Concord City Council
January 9, 2024

POLICY & PROCEDURE NO. 2
advance copies thereof.

5.71 Benched Documents. Any public records provided to the City Council subsequent to the posting of the agenda, and changes to the staff report, resolutions, contracts, and other City materials, shall be made available upon request as provided in Government Code Section 54957.5.

5.72 Plans. Plans provided by an applicant, appellant, and/or his/her/its representative to City staff or to the City Council in connection with an agenda item may be reduced in size and published together with or as part of such agenda item; reduced-sized plans use for such purpose shall become a public record subject to disclosure under the Public Records Act.

6. AGENDA DISTRIBUTION

6.1 Agendas which have been copied and distributed to the City Council will be made available to the public at the same time and at City Council meetings.

6.2 Agendas of regular and special meetings will be provided to all individuals who subscribe to an annual mailing service.

6.3 Individuals or organizations whom the City believes may be affected by an agenda item may, as a courtesy, be mailed an agenda to advise when the item is scheduled to be considered by the City Council.

6.4 The agenda shall be posted in the display case located near the Parkside Drive entrance to the Civic Center and on the City’s website not less than seventy-two (72) hours in advance of each regular meeting and not less than twenty-four (24) hours prior to each special meeting of the City Council. A log shall be maintained of the time and date each agenda is posted.

6.5 Within a reasonable time after each City Council meeting, the City Clerk shall furnish each member of the City Council, the City Manager and the City Attorney with a copy of the annotated agenda for that meeting.

7. MINUTES

7.1 Official Record. The official minutes of the City Council shall be kept by the City Clerk. The City Clerk shall be required to make a record only of such business as was actually voted upon by the City Council and shall not be required to record any remarks of any member of the City Council or of any other person, except at the special request of a member of the City Council during that meeting. The City Clerk shall enter into the minutes a brief summary of the reasons for dissent from or protest against any action of the Council if any member of the City Council so requests it during that meeting. Names of persons addressing the City Council, the title of the subject matter to which their remarks related, and whether they spoke in support of or in opposition to such matter shall be entered in the minutes.

7.2 Recordings. As an aid to the preparation of minutes, the City Clerk shall arrange to have recordings made of all regular and special City Council meetings, except for workshops and closed sessions. The City Clerk is not required to have recordings made for meetings when no recording is needed to assist in the preparation of minutes. The recordings may be destroyed after the City Council approval of minutes in accordance with the Records Retention Schedule, unless the City Attorney requests retention of a particular recording.

7.3 Approval of Minutes. The City Clerk shall attach a copy of the minutes to the agenda for the meeting at which the minutes are proposed to be approved. The City Council may request minor clarification and corrections as necessary. The minutes may be approved without reading.

8. ORGANIZATION OF CITY COUNCIL
The City Council shall annually reorganize,s choosing from amongst its members who should serve as Mayor and Vice Mayor for the coming year.

8.1 Term of Mayor. The appointment of the Mayor is for a one-year term. Page 11 of 13 POLICY & PROCEDURE NO. 2

8.2 Term of Vice Mayor. The appointment of Vice Mayor is for a one-year term.

8.3 Seating. For the purpose of consistency, seating at the dais will be per the attached diagram, or as agreed established by the Mayor.upon by the Councilmembers.The Mayor will decide the seating arrangement of the City Council at the dais.

POLICY & PROCEDURE NO. 2

8.4

Staff Report
Date: January 9, 2024
To: City Council
From: Valerie J. Barone, City Manager
Reviewed by: Karan Reid, Director of Finance
Prepared by: Suzanne McDonald, Financial Operations Manager [email protected]
(925) 671-3136
Subject: Considering acceptance of the Annual Comprehensive Financial Report with the Independent Auditors' Report and Required Communications Letter for the fiscal year ending June 30, 2023.

Report in Brief
The Annual Comprehensive Financial Report (ACFR) with the independent auditors’ report for the year ending June 30, 2023, and the Required Communications Letter has been completed. The auditors expressed an opinion that the City's financial statements for Fiscal Year 2022-2023 are fairly stated in conformity with accounting principles generally accepted in the United States. This is the most favorable conclusion and is commonly known as an "unqualified" or "clean" opinion.

Recommended Action
Accept the Annual Comprehensive Financial Report with Independent Auditors' Report for the fiscal year ending June 30, 2023, along with the Required Communications Letter for fiscal year ending June 30, 2023.

Background
The financial statements of the City of Concord are subject to an annual independent audit, performed by Maze & Associates Accountancy Corporation. The audit is a comprehensive review of the financial records of the City and the internal control procedures in place which safeguard the City's assets. The audit also looks at the City's compliance with generally accepted accounting principles, with the various requirements of the Governmental Accounting Standards Board (GASB) and with

4.d4.d4.d

City Council Agenda Report
Agenda Item No. 4.d
January 9, 2024
standards developed by the Government Financial Officers Association (GFOA). The Independent Auditor's Report is included in the ACFR (Attachment 1). The auditor is required to communicate areas of deficiency in the City’s internal control over financial reporting. The Required Communications Letter (Attachment 2) is the report in which this communication occurs and is also provided in a standardized format.

Analysis
The Independent Auditor's Report indicates that the financial statements present fairly both the financial position of the City as of June 30, 2023, and the financial activity for the year then ended. This opinion is considered "clean" or "unqualified," which means that the financial records reflect appropriately the financial activity of Fiscal Year 2022- 2023.

The ACFR includes a wealth of financial information about the City of Concord, along with the City’s Mission Statement, Vision, Organizational Values, Corporate Goals, organizational structure and statistical information pertaining to the City. Each year the ACFR is submitted to the GFOA to be considered for its Excellence in Financial Reporting award program. A copy of the award for fiscal year 2021-2022 is included in this ACFR, and we anticipate that the City will be successful in attaining the award in fiscal year 2022-2023.

The Financial Section of the ACFR reflects the actual audited financial statements of the City of Concord. This section is developed in conformance with the guidelines established by GASB and includes the Management Discussion and Analysis, Government-Wide Financial Statements and Fund Financial Statements as required under Government Accounting Standards Statement 34. The Financial Section also includes the Notes to the Basic Financial Statements, which describe the various policies and methods used to manage the finances of the City.

The General Fund fund balance increased $2.3 million from the previous year. The fund balance change was primarily due to interest earnings from cash balances coming in $1.1 million stronger than expected and a $1.4 million increase from permit center activites.

On June 30, 2023, the Unassigned General Fund balance was 40% of General fund expenditures. This includes a $10.5 million fiscal stability fund the Council approved during FY2023 to help stabilize future budgets. For financial reporting purposes, the balance must be shown as “unassigned” fund balance. This is a different calculation from the “available” fund balance discussed in the Budget document. The General Fund Reserve Balances will be discussed in more detail during the FY2022-2023 mid-cycle budget review, currently scheduled to be presented to City Council in February 2024.

GASB frequently releases new accounting and financial reporting standards which may have a significant impact on the Financial Section of the ACFR. For fiscal year 2022-

City Council Agenda Report
Agenda Item No. 4.d
January 9, 2024
2023, the City implemented several new standards, all of which are disclosed in Note 1 to the financial statements.

The Statistical Section of the ACFR includes tables, graphs and other historical information regarding the overall financial health of the City of Concord. While the Statistical Section is not audited, the information included is useful in helping readers understand the finances of the City.

In order to include the City’s full disclosure in one document, the final section of the ACFR reflects additional information necessary to continue compliance with the bond covenants for previous bond issues which are still outstanding. While not required to be a part of the ACFR, the information contained in this section is subject to disclosure requirements. Staff believes that including this section completes a concise financial package for the public.

The Required Communications Letter (Attachment 2) includes: discussion of accounting policies; disagreements with management or difficulties encountered during the audit; and other audit findings or issues. For the current year under audit, the auditors did note two new accounting policies effecting the City’s financial statements: change is accounting policy for Loans Receivable and adopting the latest guidance for accounting for Subscription Based Information Technologies Arrangements. The auditors did not note any disagreements with management or difficulties encountered during the audit.

The auditors did note one corrected misstatement made by the City to the year end cash balances in the General Fund during post-closing which was material in nature.

This was corrected and year-end cash balances are properly reflected as of June 30, 2023, in the financial statements.

Financial Impact
There is no fiscal impact.

Public Contact
The City Council Agenda was posted.

