Governmental Activities ................................................................................................................................. 63 B. Business-Type Activities ................................................................................................................................ 63 C. Fiduciary Activities ........................................................................................................................................ 64 Note 5 – Interfund Transactions .............................................................................................................................. 65 A. Due From/To Other Funds ............................................................................................................................. 65 B. Transfers ......................................................................................................................................................... 65 City of Commerce
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
46 Page
Note 6 – Capital Assets .............................................................................................................................................. 66 A. Governmental Activities ................................................................................................................................. 66 B. Business-Type Activities ................................................................................................................................ 67 Note 7 – Long-Term Liabilities ................................................................................................................................ 68 A. Governmental Activities ................................................................................................................................. 68 B. Business-Type Activities ................................................................................................................................ 70 C. Fiduciary Activities ........................................................................................................................................ 70 Note 8 – Self Insurance Programs ............................................................................................................................ 73 A. General Liability ............................................................................................................................................. 73 B. Workers’ Compensation ................................................................................................................................. 74 Note 9 – Defined Benefit Pension Plans ................................................................................................................... 75 A. General Information about the Pension Plan .................................................................................................. 75 B. Net Pension Liabilities.................................................................................................................................... 77 C. Changes in the Net Pension Liability ............................................................................................................. 79 D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions ............................................................................................................ 80 Note 10 – Other Postemployment Benefits (“OPEB”) Plan ................................................................................... 81 A. General Information about the OPEB Plan .................................................................................................... 81 B. Net OPEB Liability ........................................................................................................................................ 81 C. Changes in the Net OPEB Liability ................................................................................................................ 83 D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB ................................................................................................................ 84 Note 11 – Deferred Compensation Plan ................................................................................................................... 84 Note 12 – Net Investments in Capital Assets ........................................................................................................... 85 Note 13 – Classification of Fund Balances ............................................................................................................... 85 Note 14 – Tax Abatement .......................................................................................................................................... 86 Note 15 – Commitments and Contingencies ............................................................................................................ 86 Note 16 – Individual Fund Disclosure ...................................................................................................................... 86 Note 17 – Changes within the Financial Reporting Entity and Error Corrections ........................................................................................................................ 87 Note 18 – Subsequent Event ..................................................................................................................................... 88 City of Commerce
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
47 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Commerce, California, (the “City”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

The basic financial statements include certain prior-year summarized comparative information in total but not at the level of detail for a presentation in accordance with U.S. GAAP. Accordingly, such information should be read in conjunction with the government’s financial statements for the year ended June 30, 2023, from which the summarized information was derived.

The following is a summary of the City’s significant policies:

A. Financial Reporting Entity
The City was incorporated in 1960, under the laws of the State of California and enjoys all the rights and privileges applicable to a charter city. It is governed by an elected five-member council. As required by U.S.

GAAP these financial statements present the City (the primary government and its component units). The component units discussed below are included in the reporting entity because of their operational or financial relationships with the City.

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

Blended Component Units:

Management determined that the following entities should be reported as blended component units based on the criteria above. Although the following entities are legally separate from the City, they have been “blended” as though they are part of the City because the component units’ governing bodies are substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component units; and management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though they do not provide services directly to it.

The City of Commerce Joint Powers Financing Authority (“JPFA”) was formed January 1, 1988, to create a joint exercise of powers authority between the City and the Community Development Commission of the City of Commerce (“the Commission”). The City Council of the City is the governing board. Management of the primary government has operational responsibility for the blended component unit. The JPFA does not issue separate financial statements.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
48 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City 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.

Government-Wide Financial Statements
The government-wide financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Fiduciary activities of the City are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated. In the statement of activities, internal service fund transactions have been included in the governmental activities. The following interfund activities have been eliminated:
 Due from and to other funds, which are short-term loans within the primary government.  Except between Governmental and Business-Type Activities, transfers in and out, which are flows of assets between funds without the requirement for repayment.

Governmental Fund Financial Statements
All governmental funds are accounted for on a spending, or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) which are recognized when measurable and available. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, intergovernmental revenues and other taxes.

Business license fees are recorded as received. Expenditures are recorded in the accounting period in which the related fund liability is incurred. An exception to this general rule is principal and interest on long-term debt which is recognized when due.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
49 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
Reconciliations of the fund financial statements to the government-wide financial statements are provided to explain the differences.

The City reports the following major Governmental Funds:

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

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for each major Proprietary Fund.

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

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

The City reports the following major Proprietary Funds:

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

Compressed Natural Gas (“CNG”) /Liquefied Natural Gas (“LNG”) Enterprise Fund – This fund is used to account for the City’s CNG/LNG operations, with revenues primarily generated from fueling royalties associated with public use.

Water Enterprise Fund – This fund is used to account for the right-to-use of the City’s water facility and infrastructure that is provide to a portion of the City’s residents.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
50 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting where the assets associated with the activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from government-mandated nonexchange transactions or voluntary nonexchange transactions.

The City reports the following Fiduciary Funds:

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

C. Property Taxes
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities in the current period.

Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas.

The property tax calendar is as follows:

Lien date January 1
Levy date July 1
Due dates First Installment - November 1
Second Installment - February 1
Delinquent Date First Installment - December 11
Second Installment - April 11
D. Cash and Investments
The City’s cash and cash equivalents are comprised of cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. All cash and investments of proprietary funds are held in the City’s investment pool. These cash pools have the general characteristics of a demand deposit account, therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for statement of cash flows purposes.

E. Fair Value Measurements
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgement associated with the inputs used to measure their fair value.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
51 Note 1 – Summary of Significant Accounting Policies (Continued) E. Fair Value Measurements (Continued)
The three levels of the fair value measurement hierarchy are described below:
 Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market date at the measurement date.  Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

F. Prepaid Items
Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended.

The City uses the consumption method to account for prepaid items.

G. Lease Receivable
The City is a lessor for leases of land, buildings, and infrastructure and recognizes lease receivables and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. The City established a threshold of $25,000 for lease receivables. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses the incremental borrowing rate (IBR) provided by the financial institution during implementation for existing leases or the current rate at the time a new lease is executed or modified.  The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
 Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

H. Interfund Transactions
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due from/to other funds” (i.e., current portion of interfund loans). These are typically routine and temporary cash flow assistance from the General Fund to other funds in advance of receiving grant funds or other types of revenue.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
52 Note 1 – Summary of Significant Accounting Policies (Continued) H. Interfund Transactions (Continued)
Transactions which move resources from a fund receiving revenue to the fund through which the resources are expended are recorded as transfers.

I. 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 determined upon entering into a contact for sale.

J. Capital Assets
In the Government-Wide Financial Statements, capital assets are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Donated capital assets are valued at their acquisition value. Capital assets, which include land, buildings, improvements other than buildings, machinery and equipment, and infrastructure assets. General infrastructure assets consist of certain improvements including roads, streets, sidewalks, medians, and storm drains. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. 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 are depreciated using the straight-line method over the assets estimated useful live.

The governmental fund financial statements do not present capital assets. Instead, capital assets purchases are reported as capital outlay expenditures or other functional expenditures such as public works. As such, capital assets are shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.

The following schedule summarizes the capital asset capitalization and depreciation policy:

Asset Type Capitalization Threshold Depreciation in Years Buildings $ 250,000 10-40 years
Improvements other than buildings 200,000 20-30 years
Infrastructure 100,000 20-40 years
Machinery and equipment 25,000 5-13 years
Right to use asset 25,000 5 years
Right-of-Use Lease Assets
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and adjusted by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
53 Note 1 – Summary of Significant Accounting Policies (Continued) J. Capital Assets (Continued)
Right-of-Use Subscription Assets
Subscription assets are recorded at the amount of the initial measurement of the subscription-based information technology arrangements (“SBITA”) liabilities and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the subscription term, less any incentives received from the SBITA vendor at or before the commencement of the subscription term along with subscription implementation costs. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying information technology assets.

K. Deferred Outflows/Inflows of Resources
The financial statements report separate sections for deferred outflows of resources, and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future period.

L. Unearned and Unavailable Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues in the government-wide and fund financial statements are grant revenues received in advance.

In the governmental fund financial statements, unavailable revenue is reported when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City reports unavailable revenue when an asset is reported in governmental fund financial statements but the revenue is not collected within the availability period (within 60 days of year-end).

M. Long-Term Liabilities
Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the appropriate activities. Bonds payable are reported net of the applicable bond premium or discount. Debt issuance costs except for any portion related to prepaid insurance are recognized as expense in the period incurred. Premiums or discounts not considered as part of the reacquisition price are amortized over the life of the bond.

The governmental fund financial statements do not present long-term debt and other financed obligations. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.

Issuances costs are reported as debt service expenditures. Principal payments and reductions in the obligation are reported as debt service expenditures. As such, long-term debt and other financed obligations are shown as reconciling items in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
54 Note 1 – Summary of Significant Accounting Policies (Continued) N. Lease Liabilities
The City recognizes lease liabilities with an initial, individual value of $25,000 or more with a lease term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the lessee or usage of the underlying asset are not included in the measurement of the lease liability.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses incremental borrowing rate provided by the financial institution or the current rate at the time a new lease is executed.
 The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
 Lease payments included in the measurement of the lease payable is composed of fixed payments to the lessor.

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

O. Subscription Based Information Technology Arrangements (“SBITA”) Liabilities The City recognizes subscription liabilities with an initial, individual value of $25,000 or more with a subscription term greater than one year in the government-wide and proprietary fund financial statements.

Variable payments based on future performance of the City, usage of the underlying IT assets, or number of user seats are not included in the measurement of the subscription liability.

At the commencement of a subscription, the City initially measures the subscription liability at the present value of subscription payments expected to be made during the subscription term. Subsequently, the lease liability is reduced by the principal portion of subscription payments made.

Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
 The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscription liabilities.
 The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
55 Note 1 – Summary of Significant Accounting Policies (Continued) O. Subscription Based Information Technology Arrangements (“SBITA”) Liabilities (Continued) The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure any subscription asset or liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

P. Compensated Absences
It is the policy of the City to allow for the accumulation and payout of all accumulated vacation pay and all or a portion of accumulated sick pay and/or compensatory pay when an employee retires or terminates. The long-term amount is included as a liability in the governmental activities of the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. All of the liability for compensated absences applicable to proprietary funds is reported in those funds.

Q. Self-Insurance Programs
The City's insurance program for general liability is administered through California Joint Powers Insurance Authority (CJPIA), which is described in Note 8 to the financial statements. The Authority is a public entity risk pool. Claims losses recorded in the Authority include both current claims and incurred but not reported claims (IBNR). Deposits to the Authority are recorded by the City as insurance expenditures in the General Fund when paid. These deposits are subject to retrospective adjustment. Favorable claims experience in prior years results in a refund of deposits from the Authority and such refunds, if any, are recorded as prepaid items in the General Fund since they will be used to offset future deposit requirements. Adverse claims experience in prior years results in the payment of additional deposits and such deposits, if any, are recorded as insurance expenditures when incurred.

The City is self-insured for workers' compensation for the first $1,000,000 per occurrence. Excess insurance is provided by Arch Insurance Company. These activities are accounted for in the General and Transit Funds. The funds accrue the estimated liability for claims when such amounts are reasonably determinable and where the liability is probable. See Note 8 for the estimated liability for such claims expected to be filed for incidents that occurred as of June 30, 2024.

R. Pensions
For purposes of measuring the aggregate net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

General Fund and special revenue funds are typically used to liquidate pension liabilities for governmental funds.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
56 Note 1 – Summary of Significant Accounting Policies (Continued) R. Pensions (Continued)
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. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

S. Other Postemployment Benefits
For purposes of measuring the net other postemployment benefits (“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 plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

General Fund and special revenue funds are typically used to liquidate OPEB liabilities for governmental funds.

The following timeframes are used for OPEB reporting:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

T. Net Position
In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position 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 – This component of 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.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
57 Note 1 – Summary of Significant Accounting Policies (Continued) T. Net Position (Continued)
Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s practice is to apply the restricted component of net position first, then use the unrestricted component of net position as needed.

U. Fund Balances
In the governmental fund financial statements, fund balances are classified as follows:

Nonspendable – Nonspendable fund balances include amounts that cannot be spent because they are not in a spendable form, such as unrestricted loans receivable or prepaid items and land held for resale, or because resources legally or contractually must remain intact.

Restricted – Restricted fund balances are the portion of fund balance that have externally enforceable limitations on their usage through legislation or limitations imposed by creditors, grantor, laws and regulations of other governments or enabling legislation.

Committed – Committed fund balances are self-imposed limitations by the highest level of decision-making authority, namely the City Council, prior to the end of the reporting period. City Council adoption of a resolution is required to commit resources or to rescind the commitment.

Assigned – Assigned fund balances are limitations imposed by management based on the intended use of the funds. Modifications or rescissions of the constraints can be removed by the same type of action that limited the use of the funds. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The delegation of authority has not yet been granted to persons or bodies other than City Council.

Unassigned – Unassigned fund balances represent the residual net resources in excess of the other classifications. The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

It is the City’s policy that restricted resources will be applied first, followed in order of application by committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the Council.

V. Use of Estimates
The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
58 Note 1 – Summary of Significant Accounting Policies (Continued) W. Implementation of New GASB Pronouncement
During fiscal year ended June 30, 2024, the City has implemented GASB Statement No. 100 – Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. See Note 17 for the reclassifications due to the implementation of GASB Statement No. 100.

Note 2 – Cash and Investments
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

The City had the following cash and investments at June 30, 2024:

Fiduciary
Governmental Business-Type Fund Statement
Activities Activities of Net Position Total
Unrestricted assets:

Cash and investments 126,532,532 $ 3,349,214 $ 18,891,523 $ 148,773,269 $ Restricted assets:

Cash and investments with fiscal agent 8,413,967 - 9,946 8,423,913 Total cash and investments $ 3,349,214 134,946,499 $ 18,901,469 $ 157,197,182 $ The City’s cash and investments at June 30, 2024 in more detail:

Cash on hand $ 2,711
Deposits with financial institutions 130,989,787
Investments 26,204,684
Total cash and investments $ 157,197,182
The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agent under the provisions of bond indentures.

Interest income earned on pooled cash and investments is allocated quarterly to the funds based on the month-end cash and investment balances. Proceeds obtained from long-term debt issuances including construction, lease payment and reserve fund balances are held by the City or by fiscal agent on behalf of the City and invested in the City's name. Interest income on proceeds of debt is credited directly to the related fund, as defined by the Bond Indenture.

A. Demand Deposits
At June 30, 2024, the carrying amount of the City's demand deposits was $130,989,787 the bank balance was $131,534,228. The difference represents outstanding checks, deposits in transit, and other reconciling items.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
59 Note 2 – Cash and Investments (Continued)
A. Demand Deposits (Continued)
Under provisions of the City's investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the types of investments listed in the table below. The table also identifies certain provisions intended to limit the City's exposure to 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.

Authorized * Maximum * Maximum
by Investment * Maximum Percentage Investment in
Authorized Investment Type Policy Maturity of Portfolio One 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.

B. Investments Authorized by Debt Agreements
Investments 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 following table 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, and concentration of credit risk.

Maximum
Authorized Investment Type Maturity
U.S. Treasury Obligations None
U.S. Agency Securities None
Banker's Acceptances 360 days
Commercial Paper 270 days
Medium-Term Notes N/A
Money Market Mutual Funds None
Investment Agreements None
Non-negotiable Certificates of Deposit 360 days
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
60 Note 2 – Cash and Investments (Continued)
C. Fair Value Measurement Disclosures
The following table presents the fair value measurement of investments on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2024:

Significant
Other Observable
Investment Type Total Inputs (Level 1) Uncategorized
Local Agency Investment Fund $ 22,924,674 $ - $ 22,924,674 Held by PARS 115:

Money Market Funds 109,571 109,571 -
Mutual Funds 3,157,768 3,157,768 -
Held by fiscal agent:

Money market funds 12,671 - 12,671
Total investments $ 26,204,684 $ 3,267,339 $ 22,937,345 Measurement Input
D. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment is, the greater the sensitivity of its fair value 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 shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is as follows:
1 Year
Investment Type Total or Less
Local Agency Investment Fund $ 22,924,674 $ 22,924,674
Held by PARS 115:

Money Market Funds 109,571 109,571
Mutual Funds 3,157,768 3,157,768
Held by fiscal agent:

Money Market Mutual Funds 12,671 12,671
Total investments $ 26,204,684 $ 26,204,684
Remaining Maturity
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
61 Note 2 – Cash and Investments (Continued)
D. Risk Disclosures (Continued)
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 or the City's investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

Investment Type Total AAA Not Rated
Local Agency Investment Fund $ 22,924,674 $ - $ 22,924,674 Held by PARS 115:

Money Market Funds 109,571 - 109,571
Mutual Funds 3,157,768 - 3,157,768
Held by fiscal agent:

Money market funds 12,671 12,671 -
Total investments $ 26,204,684 $ 12,671 $ 26,192,013
Rating as of Year End
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 City Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. 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 fair 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.