Attachments

1. Annual Comprehensive Financial Report with Independent Auditors’ Report for fiscal year ending June 30, 2023

2. Required Communications Letter for fiscal year ending June 30, 2023

Annual Comprehensive
Financial Report
Fiscal Year Ending June 30, 2023
City of Concord ● California
Attachment 1

CITY OF CONCORD, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2023
Prepared by
The Finance Department
Karan Reid
Director of Finance

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CITY OF CONCORD JUNE 30, 2023
Page
Table of Contents ........................................................................................................................................... i Mission Vision & Values Statement ............................................................................................................. v Corporate Goals .......................................................................................................................................... vii Organizational Values .................................................................................................................................. ix INTRODUCTORY SECTION:

Letter of Transmittal .................................................................................................................................. xiii Principal Officers ...................................................................................................................................... xxii Organization Chart ................................................................................................................................... xxiii GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................. xxiv
FINANCIAL SECTION:

Independent Auditor’s Report ................................................................................................................... 1 Management Discussion and Analysis ...................................................................................................... 5 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ..................................................................................................................... 23 Statement of Activities ......................................................................................................................... 24 Fund Financial Statements:

Major Governmental Funds:

Balance Sheet – Governmental Funds ........................................................................................... 28 Reconciliation of the Governmental Funds – Balance Sheet to the Statement of Net Position ........................................................................................................ 29 Statement of Revenues, Expenditures
and Changes in Fund Balances ......................................... 30 Reconciliation of the Net Change in Fund Balances – Total Governmental Funds to the Statement of Activities .................................................................................................. 31 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual General Fund ........................................................................................................................... 32 Concord Housing Special Revenue Fund ................................................................................ 33 ARPA Special Revenue Fund ................................................................................................. 34 Proprietary Funds:

Statement of Net Position – Proprietary Funds .............................................................................. 36 Statement of Revenues, Expenses and Changes in Fund Net Position .......................................... 37 Statement of Cash Flows – Proprietary Funds ............................................................................... 38 Fiduciary Funds:

Statements of Fiduciary Net Position ............................................................................................ 40 Statement of Changes in Fiduciary Net Position ........................................................................... 41 i

CITY OF CONCORD JUNE 30, 2023
Page
FINANCIAL SECTION (CONTINUED):

Notes to the Basic Financial Statements:

Note 1 – Summary of Significant Accounting Policies ................................................................. 44 Note 2 – Budgets and Budgetary Accounting
................................................................................ 54 Note 3 – Cash and Investments ...................................................................................................... 54 Note 4 – Interfund Transactions .................................................................................................... 63 Note 5 – Loans and Notes Receivables .......................................................................................... 65 Note 6 – Capital Assets .................................................................................................................. 68 Note 7 – Long-Term Debt .............................................................................................................. 70 Note 8 – Fund Balances ................................................................................................................. 73 Note 9 – Stewardship, Compliance and Accountability ................................................................ 74 Note 10 – City of Concord Retirement System Plan ..................................................................... 75 Note 11 – City of Concord Early Retirement Plans ....................................................................... 79 Note 12 – Pension Plan .................................................................................................................. 79 Note 13 – Other Post-Employment Health Care Benefits ............................................................. 87 Note 14 – Deferred Compensation Plans ....................................................................................... 92 Note 15 – Leases ............................................................................................................................ 92 Note 16 – Subscription-Based Information Technology Arrangements (SBITAs) ....................... 96 Note 17 – Risk Management and Insurance .................................................................................. 98 Note 18 – Commitments and Contingencies .................................................................................. 99 Note 19 – Redevelopment Successor Agency Activities ............................................................. 100 REQUIRED SUPPLEMENTARY INFORMATION:

Schedule of Changes in the Net Pension/OPEB Liability and Related Ratios - Last Ten Years:

Miscellane ous Plan ...................................................................................................................... 106 Safety Plan
................................................................................................................................... 108 City of Concord Retirement System ........................................................................................... 110 Other Post Employment Benefit Plan .......................................................................................... 112 Schedule of Contributions – Last Ten Years:

Miscellane ous Plan ...................................................................................................................... 113 Safety Plan ................................................................................................................................... 114 City of Concord Retirement System ........................................................................................... 115 Other Post Employment Benefit Plan .......................................................................................... 116 SUPPLEMENTARY INFORMATION:

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES GENERAL FUND:

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances ................................... 119 Combining Schedule of Revenues, Expenditu
res and Changes in Fund Balances –
Budget and Actual ........................................................................................................................120 NON MAJOR GOVERNMENTAL FUNDS:

Combining Balance Sheet ..........................................................................................................................128

Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................. 132 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual ........................................................................................................................136 ii

CITY OF CONCORD JUNE 30, 2023
Page
SUPPLEMENTARY INFORMATION (CONTINUED):

INTERNAL SERVICE FUNDS:

Combining Statement of Net Position ...................................................................................................... 146 Combining Statement of Revenues, Expenses and Changes in Fund Net Position .................................. 148 Combining Statements of Cash Flows ....................................................................................................... 150 STATISTICAL SECTION:

STATISTICAL TABLES AND OTHER SCHEDULES (UNAUDITED)
Table 1 – Net Position by Component ...................................................................................................... 157 Table 2 – Changes in Net Position ............................................................................................................ 158 Table 3 – Fund Balances of Governmental Funds .................................................................................... 160 Table 4 – Change in Fund Balances of Governmental Funds ................................................................... 162
Table 5 – Assessed and Estimated Actual Value of Taxable Property ..................................................... 164 Table 6 – Property Tax Rates, Direct and Overlapping Governments ...................................................... 165 Table 7 – Principal Property Taxpayers .................................................................................................... 166 Table 8 – Property Tax Levies and Collections ........................................................................................ 167 Table 9 – Taxable Sales by Category ........................................................................................................ 168 Table 10 – Sales Tax Rates ....................................................................................................................... 169 Table 11 – Top 25 Sales Tax Producers ................................................................................................... 170 Table 12 – Ratios of Outstanding Debt by Type ...................................................................................... 171 Table 13 – Direct and Overlapping Debt .................................................................................................. 172 Table 14 – Computation of Legal Bonded Debt Margin .......................................................................... 173 Table 15 – Sewer Revenue Bonds Coverage ............................................................................................ 174 Table 16 – Bonded Debt Pledged Revenue Coverage, 2004 (Refunded), and Tax Allocation Refunding Bonds Series 2014 ................................................................... 175 Table 17 – Demographic and Economic Statistics ................................................................................... 176 Table 18 – Principal Employers ................................................................................................................ 177 Table 19 – Full-Time Equivalent (FTE) City Government Employees By Function ............................... 178 Table 20 – Operating Indicators by Function/Program ............................................................................. 179 Table 21 – Capital Asset Statistics by Function/Program ......................................................................... 180 iii

CITY OF CONCORD JUNE 30, 2023
MUNICIPAL DEBT CONTINUING DISCLOSURE:

Municipal Debt Continuing Disclosure – See Rule 15c2-12(b)(5) City of Concord Joint Powers Financing Authority
Wastewater Revenue Refunding Bonds Series 2012
2018 Wastewater Revenue Refunding Bonds
Table 1 – Ten Largest Users of the Wastewater System ....................................................... 183 Table 2 – Sewer Rates for Fiscal Year 2022-23 .................................................................... 184 Successor Agency of the Former Redevelopment Agency of the City of Concord (Contra Costa County, California) Tax Allocation Refunding Bonds Series 2014 Table 3 – Assessed Valuation by Category of Use
............................................................... 185 Table 4 – Historic Tax Revenues .......................................................................................... 186 Table 5 – Top 10 Taxpayers for Project Area ....................................................................... 187 Table 6 – Assessed Value Appeals for Project Area ............................................................. 188 Table 7 – Projection of Tax Revenues for Debt Service ....................................................... 189 Map .......................................................................................................................................................... 190 iv

Missi
on Statement for the Organization
Our mission is to join with our community to make Concord a city of the highest quality.

We do this by providing responsive, cost-effective, and innovative local government services.

Our Vision for the Future
• We will be a customer based, performance driven, results oriented organization, focused on finding the answer, solving the problem, and achieving positive outcomes.
• We will partner with the Concord community to maximize resources, deliver high quality services, and be recognized as setting the standard for excellence. • We will be trustworthy guardians of the public's resources. • We will make Concord a premier business location.
• We will collaborate to provide "seamless" services that benefit both our external and internal customers, streamlining our work processes and removing barriers wherever they arise.
• We will accept the challenge of change and be committed to continually enhancing the safety, environment, quality of life, and economic vitality of our community. • We will constantly look for new and better ways to deliver services. We will seek to be innovative, take reasonable risks, learn from our mistakes and always strive for excellence.
• We will welcome diversity in our community and our work place. • We will conduct our work in an atmosphere of trust, respect and courtesy with open doors and open communication for our customers and each other. • We will provide ethical, dynamic and effective leadership, establish clear direction and priorities, and model the mission and values in support of our common Vision. • We will be accountable for our performance and our organization's success, and be recognized for our achievements.
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Corp
orate Goals
Goal 1 Continue to make Concord a desirable place to live, work, and raise a family.

Goal 2 Be responsive to the needs of Concord citizens, maintain a high level of customer satisfaction, and provide quality public information and outreach.

Goal 3 Promote and improve Concord as a premier location for existing, expanding, and new businesses.

Goal 4 Ensure a balanced budget for a ten-year planning period with adequate replacement funds for buildings and equipment.

Goal 5 Preserve and enhance the livability of Concord's residential neighborhoods with opportunities for a broad range of housing options.

Goal 6 Offer an array of recreation, leisure, and cultural events and programs to meet the needs of citizens of all ages, with an emphasis on the well-being of youth.

Goal 7 Maintain a safe and efficient traffic circulation system.

Goal 8 Have Concord be among the safest cities of comparable size in California and have citizens feel safe in their homes, places of work, and throughout the City.

Goal 9 Maintain City parks, recreation facilities, streets, buildings, and other infrastructure to meet high standards of condition and appearance.

Goal 10 Guide Concord's development according to the General Plan and manage physical resources based on sound environmental
principles.
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Organiza
tional Values
Integrity and Trust - We say what we mean and mean what we say. We honor our word and keep our commitments. We are worthy of the public's and each other's trust.

Commitment to Service - We put our customers first. We respond to our internal customers and treat them with the same courtesy and respect as our external customers. We facilitate, enable, and problem-solve.

Partnerships - We place a high value on building partnerships with members of our community to assure we understand their needs and continue to deliver the services they desire in the most effective manner possible.