For investments identified herein as held by bond trustee, the City's designee selects the investment under the terms of the applicable trust agreement, acquires the investment, and delivers to the Trustee the investment on behalf of the reporting government.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
62 Note 2 – Cash and Investments (Continued)
E. Investment in Local Agency Investment Fund (“LAIF”)
The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. As of June 30, 2024, the City had $22,924,674 invested in LAIF. LAIF is reported at amortized cost, which approximates fair value.

F. Investment held with Public Agency Retirement Services (“PARS”) The City established an Internal Revenue Service Section 115 irrevocable trust with the 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. As of June 30, 2024, the City had $3,267,339 invested in PARS. PARS is reported at fair value for investments in mutual funds and at amortized cost for investments in money market funds.

G. Restricted Cash
In fiscal year 2023, the City sold a parcel of land formerly owned by the Successor Agency pursuant to the LongRange Property Management Plan approved by the California Department of Finance. Net proceeds of $5,143,903 from this sale are restricted for the sole purpose of constructing a new City Public Safety/City Hall Facility. This restriction is in accordance with the dissolution requirements of the former redevelopment agency and enabling City Council actions. These proceeds are recorded as restricted cash in the City’s financial statements and are not available for general governmental purposes. As of June 30, 2024, the restricted cash balance related to this transaction was $5,143,903.

Note 3 – Loans Receivable
The former Redevelopment Agency (“RDA”) of the City operated a housing First Time Homebuyer (“FTH”) loan program, which provides loans to moderated-low income borrowers who meet certain qualifications for the purpose of purchasing a home. Due to the dissolution of the RDA, many of these loans became uncollectable and the loan balances have been reduced to reflect forgiveness. The outstanding balance of the loans and interest on the loans at June 30, 2024 was $207,783 and $285,423, respectively.

In July 2019, the City entered into a Purchase and Sale Agreement between City Ventures Homebuilding, LLC and the City of Commerce to sell the properties that included the old North Annex, the Provisor Building, and the existing Transportation Building. Shortly thereafter, a three-phased housing project was submitted to the City Council outlining a plan for 133 new multi-family and single-family residential units. With the new housing additions, the City and City Ventures agreed to implement a modified version of the FTH for nine homeowners.

Loans receivables of the City as of June 30, 2024, were:

Loans receivable $ 1,723,329
Less: Allowance for uncollectible loans (1,515,546)
Total loans receivable $ 207,783
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
63 Note 4 – Lease Receivable and Lease-Related Deferred Inflows of Resources The City leases various types of property including land, buildings, and infrastructure. Leases receivable consist of agreements with other entities for the “right–to–use” the underlying assets at various locations owned by the City. The remaining terms of the agreements range from 1 to 20 years. The interest rates used calculated the net present value of the lease receivable ranged from 0.675% to 7.8112%.

A. Governmental Activities
The City’s General Fund leases land and buildings to various companies.

For the year ended June 30, 2024, the City recognized $834,372 in lease revenue and $41,702 in interest revenue, and the outstanding net present value of the lease receivable amount is $1,207,549.

At June 30, 2024, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2025 1,207,549 $ 18,397 $ 1,225,946 $
At June 30, 2024, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2025 809,366 $
B. Business-Type Activities
The City’s Water Fund leases buildings and infrastructure to the California Water Service Company to serve City residents and businesses. Under the terms of the lease agreement, the California Water Service Company is responsible for all maintenance and capital improvements related to the leased assets.

For the year ended June 30, 2024, the City recognized $771,492 in lease revenue and $115,705 in interest revenue, and the outstanding net present value of the lease receivable amount is $6,899,398.

At June 30, 2024, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2025 740,946 $ 104,054 $ 845,000 $
2026 752,783 92,217 845,000
2027 764,810 80,190 845,000
2028 777,028 67,972 845,000
2029 789,442 55,558 845,000
2030–2034 3,074,389 94,361 3,168,750
Total 6,899,398 $ 494,352 $ 7,393,750 $
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
64 Note 4 – Lease Receivable and Lease-Related Deferred Inflows of Resources (Continued) B. Business-Type Activities (Continued)
At June 30, 2024, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2025 771,492 $
2026 771,492
2027 771,492
2028 771,492
2029 771,492
2030–2034 2,893,090
Total $ 6,750,550
C. Fiduciary Activities
The Successor Agency leases land for the operation of the Commerce Truck Stop.

For the year ended June 30, 2024, the City recognized $54,119 in lease revenue and $75,214 in interest revenue, and the outstanding net present value of the lease receivable amount is $996,860.

At June 30, 2024, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2025 9,618 $ 74,493 $ 84,111 $
2026 23,947 72,781 96,728
2027 25,886 70,842 96,728
2028 27,982 68,746 96,728
2029 30,247 66,481 96,728
2030–2034 262,505 279,171 541,676
2035–2039 489,580 133,345 622,925
2040–2044 127,095 827 127,922
Total 996,860 $ 766,686 $ 1,763,546 $
At June 30, 2024, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2025 54,119 $
2026 54,119
2027 54,119
2028 54,119
2029 54,119
2030–2034 270,593
2035–2039 270,593
2040–2044 54,115
Total $ 865,896
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
65 Note 5 – Interfund Transactions
A. Due From/To Other Funds
At June 30, 2024, the City had the following due from/to other funds:

Governmental Funds Proprietary Funds
Nonmajor Transit
Governmental Enterprise
Due From Funds Fund Total
Governmental Funds:

General Fund $ 56,903 $ 6,804,311 $ 6,861,214
Due To
The above amounts represents short-term borrowing from deficits in the pooled cash account.

B. Transfers
During the year ended June 30, 2024, the City had the following transfers:

Nonmajor
General Governmental
Transfers Out Fund Funds Total
Governmental Funds:

General Fund $ - $ 1,942,572 $ 1,942,572
Nonmajor Governmental Funds 505,589 - 505,589
$ 505,589 $ 1,942,572 $ 2,448,161
Transfers In
Governmental Funds
Transfers of $505,589 from Nonmajor Governmental Funds were made to the General Fund to provide funding for general government capital expenditures and rideshare costs.

The General Fund transferred a total of $1,942,572 to the Nonmajor Governmental Funds for debt service-related costs, capital projects costs, and special revenue operating costs.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
66 Note 6 – Capital Assets
A. Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2024 is as follows:

Balance
July 1, 2023 Balance
(as restated) Additions Deletions Reclassification June 30, 2024 Capital assets, not being depreciated:

Land $ 12,946,340 $ - $ - $ 12,946,340 - $
Construction in progress 3,228,383 5,748,328 - (996,784) 7,979,927 Total capital assets, not being depreciated 16,174,723 5,748,328 - (996,784) 20,926,267 Capital assets, being depreciated:

Buildings 43,210,991 - - 43,210,991 -
Improvements 20,719,853 - - 454,757 21,174,610
Machinery and equipment 8,022,958 428,713 - - 8,451,671 Infrastructure 136,885,795 - - 542,027 137,427,822
Total capital assets, being depreciated 208,839,597 428,713 - 996,784 210,265,094 Less accumulated depreciation for:

Buildings (31,655,903) (1,104,677) - (32,760,580) -
Improvements (10,454,907) (609,077) - (11,063,984) -
Machinery and equipment (6,484,499) (331,743) - (6,816,242) - Infrastructure (85,781,449) (1,733,456) - (87,514,905) - Total accumulated depreciation (134,376,758) (3,778,953) - (138,155,711) - Total capital assets, being
depreciated, net 74,462,839 (3,350,240) - 996,784 72,109,383 Intangible capital assets, being amortized:

Right-to-use lease assets - equipment 391,143 1,140,385 - - 1,531,528 Right-to-use subscription assets - equipment - 286,013 - - 286,013 Total intangible capital assets, net 391,143 1,426,398 - - 1,817,541 Less accumulated amortization for:

Right-to-use lease assets - equipment (274,138) (164,202) - - (438,340) Right-to-use subscription assets - equipment - (57,006) - - (57,006) Total accumulated amortization (274,138) (221,208) - - (495,346) Total intangible capital assets, being
amortized, net 117,005 1,205,190 - - 1,322,195
Total capital assets, net $ 3,603,278 90,754,567 $ - $ - $ 94,357,845 $ Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2024 as follows:

General government $ 886,466
Public works 1,844,486
Parks, recreation and culture 1,095,908
Library 173,301
Total $ 4,000,161
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
67 Note 6 – Capital Assets (Continued)
B. Business-Type Activities
The summary of changes in business-type activities capital assets for the year ended June 30, 2024 is as follows:

Balance Balance
July 1, 2023 Additions Deletions Reclassification June 30, 2024 Capital assets, not being depreciated:

Land $ 2,755,498 $ - $ - $ - $ 2,755,498
Total capital assets, not being depreciated 2,755,498 - - - 2,755,498 Capital assets, being depreciated:

Buildings and improvements 13,112,526 - - 13,112,526 -
Machinery and equipment 19,635,165 - - 19,635,165 -
Total capital assets, being depreciated 32,747,691 - - 32,747,691 - Less accumulated depreciation for:

Buildings and improvements (6,617,905) (380,360) - (6,998,265) - Machinery and equipment (10,083,295) (1,199,427) - (11,282,722) - Total accumulated depreciation (16,701,200) (1,579,787) - (18,280,987) - Total capital assets, being
depreciated, net 16,046,491 (1,579,787) - 14,466,704 -
Intangible capital assets, being amortized:

Water rights 2,141,222 - - - 2,141,222
Total intangible capital assets, net 2,141,222 - - - 2,141,222 Less accumulated amortization for:

Water rights (1,653,633) (30,474) - (1,684,107) -
Total accumulated amortization (1,653,633) (30,474) - (1,684,107) - Total intangible capital assets, being
amortized, net 487,589 (30,474) - - 457,115
Total capital assets, net $ (1,610,261) 19,289,578 $ - $ - $ 17,679,317 $ Depreciation and amortization expense was charged to functions/programs of business-type activities for the year ended June 30, 2024 as follows:

Transit $ 1,417,757
CNG/LNG 92,291
Water 100,213
Total $ 1,610,261
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
68 Note 7 – Long-Term Liabilities
A. Governmental Activities
Summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2024 is as follows:

Balance
July 1, 2023 Balance Due within Due in More
(as restated) Additions Deletions June 30, 2024 One Year Than One Year Governmental Activities:
2014 JPFA Revenue Bonds 7,060,000 $ - $ (450,000) $ 6,610,000 $ $ 6,140,000 470,000 $ Premium on bond 682,642 - (60,234) 622,408 562,174 60,234 2021 Pension Obligation Bond 27,875,000 - - 27,875,000 26,350,000 1,525,000 Subtotal 35,617,642 - (510,234) 35,107,408 2,055,234 33,052,174 Lease payable 123,292 1,140,385 (165,749) 1,097,928 868,175 229,753 Subscription payable - 286,013 202,316 (83,697) 69,706 132,610 Compensated absences 2,971,762 1,691,305 (1,444,263) 3,218,804 1,054,630 2,164,174 Claims payable 865,296 417,462 (423,521) 859,237 463,603 395,634 Total governmental activities $ 39,577,992 $ 3,535,165 $ (2,627,464) $ 40,485,693 $ 3,872,926 $ 36,612,767 The General Fund has been used to liquidate the majority of the liability for compensated absences. 2014 JPFA 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, 2024 is $6,610,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Payments
2025 $ 470,000 $ 306,863 $ 776,863
2026 495,000 282,738 777,738
2027 520,000 257,363 777,363
2028 550,000 233,706 783,706
2029 570,000 211,650 781,650
2030-2034 3,250,000 610,750 3,860,750
2035 755,000 18,875 773,875
Total $ 6,610,000 $ 1,921,945 $ 8,531,945
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
69 Note 7 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2021 Pension Obligation Bond
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 is payable semiannually on the February 1st and August 1st. The interest rate on the bonds varies from 0.667% to 2.839% and mature August 1, 2041. The amount outstanding at June 30, 2024 is $27,875,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Payments
2025 $ 1,525,000 $ 615,161 $ 2,140,161
2026 1,535,000 602,692 2,137,692
2027 1,555,000 585,885 2,140,885
2028 1,575,000 564,705 2,139,705
2029 1,600,000 539,323 2,139,323
2030-2034 8,500,000 2,197,889 10,697,889
2035-2039 8,235,000 1,093,429 9,328,429
2040-2042 3,350,000 139,565 3,489,565
Total $ 27,875,000 $ 6,338,649 $ 34,213,649
Lease Liabilities
The City has entered into a lease agreement with Enterprise Fleet Management for 33 vehicles with terms of 60- months for a total monthly lease payment in the amount of $28,677. Lease payments are due on the 1st of each month. The calculated interest rates range from 2.822% to 4.300%. In the event of default, the lease shall be deemed terminated. Outstanding lease liabilities at June 30, 2024 was in the amount of $1,097,928.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 35,613 229,753 $ 265,366 $
2026 231,548 27,459 259,007
2027 239,977 19,031 259,008
2028 243,628 10,324 253,952
2029 153,022 2,185 155,207
Total 1,097,928 $ 94,612 $ 1,192,540 $
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
70 Note 7 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Subscription Liabilities
The City has entered into subscription for information technology arrangement. The terms of the arrangement range from 36 to 48 months with an implicit interest rates of 2.93 to 3.16%. Outstanding subscription liabilities at June 30, 2024 was in the amount of $202,316.

Principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 69,706 $ 4,720 $ 74,426
2026 72,902 2,534 75,436
2027 59,708 292 60,000
Total $ 202,316 $ 7,546 $ 209,862
B. Business-Type Activities
Summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2024 is as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Business-type Activities:

Compensated absences $ 628,965 $ 310,500 $ (269,096) $ 670,369 $ 211,257 $ 459,112 Claims payable 111,262 - (45,583) 65,679 21,657 44,022
Total business-type activities $ 740,227 $ 310,500 $ (314,679) $ 736,048 $ 232,914 $ 503,134 C. Fiduciary Activities
Summary of changes in long-term liabilities for fiduciary activities for the year ended June 30, 2024 is as follows:

Balance
July 1, 2023 Balance Due within Due in More
(as restated) Additions Deletions June 30, 2024 One Year Than One Year Successor Agency:
1994 Tax Allocation Refunding Bonds $ 55,000 $ - $ (55,000) $ - $ - $ - 2016 A & B Tax Allocation Refunding Bonds 25,540,000 (2,080,000) - 23,460,000 6,960,000 16,500,000 2018 Tax Allocation Bonds 15,315,000 (3,805,000) - 11,510,000 11,510,000 - Settlement Payable 572,030 (572,030) - - - -
Pollution Redeption Obligation 5,760,316 (1,049,416) - 4,710,900 1,335,300 3,375,600 Due to City of Commerce 3,014,695 - 3,014,695 - 3,014,695 - Subtotal 50,257,041 (7,561,446) - 42,695,595 8,295,300 34,400,295 Premium on bonds:
2016 Tax Allocation Refunding Bonds 872,491 - (72,707) 799,784 72,707 727,077 2018 Tax Allocation Bonds 1,481,097 (370,274) - 1,110,823 370,274 740,549 Subtotal 2,353,588 (442,981) - 1,910,607 442,981 1,467,626 Total successor agency $ 52,610,629 $ (8,004,427) - $ $ 44,606,202 $ 8,738,281 $ 35,867,921 City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
71 Note 7 – Long-Term Liabilities (Continued)
C. Fiduciary Activities (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. During the year ended June 30, 2024, the bonds were fully paid off. 2016 A & B Tax Allocation Refunding 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. The amount outstanding at June 30, 2024 is $23,460,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Principal Interest Principal Interest 2025 $ - $ 665,031 $ 6,960,000 $ 127,994 $ 6,960,000 $ 793,025 2026 900,000 654,328 755,000 11,797 1,655,000 666,125
2027 1,710,000 577,281 - 1,710,000 - 577,281
2028 1,760,000 490,531 - 1,760,000 - 490,531
2029 1,620,000 406,031 - 1,620,000 - 406,031
2030-2034 7,135,000 968,503 - 7,135,000 - 968,503
2035-2036 2,620,000 81,694 - 2,620,000 - 81,694
Total $ 15,745,000 $ 3,843,399 $ 7,715,000 $ 139,791 $ 23,460,000 $ 3,983,190 2016 A 2016 B Total
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.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
72 Note 7 – Long-Term Liabilities (Continued)
C. Fiduciary Activities (Continued)
2018 Tax Allocation Bonds (Continued)
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. The amount outstanding at June 30, 2024 is $11,510,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ - $ 575,500 $ 575,500
2026 4,630,000 459,750 5,089,750
2027 1,845,000 287,385 2,132,385
2028 5,035,000 115,385 5,150,385
Total $ 11,510,000 $ 1,438,020 $ 12,948,020
Settlement Payable
The Successor Agency to the former Commerce Community Development Commission entered into a settlement agreement with Justman Packaging & Display and related parties in connection with former redevelopment activities. Under the terms of the agreement, the Successor Agency agreed to reimburse Justman up to $1,561,431 for eligible relocation-related costs. Payments were structured with specific deadlines, generally occurring either 60 days after the effective date of the agreement or 45 days after Justman’s vacancy from the subject property. All obligations under the agreement were approved by the Oversight Board and, where applicable, the California Department of Finance, and were paid from Redevelopment Property Tax Trust Fund (“RPTTF”) allocations. As of June 30, 2024, the Successor Agency had made total payments of $1,551,350, and all obligations under the settlement were fully satisfied. No further liability remains outstanding.