Innovation and Continuous Improvement - We strive for excellence in the quality and productivity of our work. We create a work environment in which we look for new solutions and experiment with innovative ways to do things - even if they don't always work the first time. We recognize the need to be dynamic in meeting the community's changing needs. Each and every employee is given the opportunity to develop and grow.

Performance Accountability - We set measurable performance goals which support the priorities of the City and our individual work groups. We are given the necessary authority, training and resources to enable us to achieve these goals. Performance reviews are conducted in a timely and effective manner. Employee advancement and other incentives are based on performance. We are proud of the professionalism, competency and dedication that exist throughout the organization.

Long Range Planning - We conduct long range strategic and financial planning to maximize service delivery and build the economic stability of the City. We practice sound fiscal management to protect the public's resources.

Team Work - We respect each other as individuals, and we take the time and effort to show it. Although certain positions have more decision-making authority, we treat all members of the organization with the same consideration for their ideas and concerns.

We really listen to, and give each other honest feedback. We recognize partnerships among work groups and employees as essential to effectively maximizing resources and delivering high quality services.

Individual Worth and Diversity - We recognize and appreciate the uniqueness of each individual. We value the contribution made and the synergy created by different experiences and perspectives. We are committed to treating each and every person within the organization and the larger community with respect and dignity. ix

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INTRODUCTORY SECTION

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December 28, 2023
Honorable Mayor, City Council and
Members of the Concord Community:

The City of Concord follows the best management practice of publishing a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants within six months of the close of the fiscal year. This report is prepared by the City of Concord’s Finance Department in accordance with Municipal Code, Title 2, Section 15.030. Pursuant to the requirements, we hereby issue the Annual Comprehensive Financial Report (ACFR) of the City for the fiscal year ended June 30, 2023.

The ACFR consists of management’s representations concerning the finances of the City and its blended component unit. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management of the City. To provide a reasonable basis for making those representations, management of the City has established a comprehensive internal control framework that is designed to both 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 U.S. GAAP. This first note in the Notes to the Financial Statements provides a detailed explanation of the City’s significant accounting policies. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive frameworks of internal controls has been designed to provide reasonable 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.

Maze & Associates Accountancy Corporation, a firm of licensed certified public accountants, has audited the City’s financial statements. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City and its blended component units for the fiscal year ended June 30, 2023, are free of material misstatement. The 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 auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion on the City’s basic financial statements as of and for the year ended June 30, 2023. The independent auditors’ report is presented in the first component of the financial section of this report.

City of Concord
Finance Department
1950 Parkside Drive MS/06
Concord, CA 94519-2578
Fax (925) 671-3353
Telephone (925) 671-3192
xiii

The analysis of the financial condition and the results of operations are in the Management's Discussion and Analysis (MD&A) which immediately following the independent auditor's report. The MD&A complements this letter of transmittal and should be read in conjunction with it.

The City of Concord is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget's Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (2 CFR 200). Information related to this single audit, including a schedule of federal expenditures of federal awards, the independent auditor's report on internal control and compliance with applicable laws and regulations are included in a separately issued single audit report.

The Report
The ACFR is presented in three sections:
 The Introduction section includes this letter of transmittal, City Council introduction, the City’s organizational chart, and certificate of achievement.  The Financial section includes the report of the independent auditor’s; Management’s Discussion and Analysis (MD&A); the basic financial statements, including the government-wide financial statements; and the accompanying notes to the financial statements. The Financial Section also includes the fund financial statements including the governmental funds financial statements, the proprietary funds financial statements, the fiduciary funds financial statements, and the combining individual funds financial statement for the non-major governmental funds and the internal service funds. Required supplementary information other than the MD&A is also included in the Financial Section.  The Statistical section includes selected financial and demographic information, presented on a multi-year basis.

The ACFR includes all funds of the City and the City’s component units, which are legally separate organizations for which the City is financially accountable or whose relationship with the City is of a nature and significance that would cause the City’s financial statements to be incomplete were it not included. These include the Concord Public Financing Authority (the Authority), the City of Concord Retirement System, and the Concord/ Pleasant Hill Health Care District.

The Concord Redevelopment Agency (RDA) was dissolved on February 1, 2012, and was replaced by the Redevelopment Successor Agency (SA). The SA is not a component unit of the City and is instead a separate legal entity overseen by the County Oversight Board and the State Department of Finance. The City’s role in the SA is fiduciary in nature. The SA is reported as a private-purpose trust fund, a fiduciary fund type. Additional information about the dissolution of the RDA is included in the notes to the financial statements.

City Profile
Located 29 miles east of San Francisco, Concord is the largest city in Contra Costa County with a population of 122,074. The City covers 31.13 square miles and provides a full range of services including: police protection, recreational activities, community and economic xiv

development, street improvements and maintenance services, parks maintenance, sewer, and general administrative and support services. In addition, the City oversees management of the Concord Pavilion, Diablo Creek Golf Course and Camp Concord in South Lake Tahoe, California.

Concord is a General Law city formed under the State legislative process and structured under provisions of the California constitution. Concord’s governing body, the City Council, is comprised of five elected members, who serve by district, each for four-year terms. City voters also elect a City Treasurer who serves a four-year term.

Every year, the Council selects one of its members to serve as Mayor and one to serve as Vice Mayor.

Concord is operated under the Council-Manager form of government. The Council hires the City Manager, who is then responsible for all management functions of the City, including the development of the budget, delivery of services, hiring of personnel and implementation of capital projects. The City Council also directly hires the City Attorney who serves as the City's primary legal advisor.

Concord is the job center of Contra Costa County and is the County's strongest retail location.

Concord offers the amenities that many businesses require for success. In Concord, business- friendly government policies, outstanding Class A office space values, numerous industrial parks and excellent transportation options combine with favorable home prices, an educated workforce and a dynamic retail environment to create ideal conditions for businesses to locate and expand. These qualities make Concord a premier business location.

The City Council's commitment to families and to the community fosters a high quality of life with attractive residential neighborhoods, and abundant recreational and entertainment opportunities for all ages. Concord, the city where "Families Come First," is a community of friendly neighborhoods with an excellent park system, convenient shopping, large preserves of open space, and an exciting downtown, which features Todos Santos Plaza as the focal point.

Concord's housing mix offers residents to live where they work and play. An extensive transportation system, including easy freeway access, two rapid rail transit stations (Bay Area Rapid Transit (BART)), bus services and a regional airport operated by Contra Costa County, makes Concord's location convenient to San Francisco and other Bay area cities. xv

Economic Condition and Outlook
The City of Concord’s diverse economy is supported by approximately 3.1 million square feet of Class A office space, 7 million square feet of industrial space, and four regional shopping centers, along with a variety of other commercial spaces, making Concord the largest employment center within Contra Costa County.

During the COVID-19 pandemic, the City of Concord focused its economic development efforts on supporting existing businesses through a variety of programs, including the Small Business Grant Program, which provided $5,000 grants to 130 businesses, and the Measure V Commercial Rent Relief Grant Program, which provided $10,000 commercial rent relief grants to 95 businesses. This effort continued during FY2022/2023. Funded by $2 million of American Rescue Plan Act funding, the ARPA Small Business Reimbursement Grant provided a one- time grant of $5,000 to small businesses that continued to experience financial hardship due to the COVID-19 pandemic. The grant program provided 176 grants to small businesses in round one and will award 207 grants in the second round. In addition to the Small Business Grant Reimbursement Program, the City distributed $7 million in one-time grants to 22 non-profit organizations serving the Concord Community. Through programs like these, the City of Concord helped existing businesses remain operational and in their commercial spaces, keeping people employed, which stabilizes families.

Concord is seeing some signs of recovery in its retail and manufacturing sectors. Currently, the occupancy rate of Concord’s industrial market remains high at 97.9%, with lease rates increasing 7.7% within the past year. Concord’s industrial space is attractive due to its central location in the Bay Area and access to a strong workforce. As of March 2023, Concord’s retail vacancy rate is 4.2%. Office space is the one sector continuing to show a decline, its vacancy rate is currently 13%, compared to 12.2% this time last year.

At Council’s direction, the City began implementing a fiscal stability plan in 2018 in order to start addressing the City’s unfunded maintenance needs. The City had previously implemented fiscal stability measures in order to address the revenue declines of the Great Recession, which began in 2007, and again in 2020 due to the COVID-19 pandemic. The City addressed both recessions by significantly reducing staff and cutting all non-essential spending. Those reductions allowed the City to remain fiscally solvent during both of those recessions.

A major step toward achieving long-term fiscal sustainability for the City occurred with two voter approved local transa
ction and use tax measures. Originally approved by voters in 2010 and extended in 2014, the City’s local transactions and use tax, Measure Q, has been a vital, locally controlled, revenue source supporting day-to-day City operations. Measure Q was a voter approved half-cent transactions and use tax that was scheduled to sunset in March 2025.

During its tenure, Measure Q provided $113 million to support general fund programs and $9 million to General Fund stability reserves.

On November 3, 2020, voters approved a one-cent transaction and use tax, Measure V, to replace Measure Q. Measure V stays in place until ended by voters. Collections from Measure V began April 1, 2021, ensuring that the City can maintain essential City services and begin addressing the City’s remaining fiscal challenges. Council has prioritized continuing to use the original ½ cent to support operations and has been dedicating the remaining ½ cent towards infrastructure maintenance and other Council and community priorities. The tables below provide an overview of the use of Measure V funds through the end of FY 2022-23. xvi

Table 1: Annual Measure V Use Tax Receipts and Uses
As of June 30, 2023 (Dollars in Millions)
Sales tax revenue (Measure V Transactions & Use Tax an
d the City’s Bradley Burns Sales
Tax) remains the largest General Fund revenue source and provides for 39 percent of general municipal services such as public safety, street maintenance, and parks and recreation programs. Sales tax revenue has remained steady.. . The adoption of Measure V, combined with recovering regular Bradley Burns sales tax, resulted in sales tax revenue increasing by $0.9 million from fiscal year 2021-22 to a total of $74.8 million in FY2022-23.

Property tax revenue represents the second most significant General Fund revenue source making up 14 percent of total General Fund revenues. Property taxes increased $1.2 million over fiscal year 2021-22. The City’s net taxable assessed value increased 7.4% in fiscal year 2022-23, comparable to the countywide increase of 7.8%. Looking ahead, Beacon Economics Fall 2023 Regional Outlook for the East Bay predicts continued weakness in the housing market for the East Bay. Rising interest rates have taken a toll on potential homeowners. Relief may be provided with new housing production or a new inventory of homes on the market.

The City’s unemployment rate was 3.8% in June 2023 compared to 2.9% in the previous year.

This is similar to the County’s rate of 4.2% in June 2023 (vs. 3.2% in June 2022). The region’s unemployment rates are slightly lower than the State rate of 4.9%. Beacon Economics Fall 2023 Regional Outlook for the East Bay recognizes that the labor market has been growing slower than other local economies, it is worth noting that the region has recovered 99.6% of the jobs lost during the pandemic.

Significant Community Events and Accomplishments
Examples of significant accomplishments for the f
iscal year ended June 30, 2023 include the
following:

Affordable Housing Sites: Resources for Community Development (RCD) partnered with the City, Contra Costa County, State Department of Housing and Community Development (HCD), and Wells Fargo to break ground on development of a new, 62-unit, affordable housing project which will be in close proximity to regional transportation and downtown Todos Santos.

Housing Element Update: With input from the community, the City drafted and submitted its Housing Element Update (HEU) to the CA Department of Housing & Community Development (HCD) in August 2022. During FY2022-23, the City worked with the community, Council, and Measure V Receipts
General Fund
Programs &
Reserves
Measure V
Fund Balance
Fiscal Year 2020-21 Activity (April 1 through June 30) $7.437 $2.549 $4.888 Fiscal Year 2021-22 $32.971 $32.416 $0.555
Fiscal Year 2022-23 $34.358 $34.883 ($0.525)
Total Available Fund Balance $74.766 $69.848 $4.918
xvii

HCD to apply HCD recommendations to the plan. The plan was adopted by Council and certified by HCD during FY2023-24.

Pre-approved Accessory Dwelling Unit (ADU) Program: Thanks to a grant from the California Department of Housing and Community Development, the City of Concord has officially introduced its pre-approved Accessory Dwelling Unit (ADU) program to help people save time and money during the design, planning, and permitting process of building an ADU.

Homelessness Strategic Plan: With input from the community and the Homeless Strategic Plan Working Group, the City is developing a strategic plan to address the crisis of homelessness in our community. The Plan will help assess gaps in services, clarify community goals, identify strategies and help set priorities for funding investments to effectively respond to and prevent homelessness.

Youth Scholarship Program: The American Rescue Plan Act (ARPA) funded a new program to support underserved Concord youth so they can experience traditional summer recreation activities, including the popular group swim lessons at Concord Community Pool, Backyard Explorers day camp for elementary students, East Bay Explorers day camp for middle school students, and the Counselor in Training (CIT) program for teens ages 12-15.

Infrastructure Maintenance: As of June 30, 2023, the City had 33 pavement projects under design or in construction. These were primarily funded through the Measure V sales tax measure. In addition, the City had in progress: 7 Bicycle & Pedestrian/ADA Accessibility projects; 6 Stormwater projects; 5 Sewer Infrastructure projects; 23 Building and Ground Maintenance projects; and 5 Transportation projects.

Former Naval Weapons Station Reuse Project: In January 2023, City Council voted to reject the Concord First Partners, LLC Term Sheet to develop the former naval weapons station area and directed staff to let the Exclusive Negotiating Agreement expire. At a special meeting on August 26, 2023, the Local Reuse Authority voted unanimously to select the global real estate developer, Brookfield Properties, as the preferred master developer for Concord’s Base Reuse Project. The Local Reuse Authority will consider the terms of an Exclusive Negotiating Agreement (ENA) during FY2024.

January 2023 Winter Storm Event: On January 14, 2023, a Major Disaster Declaration was made for California Severe Winter Storms, Flooding, Landslides & Mudslides for damages that occurred between December 27, 2022, through January 31, 2023. The City of Concord submitted a damage assessment to FEMA which resulted in the creation of eight FEMA projects costing approximately $800,000.

Budgetary Control
The City maintains budgetary controls through the City Council’s adoption of an annual budget and by maintaining an encumbrance accounting system. Expenditures for City operations and other purposes identified in the annual budget cannot legally exceed the budgeted amounts approved by the City Council.

The Concord Municipal Code requires the City Manager to present the Annual Operating Budget to the City Council for approval. In June 2023, the City Council adopted a biennial budget encompassing Fiscal Years 2023-24 and 2024-25. The City Council has adopted a number of Policies & Procedures, including Budget and Fiscal Policies; Budget Preparation; xviii

Budget Appropriation and Transfer Controls, which provide direction in the development of the Annual Operating Budget. The City Manager has also authorized several Administrative Directives, which further clarify budget policies, processes and related controls.

Ultimate budgetary control resides at the fund level; however, the City has adopted a number of budgetary appropriation and transfer procedures to provide strong internal controls while encouraging improved accountability and administrative responsiveness. All budgetary transfers require Director of Finance review and approval. All transfers of appropriations affecting Personnel Services (wages & benefits) require Director of Human Resources and City Manager review and approval. Additionally, all transfers between funds and between departments require City Manager or City Council review and approval.

All capital project appropriation transfers require City Manager approval. Transfers in excess of $75,000 require City Council approval. The City Council’s approval is required for new appropriations with the exception of money received for specific purposes (e.g. Developer Contributions) where the appropriation and revenue received are of equal value. Special revenue budget appropriations based on funds provided by grants, donations or contributions require City Manager and City Council approval.

The City also uses encumbrance accounting as another technique for accomplishing budgetary control. An encumbrance is a commitment of a future expenditure earmarked for a particular purpose that reduces the amount of budgetary authority available for general spending. At the end of the fiscal year, encumbered appropriations are carried forward and become part of the following year’s budget while appropriations that have not been encumbered lapse.

The City continues to meet its responsibility for sound financial management as demonstrated by the statements and schedules included in the financial section of this report.

Internal Controls
In developing and enhancing the City's accounting system, significant consideration is given to the adequacy of the City's system of internal accounting controls. Internal controls are designed to provide reasonable assurance regarding the safeguarding of assets against the loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of control should not exceed the benefits likely to be derived, and that the evaluation of costs and benefits requires estimates and judgments by management.

Budget and Fiscal Policies: Long Range Financial Forecasting The City of Concord has utilized a Ten Year Financial Forecast Program since 1995. The Ten Year Financial Forecast Program requires that the City Manager biennially present balanced ten-year financial forecasts for all major funds. Beginning with 2018, the City developed a long- range forecast for the General Fund that projects out twenty years, in order to provide a longer- term view of the City’s fiscal condition, and incorporates both the operating and capital needs in the community. All other funds still present balanced ten-year forecasts. These funds include Special Revenue Funds, Capital Improvement Funds, and Proprietary Funds including the Post-Retirement Benefits Funds. In addition, the Twenty Year Financial Forecast for the xix

General Fund is updated annually. The Twenty Year Financial Forecast includes all projected sources of revenue and all projected expenditures including salaries, benefits, materials, services and capital improvement projects. Each budget cycle, all forecasts are revisited, and assumptions are evaluated and updated.

Reserve Policy
The City’s reserve policy is to maintain a minimum of 17% of GF expenditures with a goal of 30%. In addition to this reserve, the Council approved an additional fiscal stability reserve of $10.5 million during FY 2023, bringing the total goal reserve level to 40% for FY 2023.

The reserve and contingency funds include: the General Fund Operating Contingency Reserve fund; the Benefit Reserve fund; the Capital Maintenance Reserve fund; the Economic Contingency Reserve fund; and the Unforecasted Reserve fund. The total combined General Fund reserve balance for these funds is $46.7 million or 40% of General Fund Operating Expenditures.

Awards
The Government Finance Officers Association (GFOA) of the United States and Canada awarded its Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended June 30, 2022. This was the thirtieth consecutive year that the City of Concord has been recognized for excellence in financial reporting. To qualify for the Certificate of Achievement, the governmental entity must publish an easily readable and efficiently organized ACFR, the content of which conform to program standards. Such report must satisfy accounting principles generally accepted in the United States of America, as well as all applicable legal requirements.

The Certificate of Achievement is valid for only one year. The City believes this ACFR continues to conform to the Certificate of Achievement Program requirements and will be submitting it to GFOA for consideration of the annual award.

Acknowledgments
The preparation of this ACFR could not have been accomplished without the professional, efficient and dedicated services of the highly qualified staff of the Finance Department, in particular Suzanne McDonald, Jonathan Palmer, George Villa, Blake Muller, and Aaron Hill.

In addition, staff in all City departments should be recognized for responding so positively to the requests for detailed information that accompanies each annual audit. The City also recognizes the contributions and positive working relationship with Maze & Associates Accountancy Corporation.