Pollution Remediation Obligation
The Successor Agency to the former Commerce Community Development Commission is engaged in ongoing environmental remediation activities at the former Specific Plating facility, located at 1350 South Eastern Avenue. This site is being addressed under the oversight of the California Department of Toxic Substances Control (“DTSC”) through a Voluntary Cleanup Agreement. The Successor Agency contracted GSI Environmental Inc. to perform the environmental work. Initial remediation activities began under a June 1, 2018 agreement. These activities were approved for funding through the Recognized Obligation Payment Schedule (“ROPS”) as an enforceable obligation of the former Redevelopment Agency. All costs associated with the remediation are eligible for reimbursement from Redevelopment Property Tax Trust Fund (“RPTTF”) allocations.

The City will continue to evaluate and report updated cost estimates and obligations as additional information becomes available. The amount outstanding at June 30, 2024 is $4,710,900.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
73 Note 7 – Long-Term Liabilities (Continued)
C. Fiduciary Activities (Continued)
Pollution Remediation Obligation (Continued)
The annual obligation requirements are as follows:

Year Ending
June 30, Principal
2025 $ 1,335,300
2026 1,170,200
2027 1,330,200
2028 875,200
Total $ 4,710,900
Pledged Revenues
The Successor Agency has pledged tax revenues to the repayment of the former Redevelopment Agency’s debts through the final maturity of the loans, or early retirement of the loans, whichever comes first. Tax revenues consist of property tax revenues allocated to the Redevelopment Property Tax Trust Fund (“RPTTF”) for the Successor Agency that is maintained by the County of Los Angeles Auditor and Controller. The amounts so allocated are those that would have been allocated to the RDA had the RDA not been dissolved. The Auditor and Controller (“A&C”) then distributes RPTTF revenues to the Successor Agency based on Recognized Obligation Payment Schedules (“ROPS”) as approved by the California State Department of Finance (“DOF”) and after deducting amounts for A&C administrative costs and amounts required to be paid under tax-sharing agreements unless the payment of such amounts has been subordinated to payment of debt services on the loans. Each ROPS covers a six-month period and includes the applicable debt service payments on the loans. The RPTTF revenue distributed to the Successor Agency in fiscal year 2024 was $10,081,187. Total debt outstanding was $3,014,695.

Note 8 – Self Insurance Programs
A. General Liability
Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (the “CJPIA”). The CJPIA is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The CJPIA began covering claims of its members in 1978.

Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
74 Note 8 – Self Insurance Programs (Continued)
A. General Liability (Continued)
Primary Self-Insurance Programs of the Authority
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 CJPIA’s website: https://cjpia.org/coverage/risk-sharing-pools/.

Purchased Insurance
The City also participates in the following coverage programs provided by the CJPIA:

Property Insurance
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 CJPIA. The total insured value of scheduled City property is $143,968,167. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.

Earthquake and Flood Insurance
This coverage is part of the Property Protection Program. The City has total insured values of $4,966,306 scheduled for coverage under this program. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

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 CJPIA has an aggregate limit of $20 million.

Crime Insurance
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.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2023-24.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
75 Note 8 – Self Insurance Programs (Continued)
B. Workers’ Compensation
The City is exposed to various risks of loss related to its operation, including losses associated with errors and omissions, injuries to employees and members of the public. The City uses the General and Transit Funds to account for and finance risks for workers’ compensation. Excess insurance is provided by Municipal Insurance Cooperative JPA (“MIC”). This policy is designed to cover claims in excess of the City’s retention of $1,000,000 per occurrence, for Workers’ Compensation. Under this policy, the City recovers claims in excess of the selfinsured retention of $250,000 per occurrence, and provides workers’ compensation coverage up to $750,000 per occurrence.

The claims and judgements liability reported in the General and Transit Funds are based on the requirements of Governmental Accounting Standards Board Statements Nos. 10 and 30, which requires that a liability for claims and judgements be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. As of June 30, 2024, claims and judgments payable, including estimated claims for incurred but not reported claims, amounted to $924,916 of which $485,260 represents the current portion.

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

Changes in the Workers’ Compensation claims and judgments payable amounts for the three years ended June 30, 2024 are as follows:

Current Year
Beginning of Fiscal Claims and Changes Balance at Fiscal Year Ended June 30, Year Liability in Estimates Claim Payments Year End 2022 $ 647,041 $ 519,181 $ (485,777) $ 680,445
2023 680,445 809,006 (512,893) 976,558
2024 976,558 463,046 (514,688) 924,916
Note 9 – Defined Benefit Pension Plans
A. General Information about the Pension Plan
Plan Description
The City contributes to the California Public Employees’ Retirement System (“CalPERS”), an agent multipleemployer defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of the CalPERS annual financial report may be obtained from https://www.calpers.ca.gov/page/forms-publications.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
76 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) 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. Below is the summary of the plans' provisions and benefits in effect at June 30, 2024, for which the City has contracted:

Classic PEPRA
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50 52
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.0% to 2.5% Required employee contribution rates 7.230% 7.750%
Required contribution during measurement period 11.350% 11.350% Miscellaneous
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits (total service across all CalPERS employers, and with certain other Retirement Systems with which CalPERS has reciprocity agreements). All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law.

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.

Employees Covered by Benefit Terms
At June 30, 2022, valuation date, the following employees were covered by the benefit terms:

Miscellaneous
Active employees 138
Transferred members 39
Terminated members 34
Retired Employees and Beneficiaries 233
Total 444
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
77 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) Contributions
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 CalPERS’ annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan's allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

B. Net Pension Liabilities
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2023, the total pension liability was determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase
Varies by Entry Age and Service
Entry Age Actuarial Cost Method

6.90%

2.30%
Derived using CalPERS’ Membership Data for all Funds.

Contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.30% thereafter
1The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 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 November 2021 that can be found on the CalPERS website.

Change of Assumption
There was no changes in assumptions in 2023.

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. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
78 Note 9 – Defined Benefit Pension Plans (Continued)
B. Net Pension Liabilities (Continued)
Long-term Expected Rate of Return (Continued)
The expected real rates of return by asset class are as follows:

Assumed
Asset Class1 Asset Allocation Real Return1,2
Global equity - Cap-weighted 30.00% 4.54
Global equity - Non-Cap-weighted 12.00% 3.84
Private equity 13.00% 7.28
Treasury 5.00% 0.27
Mortgage-backed Securities 5.00% 0.5
Investment Grade Corporates 10.00% 1.56
High yield 5.00% 2.27
Emerging Market Debt 5.00% 2.48
Private equity 5.00% 3.57
Real assets 15.00% 3.21
Leverage -5.00% (0.59)
100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management Study.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. 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 rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
79 Note 9 – Defined Benefit Pension Plans (Continued)
C. Changes in the Net Pension Liability
The following table shows the change in net pension liability over the measurement period:

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 (Valuation Date) $ 130,577,356 $ 117,306,271 $ 13,271,085 Changes Recognized for the Measurement Period:

Service Cost 2,054,622 - 2,054,622
Interest on the total pension liability 8,897,361 - 8,897,361 Changes of benefit terms 134,927 - 134,927
Difference between expected and actual experience 893,471 - 893,471 Contributions from the employer - 1,817,957 (1,817,957) Contributions from employees - 772,426 (772,426)
Net investment income - 6,969,578 (6,969,578)
Benefit payments, including refunds of employee
contributions (7,371,582) (7,371,582) -
Administrative expenses - (86,262) 86,262
Net Changes during July 1, 2022 to June 30, 2023 4,608,799 2,102,117 2,506,682 Balance at June 30, 2023 (Measurement Date) $ 135,186,155 $ 119,408,388 $ 15,777,767 Miscellaneous Plan
Increase (Decrease)
Sensitivity of the City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous Plan $ 15,777,767 32,874,126 $ 1,584,324 $ Plan's Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detail information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report and can be obtained from CalPERS’ website under Forms and Publications.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
80 Note 9 – Defined Benefit Pension Plans (Continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense in the amount of $4,623,052. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Contribution made after the measurement date 1,414,883 $ - $ Changes of assumptions 1,314,015 -
Difference between expected and actual experience 605,255 (669,352) Net difference between projected and actual earning
on pension plan investments 6,118,430 -
Total 9,452,583 $ (669,352) $
Miscellaneous Plan
The amounts above are net of outflows and inflows recognized in the 2022-2023 measurement period expense.

The expected average remaining service lifetime (“EARSL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk pool for the 2022-2023 measurement period is 3.1 years, which was obtained by dividing the total service years of 1,397 (the sum of remaining service lifetimes of the active employees) by 444 (the total number of participants:
active, inactive, and retired).

Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date in the amount of $1,414,883 will be recognized as a reduction of the net pension liability in the year ending June 30, 2025.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Deferred Outflows/
(Inflows)
Measurement of Resources
Period Miscellaneous
Ending June 30 Plan
2024 $ 2,190,137
2025 1,314,216
2026 3,674,464
2027 189,531
2028 -
Thereafter -
$ 7,368,348
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
81 Note 10 – Other Postemployment Benefits (“OPEB”) Plan A. General Information about the OPEB Plan
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 by Benefit Term
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, 2023 measurement date, the following participants were covered by the benefit terms:

Active employees 147
Retirees and beneficiaries 143
Inactive with deferred benefits 13
Total 303
Contributions
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 the year ending June 30, 2024, the City contributed $2,053,891 for current premiums.

B. Net OPEB Liability
The City's net OPEB liability is based on a roll-forward of the June 30, 2022 valuation with liabilities and assets measured as of June 30, 2023.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
82 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) B. Net OPEB Liability (Continued)
Actuarial Assumptions
The total OPEB liability as of June 30, 2023 measurement date was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Actuarial Assumptions:

Discount Rates
General Inflation
Salary Increases
Mortality
Mortality Improvement
Healthcare Cost Trend Rates

3.74% per annum as of June 30, 2023

3.65% per annum as of June 30, 2022

2.5% per annum

2.75% per annum, in aggregate
CalPERS 2000-2019 Experience Study
Scale MP-2021 Projection Scale
Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Non-Kaiser) - 7.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Kaiser) - 6.25% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Change in Assumptions
The discount rate was changed from 3.65% at June 30, 2022 to 3.74% at June 30, 2023 measurement date.

Discount Rate
The discount rate used to measure the total OPEB liability was 3.74%. The projection of cash flows used to determine the discount rate assumed that the City contribution 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 cover all future OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return.

Expected Long-Term Rates of Return
Target Allocation Expected Real
Asset Class PARS-Moderate Rate of Return
Global Equity 50% 4.56%
Fixed Income 45% 0.78%
Cash 5% (0.50%)
Total 100%
Assumed Long-term rate of inflation is 2.5%.

Long-term expected rate of return is 5.50%.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
83 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) C. Changes in the Net OPEB Liability
The following presents the changes in the net OPEB liability for the governmental activities’ Retiree Health Plan:

Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 $ 61,296,277 $ 3,355,655 $ 57,940,622 Changes recognized for the measurement period:

Service cost 2,198,169 - 2,198,169
Interest on the total OPEB liability 2,282,557 - 2,282,557 Changes of assumptions (834,174) - (834,174)
Contributions from the employer - 1,921,107 (1,921,107) Net investment income, net of administrative expense - 248,095 (248,095) Benefit payments, including refunds of employee
contributions (1,917,239) (1,917,239) -
Administrative expense - (12,416) 12,416
Net Changes during July 1, 2022 to June 30, 2023 1,729,313 239,547 1,489,766 Balance at June 30, 2023 (Measurement Date) $ 63,025,590 $ 3,595,202 $ 59,430,388 Increase (Decrease)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.74%) or one percentage point higher (4.74%) follows:

Discount Rate Current Discount Discount Rate
- 1% (2.74%) Rate (3.74%) + 1% (4.74%)
$ 59,430,388 69,709,368 $ 51,173,174 $
Plan's Net OPEB Liability/(Asset)
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than current healthcare cost trend rates follows:
1% Decrease Current Trend Rate 1% Increase
$ 49,842,590 $ 59,430,388 $ 71,625,708
Plan's Net OPEB Liability/(Asset)
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
84 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2024, the City recognized an OPEB expense of $2,081,529. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date $ 2,053,891 $ - Changes of assumptions 1,153,327 (4,332,616)
Difference between expected and actual experience - (1,910,060) Difference between projected and actual earnings
on plan investments 186,891 -
Total $ 3,394,109 $ (6,242,676)
OPEB Plan
Deferred outflows of resources related to OPEB resulting from City’s contributions subsequent to the measurement date in the amount of $2,053,891 will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2025.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Deferred Outflows
Fiscal Year /(Inflows)
Ending June 30 of Resources
2025 (1,245,728) $
2026 (1,697,539)
2017 (1,227,464)
2028 (684,508)
2029 (47,219)
Thereafter -
$ (4,902,458)
Note 11 – 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.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
85 Note 11 – 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.

Note 12 – Net Investment in Capital Assets
Net investment in capital assets at June 30, 2024 is reported as follows:

Governmental Business-Type
Activities Activities Transit CNG/LNG Water
Total capital assets, net 94,357,845 $ 17,679,317 $ 14,087,894 $ 2,812,837 $ 778,586 $ Capital related debt (8,532,652) - - - -
Net investment in capital assets 85,825,193 $ 17,679,317 $ 14,087,894 $ 2,812,837 $ 778,586 $ Enterprise Funds
Note 13 – Classification of Fund Balances
At June 30, 2024, fund balances are classified in the governmental funds as follows:

Nonmajor
Governmental
General Funds Total
Nonspendable:

Prepaid items and deposits 296,422 $ - $ 296,422 $
Land held for development 19,535,000 - 19,535,000
Total nonspendable 19,831,422 - 19,831,422
Restricted:

Community development projects - 2,165,838 2,165,838
Public safety - 207,977 207,977
Low and moderate housing - 2,197,365 2,197,365
Transportation - 511,968 511,968
Capital projects - 6,610,448 6,610,448
Debt service - 2,725 2,725
Pension 3,267,339 - 3,267,339
Total restricted 3,267,339 11,696,321 14,963,660
Committed:

Capital projects 26,739,477 3,145,778 29,885,255
Total committed 26,739,477 3,145,778 29,885,255
Unassigned 105,918,791 - 105,918,791
Total fund balances 155,757,029 $ 14,842,099 $ 170,599,128 $ City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
86 Note 14 – 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.

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 $1,285,771 to that fuel distributor.

Note 15 – Commitments and Contingencies
Under the terms of federal, county, and state grants, periodic audits are required and certain costs may be questioned as not appropriate expenditures under the terms of the grants. Such audits could lead to reimbursements to the grantor agencies. If expenditures were disallowed, the City believes such disallowances, if any, would be immaterial.

The City is a defendant in a number of lawsuits that have arisen in the normal course of business. While substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty. In the opinion of the City Attorney, these actions when finally adjudicated will not have material adverse effect on the financial position of the City.

Note 16 – Individual Fund Disclosure
Funds with deficit fund balances at June 30, 2024 are as follows:

Funds Amount
Proprietary Funds:

Transit $ (10,698,819)
The City plans to eliminate the deficit fund balances with future grant revenues and by utilizing surplus revenue from the City’s CNG/LNG station.

The following funds exceeded appropriation amounts for the year ended June 30, 2024:

Final Total
Funds Appropriations Expenditures Excess
General Fund $ 75,660,326 $ 77,849,790 $ (2,189,464)
Nonmajor Governmental Funds:

Local Jurisdiction Assistance Program Special Revenue Fund - 33,391 (33,391) Supplemental Law Enforcement Special Revenue Fund 100,000 185,710 (85,710) Housing Special Revenue Fund - 196,353 (196,353)
Stormwater Management Special Revenue Fund 674,350 831,391 (157,041) Community Center Debt Service Fund 779,863 780,391 (528) City Capital Projects Fund 352,962 609,755 (256,793)
City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
87 Note 17 – Changes within the Financial Reporting Entity and Error Corrections During fiscal year 2024, Governmental and Business-Type Funds had changes within the financial reporting entity and error corrections of beginning net position and fund net position as follows:

June 30, 2023 Changes Within the June 30, 2023
As Previously Reported Financial Reporting Entity Error Corrections As Restated Government-Wide
Governmental Activities $ 154,761,102 $ - $ 884,245 $ 155,645,347 Business-Type Activities (16,198) - 452,674 436,476
Total primary government $ 154,744,904 $ - $ 1,336,919 $ 156,081,823 Governmental Funds:

Major Funds:

General Fund $ 110,866,778 $ 25,818,962 $ 1,760,780 $ 138,446,520 Measure AA Special Revenue Fund 25,818,962 (25,818,962) - - Nonmajor Funds 14,501,187 - (11,046) 14,490,141
Total Governmental Funds $ 151,186,927 $ - $ 1,749,734 $ 152,936,661 Proprietary Funds:

Major Funds:

Transit Fund $ (6,557,760) $ - $ (111,262) $ (6,669,022) CNG/LNG Fund 4,044,979 - - 4,044,979
Water Fund 2,496,583 - 563,936 3,060,519
Total Proprietary Funds $ (16,198) $ - $ 452,674 $ 436,476 Fiduciary Funds:

Private Purpse Trust Funds:

Redevelopment Property Tax Trust Fund $ 17,596,500 $ - $ - $ 17,596,500 Successor Agency Trust Fund 1,923,334 - (9,261,299) (7,337,965) Total Fiduciary Funds $ 19,519,834 $ - $ (9,261,299) $ 10,258,535 Governmental Activities are restated to correct capital assets by ($42,486), lease liabilities by $42,679, and claims payable by $865,296.

Business-Type Activities are restated to correct loan and lease receivables by $563,936 and claims payable by ($111,262).

Governmental Funds are restated as follows:
 The Measure AA Special Revenue Fund was combined with the General Fund by $25,818,962 and is no longer reported as a separate fund.
 The General Fund is restated to report settlement payment by ($995,000), loans receivable from Successor Agency by $2,557,410, and lease receivable by $198,370.  Nonmajor Funds are restated to correct return of Local Jurisdiction Assistance Program Special Revenue Fund revenue to Agency by ($86,950) and loans receivable principal and interest related to first-time homebuyer loans by $75,904.

City of Commerce
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
88 Note 17 – Changes within the Financial Reporting Entity and Error Corrections (Continued) Proprietary Funds are restated as follows:
 The Transit Enterprise Fund is restated to correct claims payable by ($111,262).  The Water Enterprise Fund is restated to correct loans receivable from Successor Agency by $457,285, and lease receivable by $106,651.

Fiduciary Funds are restated as follows:
 The Successor Agency Fund is restated to correct loans payable to City by ($3,014,695), lease receivable by $85,742, settlement payable by ($572,030), and pollution redemption obligation by ($5,760,316).

Note 18 – Subsequent Event
In September 2024, the State of California enacted SB 549 into law, granting federally recognized tribal governments the legal standing to file lawsuits against commercial cardrooms on alleged violations of exclusive gaming rights. The City receives a large portion of its General Fund revenues from cardroom operations. As of the date of this report, the long-term impact of this legislation is unknown. However, a court declaration in favor of the tribal governments would have adverse impact on City revenues. The City management is closely monitoring ongoing developments and is evaluating contingency plans and measures, as needed.

REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
89 This page intentionally left blank.
90 Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes 44,050,278 $ 44,050,278 $ 48,530,176 $ 4,479,898 $ Casino license tax 29,370,000 29,370,000 31,436,082 2,066,082 Licenses and permits 5,433,950 5,433,950 5,954,753 520,803 Intergovernmental 488,300 488,300 1,214,421 726,121
Charges for services 1,872,797 1,879,017 2,562,317 683,300 Activity fees 188,502 229,287 527,460 298,173
Fines, forfeitures, and penalties 1,308,200 1,308,200 1,438,638 130,438 Use of money and property 1,000,000 1,000,000 2,592,057 1,592,057 Miscellaneous 300,603 300,603 914,980 614,377
Total revenues 84,059,635 84,012,630 95,170,884 11,111,249 EXPENDITURES:

Current:

General government 13,866,883 13,906,883 14,880,371 (973,488) Community development 4,119,749 4,119,749 4,741,253 (621,504) Public safety 27,014,991 27,030,991 27,635,843 (604,852) Public works 15,465,845 12,217,409 10,485,633 1,731,776 Library 3,052,740 3,125,832 3,482,413 (356,581)
Parks, recreation and culture 6,258,675 6,367,382 8,754,461 (2,387,079) Capital outlay 14,192,580 8,892,080 7,601,755 1,290,325 Debt service:

Principal retirement - - 249,446 (249,446)
Interest and fiscal charges - - 18,615 (18,615)
Total expenditures 75,660,326 83,971,463 77,849,790 (2,189,464)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 8,399,309 41,167 17,321,094 8,921,785 OTHER FINANCING SOURCES (USES):

Transfers in 800,000 800,000 505,589 (294,411)
Transfers out (3,645,000) (3,645,000) (1,942,572) 1,702,428 Issuance of lease liabilities - - 1,140,385 1,140,385
Issuance of subscription liabilities - - 286,013 286,013 Total other financing sources (uses) (2,845,000) (2,845,000) (10,585) 2,834,415 NET CHANGE IN FUND BALANCE $ 5,554,309 (2,803,833) $ 17,310,509 11,756,200 $ FUND BALANCE:

Beginning of year, as previously
reported as of June 30, 2023 110,866,778
Changes within the finacial reporting entity
(reclass to General Fund) 25,818,962
Error corrections 1,760,780
Beginning of year, as restated (Note 17) 138,446,520
End of Year $ 155,757,029
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - General Fund
City of Commerce
For the Year Ended June 30, 2024
91 This page intentionally left blank.
92 Budget and Budgetary Accounting
The City prepares its budgets on the basis of estimated revenues and expenditures and, accordingly, the budget amounts included in the accompanying financial statements are presented on a basis substantially consistent with generally accepted accounting principles. Encumbrance accounting is utilized during the fiscal year, whereby purchase orders, contracts and other commitments are recorded in order to control appropriations. However, at fiscal year end, all appropriations lapse. Accordingly, encumbrances are cancelled and generally are re-appropriated as part of the following year’s budget. Encumbrances are not included in reported expenditures.

Annual budgets are adopted for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds. In fiscal year 2023-2024, no budget was adopted for the Local Jurisdiction Special Revenue Fund, Air Quality Management District Special Revenue Fund, Housing Special Revenue Fund, and Art in Public Places Special Revenue Fund. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.

City of Commerce
Required Supplementary Information
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2024
The City of Commerce, a general law city in the State of California, does not legally require a budget. 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. Budgetary controls are maintained at the fund 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. 93 Measurement period 2013-14 2014-15 2015-16 2016-17 2017-18 Total pension liability
Service cost 1,460,709 $ 1,550,187 $ 1,662,850 $ 1,989,007 $ 2,000,050 $ Interest 6,545,470 6,869,505 7,177,076 7,385,664 7,644,908 Changes in benefit terms - - - - -
Changes of assumptions - (1,650,414) - 6,078,010 (762,647) Differences between expected and actual experience - 1,062,228 512,205 (490,554) 299,589 Benefit payments, including
refunds of employee contributions (4,938,877) (4,937,517) (4,997,904) (5,226,953) (5,355,765) Net change in total pension liability 2,893,989 3,067,302 4,354,227 9,735,174 3,826,135 Total pension liability - beginning 92,079,312 89,012,010 94,973,301 99,327,528 109,062,702 Total pension liability - ending (a) $ 94,973,301 92,079,312 $ 99,327,528 $ 109,062,702 $ 112,888,837 $ Pension fiduciary net position
Contributions - employer 1,435,188 $ 1,515,782 $ 1,895,010 $ 2,034,184 $ 2,265,421 $ Contributions - employee 694,273 720,100 788,933 756,795 847,735 Net investment income 11,658,199 1,670,372 364,679 7,980,374 6,641,333 Benefit payments, including
refunds of employee contributions (4,938,877) (4,937,517) (4,997,904) (5,226,953) (5,355,765) Administrative expense (83,334) (84,670) (45,842) (108,109) (122,573) Other miscellaneous income/ (expense)1 - - - - (232,961) Net change in plan fiduciary net position (1,115,933) 8,765,449 (1,995,124) 5,436,291 4,043,190 Plan fiduciary net position - beginning
2 76,334,230 67,568,781 75,218,297 73,223,173 78,659,464 Plan fiduciary net position - ending (b) $ 75,218,297 76,334,230 $ 73,223,173 $ 78,659,464 $ 82,702,654 $ Plan net pension liability - ending (a) - (b) $ 19,755,004 15,745,082 $ 26,104,355 $ 30,403,238 $ 30,186,183 $ Plan fiduciary net position as a percentage 82.90% 79.20% 73.72% 72.12% 73.26% of the total pension liability
Covered payroll
3 $ 10,161,824 9,389,402 $ 10,861,205 $ 11,673,945 $ 11,973,479 $ Plan net pension liability as a percentage
of covered payroll 167.69% 194.40% 240.34% 260.44% 252.11% Notes to Schedule:

City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios For the Year Ended June 30, 2024
2 Includes any beginning of year adjustment.

Last Ten Fiscal Years
3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended June 30, 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17.

Changes of Assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from

7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows.

Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp ound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.

Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 1 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, 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).

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.
94 Measurement period 2018-19 2019-2020 2020-2021 2021-2022 2022-2023 Total pension liability
Service cost 2,088,263 $ 1,971,408 $ 1,956,630 $ 1,927,809 $ 2,054,622 $ Interest 8,029,232 8,283,613 8,519,425 8,595,249 8,897,361 Changes in benefit terms - - - - 134,927
Changes of assumptions - - - 3,703,131 -
Differences between expected and actual experience 1,265,886 (470,235) (381,995) (1,759,700) 893,471 Benefit payments, including
refunds of employee contributions (5,803,808) (6,258,294) (6,876,834) (7,101,261) (7,371,582) Net change in total pension liability 3,526,492 5,579,573 3,217,226 5,365,228 4,608,799 Total pension liability - beginning 118,468,410 112,888,837 121,994,902 125,212,128 130,577,356 Total pension liability - ending (a) $ 121,994,902 118,468,410 $ 125,212,128 $ 130,577,356 $ 135,186,155 $ Pension fiduciary net position
Contributions - employer 2,665,962 $ 3,010,008 $ 3,280,476 $ 28,816,820 $ 1,817,957 $ Contributions - employee 989,676 826,978 756,081 729,151 772,426 Net investment income 5,407,865 4,257,013 19,560,972 (9,324,793) 6,969,578 Benefit payments, including
refunds of employee contributions (5,803,808) (6,258,294) (6,876,834) (7,101,261) (7,371,582) Administrative expense (59,018) (121,103) (87,525) (64,942) (86,262) Other miscellaneous income/ (expense)1 - 193 - - -
Net change in plan fiduciary net position 1,714,602 3,200,870 16,633,170 13,054,975 2,102,117 Plan fiduciary net position - beginning
2 85,903,524 82,702,654 87,618,126 104,251,296 117,306,271 Plan fiduciary net position - ending (b) $ 87,618,126 85,903,524 $ 104,251,296 $ 117,306,271 $ 119,408,388 $ Plan net pension liability - ending (a) - (b) $ 34,376,776 32,564,886 $ 20,960,832 $ 13,271,085 $ 15,777,767 $ Plan fiduciary net position as a percentage 72.51% 71.82% 83.26% 89.84% 88.33% of the total pension liability
Covered payroll
3 $ 11,854,528 12,462,034 $ 11,937,948 $ 10,627,391 $ 11,094,073 $ Plan net pension liability as a percentage
of covered payroll 261.31% 289.99% 175.58% 124.88% 142.22% Notes to Schedule:

Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

Changes of Assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from

7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows.

Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp ound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.

City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 1 During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75. Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, 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). 2 Includes any beginning of year adjustment.
3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal years ended June 30, 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17.

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.
95 2014-15 2015-16 2016-17 2017-18 2018-19
Actuarially determined contribution 1,515,782 $ 1,895,010 $ 2,034,184 $ 2,265,421 $ 2,665,962 $ Contributions in relation to
the actuarially determined contribution1 (1,895,010) (1,435,188) (2,034,184) (2,265,421) (2,665,962) Contribution deficiency (excess) 80,594 $ - $ - $ - $ - $ Covered payroll2 $ 10,861,205 10,161,824 $ 11,673,945 $ 11,973,479 $ 12,462,034 $ Contributions as a percentage of covered payroll2 14.12% 17.45% 17.42% 18.92% 21.39% City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2024
2 Includes one year’s payroll growth using 2.80 percent growth assumption for fiscal year ended June 30, 2022 and 2023; 2.75 percent payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00 percent payroll growth assumption for fiscal years ended June 30, 2014-17.

California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan Last Ten Fiscal Years
1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. 96 2019-20 2020-21 2021-22 2022-23 2023-24
Actuarially determined contribution 3,010,008 $ 3,280,476 $ 3,587,818 $ 1,817,957 $ 1,414,883 $ Contributions in relation to
the actuarially determined contribution1 (3,280,476) (3,010,008) (28,816,820) (1,817,957) (1,414,883) Contribution deficiency (excess) - $ - $ (25,229,002) $ - $ - $ Covered payroll2 $ 11,937,948 11,854,528 $ 10,627,391 $ 11,094,073 $ 11,404,707 $ Contributions as a percentage of covered payroll2 25.39% 27.48% 271.16% 16.39% 12.41% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal Cost Method
Amortization method Level percentage of payroll
Asset valuation method Fair value
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.80%
Investment rate of return
Retirement age
Mortality
For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 2 Includes one year’s payroll growth using 2.80 percent growth assumption for fiscal year ended June 30, 2022 and 2023; 2.75 percent payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00 percent payroll growth assumption for fiscal years ended June 30, 2014-17.

City of Commerce
1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - Pensions (Continued)
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2020 funding valuation report.

7.00% net of pension plan investment and administrative expenses; includes Inflation.

The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015.

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. 97 Measurement period 2016-171 2017-18 2018-19 2019-20 2020-21 Total OPEB liability
Service cost 2,234,000 $ 2,300,649 $ 2,029,528 $ 2,529,281 $ 2,548,186 $ Interest 2,294,000 2,509,423 2,386,306 2,361,171 1,834,245 Changes of assumptions (3,068,000) (6,043,482) 5,977,722 (1,405,720) 922,287 Differences between expected and actual experience - (4,522,194) - (2,772,589) - Benefit payments, including refunds (1,666,000) (1,698,028) (1,676,840) (1,721,539) (1,741,680) Net change in total OPEB liability (7,453,632) (206,000) 8,716,716 (1,009,396) 3,563,038 Total OPEB liability - beginning of the year 61,758,000 61,964,000 54,304,368 63,021,084 62,011,688 Total OPEB liability - end of the year (a) $ 54,304,368 61,758,000 $ 63,021,084 $ 62,011,688 $ 65,574,726 $ OPEB fiduciary net position
Contributions - employer 2,166,402 $ 1,698,028 $ 1,679,352 $ 1,724,623 $ 1,744,592 $ Contributions - employee 225,000 172,173 - - -
Net investment income - - 168,198 103,963 705,834
Benefit payments, including refunds (1,666,000) (1,698,028) (1,676,840) (1,721,539) (1,741,680) Administrative expense (6,000) (7,181) (7,348) (10,844) (11,713) Net change in plan fiduciary net position 164,992 719,402 163,362 96,203 697,033 Plan fiduciary net position - beginning of year 2,754,402 2,035,000 2,919,394 3,082,756 3,178,959 Plan fiduciary net position - end of year (b) $ 2,919,394 2,754,402 $ 3,082,756 $ 3,178,959 $ 3,875,992 $ Plan net OPEB liability - end of year (a) - (b) $ 51,384,974 59,003,598 $ 59,938,328 $ 58,832,729 $ 61,698,734 $ Plan fiduciary net position as a percentage
of the total OPEB liability 4.46% 5.38% 4.89% 5.13% 5.91% Covered employee payroll $ 13,074,368 13,175,000 $ 13,377,980 $ 13,641,362 $ 13,267,936 $ Plan net OPEB liability as a percentage of
covered employee payroll 447.85% 393.02% 448.04% 431.28% 465.02% Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2023.

Changes of assumptions: In 2023, the accounting discount rate increase from 3.65 percent to 3.74 percent. In 2022, the accounting discount rate increase from 2.79 percent to 3.65 percent. In addition, the demographic assumptions and the inflation rate assumption were changed in accordance with the 2002-2019 CalPERS Experience Study and Review of Actuarial Assumptions. In 2021, the accounting discount rate increased from 2.88 percent to 2.79 percent. In 2020, the accounting discount rate decreased from 3.65 percent to 2.88 percent. In 2019, the accounting discount rate decreased from 4.30 percent to 3.65 percent. In 2018, the accounting discount rate increased from 3.97 percent to 4.30 percent. 1 Historical information is presented for measurement periods after GASB 75 implementation in 2016-17. Additional years' information will be displayed as it becomes available.