Finally, we wish to express our deep appreciation to the Mayor, City Council and the City Manager for their unfailing support for maintaining the highest standards of professionalism in the financial management of the City of Concord.

Respectfully submitted,
Karan Reid
Director of Finance
xx

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PRINCIPAL OFFICERS
(June 30, 2023)
Elected Officials
Executive Team
Laura M. Hoffmeister
Mayor
Carlyn Obringer
Councilmember
Patti Barsotti
City Treasurer
Valerie Barone
Cit
y Manager
Susanne Brown
City Attorney
Kevin Marstall
Director of Community
Development
Guy Bjerke
Director of Economic
Development and
Base Reuse
Karan Reid
Director of Finance
Jasmin Loi
Director of
Human Resources
Greg Taylor
Director of
Information Technology
Steve Voorhies
Director of
Recreation Services
Mark Bustillos
Ch
ief of Police
William Tarbox
Director of
Public Works
Justin Ezell
Assistant City
Ma
nager
Laura Nakamura
Councilmember
Edi Birsan
Vice Mayor
Dominic Aliano
Councilmember
xxii

The People of the City of Concord
Community
Development
Affordable Housing
Programs
Building
Engineering
Multi-Family Rent al
Inspections
Planning
Transportation
Board of Appeals
Design Review Board
Planning Commission
Econo mic Development
& Base Reuse
Conveyance Strategies
Base Management
Economic Development
Programs
Financial Feasibility
Fiscal Sustainability
Public Outreach
Redevelopment
Successor Agency
Reuse Planning
Police
Field Operations
Internal Operati ons
Investigations
Professional Standards
Volunteer Emergency
Services
Administration
Finance
Budget & Financial
Planning
City Treasury
Disbursements
Financial Analysis &
Reporting
Purchasing & Materials
Management
Revenue Generation
Lease Management
Public Works
Citywide Streetlight
Assessment Dist rict &
Traffic Signals
Facility Maintenance &
Custodial Services
Fleet Management
Graffit i Removal
Landscape & Lighting
Assessment Districts
Parks Services
Sewer Enterprise
Street Maintenance ,
Signs & Markings
Street Sweeping
Traffic Operations
Information
Technology
City Boundaries
Parcel O wnership
Land Management
Geospat ial Analytics
GIS Data Layers
Street Addressing
Help Desktop Support
Web Sit es
Client-side Security
Technology Training
Enterprise
Applications & Data
Bases
Application & Data Base
Security
Project Management
Office (PMO)
Network Services
Telephone Services
Voice Mail Services
Radio/Wireless
Communications
Network Security
Office of the
City Manager
City Clerk /
Administrative
Services
City Council Support
Community Relations
Document Imaging /
Records Management
Measure V Oversight
Committee
Parks &
Recreation
Aquatics
Camp Concord
Facility Operations &
Programs
Golf Course Enterprise
Agreements
Pavilion Management &
Operat ions Agreement
Senior & Special
Recreation Services
Adult Sports & Events
Youth & Teen Programs
Commission on Aging
Concord Pavilion
Community Outreach
Committee
Parks, Recreation &
Open Space
Commission
City Council
Mayor and Four Council Members
Appointive Advisory Boards ,
Committees or Commissions
City Treasurer
Deposits
Investments
City Attorney
City Manager
Claims Processing
Legal Council to City Council, Commissions, Committees, City Management, City Departments and City Staff
Litigation and Liability Defens e
Municipal Code Violation Prosecution
Ordinances, Resolutions, Contracts
The City of Concord has a City Council/City Manger form of government. Five Council Members and the City Treasurer are elected. The Council appoints the City Manager and the City Attorney. The City Manager appoints the City Clerk and department heads and hires employees to carry out program services. The City Council appoints qualified citizens from the community to serve on advisory boards and commissions.

Assistant City Manager
Human
Resources
Employee Services
Benefits Administration
Classificat ion &
Compensation
Employee Relations
Labor Relations
Organizational Training
& Development
Recruitment & Selection
Safety & Workers
Compensation
xxiii

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Concord
California
For its
Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
xxiv

FINANCIAL SECTION

This Page Left Intentionally Blank

INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
City of Concord, California
Report on the Audit of the Financial Statements
Opinions
We h
ave audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Concord, California, as of and for the year ended June 30, 2023, and th e related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, th e business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons listed in the Table of Contents as part of the basic financial statements for the year then ende d in accordance with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement da te, including any currently known information that may raise substantial doubt shortly thereafter. 1

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assu rance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accord ance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, inte ntional omissions, misrepresentatio ns, or the override of internal control. Misstatements are considered material if there is substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstate ment 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 expres sing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policie s used and the reasonableness of significant accounting estimates made by ma nagement, 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.

Change in Accounting Principles
Management adopted the provisions of the Governmental Accounting Standards Board Statement No. 96 – Subscription-Based Information Technology Arrangements (SBITAs), which became effective during the year ended June 30, 2023 as discussed in Note 16 to the financial statements.

The emphasis of this matter does not constitute a modification to our opinions. 2

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and other Required Supplementary Information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial stat ements, is required by th e 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 hi storical context. We have applied certain limited procedures to the required supplementary informa tion in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

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

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an un corrected material misstatement of the other information exists, we are required to describe it in our report.
3

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued ou r report dated December 28, 2023, on our consideration of the City’s internal cont rol over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Pleasant Hill, California
December 28, 2023
4

CITY OF CONCORD JUNE 30, 2023
MANAGEMENT’S DISCUSSION AND ANALYSIS
The City of Concord issues its financial statement s in the format prescribed by generally accepted accounting principles. The Management’s Discussion and Analysis provides an overview of the City’s financial activities for the fiscal year, which should be read in conjunction with the accompanying Transmittal Letter and Basic Financial Statements.

FISCAL 2023 FINANCIAL HIGHLIGHTS
Financial hi
ghlights of the year include the following:

Government-Wide
 The City’s total net position was up $32 million, from $620 million at June 30, 2022 to $652 million at June 30, 2023. Of this total, $551 million was governmental activities net position and $101 million was business-type activities net position.  Government-wide governmental revenues inc luded program revenues of $56 million and general revenues of $140 million for a total of $196 million, an increase of $30 million from the prior year’s total.
 Total government-wide governmental activities expenses were $173 million, up $36 million from the prior year.
 Government-wide business-type activities revenues were $46 million while expenses were $39 million.

Fund Level
 Governmental Fund balances decreased $25 million in fiscal 2023 to $252 million.  Governmental Fund revenues increased $26 million in fiscal 2023 to $191 million.  Governmental Fund expenditures increased to $197 million in fiscal 2023, up $56 million from the prior year.
 General Fund revenues of $147 million in fiscal 2023 reflected an increase of $11 million from the prior year.
 General Fund expenditures of $120 million reflected an increase of $15 million when compared to the prior year.
 General Fund balance of $65 million at June 30, 2023 was $3.5 million more than June 30, 2022.

OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This Annual Comprehen
sive Financial Report is in five parts:

1. Introductory section, which includes the Transmittal Letter and general information;

2. Management’s Discussion and Analysis (this part);

3. The Basic Financial Statements, which include the Government-Wide and the Fund financial statements, along with the Notes to these financial statements;

4. Supplemental Information for the General Fund, Non-Major Governmental Funds and Internal Service Funds; and

5. Statistical information and other schedules.
5

CITY OF CONCORD JUNE 30, 2023

THE BASIC FINANCIAL STATEMENTS
The Basic Financial Statements comprise the Government-Wide Finan cial Statements and the Fund
Financial Statements; these two sets of financial statements provide two different views of the City’s financial activities and financial position.

The Government-Wide Financial Statements provide a longer-term view of the City’s activities as a whole, and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations.

The Statement of Activities provides information about all the City’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses for each of the City’s programs. The Statement of Activities explains in detail the change in net position for the year.

All of the City’s activities are grouped into Governmental Activities and Business-Type Activities, as explained below. All the amounts in the Statement of Net Position and the Statement of Activities are separated into Governmental Activities and Business-Type Activities in order to provide a summary of these two activities of the City as a whole.

The Fund Financial Statements report the City’s operations in more detail than the Government- Wide Statements and focus primarily on the short-term activities of the City’s General Fund and other Major Funds. The Fund Financial Statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt and other long-term amounts.

Major Funds account for the major financial activities of the City and are presented individually, while the activities of Non-Major Funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. Major Funds are explained below.

The fiduciary statements provide financial information about the activities of the Concord Retirement System Pension Trust Fund, the Custodial Fund and the Redevelopment Successor Agency (SA), for which the City acts solely as agent.

The Government-Wide Financial Statements
The Statement of Net
Position and the Statement of Activities present information about the following:
 Governmental Activities - All of the City’s basic services are considered Governmental Activities, including General Government; Public Safety; Public Works; Economic Development and Base Reuse; Community Development; and Recreation Services. These services are supported by general City revenues such as taxe s, and by specific program revenues such as developer fees.

The City’s Governmental Activities include the activities of two separate legal entities: the Concord Pleasant Hill Health Care District and the City of Concord Joint Powers Financing Authority. The City is financially accountable for these entities.  Business-Type Activities - The City’s two enterprise activities, the sewer and the golf course, are reported here. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.

Government-Wide Financial Statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole. 6

CITY OF CONCORD JUNE 30, 2023
Fund Financial Statem
ents
The Fund Financial Statements provide detailed
information about each of the City’s most significant
funds, called Major Funds. The concept of major funds and the determination of which funds are major funds were established by GASB 34 and replace the concept of combining like funds and presenting them in total. Instead, each Major Fund is presented individually, with all Non-Major Funds summarized and presented in a single column. Subordinate schedules present the detail of these Non-Major Funds. Major Funds present the major activities of the City for the year and may change from year to year because of changes in the pattern of City’s activities.

Major funds for the City are the General Fund, Concord Housing Fund, ARPA (American Rescue Plan Act) Special Revenue Fund, General Projects Fund, the 2021 COP Projects Fund, and the Sewer Enterprise Fund.

Fund Financial Statements include Governmental, Proprietary, and Fiduciary Funds as discussed below.

Governmental Fund Financial Statements are prepared on the modified accrual basis, which means they measure only current financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund Financial Statements.

Proprietary Fund Financial Statements are prepared on the full accrual basis, and include all their assets, liabilities, and deferred outflows of resources, current and long-term.

Since the City’s Internal Service Funds provide goods and services only to the City’s Governmental and Business-Type Activities, their activities are reported only in total at the Fund level. Internal Service Funds may not be Major Funds because their revenues are derived from other City funds.

These revenues are eliminated in the Government-Wide Financial Statements and any related profits or losses are returned to the Activities that created them, along with any residual net position of the Internal Service Funds.

Comparisons of Budget and Actual financial information are presented for the General Fund, Concord Housing Fund, ARPA Fund, Special Revenue Funds and Debt Service Funds.

Fiduciary Fund Statements
The City’s fiduciary fund activitie
s are reported in the separate Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. Fiduciary funds include the City of Concord Retirement System Pension Trust Fund, the Successor Agency Private Purpose Trust Fund (SAPPTF) and the Custodial Fund. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its own operations. 7

CITY OF CONCORD JUNE 30, 2023

FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
The analyses presented
below focus on the net position (Table 1) and changes in net position (Table 2) of the City as a whole. The information summarizes the Citywide Statement of Net Position and Statement of Activities stated more fully in the Financial Section of this report.

Table 1: Citywide Net Position
As of June 30, 2023 and 2022 (Dollars in Millions)
Governmental Business-Type Total
Activities Activities
2023 2022 2023 2022 2023 2022
Cash and Investments $319.2 $334.1 $78.1 $67.0 $397.3 $401.1 Other Assets 92.6 67.1 1.0 1.4 93.6 68.5
Current and Other Assets 411.8 401.2 79.1 68.4 490.9 469.6 Capital Assets, net of depreciation 549.9 541.3 61.1 61.0 611.0 602.3 Total Assets 961.7 942.5 140.2 129.4 1,101.9 1,071.9
Deferred Outflows of Resources 71.4 37.1 0.0 0.0 71.4 37.1 Current and Other Liabilities 53.5 55.6 29.7 26.0 83.2 81.6 Noncurrent Liabilities 414.2 338.3 9.4 10.5 423.6 348.8 Total Liabilities 467.7 393.9 39.1 36.5 506.8 430.4
Deferred Inflows of Resources 14.6 58.2 0.4 0.5 15.0 58.7 Net Position:

Net Investment in Capital Assets 541.8 530.3 50.9 49.5 592.7 579.8 Restricted 83.1 91.2 83.1 91.2
Unrestricted (74.1) (94.0) 49.8 42.9 (24.3) (51.1)
Total Net Position $550.8 $527.5 $100.7 $92.4 $651.5 $619.9 Note: Fiscal year 2022 has not been restated for the implementation of GASB Statement No. 96. 8

CITY OF CONCORD JUNE 30, 2023
Table 2: Citywide Changes in Net Position
For the Years Ended June 30, 2023 and 2022 (Dollars in Millions) The analyses below focus on the net position and
changes in net position of the City's Governmental
Activities (Table 3, 4 and 5) and Business-Type Activities (Table 6 and 7) presented in the Citywide Statement of Net position and Statement of Activities that follow.

Governmental Business-Type Total
Activities Activities
2023 2022 2023 2022 2023 2022

EXPENSES
General Government $52.8 $42.4 $52.8 $42.4
Public Safety 73.2 55.9 73.2 55.9
Public Works 16.9 13.6 16.9 13.6
Economic Development and Base Reuse 3.4 1.5 3.4 1.5
Community Development 14.6 12.0 14.6 12.0
Parks & Recreation Services 0.0 7.0 0.0 7.0
Recreation Services 8.2 0.0 8.2 0.0
Interest on Long-Term Debt 3.5 4.2 3.5 4.2
Sewer $37.1 $33.2 37.1 33.2
Golf Course 1.8 1.8 1.8 1.8
Total Expenses 172.6 136.6 38.9 35.0 211.5 171.6

REVENUES
Program Revenues:

Charges for Services 21.9 17.3 45.9 43.6 67.8 60.9
Operating Grants and Contributions 12.9 9.6 12.9 9.6
Capital Grants and Contributions 21.0 13.3 21.0 13.3
Total Program Revenues 55.8 40.2 45.9 43.6 101.7 83.8
General Revenues:

Taxes:

Property Taxes 26.5 25.2 26.5 25.2
Sales Taxes 41.0 41.1 41.0 41.1
Sales Taxes - Transaction Use Tax 33.8 32.8 33.8 32.8
Other Taxes 16.1 15.0 16.1 15.0
Motor Vehicle in Lieu 14.2 13.2 14.2 13.2
Investment Earnings 8.4 (1.7) 1.4 (0.2) 9.8 (1.9)
Transfers, Net 0.1 0.0 (0.1) 0.0 0.0 0.0
Total General Revenues 140.1 125.6 1.3 (0.2) 141.4 125.4 Total Revenues 195.9 165.8 47.2 43.4 243.1 209.2
Change in Net Position 23.3 29.2 8.3 8.4 31.6 37.6
Beginning Net Position 527.5 498.3 92.4 84.0 619.9 582.3 Ending Net Position $550.8 $527.5 $100.7 $92.4 $651.5 $619.9 9

CITY OF CONCORD JUNE 30, 2023

Governmental Activities
Table 3: Governmental Net Position
As of June 30, 2023 and 2022 (Dollars in Millions)
The City’s net position fr
om Governmental Activities increased $23.2 million to $550.8 million in 2023.

The increase in Governmental Net position is due primarily to the increase in the City’s Other Assets.  Current & Other assets increased $10.6 million. $10.7 million is attributable to an increase in Loan Receivable Balances and $6.6 million is from Grant Receivable balances. $6.9 million is due to an increase in Accounts Receivable. These increases are offset with a decline in cash balances and a decline in Leases Receivable.
 Capital assets, net of depreciation, increased $8.6 million, primarily due to an influx of infrastructure improvements funded by the 2021 COP issuance. The City capitalized $22.6 million in street assets in fiscal year 2023, compared to $7.2 million in 2022. Other assets that show notable increases are Traffic Signals and Construction in Progress. These increases were offset by current year depreciation. For more on Capital Assets see Note 6.  Current and other liabilities decreased by $2.1 million, mostly due to a decline in unearned revenue associated with the spending of funds from the American Rescue Plan Act.  Noncurrent liabilities increased $75.9 million, mainly due to an increased in long-term pension liabilities.
2023 2022
Current and other assets $411.8 $401.2
Capital Assets, net of depreciation 549.9 541.3
Total Assets 961.7 942.5
Deferred Outflows of Resources 71.4 37.1
Current and other liabilities 53.5 55.6
Noncurrent Liabilities 414.2 338.3
Total Liabilities 467.7 393.9
Deferred Inflows of Resources 14.6 58.2
Net Position:

Net investment in Capital Assets 541.8 530.3
Restricted 83.1 91.2
Unrestricted (74.1) (94.0)
Total Net Position $550.8 $527.5
Governmental
Activities
Note: Fiscal year 2022 has not been restated for the implementation of GASB Statement No. 96.
10

CITY OF CONCORD JUNE 30, 2023

 The increase in Capital
Assets resulted in the increase of net investment in capital assets by $11.5 million.
 Restricted net position decreased $8.1 million from the prior fiscal year. The decline is mainly attributable to the spending of the 2021 COP Bond proceeds on capital improvement projects.  Unrestricted net position reflects the resources that can be used to finance day-to-day operations. Unrestricted net position increased $19.9 million from the prior fiscal year to negative $74.1 million at June 30, 2023.

Governmental Activities - Sources of Revenues
For the Year Ended June 30, 2023 (see Ta
ble 4)
As the Sources of Revenues Chart above shows, 38%, or
$74.8 million, of the City’s fiscal 2023
governmental activities revenue came from sales taxes; 14%, or $26.5 million, came from property taxes; 11%, or $21.9 million, came from charges for services; 8%, or $16.1 million, came from other taxes; 11%, or $21 million, came from capital grants; and 7%, or $14.2 million, came from motor vehicle in lieu. The remaining 11% came primarily from two sources – operating grants and contributions, and investment earnings.
11

CITY OF CONCORD JUNE 30, 2023

Governmental Activities - Functional Expenses
For the Year Ended June 30, 2023 (see Table 4)
The Functional Expense
s Chart above includes only current year expenses, which are discussed in detail below.

Public Safety accounted for $73.2 million or 42% of expenses, while General Government accounted for $52.8 million or 31% of expenses, followed by Public Works, which accounted for $16.9 million or 10% of expenses. The remaining 17% was spread among Community Development, Recreation Services, Economic Development and Base Reuse, and Interest Expense.