City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios For the Year Ended June 30, 2024
Last Ten Fiscal Years
Other Postemployment Benefits ("OPEB")
98 Measurement period 2021-22 2022-23
Total OPEB liability
Service cost $ 2,198,169 2,681,620 $
Interest 2,282,557 1,877,929
Changes of assumptions (834,174) (5,168,431)
Differences between expected and actual experience (1,775,473) - Benefit payments, including refunds (1,917,239) (1,894,094) Net change in total OPEB liability 1,729,313 (4,278,449) Total OPEB liability - beginning of the year 61,296,277 65,574,726 Total OPEB liability - end of the year (a) $ 63,025,590 61,296,277 $ OPEB fiduciary net position
Contributions - employer $ 1,921,107 1,897,101 $
Contributions - employee - -
Net investment income 248,095 (510,825)
Benefit payments, including refunds (1,917,239) (1,894,094) Administrative expense (12,416) (12,519)
Net change in plan fiduciary net position 239,547 (520,337) Plan fiduciary net position - beginning of year 3,355,655 3,875,992 Plan fiduciary net position - end of year (b) $ 3,595,202 3,355,655 $ Plan net OPEB liability - end of year (a) - (b) $ 59,430,388 57,940,622 $ Plan fiduciary net position as a percentage
of the total OPEB liability 5.47% 5.70%
Covered employee payroll $ 12,958,676 13,267,936 $
Plan net OPEB liability as a percentage of
covered employee payroll 436.70% 458.61%
Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2023.

Other Postemployment Benefits ("OPEB")
Changes of assumptions: In 2023, the accounting discount rate increase from 3.65 percent to 3.74 percent. In 2022, the accounting discount rate increase from 2.79 percent to 3.65 percent. In addition, the demographic assumptions and the inflation rate assumption were changed in accordance with the 2002-2019 CalPERS Experience Study and Review of Actuarial Assumptions. In 2021, the accounting discount rate increased from 2.88 percent to 2.79 percent. In 2020, the accounting discount rate decreased from 3.65 percent to 2.88 percent. In 2019, the accounting discount rate decreased from 4.30 percent to 3.65 percent. In 2018, the accounting discount rate increased from 3.97 percent to 4.30 percent.

City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
99 2016-171 2017-18 2018-19 2019-20 2020-21
Actuarially determined contribution 4,715,000 $ 4,975,000 $ 3,805,000 $ 4,051,000 $ 3,870,000 $ Contributions in relation to
the actuarially determined contribution (2,166,402) (1,698,000) (1,679,352) (1,724,623) (1,744,592) Contribution deficiency (excess) 2,548,598 $ 3,277,000 $ 2,125,648 $ 2,326,377 $ 2,125,408 $ Covered employee payroll 13,175,000 $ 13,074,000 $ 13,377,980 $ 13,641,362 $ 13,267,936 $ Contributions as a percentage of covered employee payroll 16.44% 12.99% 12.55% 12.64% 13.15% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal, Level % of pay
Amortization method Level % of pay
Amortization period 19-year fixed period for 2023/24
Asset valuation method
Discount rate
General inflation 2.50%
Medical trend
Mortality CalPERS 2000-2019 Experience Study.

Mortality improvement
Other Postemployment Benefits ("OPEB")
City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits For the Year Ended June 30, 2024
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Non-Kaiser) - 7.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Kaiser) - 6.25% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Mortality projected fully generational with Scale MP-2021.

5.50%
Investment gains and losses spread over 5-year rolling period The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2023-24 were derived from the June 30, 2022 valuation report.
100
2021-22 2022-23 2023-24
Actuarially determined contribution 4,074,000 $ 4,443,000 $ 4,715,000 $ Contributions in relation to
the actuarially determined contribution (1,897,101) (1,921,107) (2,053,891) Contribution deficiency (excess) 2,176,899 $ 2,521,893 $ 2,661,109 $ Covered employee payroll 13,267,936 $ 12,958,676 $ 15,020,484 $ Contributions as a percentage of covered employee payroll 14.30% 14.82% 13.67% Other Postemployment Benefits ("OPEB")
City of Commerce
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
101
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102

SUPPLEMENTARY INFORMATION
103
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104

GENERAL FUND
General Fund:

The General Fund is the primary fund used to account for and report all financial resources not accounted for and reported in another fund.

General Operating Fund – The account for primary operating revenues and expenditure of the City not legally restricted as to use. It supports the general operations and administrative functions of the organization.

Measure AA General Fund – To account for revenues collected through a sales tax to be used for capital improvement purposes in accordance with Measure AA requirements.
105
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106
General Measure AA
Fund Fund Total
ASSETS
Cash and investments 92,799,393 $ 27,063,815 $ 119,863,208 $ Restricted cash and investment 3,267,339 - 3,267,339
Receivables:

Accounts - 4,211,071 4,211,071
Interest - 260,085 260,085
Leases - 1,207,549 1,207,549
Due from other governments 5,090,161 1,956,552 7,046,713 Due from other funds 6,861,214 - 6,861,214
Due from Successor Agency 2,557,410 - 2,557,410
Prepaid items and deposits 296,422 - 296,422
Land held for development 19,535,000 - 19,535,000
Total assets $ 29,020,367 136,085,644 $ 165,106,011 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 4,891,917 $ 2,117,410 $ 7,009,327 $
Salaries and benefits payable 641,274 - 641,274
Deposits payable - 725,535 725,535
Total liabilities 2,117,410 6,258,726 8,376,136
Deferred inflows of resources:

Unavailable revenue 163,480 - 163,480
Lease related 809,366 - 809,366
Total deferred inflows of resources 163,480 809,366 972,846 Fund balances:

Nonspendable - 19,831,422 19,831,422
Restricted - 3,267,339 3,267,339
Committed 26,739,477 26,739,477 -
Unassigned - 105,918,791 105,918,791
Total fund balances 26,739,477 129,017,552 155,757,029
Total liabilities, deferred inflows of
resources, and fund balances $ 29,020,367 136,085,644 $ 165,106,011 $ City of Commerce
Combining Balance Sheet
General Fund
June 30, 2024
107
General Measure AA
Fund Fund Eliminations Total
REVENUES:

Taxes 38,788,773 $ 9,741,403 $ - $ 48,530,176 $
Casino license tax 31,436,082 - - 31,436,082
Licenses and permits 5,954,753 - - 5,954,753
Intergovernmental 320,800 893,621 - 1,214,421
Charges for services 2,562,317 - - 2,562,317
Activity fees 527,460 - - 527,460
Fines, forfeitures, and penalties 1,438,638 - - 1,438,638 Use of money and property 2,438,476 153,581 - 2,592,057 Miscellaneous 828,227 86,753 - 914,980
Total revenues 10,875,358 84,295,526 - 95,170,884
EXPENDITURES:

Current:

General government 14,880,371 - - 14,880,371
Community development 4,741,253 - - 4,741,253
Public safety 27,635,843 - - 27,635,843
Public works 7,181,132 3,304,501 - 10,485,633
Library 3,482,413 - - 3,482,413
Parks, recreation and culture 8,754,461 - - 8,754,461
Capital outlay 1,290,049 6,311,706 - 7,601,755
Debt service:

Principal retirement 186,633 62,813 - 249,446
Interest and fiscal charges 14,428 4,187 - 18,615
Total expenditures 9,683,207 68,166,583 - 77,849,790

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,192,151 16,128,943 - 17,321,094
OTHER FINANCING SOURCES (USES):

Transfers in 1,014,054 - (508,465) 505,589
Transfers out (1,942,572) (508,465) 508,465 (1,942,572) Issuance of lease liabilities 1,140,385 - - 1,140,385
Issuance of subscription liabilities 49,184 236,829 - 286,013 Total other financing sources (uses) (271,636) 261,051 - (10,585) NET CHANGES IN FUND BALANCES 920,515 16,389,994 - 17,310,509 FUND BALANCES:

Beginning of year, as previously
reported as of June 30, 2023 110,866,778 - - 110,866,778 Changes within the finacial reporting entity
(reclass to General Fund) - 25,818,962 - 25,818,962
Error corrections 1,760,780 - - 1,760,780
Beginning of year, as restated (Note 17) 112,627,558 25,818,962 - 138,446,520 End of year $ 26,739,477 129,017,552 $ - $ 155,757,029 $ City of Commerce
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances General Fund
For the Year Ended June 30, 2024
108
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes 35,550,278 $ 35,550,278 $ 38,788,773 $ 3,238,495 $ Casino license tax 29,370,000 29,370,000 31,436,082 2,066,082 Licenses and permits 5,433,950 5,433,950 5,954,753 520,803 Intergovernmental 488,300 488,300 320,800 (167,500)
Charges for services 1,872,797 1,879,017 2,562,317 683,300 Activity fees 188,502 229,287 527,460 298,173
Fines, forfeitures, and penalties 1,308,200 1,308,200 1,438,638 130,438 Use of money and property 1,000,000 1,000,000 2,438,476 1,438,476 Miscellaneous 300,603 300,603 828,227 527,624
Total revenues 75,559,635 75,512,630 84,295,526 8,735,891 EXPENDITURES:

Current:

General government 13,866,883 13,906,883 14,880,371 (973,488) Community development 4,119,749 4,119,749 4,741,253 (621,504) Public safety 27,014,991 27,030,991 27,635,843 (604,852) Public works 6,004,045 5,949,411 7,181,132 (1,231,721)
Library 3,052,740 3,125,832 3,482,413 (356,581)
Parks, recreation and culture 6,258,675 6,367,382 8,754,461 (2,387,079) Capital outlay - - 1,290,049 (1,290,049)
Debt service:

Principal retirement - - 186,633 (186,633)
Interest and fiscal charges - - 14,428 (14,428)
Total expenditures 60,500,248 60,317,083 68,166,583 (7,666,335)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 15,059,387 15,195,547 16,128,943 1,069,556 OTHER FINANCING SOURCES (USES):

Transfers in 800,000 800,000 1,014,054 214,054
Transfers out (3,645,000) (3,645,000) (1,942,572) 1,702,428 Issuance of lease liabilities - - 1,140,385 1,140,385
Issuance of subscription liabilities - - 49,184 49,184
Total other financing sources (uses) (2,845,000) (2,845,000) 261,051 3,106,051 NET CHANGE IN FUND BALANCE $ 12,214,387 12,350,547 $ 16,389,994 4,175,607 $ FUND BALANCE:

Beginning of year, as previously
reported as of June 30, 2023 110,866,778
Error corrections 1,760,780
Beginning of year, as restated (Note 17) 112,627,558
End of Year $ 129,017,552
City of Commerce
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - General Operating Fund
For the Year Ended June 30, 2024
109
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes 8,500,000 $ 8,500,000 $ 9,741,403 $ 1,241,403 $
Intergovernmental - - 893,621 893,621
Use of money and property - - 153,581 153,581
Miscellaneous - - 86,753 86,753
Total revenues 8,500,000 8,500,000 10,875,358 2,375,358 EXPENDITURES:

Current:

Public works 9,461,800 6,267,998 3,304,501 2,963,497
Capital outlay 14,192,580 8,892,080 6,311,706 2,580,374 Debt service:

Principal retirement - - 62,813 (62,813)
Interest and fiscal charges - - 4,187 (4,187)
Total expenditures 15,160,078 23,654,380 9,683,207 5,476,871

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (6,660,078) (15,154,380) 1,192,151 7,852,229 OTHER FINANCING SOURCES (USES):

Transfers out - - (508,465) (508,465)
Issuance of subscription liabilities - - 236,829 236,829 Total other financing sources (uses) - - (271,636) (271,636) NET CHANGE IN FUND BALANCE $ (6,660,078) (15,154,380) $ 920,515 7,580,593 $ FUND BALANCE:

Beginning of year, as previously
reported as of June 30, 2023 -
Changes within the finacial reporting entity
(reclass to General Fund) 25,818,962
Beginning of year, as restated (Note 17) 25,818,962
End of Year $ 26,739,477
City of Commerce
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - Measure AA General Fund For the Year Ended June 30, 2024
110
Pension Obligation Bond - To account for the payment of principal and interest related to the 2021 pension obligation bond issue.

General City Capital Projects - 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 City.

Local Jurisdiction Assistance Program - To account for grant funding from the State for local jurisdictions with the goal of transitioning provisional cannabis licenses into annual licenses in order to meet the requirements of the California Environmental Quality Act.

Community Benefits - 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 - To account for the revenues and expenditures associated with stormwater management.

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

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

Community Center - To account for the payment of principal and interest on the City’s general debt issuances.

Nonmajor Debt Service Funds:

The Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest.

Nonmajor Capital Projects Funds:

The Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other assets.

NONMAJOR

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

Supplemental Law Enforcement - 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.

State Gas Tax - 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.

Air Quality Management District - 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.

Nonmajor Special Revenue Funds:

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. 111
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112
Pension General City
Special Revenue Community Obligation Capital Projects
Funds Center Bonds Fund Total
ASSETS
Cash and investments 5,774,175 $ - $ - $ 895,149 $ 6,669,324 $ Cash and investments with fiscal agents - 2,725 - 5,143,903 5,146,628 Receivables:

Accounts 57,250 - - - 57,250
Interest 285,423 - - - 285,423
Loans 207,783 - - - 207,783
Due from other governments 141,993 - - 1,434,495 1,576,488 Property held for resale 726,000 - - 2,439,680 3,165,680 Total assets $ 2,725 7,192,624 $ - $ 9,913,227 $ 17,108,576 $ Liabilities:

Accounts payable 426,506 $ - $ - $ 189,051 $ 615,557 $
Salaries and benefits payable 1,706 - - - 1,706
Due to other funds 56,903 - - - 56,903
Unearned revenue 157,816 - - - 157,816
Total liabilities - 642,931 - 189,051 831,982
Deferred Inflows of Resources:

Unavailable revenue - - - 1,434,495 1,434,495
Total deferred inflows of resources - - - 1,434,495 1,434,495 Fund Balances:

Restricted:

Community development projects 2,165,838 - - - 2,165,838 Public safety 207,977 - - - 207,977
Low and moderate housing 2,197,365 - - - 2,197,365
Transportation 511,968 - - - 511,968
Capital projects 1,466,545 - - 5,143,903 6,610,448
Debt service - 2,725 - - 2,725
Committed:

Capital projects - - - 3,145,778 3,145,778
Total fund balances 2,725 6,549,693 - 8,289,681 14,842,099 Total liabilities, deferred inflows of
resources, and fund balances $ 2,725 7,192,624 $ - $ 9,913,227 $ 17,108,576 $ City of Commerce
Combining Balance Sheet

RESOURCES AND FUND BALANCES
Debt Service Funds

LIABILITIES, DEFERRED INFLOWS OF
Nonmajor Governmental Funds
June 30, 2024
113
Pension General City
Special Revenue Community Obligation Capital Projects
Funds Center Bonds Fund Total
REVENUES:

Licenses and permits 619,985 $ - $ - $ - $ 619,985 $
Intergovernmental 1,842,595 - - 49,590 1,892,185
Use of money and property 251,621 3,433 - 5,080 260,134 Total revenues 3,433 2,714,201 - 54,670 2,772,304
EXPENDITURES:

Current:

Community development 394,174 - - - 394,174
Public safety 185,710 - - - 185,710
Public works 831,391 - - 608,071 1,439,462
Parks, recreation and culture 435,661 - - - 435,661
Capital outlay - - - 1,684 1,684
Debt service:

Principal retirement - 450,000 - - 450,000
Interest and fiscal charges - 330,391 620,247 - 950,638 Total expenditures 780,391 1,846,936 620,247 609,755 3,857,329

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (776,958) 867,265 (620,247) (555,085) (1,085,025) OTHER FINANCING SOURCES (USES):

Transfers in 128,570 776,956 620,247 416,799 1,942,572
Transfers out (505,589) - - - (505,589)
Total other financing sources (uses) 776,956 (377,019) 620,247 416,799 1,436,983 NET CHANGES IN FUND BALANCES (2) 490,246 - (138,286) 351,958 FUND BALANCES:

Beginning of year, as previously
reported as of June 30, 2023 6,070,493 2,727 - 8,427,967 14,501,187 Error corrections (11,046) - - - (11,046)
Beginning of year, as restated (Note 17) 6,059,447 2,727 - 8,427,967 14,490,141 End of year $ 2,725 6,549,693 $ - $ 8,289,681 $ 14,842,099 $ Debt Service Funds
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
City of Commerce
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 114
Local Jurisdiction Community
Assistance Supplement Law Development
Program Enforcement State Gas Tax Block Grant
ASSETS
Cash and investments 333,120 $ 207,977 $ 378,208 $ - $
Receivables:

Accounts - - - -
Interest - - - -
Loans - - - -
Due from other governments - - 84,872 57,121
Property held for resale - - - -
Total assets $ 207,977 333,120 $ 463,080 $ 57,121 $
Liabilities:

Accounts payable 333,056 $ - $ - $ - $
Salaries and benefits payable 64 - - 218
Due to other funds - - - 56,903
Unearned revenue - - - -
Total liabilities - 333,120 - 57,121
Fund Balances:

Restricted:

Community development projects - - - -
Public safety - 207,977 - -
Low and moderate housing - - - -
Transportation - - 463,080 -
Capital projects - - - -
Total fund balances 207,977 - 463,080 -
Total liabilities and fund balances $ 207,977 333,120 $ 463,080 $ 57,121 $ (Continued)
City of Commerce
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024

LIABILITIES AND FUND BALANCES
Special Revenue Funds
115
Air Quality
Management Art in Community
District Housing Public Places Benefits
ASSETS
Cash and investments 48,888 $ 979,304 $ 1,845,185 $ 274,882 $ Receivables:

Accounts - - - 57,250
Interest - 285,423 - -
Loans - 207,783 - -
Due from other governments - - - -
Property held for resale - 726,000 - -
Total assets $ 2,198,510 48,888 $ 1,845,185 $ 332,132 $ Liabilities:

Accounts payable - $ 1,145 $ - $ 11,479 $
Salaries and benefits payable - - - -
Due to other funds - - - -
Unearned revenue - - - -
Total liabilities 1,145 - - 11,479
Fund Balances:

Restricted:

Community development projects - - 1,845,185 320,653
Public safety - - - -
Low and moderate housing - 2,197,365 - -
Transportation 48,888 - - -
Capital projects - - - -
Total fund balances 2,197,365 48,888 1,845,185 320,653
Total liabilities and fund balances $ 2,198,510 48,888 $ 1,845,185 $ 332,132 $ (Continued)

LIABILITIES AND FUND BALANCES
City of Commerce
Combining Balance Sheet (Continued)
Nonmajor Special Revenue Funds
June 30, 2024
Special Revenue Funds
116
Special
Revenue Funds
Stormwater Total Special
Management Revenue Funds
ASSETS
Cash and investments $ 5,774,175 1,706,611 $
Receivables:

Accounts 57,250 -
Interest 285,423 -
Loans 207,783 -
Due from other governments 141,993 -
Property held for resale 726,000 -
Total assets $ 7,192,624 1,706,611 $
Liabilities:

Accounts payable $ 426,506 80,826 $
Salaries and benefits payable 1,706 1,424
Due to other funds 56,903 -
Unearned revenue 157,816 157,816
Total liabilities 642,931 240,066
Fund Balances:

Restricted:

Community development projects 2,165,838 -
Public safety 207,977 -
Low and moderate housing 2,197,365 -
Transportation 511,968 -
Capital projects 1,466,545 1,466,545
Total fund balances 6,549,693 1,466,545
Total liabilities and fund balances $ 7,192,624 1,706,611 $ (Concluded)

LIABILITIES AND FUND BALANCES
City of Commerce
Combining Balance Sheet (Continued)
Nonmajor Special Revenue Funds
June 30, 2024
117
Local Jurisdiction Community
Assistance Supplement Law Development
Program Enforcement State Gas Tax Block Grant
REVENUES:

Licenses and permits - $ - $ - $ - $
Intergovernmental - 186,159 659,238 156,666
Use of money and property - 1,180 2,147 -
Total revenues 187,339 - 661,385 156,666
EXPENDITURES:

Current:

Community development 33,391 - - 164,430
Public safety - 185,710 - -
Public works - - - -
Parks, recreation and culture - - - -
Total expenditures 185,710 33,391 - 164,430

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,629 (33,391) 661,385 (7,764)
OTHER FINANCING SOURCES (USES):

Transfers in 120,341 - - 8,229
Transfers out - - (500,000) -
Total other financing sources (uses) - 120,341 (500,000) 8,229 NET CHANGES IN FUND BALANCES 1,629 86,950 161,385 465
FUND BALANCES (DEFICIT):

Beginning of year, as previously
reported as of June 30, 2023 - 206,348 301,695 (465)
Error corrections (86,950) - - -
Beginning of year, as restated (Note 17) (86,950) 206,348 301,695 (465) End of year - $ 207,977 $ 463,080 $ - $
(Continued)
Special Revenue Funds
City of Commerce
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds
For the Year Ended June 30, 2024
118
Air Quality
Management Art in Community
District Housing Public Places Benefits
REVENUES:

Licenses and permits - $ - $ 374,790 $ 245,195 $
Intergovernmental 12,141 - - -
Use of money and property 277 227,862 10,471 -
Total revenues 227,862 12,418 385,261 245,195
EXPENDITURES:

Current:

Community development - 196,353 - -
Public safety - - - -
Public works - - - -
Parks, recreation and culture - - - 435,661
Total expenditures 196,353 - - 435,661

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 31,509 12,418 385,261 (190,466)
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out (5,589) - - -
Total other financing sources (uses) - (5,589) - -
NET CHANGES IN FUND BALANCES 31,509 6,829 385,261 (190,466) FUND BALANCES (DEFICIT):

Beginning of year, as previously
reported as of June 30, 2023 42,059 2,089,952 1,459,924 511,119 Error corrections - 75,904 - -
Beginning of year, as restated (Note 17) 42,059 2,165,856 1,459,924 511,119 End of year 48,888 $ 2,197,365 $ 1,845,185 $ 320,653 $
(Continued)
City of Commerce
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Special Revenue Funds
For the Year Ended June 30, 2024
Special Revenue Funds
119
Special
Revenue Funds
Stormwater Total Special
Management Revenue Funds
REVENUES:

Licenses and permits $ 619,985 - $
Intergovernmental 1,842,595 828,391
Use of money and property 251,621 9,684
Total revenues 2,714,201 838,075
EXPENDITURES:

Current:

Community development 394,174 -
Public safety 185,710 -
Public works 831,391 831,391
Parks, recreation and culture 435,661 -
Total expenditures 1,846,936 831,391

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 867,265 6,684
OTHER FINANCING SOURCES (USES):

Transfers in 128,570 -
Transfers out (505,589) -
Total other financing sources (uses) (377,019) -
NET CHANGES IN FUND BALANCES 490,246 6,684
FUND BALANCES (DEFICIT):

Beginning of year, as previously
reported as of June 30, 2023 6,070,493 1,459,861
Error corrections (11,046) -
Beginning of year, as restated (Note 17) 1,459,861 6,059,447 End of year $ 6,549,693 1,466,545 $
(Concluded)
City of Commerce
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Special Revenue Funds
For the Year Ended June 30, 2024
120
Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Current:

Community development - $ - $ 33,391 $ (33,391) $
Total expenditures - - 33,391 (33,391)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - - (33,391) (33,391)
OTHER FINANCING USES:

Transfers in - - 120,341 120,341
Total other financing uses - - 120,341 120,341
NET CHANGE IN FUND BALANCE $ - - $ 86,950 86,950 $
FUND BALANCE:

Beginning of year, as previously
reported as of June 30, 2023 -
Error corrections (86,950)
Beginning of year, as restated (Note 17) (86,950)
End of year $ -
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Local Jurisdiction Assistance Program Special Revenue Fund For the Year Ended June 30, 2024
121
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental - $ - $ 186,159 $ 186,159 $
Use of money and property - - 1,180 1,180
Total revenues - - 187,339 187,339
EXPENDITURES:

Current:

Public safety 100,000 100,000 185,710 (85,710)
Total expenditures 100,000 100,000 185,710 (85,710)
NET CHANGE IN FUND BALANCE $ (100,000) (100,000) $ 1,629 101,629 $ FUND BALANCE:

Beginning of year 206,348
End of year $ 207,977
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2024
122
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental 660,380 $ 660,380 $ 659,238 $ (1,142) $ Use of money and property - - 2,147 2,147
Total revenues 660,380 660,380 661,385 1,005
OTHER FINANCING USES:

Transfers out (636,997) (636,997) (500,000) 136,997
Total other financing uses (636,997) (636,997) (500,000) 136,997 NET CHANGE IN FUND BALANCE $ 23,383 23,383 $ 161,385 138,002 $ FUND BALANCE:

Beginning of year 301,695
End of year $ 463,080
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2024
123
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental - $ - $ 156,666 $ 156,666 $
Total revenues - - 156,666 156,666
EXPENDITURES:

Current:

Community development 188,662 188,662 164,430 24,232
Total expenditures 188,662 188,662 164,430 24,232

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (188,662) (188,662) (7,764) 180,898 OTHER FINANCING SOURCES:

Transfer in - - 8,229 8,229
Total other financing sources - - 8,229 8,229
NET CHANGE IN FUND BALANCE $ (188,662) (188,662) $ 465 189,127 $ FUND BALANCE (DEFICIT):

Beginning of year (465)
End of year $ -
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2024
124
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental - $ - $ 12,141 $ 12,141 $
Use of money and property - - 277 277
Total revenues - - 12,418 12,418
OTHER FINANCING USES:

Transfers out - - (5,589) (5,589)
Total other financing uses - - (5,589) (5,589)
NET CHANGE IN FUND BALANCE $ - - $ 6,829 6,829 $
FUND BALANCE:

Beginning of year 42,059
End of year $ 48,888
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2024
125
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property - $ - $ 227,862 $ 227,862 $
Total revenues - - 227,862 227,862
EXPENDITURES:

Current:

Community development - - 196,353 (196,353)
Total expenditures - - 196,353 (196,353)
NET CHANGE IN FUND BALANCE $ - - $ 31,509 31,509 $
FUND BALANCE:

Beginning of year, as previously
reported as of June 30, 2023 2,089,952
Error corrections 75,904
Beginning of year, as restated (Note 17) 2,165,856
End of year $ 2,197,365
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Special Revenue Fund
For the Year Ended June 30, 2024
126
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Licenses and permits - $ - $ 374,790 $ 374,790 $
Use of money and property - - 10,471 10,471
Total revenues - - 385,261 385,261
NET CHANGE IN FUND BALANCE $ - - $ 385,261 385,261 $
FUND BALANCE:

Beginning of year 1,459,924
End of year $ 1,845,185
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Art in Public Places Special Revenue Fund
For the Year Ended June 30, 2024
127
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Licenses and permits - $ - $ 245,195 $ 245,195 $
Total revenues - - 245,195 245,195
EXPENDITURES:

Current:

Parks, recreation and culture 443,016 443,016 435,661 7,355 Total expenditures 443,016 443,016 435,661 7,355
NET CHANGE IN FUND BALANCE $ (443,016) (443,016) $ (190,466) 252,550 $ FUND BALANCE:

Beginning of year 511,119
End of year $ 320,653
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Benefits Special Revenue Fund
For the Year Ended June 30, 2024
128
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental 986,207 $ 986,207 $ 828,391 $ (157,816) $ Use of money and property - - 9,684 9,684
Total revenues 986,207 986,207 838,075 (148,132)
EXPENDITURES:

Current:

Public works 674,350 674,350 831,391 (157,041)
Total expenditures 674,350 674,350 831,391 (157,041)
NET CHANGE IN FUND BALANCE $ 311,857 311,857 $ 6,684 (305,173) $ FUND BALANCE:

Beginning of year 1,459,861
End of year $ 1,466,545
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Stormwater Management Special Revenue Fund
For the Year Ended June 30, 2024
129
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property - $ - $ 3,433 $ 3,433 $
Total revenues - - 3,433 3,433
EXPENDITURES:

Debt service:

Principal retirement 450,000 450,000 450,000 -
Interest and fiscal charges 329,863 329,863 330,391 (528) Total expenditures 779,863 779,863 780,391 (528)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (779,863) (779,863) (776,958) 2,905 OTHER FINANCING SOURCES:

Transfers in 776,956 776,956 776,956 -
Total other financing sources 776,956 776,956 776,956 - NET CHANGE IN FUND BALANCE $ (2,907) (2,907) $ (2) 2,905 $ FUND BALANCE:

Beginning of year 2,727
End of year $ 2,725
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Center Debt Service Fund
For the Year Ended June 30, 2024
130
Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Debt service:

Interest and fiscal charges 620,247 $ 620,247 $ 620,247 $ - $ Total expenditures 620,247 620,247 620,247 -
OTHER FINANCING SOURCES:

Transfers in 620,247 620,247 620,247 -
Total other financing sources 620,247 620,247 620,247 - NET CHANGE IN FUND BALANCE $ - - $ - - $
FUND BALANCE:

Beginning of year -
End of year $ -
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Pension Obligation Bonds Debt Service Fund
For the Year Ended June 30, 2024
131
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental - $ 160,000 $ 49,590 $ (110,410) $
Use of money and property - - 5,080 5,080
Total revenues 160,000 - 54,670 (105,330)
EXPENDITURES:

Current:

Public works - 192,962 608,071 (415,109)
Capital outlay - 160,000 1,684 158,316
Total expenditures 352,962 - 609,755 (256,793)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (192,962) - (555,085) (362,123)
OTHER FINANCING SOURCES:

Transfers in - - 416,799 416,799
Total other financing sources - - 416,799 416,799
NET CHANGE IN FUND BALANCE $ (192,962) - $ (138,286) 54,676 $ FUND BALANCE:

Beginning of year 8,427,967
End of year $ 8,289,681
City of Commerce
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual City Capital Projects Fund
For the Year Ended June 30, 2024
132
Successor Agency Trust Fund - To account for the housing activities of the former community development commission taken over by the Successor Agency.

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.

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 Recognized Obligation Payment Schedule ("ROPS"). 133
This page intentionally left blank.
134
Redevelopment Successor
Property Tax Agency
Trust Fund Trust Fund Eliminations Total
ASSETS
Current assets:

Cash and investments 18,891,523 $ - $ - $ 18,891,523 $
Receivables:

Accounts, net - 7,702 - 7,702
Lease receivable, due in one year - 9,618 - 9,618
Total current assets 17,320 18,891,523 - 18,908,843
Noncurrent assets:

Cash and investments with fiscal agents - 9,946 - 9,946 Lease receivable, due in more than one year - 987,242 - 987,242 Property held for resale - 44,407,092 - 44,407,092
Total noncurrent assets 45,404,280 - - 45,404,280
Total assets 45,421,600 18,891,523 - 64,313,123

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding - 2,405,260 - 2,405,260
Total deferred outflows of resources 2,405,260 - - 2,405,260

LIABILITIES
Current liabilities:

Accounts payable - 2,297,169 - 2,297,169
Salaries and benefits payable - 1,297 - 1,297
Long-term debt, due within one year - 8,738,281 - 8,738,281 Total current liabilities 11,036,747 - - 11,036,747
Noncurrent liabilities:

Due to City of Commerce - 3,014,695 - 3,014,695
Long-term debt, due in more than one year - 32,853,226 - 32,853,226 Total noncurrent liabilities 35,867,921 - - 35,867,921
Total liabilities 46,904,668 - - 46,904,668

DEFERRED INFLOWS OF RESOURCES
Leases related - 865,896 - 865,896
Total deferred inflows of resources 865,896 - - 865,896

NET POSITION
Held in trust for Successor Agency $ 56,296 18,891,523 $ - $ 18,947,819 $ City of Commerce
Combining Statement of Fiduciary Net Position
Private Purpose Trust Funds
June 30, 2024
Successor Agency
135
Redevelopment Successor
Property Tax Agency
Trust Fund Trust Fund Eliminations Total
ADDITIONS:

Property tax 10,081,187 $ - $ - $ 10,081,187 $
Investment income 107,206 140,361 - 247,567
Rental income - 698,779 - 698,779
Miscellaneous income - 442,982 - 442,982
Total additions 1,282,122 10,188,393 - 11,470,515
DEDUCTIONS:

Administrative expenses - 572,951 - 572,951
Interest and fiscal charges - 2,208,280 - 2,208,280
Total deductions 2,781,231 - - 2,781,231
TRANSFERS:

Transfers in - 8,893,370 (8,893,370) -
Transfers out (8,893,370) - 8,893,370 -
Total transfers 8,893,370 (8,893,370) - -
CHANGES IN NET POSITION 7,394,261 1,295,023 - 8,689,284 NET POSITION (DEFICIT):

Beginning of year, as previously
reported as of June 30, 2023 17,596,500 1,923,334 - 19,519,834 Error corrections - (9,261,299) - (9,261,299)
Beginning of year, as restated (Note 17) 17,596,500 (7,337,965) - 10,258,535 End of year $ 56,296 18,891,523 $ - $ 18,947,819 $
City of Commerce
Combining Statement of Changes in Fiduciary Net Position Private Purpose Trust Funds
For the Year Ended June 30, 2024
Successor Agency
136

STATISTICAL SECTION
137
This page intentionally left blank.
138
Finanical Trends:

Net Position by Component 140
Changes in Net Position 142
Fund Balances of Governmental Funds 146
Changes in Fund Balances of Governmental Funds 148
Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property 151 Direct and Overlapping Property Tax Rates 152
Principal Property Tax Payers 154
Property Tax Levies and Collections 155
Card Club Schedules for Revenue Capacity
Card Club License Fee by Category 157
Direct and Overlapping Card Club Rates 158
Principal Card Club Remitter 159
Debt Capacity:

Ratios of Outstanding Debt by Type 161
Ratio of General Bonded Debt Outstanding 162
Direct and Overlapping Debt 163
Legal Debt Margin Information 164
Demographic and Economic Information:

Demographic and Economic Statistics 167
Principal Employers 168
Operating Information:

Full-time and Part-time City Employees 169
Capital Asset Statistics 170
For the Year Ended June 30, 2024
Index to the Statistical Section
City of Commerce
139
2015 2016 2017 2018 2019
Governmental activities:

Net investment in capital assets $ 45,509,674 $ 69,045,438 $ 84,719,037 $ 81,609,386 $ 82,699,502 Restricted (8,770,483) 1,695,259 1,706,688 1,876,124 2,048,261 Unrestricted 54,250,682 44,026,277 42,451,641 7,083,848 11,612,066 Total governmental activities
net position 90,989,873 114,766,974 128,877,366 90,569,358 96,359,829 Business-type activities:

Net investment in capital assets 13,415,492 12,812,420 12,305,690 11,644,934 13,413,120 Restricted - - - - -
Unrestricted (7,071,258) (6,730,545) (6,948,259) (16,115,502) (14,607,134) Total business-type activities
net position 6,344,234 6,081,875 5,357,431 (4,470,568) (1,194,014) Primary government:

Net investment in capital assets 58,925,166 81,857,858 97,024,727 93,254,320 96,112,622 Restricted (8,770,483) 1,695,259 1,706,688 1,876,124 2,048,261 Unrestricted 47,179,424 37,295,732 35,503,382 (9,031,654) (2,995,068) Total primary government
net position $ 97,334,107 $ 120,848,849 $ 134,234,797 $ 86,098,790 $ 95,165,815 Source: City of Commerce Finance Department
Fiscal Year
City of Commerce
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
140
2020 2021 2022 2023 2024
Governmental activities:

Net investment in capital assets $ 87,603,633 $ 83,964,506 $ 80,664,261 $ 82,888,826 $ 85,825,193 Restricted 2,038,137 2,098,713 2,422,583 10,532,686 16,561,635 Unrestricted 4,908,821 2,725,740 43,817,601 61,339,590 71,524,808 Total governmental activities
net position 94,550,591 88,788,959 126,904,445 154,761,102 173,911,636 Business-type activities:

Net investment in capital assets 13,066,918 13,584,738 18,237,717 19,289,578 17,679,317 Restricted - - - - -
Unrestricted (15,245,267) (15,339,653) (18,380,192) (19,305,776) (20,595,645) Total business-type activities
net position (2,178,349) (1,754,915) (142,475) (16,198) (2,916,328) Primary government:

Net investment in capital assets 100,670,551 97,549,244 98,901,978 102,178,404 103,504,510 Restricted 2,038,137 2,098,713 2,422,583 10,532,686 16,561,635 Unrestricted (10,336,446) (12,613,913) 25,437,409 42,033,814 50,929,163 Total primary government
net position $ 92,372,242 $ 87,034,044 $ 126,761,970 $ 154,744,904 $ 170,995,308 Source: City of Commerce Finance Department
City of Commerce
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
141
2015 2016 2017 2018 2019
Expenses:

Governmental activities:

General government $ 18,681,419 $ 16,097,044 $ 17,143,378 $ 19,705,680 $ 22,493,477 Public safety 17,825,986 18,994,377 20,528,705 21,462,109 21,457,403 Public works 9,574,171 10,080,047 7,753,735 13,955,387 13,705,539 Community development 2,582,041 4,550,938 3,111,106 3,189,480 2,112,054 Parks and recreation 9,298,527 9,917,064 11,936,131 12,835,675 13,083,293 Library 1,201,234 3,210,975 3,774,862 4,275,731 3,627,221 Interest on long-term debt 5,393,909 4,196,186 1,870,823 2,036,161 365,743 Total governmental activities expenses 64,557,287 67,046,631 66,118,740 77,460,223 76,844,730 Business-type activities:

Transit 4,982,321 5,322,991 4,919,636 6,191,022 5,747,313 CNG/LNG 2,038,687 1,564,009 1,657,378 2,027,056 1,941,685 Water 593,822 711,572 695,715 637,396 611,098
Cable Television 294,436 258,221 301,827 359,704 -
Total business-type activities expenses 7,909,266 7,856,793 7,574,556 9,215,178 8,300,096 Total primary government expenses 72,466,553 74,903,424 73,693,296 86,675,401 85,144,826 Program revenues:

Governmental activities:

Charges for services:

General government - - - - -
Public safety 1,670,473 1,481,520 1,560,967 1,536,732 1,639,854 Public works 3,336,377 3,395,581 2,753,032 3,027,305 4,063,390 Community development 48,270 20,462 89,950 40,000 88,882 Library 22,533 18,940 10,638 17,380 5,155
Parks and recreation 575,150 594,096 647,552 674,476 2,858,857 Operating grants and contributions 2,517,480 2,208,545 2,549,722 2,757,719 4,106,368 Capital grants and contributions 9,611,896 18,508,737 12,503,266 4,620,744 290,533 Total governmental activities
program revenues 17,782,179 26,227,881 20,115,127 12,674,356 13,053,039 Business-type activities:

Charges for services:

Transit - - - - -
CNG/LNG 2,067,530 1,398,775 1,480,555 1,930,926 1,483,555 Water - 845,000 845,000 845,000 845,000
Cable Television 45,541 49,402 53,950 53,748 -
Operating grants and contributions 2,726,291 3,140,870 2,801,867 3,138,934 6,046,775 Capital grants and contributions - - - - -
Total business-type activities
program revenues 4,839,362 5,434,047 5,181,372 5,968,608 8,375,330 Total primary government
program revenues 22,621,541 31,661,928 25,296,499 18,642,964 21,428,369 Net revenues (expenses):

Governmental activities (46,775,108) (40,818,750) (46,003,613) (64,785,867) (63,791,691) Business-type activities (3,069,904) (2,422,746) (2,393,184) (3,246,570) 75,234 Total net revenues (expenses) $ (49,845,012) $ (43,241,496) $ (48,396,797) $ (68,032,437) $ (63,716,457) Source: City of Commerce Finance Department
City of Commerce
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
142
2020 2021 2022 2023 2024
Expenses:

Governmental activities:

General government $ 14,923,956 $ 19,230,660 $ 12,888,535 $ 17,061,923 $ 16,528,267 Public safety 22,513,602 23,367,758 24,691,709 24,304,792 5,308,728 Public works 16,343,439 12,613,431 9,664,523 16,442,212 27,821,008 Community development 2,444,173 3,626,129 3,252,267 4,965,052 14,532,596 Parks and recreation 12,836,798 6,659,835 7,330,089 9,579,307 3,890,316 Library 4,719,709 3,067,205 2,539,074 3,532,582 10,843,894 Interest on long-term debt 347,944 327,503 679,503 1,065,145 906,354 Total governmental activities expenses 74,129,621 68,892,521 61,045,700 76,951,013 79,831,163 Business-type activities:

Transit 7,123,822 7,059,103 9,731,130 10,440,610 10,904,732 CNG/LNG 2,283,888 2,725,050 2,906,790 4,179,857 2,934,201 Water 482,240 215,971 197,721 128,392 212,107
Cable Television - - - - -
Total business-type activities expenses 9,889,950 10,000,124 12,835,641 14,748,859 14,051,040 Total primary government expenses 84,019,571 78,892,645 73,881,341 91,699,872 93,882,203 Program revenues:

Governmental activities:

Charges for services:

General government - - - - 606,771
Public safety 1,355,125 1,392,108 1,507,851 2,192,585 473,057 Public works 4,470,153 6,422,295 6,446,246 7,423,325 1,422,520 Community development 339,948 536,975 261,721 500,865 5,999,141 Library 12,581 45,514 12,053 16,118
Parks and recreation 1,188,201 363,964 702,740 1,549,472 1,216,862 Operating grants and contributions 5,477,203 4,632,926 9,590,128 5,129,104 5,144,051 Capital grants and contributions 295,545 9,999 92,991 5,997 7,825 Total governmental activities
program revenues 13,138,756 13,358,267 18,647,191 16,813,401 14,886,345 Business-type activities:

Charges for services:

Transit - - - 122,333 -
CNG/LNG 2,871,693 3,215,859 2,858,149 4,005,725 2,895,747 Water 845,000 845,000 845,000 774,583 771,492
Cable Television - - - - -
Operating grants and contributions 3,748,452 4,931,427 9,828,325 6,467,805 6,874,935 Capital grants and contributions - - 532,271 2,662,122 - Total business-type activities
program revenues 7,465,145 8,992,286 14,063,745 14,032,568 10,542,174 Total primary government
program revenues 20,603,901 22,350,553 32,710,936 30,845,969 25,428,519 Net revenues (expenses):

Governmental activities (60,990,865) (55,534,254) (42,398,509) (60,137,612) (64,944,818) Business-type activities (2,424,805) (1,007,838) 1,228,104 (716,291) (3,508,866) Total net revenues (expenses) $ (63,415,670) $ (56,542,092) $ (41,170,405) $ (60,853,903) $ (68,453,684) Source: City of Commerce Finance Department
Fiscal Year
City of Commerce
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
143
2015 2016 2017 2018 2019
General revenues and other changes in net position:

Governmental activities:

Taxes:

Casino license tax $ 22,240,233 $ 25,012,715 $ 25,780,700 $ 28,217,260 $ 27,658,745 Property taxes 2,819,939 2,322,486 2,481,617 4,680,877 4,563,560 Sales tax 29,360,146 27,795,167 26,979,330 28,702,600 32,166,106 Franchise taxes 1,128,060 1,052,568 952,432 1,024,506 1,089,138 Transient occupancy taxes 2,549,218 2,843,656 3,063,406 3,269,164 3,145,415 Motor vehicle in lieu, unrestricted 1,126,561 1,177,552 1,242,958 6,877 6,272 Investment income 5,484,438 5,372,963 2,413,906 2,410,372 576,337 Miscellaneous revenues (expenses) 3,662,709 1,179,131 (1,137,872) 3,370,780 1,661,221 Extraordinary gain (loss) - - (8,515,224) - 6,308,116
Transfers (2,504,962) (2,160,387) (1,662,472) (1,656,133) (2,000,747) Total governmental activities 65,866,342 64,595,851 60,114,005 61,511,079 75,174,163 Business-type activities:

Investment income - - 6,268 5,219 8,689
Miscellaneous revenues (expenses) - - - - -
Transfers 2,504,962 2,160,387 1,662,472 1,656,133 2,000,747 Special Items - - - 1,191,884 -
Total business-type activities 2,504,962 2,160,387 1,668,740 1,661,352 3,201,320 Total primary government 68,371,304 66,756,238 61,782,745 63,172,431 78,375,483 Changes in net position
Governmental activities 19,091,234 23,777,101 14,110,392 (3,274,788) 11,382,472 Business-type activities (564,942) (262,359) (724,444) (1,585,218) 3,276,554 Total primary government $ 23,514,742 18,526,292 $ 13,385,948 $ (4,860,006) $ 14,659,026 $ Source: City of Commerce Finance Department
City of Commerce
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
144
2020 2021 2022 2023 2024
General revenues and other changes in net position:

Governmental activities:

Taxes:

Casino license tax $ 20,260,767 $ 8,848,685 $ 26,653,916 $ 31,572,956 $ 31,436,082 Property taxes 4,548,892 5,184,180 4,766,079 4,627,743 5,110,125 Sales tax 27,005,166 29,411,394 40,590,324 40,480,501 38,642,346 Franchise taxes 1,055,508 1,114,535 1,271,376 1,598,267 1,613,037 Transient occupancy taxes 2,613,232 1,717,154 2,634,216 3,139,541 3,164,668 Motor vehicle in lieu, unrestricted 10,306 9,438 14,814 12,688 15,289 Investment income 495,961 481,994 1,834,343 4,566,293 2,441,907 Miscellaneous revenues (expenses) 1,819,994 3,020,230 2,313,868 809,831 787,653 Extraordinary gain (loss) 1,410,012 - 273,000 1,186,724 Transfers (1,425,000) (1,425,000) 221,583 - -
Total governmental activities 56,384,826 49,772,622 80,573,519 87,994,544 83,211,107 Business-type activities:

Investment income 15,470 6,272 320,470 817,087 156,062
Miscellaneous revenues (expenses) - - 63,866 25,206
Transfers 1,425,000 1,425,000 - - -
Special Items - - - - -
Total business-type activities 1,440,470 1,431,272 384,336 842,293 156,062 Total primary government 57,825,296 51,203,894 80,957,855 88,836,837 83,367,169 Changes in net position
Governmental activities (4,606,039) (5,761,632) 38,175,010 27,856,932 18,266,289 Business-type activities (984,335) 423,434 1,612,440 126,002 (3,352,804) Total primary government $ (5,338,198) (5,590,374) $ 39,787,450 $ 27,982,934 $ 14,913,485 $ Source: City of Commerce Finance Department
Fiscal Year
City of Commerce
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
145
2015 2016 2017 2018 2019
General fund:

Nonspendable $ 15,127,548 $ 11,474,577 $ 9,529,236 $ 9,348,695 $ 17,036,179 Restricted - - - - -
Committed - - - - -
Unassigned 45,493,743 52,400,666 55,268,246 59,647,840 55,618,952 Total general fund $ 63,875,243 60,621,291 $ 64,797,482 $ $ 72,655,131 68,996,535 $ All other governmental funds:

Restricted 92,432,391 $ 43,739,182 $ 40,512,561 $ 2,092,277 $ 8,564,324 $ Committed 13,214,883 15,622,958 14,994,703 16,059,636 19,580,713 Unassigned (12,632,110) (23,495,816) (18,936,253) (11,755,176) (10,116,122) Total all other governmental funds $ 35,866,324 93,015,164 $ 36,571,011 $ $ 18,028,915 6,396,737 $ Source: City of Commerce Finance Department
City of Commerce
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
146
2020 2021 2022 2023 2024
General fund:

Nonspendable $ 22,002,880 $ 20,230,513 $ 20,279,764 $ 20,069,590 $ 19,831,422 Restricted 2,913,821 3,309,427 2,900,437 3,024,041 3,267,339 Committed - - - 26,739,477 -
Unassigned 39,498,623 37,888,039 57,281,481 87,773,147 105,918,791 Total general fund $ 61,427,979 64,415,324 $ 80,461,682 $ $ 155,757,029 110,866,778 $ All other governmental funds:

Restricted 3,972,844 $ 5,280,588 $ 6,219,172 $ 6,073,685 $ 11,696,321 $ Committed 18,617,305 20,922,336 26,671,452 34,246,929 3,145,778 Unassigned (1,407,626) (915,970) 8,691,715 (465) -
Total all other governmental funds $ 25,286,954 21,182,523 $ 41,582,339 $ $ 14,842,099 40,320,149 $ Source: City of Commerce Finance Department
Fiscal Year
City of Commerce
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
147
2015 2016 2017 2018 2019
Revenues:

Taxes $ 36,983,924 $ 35,191,429 $ 34,719,747 $ 37,684,024 $ 40,970,492 Casino license tax 22,240,233 25,012,715 25,780,700 28,217,260 27,658,745 Licenses and permits 2,995,798 3,094,043 2,593,315 2,811,786 3,533,999 Fines and forfeitures 1,693,006 1,500,460 1,571,605 1,554,112 1,645,009 Investment income 5,492,779 5,376,602 2,442,142 2,410,372 576,337 Rental income 60,546 65,804 107,310 256,456 2,650,024
Intergovernmental 4,716,798 10,533,532 15,151,211 13,918,486 5,607,209 Charges for services 481,788 442,178 331,457 394,724 361,727 Activity Fees 401,567 387,652 433,274 433,813 458,610
Other 1,805,765 956,288 1,232,109 3,940,461 2,290,119
Total revenues 76,872,204 82,560,703 84,362,870 91,621,494 85,752,271 Expenditures
Current:

General government 18,208,263 15,910,208 16,416,508 16,594,325 19,905,892 Public safety 17,696,949 18,717,286 20,010,785 20,871,826 21,424,472 Public works 14,543,747 29,308,208 21,221,420 12,614,426 13,332,466 Community development 2,566,731 5,510,293 3,015,986 3,084,391 3,391,322 Library 3,593,745 3,640,566 3,764,624 3,808,597 4,080,542 Parks, recreation and culture 8,948,228 9,563,855 10,613,121 10,804,067 11,853,187 Capital outlay - - 4,301,838 - -
Debt service:

Principal retirement 4,585,000 46,690,000 3,925,000 4,075,000 355,000 Interest and fiscal charges 4,791,759 4,954,788 2,243,768 2,098,092 430,414 Payment to bond escrow agent 1,591,812 - 5,050,414 - -
Total expenditures 76,526,234 134,295,204 81,211,212 83,302,976 74,773,295 Excess (deficiency) of
revenues over (under)
expenditures 345,970 (51,734,501) 3,151,658 8,318,518 10,978,976 Other financing sources (uses):

Transfers in 6,824,304 2,259,463 1,676,324 1,535,053 2,164,640 Transfers out (8,560,288) (4,419,850) (3,201,056) (3,191,186) (4,262,726) Issuance of debt - - - - -
Issuance of bonds - - - - -
Gain on property held for resale - - - - -
Proceeds of refunding bonds 10,000,000 - - - -
Premium on bonds 1,204,670 - - - -
Payment to bond escrow agent (10,811,993) - (32,637,606) - - Total other financing
sources (uses) (1,343,307) (2,160,387) (1,524,732) (34,293,739) (2,098,086) Extraordinary/ Special Items
Successor Agency land
aquired by City - - - 6,409,884 -
Net change in fund balances $ (997,337) $ (53,894,888) $ 1,626,926 $ (25,975,221) $ 15,290,774 Ratio of debt service expenditures
to noncapital expenditures 14.3% 38.5% 7.6% 14.2% 1.1%
Source: City of Commerce Finance Department
(modified accrual basis of accounting)
Last Ten Fiscal Years
Changes in Fund Balances of Governmental Funds
City of Commerce
Fiscal Year
148
2020 2021 2022 2023 2024
Revenues:

Taxes $ 35,233,104 $ 37,436,701 $ 49,276,809 $ 49,846,052 $ 48,530,176 Casino license tax 20,060,305 9,049,147 26,653,916 31,572,956 31,436,082 Licenses and permits 3,937,691 5,660,787 5,453,634 7,693,813 6,574,738 Fines and forfeitures 1,367,724 1,392,108 1,553,365 2,204,638 1,438,638 Investment income 495,961 504,795 1,851,079 4,754,686 2,852,191 Rental income 1,770,027 1,690,928 634,348 - -
Intergovernmental 5,779,860 3,412,514 8,427,721 3,726,875 3,106,606 Charges for services 110,177 1,268,381 2,665,125 2,756,672 2,562,317 Activity Fees 231,657 43,829 272,415 359,118 527,460
Other 1,750,094 4,662,651 2,336,248 839,260 914,980
Total revenues 70,736,600 65,121,841 99,124,660 103,754,070 97,943,188 Expenditures
Current:

General government 17,482,692 15,495,586 42,406,606 15,151,561 14,880,371 Public safety 22,513,602 23,389,362 24,716,722 24,308,966 27,821,553 Public works 17,680,994 11,008,151 9,741,623 14,616,394 11,925,095 Community development 3,328,344 3,450,539 3,662,523 4,791,751 5,135,427 Library 4,185,953 2,921,776 2,887,478 3,029,171 3,482,413 Parks, recreation and culture 11,220,212 5,531,729 7,275,835 7,097,239 9,190,122 Capital outlay - - 5,361,900 - 7,603,439
Debt service:

Principal retirement 370,000 390,000 486,291 472,776 699,446 Interest and fiscal charges 412,803 392,612 641,488 975,630 969,253 Payment to bond escrow agent - - 339,089 - -
Total expenditures 77,194,600 62,579,755 92,157,655 75,805,388 81,707,119 Excess (deficiency) of
revenues over (under)
expenditures (6,458,000) 2,542,086 6,967,005 27,948,682 16,236,069 Other financing sources (uses):

Transfers in 5,520,251 2,439,538 9,317,962 2,600,078 2,448,161 Transfers out (6,945,251) (3,864,538) (9,096,379) (2,600,078) (2,448,161) Issuance of debt - - - 1,426,398 -
Issuance of bonds - 27,875,000 - - -
Gain on property held for resale - - 273,000 1,186,724 - Proceeds of refunding bonds - - - - -
Premium on bonds - - - - -
Payment to bond escrow agent - - - - -
Total other financing
sources (uses) (1,425,000) (1,425,000) 28,369,583 1,186,724 1,426,398 Extraordinary/ Special Items
Successor Agency land
aquired by City - - - - -
Net change in fund balances $ (7,883,000) $ 1,117,086 $ 35,336,588 $ 29,135,406 $ 17,662,467 Ratio of debt service expenditures
to noncapital expenditures 1.0% 1.3% 1.6% 2.1% 2.3%
Source: City of Commerce Finance Department
City of Commerce
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
149
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150
Fiscal Year Taxable Total
Ended Assessed Direct Tax
June 30 Secured Unsecured Value Rate
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%
2022 5,534,390 676,463 6,210,853 0.068%
2023 5,885,461 724,227 6,609,687 0.068%
2024 6,304,730 813,537 7,118,267 0.068%
Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. County of Los Angeles Department of Auditor-Controller 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.

City of Commerce
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
City
151
2014/15 2015/16 2016/17 2017/18 2018/19
Basic Levy (1) 1.00000 1.00000 1.00000 1.00000 1.00000
Cerritos Community College District - - - - -
Downey Unified School District - - - - -
LA CCD DS 2008 Series F - - - - -
LA Community College District 0.04017 0.03575 0.03596 0.04599 0.04621 LAUSD 0.14688 0.12971 0.13110 0.12219 0.12323
MWD 0.00350 0.00350 0.00350 0.00350 0.00350
Montebello Unified School District 0.08750 0.08715 0.14705 0.13514 0.13921 Total Direct & Overlapping (2) Tax Rates 1.27805 1.25611 1.31761 1.30682 1.31215 City's Share of 1% Levy Per Prop 13 (3) 0.06793 0.06793 0.06793 0.06793 0.06793 Redevelopment Rate (4) - - - - -
Total Direct Rate (5) 0.06818 0.06817 0.06817 0.06815 0.06832 Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. County of Los Angeles Department of Auditor-Controller (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 obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue. (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.

City of Commerce
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
152
2019/20 2020/21 2021/22 2022/23 2023/24
Basic Levy (1) 1.00000 1.00000 1.00000 1.00000 1.00000
Cerritos Community College District - - - - -
Downey Unified School District - - - - -
LA CCD DS 2008 Series F - - - - -
LA Community College District 0.02717 0.04016 0.04376 0.02488 0.06023 LAUSD 0.12552 0.13993 0.11323 0.12107 0.12422
MWD 0.00350 0.00350 0.00350 0.00350 0.00350
Montebello Unified School District 0.09306 0.09706 0.09031 0.12770 0.11275 Total Direct & Overlapping (2) Tax Rates 1.24925 1.28065 1.25080 1.27715 1.30070 City's Share of 1% Levy Per Prop 13 (3) 0.06793 0.06793 0.06793 0.06793 0.06793 Redevelopment Rate (4) - - - - -
Total Direct Rate (5) 0.06813 0.06814 0.06817 0.06815 0.06815 Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. County of Los Angeles Department of Auditor-Controller (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 obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.

City of Commerce
Direct and Overlapping Property Tax Rates (Continued)
(Rate per $100 of assessed value)
Last Ten Fiscal Years
153
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 $ 319,210,734 4.48% Craig Realty Group Citadel LLC 175,078,729 $ 3.81% Prologis LP 161,738,929 2.27% AMB Institutional Alliance Fund I LP 147,392,833 3.21% Rexform Industrial - 5300 Sheila LLC LESSR 124,793,768 1.75% California Commerce Club Inc. 104,993,726 2.29% AMB Institutional Alliance Fund II LP 123,461,848 1.73% LIT Commerce Distribution Center LLC 1.98% 90,688,968 California Commerce Club Inc. 115,947,925 1.63% Rreef America Reit II Corporation 77,682,746 1.69% Rreef America Reit II Corporation 110,469,724 1.55% Prologis USLV NEWCA 6 LLC 70,058,957 1.53% Rexford Industrial Realty LP 109,736,276 1.54% VON'S Companies Inc 63,716,816 1.39% LIT Commerce Distribution Center LLC 106,995,517 1.50% TELACU 60,327,409 1.31% Liberty Property LP 99,877,725 1.40% Terreno Garfield LLC 53,690,653 1.17% JFC International Inc. 98,123,644 1.38% Teachers Insurance & Annuity Assoc. 53,562,574 1.17% $ 19.23% 897,193,411 1,370,356,090 $ 19.55%
The amounts shown above include assessed value data for both the City and the Successor Agency.

Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. County of Los Angeles Department of Auditor-Controller 2023/24 2014/15
Current Year and Nine Years Ago
City of Commerce
Principal Property Tax Payers
154
Fiscal Taxes Levied Collections in
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy 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% 2022 2,222,252 2,127,092 95.72% 99,151 2,226,243 100.18% 2023 2,180,356 2,223,028 101.96% 56,479 2,279,507 104.55% 2024 2,301,968 2,358,447 102.45% - 2,358,447 102.45%
Sources:

1. City of Commerce Finance Department

2. County of Los Angeles Assessor
Last Ten Fiscal Years
Property Tax Levies and Collections
City of Commerce
Fiscal Year of Levy Total Collections to Date
Collected within the
155
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156
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Gross Card Room --
Gaming Revenue 22,130 $ 24,883$ 25,661$ 28,097$ 27,539$ 19,960 $ 8,959 $ 26,534 $ 31,453$ 31,316 $ Monthly License Fee 120 120 120 120 120 100 90 120 120 120 Total $ 25,003$ 25,781$ 28,217$ 27,659$ 20,060 22,250 $ 9,049 $ 26,654 $ 31,573$ 31,436 $ Monthly Percentage applied (a) (a) (a) (a) (a) (a) (a) (a) (a) (a) 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
(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.

City of Commerce
Card Club License Fee by Category
Last Ten Calendar Years
(in thousands of dollars)
Calendar Year
157
Monthly Gross Card Club Revenue 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 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%
Source: City of Commerce - Finance Department
Notes: The Tax is based upon the above formula as provided for in the agreement between the City and the Commerce Casino.

City of Commerce
Direct and Overlapping Card Club Rates
Last Ten Fiscal Years
158
Tax Percentage Tax Percentage
Tax Remitter Liability Rank of Total Liability Rank of Total Commerce Casino $ 31,316,082 1 100.00% $ 22,130,233 1 100.00% Total $ 31,316,082 100.00% $ 22,130,233 100.00%
Source: City of Commerce - Finance Department
City of Commerce
Principal Card Club Remitter
Current Year and Nine Years Ago
2024 2015
159
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160
Fiscal Year Pension Tax Total Total Percentage Debt
Ended Obligation Allocation Governmental Primary of Personal Per June 30 Bonds Bonds 1 Leases Subscriptions Activities Government Income 2 Capita 2 2015 $ 101,859,514 - $ - $ -$ 101,859,514 $ 101,859,514 $ 49.48% 7,829 2016 - 55,109,280 - - 55,109,280 55,109,280 27.18% 4,198 2017 - 51,124,046 - - 51,124,046 51,124,046 24.91% 3,913 2018 - 9,993,812 - - 9,993,812 9,993,812 4.93% 765
2019 - 9,578,578 - - 9,578,578 9,578,578 4.49% 736
2020 - 9,148,344 - - 9,148,344 9,148,344 3.94% 711
2021 - 8,698,110 - - 8,698,110 8,698,110 3.48% 680
2022 27,875,000 8,227,876 128,389 - 36,231,265 36,231,265 13.50% 2,984 2023 27,875,000 7,742,642 123,292 - 35,740,934 35,740,934 13.02% 2,970 2024 27,875,000 7,232,408 1,097,928 202,316 36,407,652 36,407,652 12.13% 3,003 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.

Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. City of Commerce Finance Department
Governmental Activities
City of Commerce
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
161
Fiscal Year Pension Tax Percent of
Ended Obligation Allocation Assessed Per
June 30 Bonds Bonds Total Value1 Capita
2015 - $ 101,859,514 $ 101,859,514 $ 2.13% 7,829
2016 - 55,109,280 55,109,280 1.09% 4,198
2017 - 51,124,046 51,124,046 0.97% 3,913
2018 - 9,993,812 9,993,812 0.18% 765
2019 - 9,578,578 9,578,578 0.17% 736
2020 - 9,148,344 9,148,344 0.15% 711
2021 - 8,698,110 8,698,110 0.14% 680
2022 27,875,000 8,227,876 36,102,876 0.55% 2,974
2023 27,875,000 7,742,642 35,617,642 0.50% 2,959
2024 27,875,000 7,232,408 35,107,408 0.49% 2,896
Source: City of Commerce - Finance Department

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.

City of Commerce
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Outstanding General Bonded Debt
162
Gross Bonded Debt
Balance
Percent Applicable to
City Net Bonded Debt
Total Direct Debt 36,407,652 $ 100.000% $ 36,407,652
Metropolitan Water District 18,210,000 0.184% 33,506
Los Angeles Unified School District 10,723,385,000 0.042% 4,503,822 Los Angeles City Community College District 5,155,845,000 0.628% 32,378,707 Montebello Unified School District 237,721,813 30.647% 72,854,604 Total Overlapping Debt 16,135,161,813 109,770,639
Total Direct and Overlapping Debt 16,171,569,465 $ $ 146,178,291 2022/23 Assessed Valuation: 3,039,488,005 $
Debt to Assessed Valuation Ratios: Direct Debt 1.20%
Overlapping Debt 3.61%
Total Debt 4.81%
Source: California Municipal Statistics
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.

City of Commerce
Direct and Overlapping Debt
June 30, 2024
163
2015 2016 2017 2018 2019
Assessed valuation $ 4,586,304,000 $ 4,792,383,000 $ 5,059,632,808 $ 5,259,167,690 $ 5,408,920,657 Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 1,146,576,000 1,198,095,750 1,264,908,202 1,314,791,923 1,352,230,164 Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 171,986,400 179,714,363 189,736,230 197,218,788 202,834,525 Total net debt applicable to limit:

General obligation bonds 101,859,514 55,109,280 51,124,046 9,993,812 9,578,578 Legal debt margin $ 124,605,083 70,126,886 $ 138,612,184 $ 187,224,976 $ 193,255,947 $ Total debt applicable to the limit
as a percentage of debt limit 59.2% 30.7% 26.9% 5.1% 4.7% Sources:

1. City of Commerce Finance Department

2. HDL 2023-24 ACFR Statistical Reports

3. County of Los Angeles Department of Auditor-Controller 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.

Fiscal Year
City of Commerce
Legal Debt Margin Information
Last Ten Fiscal Years
164
2020 2021 2022 2023 2024
Assessed valuation $ 5,774,656,000 $ 6,089,319,551 $ 6,210,852,946 $ 6,609,687,340 $ 7,118,266,894 Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 1,443,664,000 1,522,329,888 1,552,713,237 1,652,421,835 1,779,566,724 Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 216,549,600 228,349,483 232,906,985 247,863,275 266,935,009 Total net debt applicable to limit:

General obligation bonds 9,148,344 8,698,110 8,227,876 7,742,642 7,232,408 Legal debt margin $ 207,401,256 $ 219,651,373 $ 224,679,109 $ 240,120,633 $ 259,702,601 Total debt applicable to the limit
as a percentage of debt limit 4.2% 3.8% 3.5% 3.1% 2.7%
Sources:

1. City of Commerce Finance Department

2. HDL 2023-24 ACFR Statistical Reports

3. County of Los Angeles Department of Auditor-Controller 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.

Fiscal Year
City of Commerce
Legal Debt Margin Information (Continued)
Last Ten Fiscal Years
165
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166
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) 2014 13,010 $ 205,857 $ 15,823 12.0%
2015 13,127 202,739 15,444 9.8%
2016 13,064 205,233 15,709 7.7%
2017 13,067 202,639 15,507 6.1%
2018 13,021 213,295 16,380 6.7%
2019 12,868 231,904 18,021 5.3%
2020 12,792 250,173 19,556 12.8%
2021 12,140 268,439 22,112 7.7%
2022 12,036 274,582 22,813 5.3%
2023 12,124 300,161 24,758 5.4%
Sources:

1. HDL 2023-24 ACFR Statistical Reports

2. State Department of Finance

3. U.S. Bureau of Economic Analysis

4. State of California Employment Development Department 167
City of Commerce
Principal Employers
Current Year and Nine Years Ago
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
California Commerce Club, Inc. 1,964 4.08% 2,529 4.22%
Parsec, Inc. 945 1.96% 801 1.34%
County of Los Angeles 800 1.66% 4,000 6.67%
BNSF Railway Company 648 1.35%
Mission Foods 610 1.27% 520 0.87%
Revolution Foods, PBC 544 1.13%
Smart & Final, INC 389 0.81% 883 1.47%
Precision Wire Product Inc 380 0.79% 322 0.54%
Fedex Ground Package System, INC 380 0.79%
99 Cents Only Stores LLC 375 0.78% 998 1.66%
American Internation Industries 985 1.64%
Unified Grocers Inc. 743 1.24%
Gibson Overseas, Inc. 400 0.67%
Wine Warehouse 365 0.61%
Valassis Direct Mail, Inc. 330 0.55%
"Total Employment" as used above represents the total employment of all employers located within City limits.

Sources:

1.City of Commerce Finance Department

2. State of California Employment Development Department 2024 2015
168
City of Commerce
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General government 39 39 39 38 38 39 28 30 33 36
Public safety 1 - - 1 - - - - - - -
Community services 28 28 29 28 21 11 11 22 15 17
Public Works & Development Services 17 13 17 21 26 55 43 51 53 54 Park & Recreation 135 136 136 135 139 122 113 182 121 186 Library Services 39 39 39 39 43 45 42 27 36 42
Transportation 34 34 34 34 40 33 35 53 64 67
Total 292 289 295 295 307 305 272 365 322 402
1 Police and fire services were provided by the County.

Source: City of Commerce Annual Adopted Budget
169
Fiscal Year Fiscal Year
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Police:

Stations - - - - - - - - - -
Fire:

Fire stations 3 3 3 3 3 3 3 3 3 3
Public services:

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

Parks 4 4 4 4 4 4 4 4 4 4
Community centers 2 2 2 2 2 2 2 2 2 3
Water:

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

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

Libraries 4 4 4 4 4 4 4 4 4 4
Source: City of Commerce Annual Adopted Budget
City of Commerce
Capital Asset Statistics
by Function
Last Ten Fiscal Years
170