The expenses reflected above do not include capital outlay, which is added to the City’s capital assets on t
he Government-Wide Financial Statements. In 2023, the City capitalized $38.6 million dollars in infrastructure and equipment. The details of the changes in capital assets are discussed in Note 6.

The Statement of Activities presents program revenues and expenses and general revenues in detail. These are elements in the Changes in Governmental Net Position, which summarized below:

Public Safety,
$73.2M, 42%Public Works,
$16.9M, 10%
Community
Development,
$14.6M, 8%
Economic
Development and
Base Reuse, $3.4M,
2%
General
Government,
$52.8M, 31%
Recreation
Services, $8.2M, 5%
Interest on Long
Term Debt, $3.5M,
2%
12

CITY OF CONCORD JUNE 30, 2023

Table 4: Changes in Governmental Net Position
For the Years Ended June 30, 2023 and 2022 (Dollars in Millions) Total governmental expenses were $172.6 million in fi
scal year 2023, reflecting a $36 million
increase from the prior year. This increase is due the spending on infrastructure projects using the 2021 COP Bond proceeds, Measure V funding, and other grant funds.

Total governmental revenues increased $30.1 million to $195.9 million in fiscal 2023. Investment earnings increased $10.1 million as interest rate increases took effect in 2023. In addition, the City noticed increased revenue recognition from ARPA, Measure V, and other grant opportunities. 2023 2022

EXPENSES
General Government $52.8 $42.4
Public Safety 73.2 55.9
Public Works 16.9 13.6
Economic Development and Base Reuse 3.4 1.5
Community Development 14.6 12.0
Parks & Recreation Services 0.0 7.0
Recreation Services 8.2 0.0
Interest on Long-Term Debt 3.5 4.2
Total Expenses 172.6 136.6

REVENUES
Program Revenues:

Charges for Services 21.9 17.3
Operating Grants and Contributions 12.9 9.6
Capital Grants and Contributions 21.0 13.3
Total Program Revenues 55.8 40.2
General Revenues:

Taxes:

Property Taxes 26.5 25.2
Sales Taxes 41.0 41.1
Sales Taxes - Transaction Use Tax 33.8 32.4
Other Taxes 16.1 15.0
Motor Vehicle in Lieu 14.2 13.2
Investment Earnings 8.4 (1.7)
Transfers, Net 0.1 0.0
Total General Revenues 140.1 125.6
Total Revenues 195.9 165.8
Change in Net Position $23.3 $29.2
Governmental
Activities
13

CITY OF CONCORD JUNE 30, 2023

Governmental Activities
Table 5 presents the net expense
of each of the City’s programs. Net expense is defined as total program cost offset by revenues generated by those specific activities. Overall, the City’s net expense increased $20.5 million compared to the prior year. The biggest contributor to the increase in net program expense is the increase in Public Safety pension costs.

Ta
ble 5: Governmental Activities Net Program Expense
As of June 30, 2023 and 2022 (Dollars in Millions)
Business-Type Activities
The net position of Business-Type Activities
increased to $100.7 million in fiscal 2023, up $8.3 million from $92.4 million from the prior year. Sewer expenditures increased by $3.9 million primarily due to an increase in the annual payment made to Central Contra Costa Sanitary District for sewer treatment services. Sewer revenue increased by $2.5 million as sewer fees were increased to help fund future capital improvement projects.
2023 2022
General Government ($48.6) ($40.1)
Public Safety (70.4) (53.3)
Public Works 4.4 3.3
Economic Development and Base Reuse (3.3) 2.2
Community Development 8.2 (1.5)
Parks & Recreation Services 0.0 (2.8)
Recreation Services (3.7) 0.0
Interest on Long-Term Debt (3.5) (4.2)
Total ($116.9) ($96.4)
Net (Expense) Revenue from
Services
14

CITY OF CONCORD JUNE 30, 2023

Table 6: Business-Type Activities Net Position
As of June 30, 2023 and 2022 (Dollars in Millions)
Ta
ble 7: Changes in Business -Type Activities Net Position As of June 30, 2023 and 2022 (Dollars in Millions)
The Sewer Fund generated servic
e fee revenues of $43.7 million in fiscal 2023, reflecting a $2.5 million increase over the prior year. Operating ex penses increased by $3.9 million, to $36.7 million.

Investment income increased $1.4 million during the year. As a result of the various changes, the Sewer Fund ended with a $7.8 million operating gain, which was similar to the results of prior year operations. The Golf Course Fund realized a $0.5 million gain in fiscal year 2023.

Activities
2023 2022
Current and Other Assets $79.1 $68.4
Capital Assets, net of depreciation 61.1 61.0
Total Assets 140.2 129.4
Deferred Outflows of Resources 0.0 0.0
Current and Other Liabilities 29.7 26.0
Long-Term Debt Outstanding 9.4 10.5
Total Liabilities 39.1 36.5
Deferred Inflows of Resources 0.4 0.5
Net Position:

Net investment in Capital Assets 50.9 49.5
Unrestricted 49.8 42.9
Total Net Position $100.7 $92.4
Business-Type
Business-Type
Activities
2023 2022
Net Revenues/(Expense) from Business-Type Activities:

Sewer Fund $6.6 $8.0
Golf Course Fund 0.4 0.6
General Revenues:

Investment Earnings 1.4 (0.2)
Other (0.1) 0.0
Total $8.3 $8.4
15

CITY OF CONCORD JUNE 30, 2023

THE CITY’S FUND FINANCIAL STATEMENTS
Governmental Funds
At June 30, 2023, the Ci
ty’s governmental funds reported combined fund balances of $252.4 million, a $25 million decrease when compared with last year’s combined fund balance of $277.4 million.

General fund balance increased $3.5 million. The Other Governmental Funds increased $20 million.

These gains were offset by decreases the General Projects fund ($6 million) and the 2021 COP Projects fund balance ($12.4 million); both were the result of prioritized spending on infrastructure projects. The Concord Housing Fund also noticed a decrease of $30.5 million; $11.1 million of that decrease is attributable to new housing loan activity and $19.9 million is the result of a change in accounting policy. The remaining $0.5 million of the change in combined fund balances was due to activity in the ARPA fund.

Governmental fund revenues increased $25.6 million this year to $191 million from $165.4 million in the prior year. This increase is due to: General Fund revenues increased $11.8 million; General Projects fund revenues increased $4.3 million; interest earnings in the 2021 COP Project Fund increased $2.6 million; and Other Governmental fund revenues increased $4.1 million from an increase in OSIP and Parkland revenue. The ARPA fund had a revenue increase of $2.2 million this year.

Governmental expenditures increased $55.1 million this year to $196.6 million from $141.5 million in the prior year. This increase is due to the changes noted in the following funds: General Fund increased by $15 million; Concord Housing Fund increase by $11.1; ARPA expenditures increased by $1.8 million; and 2021 COP Projects fund increased by $12.7 million.

Other Financing Sources (Uses) are primarily comprised of issuances of long-term debt and transfers among the various funds in the City. During fiscal year 2023, the General Fund transferred out $23.7 million to fund capital projects. Additional information regarding these transfers can be found in Note

4. Proprietary Funds
Enterprise fund net position increased to $100.7 million in fiscal 2023, up $8.3 million from $92.4
million in the prior year. Enterprise operating revenues were $45.9 million this year, up $2.3 million from last year. Enterprise Fund operating expenses were $38.5 million in fiscal 2023, up $3.8 million from $34.7 million in the prior year. The net position increase is due to two factors: an increase in sewer service rates and an increase in investment income. The additional revenue will be used to fund capital projects.

Internal service fund net position increased to $58 million in fiscal 2023, up $3.7 million from the net position of $54.3 million at the end of the prior year. This increase is due largely in part to an increase of $4.1 million in net position in the Workers’ Compensation Fund, offset by declines in the net positions for the Post Retirement Health Care Benefit Fund, Compensated Absences Fund, and Building Maintenance Fund.

ANALYSES OF MAJOR GOVERNMENTAL FUNDS
General Fund
General Fund revenues totaled $147.4 million, reflecting an increase of $11.8 million, or 9%, over the prior fiscal year. Transaction Use Tax revenue increased $1 million. Property tax revenue increased $1.2 million due to an increase in taxable assessed property values. Interest rate increases are reflected in the $5.6 million increase in the Use of Money and Property. General Fund operating expenditures increased $15 million primarily due to a citywide increase in personnel costs. A portion 16

CITY OF CONCORD JUNE 30, 2023

of the increase in the General Government costs is due to the City paying an additional $1.7 million for the City of Concord Retirement System to increase the plan’s funded status.

Table 8: Changes in General Fund
As of June 30, 2023 and 2022 (Dollars in Millions)
At June 30, 2023, the General Fund balance totaled $65.4 million compared to $61.9 million in the prior year.

The increase of $3.5 million in fund balance was primarily due to interest revenue outperforming prior year values.

Fiscal year 2023 had transfers out of $23.7 million, which mainly supported construction projects.

Details of the City’s transfers can be found in Note 4. This year’s ending fund balance consisted of 2023 2022

REVENUES
Taxes:

Property Taxes $22.3 $21.1
Sales Taxes 41.0 41.1
Sales Taxes - Transaction Use Tax 33.8 32.8
Other Taxes 15.7 14.7
Motor Vehicle In Lieu, Unrestricted 14.2 13.2
Licenses and Permits 2.7 2.2
Intergovernmental 1.7 1.6
Charges for Services 7.6 7.6
Use of Money and Property 3.3 (2.3)
Miscellaneous Revenues 5.1 3.6
Total Revenues 147.4 135.6

EXPENDITURES
General Government 22.8 19.0
Public Safety 69.1 64.5
Public Works 10.9 7.1
Economic Development and Base Reuse 1.1 0.6
Community Development 9.3 8.9
Parks & Recreation Services 0.0 4.9
Recreation Services 6.8 0.0
Principal & Interest on Long-Term Debt 0.4 0.4
Total Expenditures 120.4 105.4
Excess (Deficiency)
of Revenues Over Expenditures 27.0 30.2

OTHER FINANCING SOURCES (USES)
Transfers In 0.2 0.3
Transfers Out (23.7) (27.2)
Total Other Financing Sources (Uses) (23.5) (26.9)
Net Change in Fund Balance 3.5 3.3
Fund Balance at Beginning of Year 61.9 58.6
Ending Fund Balance $65.4 $61.9
General Fund
Revenues and Expenditures
17

CITY OF CONCORD JUNE 30, 2023

$12.1 million categorized as non-spendable, $1.5 million as restricted and $47.7 million as unassigned. Refer to Note 8 for more information regarding the fund balance details.

Concord Housing Fund
The Concord Housing Fund account
s for the activities related to the assets assumed by the City of Concord as the Housing Successor to the housing activities of the former Redevelopment Agency.

The total fund balance as of June 30, 2023, was $3.7 million. Fund balance declined due to issuance of new housing loans activity and a change in accounting policy for the recognition of loan expenditures resulting in a special item.

General Projects Fund
This fund tr
acks capital project costs funded by General Fund money or that are reimbursable from other external sources. The fund’s revenues were $9 million in fiscal 2023, an increase of $4.3 million from fiscal 2022. Fund expenditures were $17.2 million in fiscal 2023 compared to $6.2 million in fiscal 2022. The fund balance decreased by $6 million to a negative $2.5 million primarily due to reimbursements pending for spending on grant related projects.

ARPA
This fund accounts for Coronavirus State and Local Fiscal Recovery Funds received as part of the
American Rescue Plan Act of 2022. The fund expenditures were $7.5 million in fiscal 2023. The cash balance of $12.9 million will be spent in future years. 2021 COP Projects
This fund tra
cks proceeds from the issuance of the 2021 Capital Improvement Project Certificates of Participation to be used to finance the cost of various capital projects and to prepay the 2015 Lease Revenue Financing Agreement. The fund expenditures were $15.1 million in fiscal 2023. See Note 7 for more information on this debt issuance.

Other Governmental Funds
These funds are not presented separately in th
e Basic Financial Statements, but are individually
presented as non-major governmental funds in the Supplementary Information section.

ANALYSES OF MAJOR ENTERPRISE FUND
Sewer Fund
Net position of the Sewe
r Fund at fiscal year-end was $96.6 million, an increase of $7.8 million from the prior year. Net investment in capital assets was $49.4 million and unrestricted net position was $47.2 million at June 30, 2023. As mentioned previously, this increase in the net position is mainly due to an increase in sewer rates, which will be used to fund capital projects.

CAPITAL ASSETS
Generally accepted accounting principles requir
e the City to record all its capital assets, including
infrastructure, in its financial statements. Infrastructure includes roads, bridges, signals, storm drains and other similar assets.
18

CITY OF CONCORD JUNE 30, 2023

In accordance with generally accepted accounting principles, in fiscal 2002, the City recorded the cost of all its infrastructure assets and computed the amount of accumulated depreciation for these assets based on their original acquisition dates. At the end of fiscal 2023, the cost of infrastructure and other capital assets recorded on the City’s financial statements was as shown in Table 9 below:

Table 9: Capital Assets
For the Years Ended June 30, 2023 and 2022 (Dollars in Millions) The principal additions to governmental capital assets in fiscal 2023 were in the streets asset group, which included $22.6 million for pavement rehabilitation projects and rehabilitation of numerous streets throughout the City. Business-Type Activities experienced an increase of $4.7 million in construction in progress, due to sewer projects still in progress as of June 30, 2023. The City depreciates all its capital assets over their estimated useful lives, as required by generally accepted accounting principles. The purpose of depreciation is to spread the cost of a capital asset over the years of its useful life so that an allocable portion of the cost of the asset is borne by all users. Further detail on capital assets, current year additions, construction in progress and depreciation can be found in Note 6.

Balance at Balance at
6/30/2023 6/30/2022
(As Restated)
Governmental Activities
Land $26.4 $26.4
Construction in Progress 16.9 9.7
Ground Improvements 23.8 23.8
Buildings and Improvements 81.7 81.7
Right to Use Leased Buildings and Improvements 0.1 0.1
Right to Use Lease Equipment 0.6 0.0
Right to Use Subscription Asset 1.8 0.7
Machinery and Equipment 25.4 25.1
Vehicles 14.9 13.0
Streets 515.9 493.3
Sidewalks 62.7 62.2
Storm Drains/Catch Basins 444.8 444.8
Street Lights 5.9 5.9
Traffic Signals 36.8 32.4
Less: Accumulated Depreciation (707.8) (677.1)
Governmental Activities Capital Assets, Net $549.9 $542.0 Business-Type Activities
Land $0.4 $0.4
Construction in Progress 24.2 19.5
Buildings and Improvements 8.7 8.7
Machinery and Equipment 0.5 0.5
Sewer Lines 219.8 219.8
Less: Accumulated Depreciation (192.5) (187.9)
Business-Type Activities Capital Assets, Net $61.1 $61.0 19

CITY OF CONCORD JUNE 30, 2023

DEBT ADMINISTRATION
The City made all scheduled debt service payments. Each of the City’s debt issues is discussed in detail in Note 7 to the Financial Statements. At June 30, 2023, the City’s debt was comprised of the following issues:

Table 10: Outstanding Debt
As of June 30, 2023 and 2022 (Dollars in Millions)
Total Governmental Activities debt decreased by $5.7 million due to principal payments made during the year. Business-Type Activities Debt decreased slightly over prior year because of the scheduled pay down of outstanding debt.

ECONOMIC OUTLOOK AND MAJOR INITIATIVES
The economy of the City
and its major initiatives for fiscal year 2022/2023 are discussed in detail in the accompanying Transmittal Letter.

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Comprehensive Finan
cial Report is int ended to provide citizens, taxpayers, investors, and creditors with a general overview of the City’s finances. Questions about this Report should be directed to the Finance Department, at 1950 Parkside Drive, Concord, CA 94519-2578. 6/30/2023 6/30/2022 Net Change
Governmental Activities Debt:
2021 Certificates of Participation
2-4%, due 4/1/41 $101.4 $105.3 ($3.9)
Plus premium on bonds 13.8 14.5 (0.7)
Lease Purchase Agreement

2.78%, due 12/01/26 3.1 3.9 (0.8)
Capital Lease:

Motorola Lease Agreement, due 11/15/26 1.5 1.8 (0.3)
Total Governmental Activities Debt $119.8 $125.5 ($5.7) Business-Type Activities Debt:

Enterprise Long Term Debt:
2012 - Wastewater Revenue Refunding Bonds,

1.50-4.00%, due 2/1/29 $4.1 $4.7 ($0.6)
2018 - Wastewater Revenue Refunding Bonds,

1.25-3.24%, due 2/1/32 6.2 6.8 (0.6)
Total Business-Type Activities Debt $10.3 $11.5 ($1.2)
20

CITY OF CONCORD JUNE 30, 2023

BASIC FINANCIAL STATEMENTS

CITY OF CONCORD JUNE 30, 2023

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City's financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources as well as all its revenues and expenses. This is known as the full accrual basis—the effect of all the City's transactions is taken in to account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated.

The Statement of Net Position reports the difference betw een the City's total assets and deferred outflows of resources and the City's total liabilities and deferred inflows of resources, including all the City's capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of all the City's Governmental Activities in a single column, and the financial position of all the City's Business-Type Activities in a single column; these columns are foll owed by a Total column that presents the financial position of the entire City.

The City's Governmental Activities include the activitie s of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Si nce the City's Internal Service Funds service these Funds, their activities are consolidated with Govern mental Activities, after eliminating inter-fund transactions and balances. The City's Business-Type Activities include all its Enterprise Fund activities.

The Statement of Activities reports increases and decreases in the City's Net Position. It is also prepared on
the full accrual basis, which means it includes all th e City's revenues and all its expenses, regardless of when cash changes hands. This di ffers from the “modified accrual” ba sis used in the Fund financial statements, which reflect only current assets, curre nt liabilities, available revenues and measurable expenditures.

The Statement of Activities presents the City's expenses, first, listed by program, and follows these with the expenses of its Business-Type Activities. Prog ram revenues—that is, reve nues which are generated directly by these programs—are then deducted from prog ram expenses to arrive at the net expense of each governmental and business-type program. The City's general revenues are then listed in the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position.

Both these Statements include the financial activities of the City, Concord/Pleasant Hill Health Care District and the City of Concord Joint Powers Financing Aut hority, which are legally separate but are component units of the City because they are controlled by the City, which is financially accountable for the component units' activities.
22

CITY OF CONCORD

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments (Note 3) 205,942,589 $ 78,063,839 $ 284,006,428 $ Cash with Fiscal Agents (Note 3) 113,297,493 1,533 113,299,026 Receivables (Net of Allowances for Uncollectibles):

Accounts 15,470,484 363,017 15,833,501 Due from Other Governments 22,196,000 - 22,196,000 Interest 7,218,072 82,492 7,300,564
Loans and Notes (Note 5) 36,423,838 - 36,423,838 Leases Receivable (Note 15) 11,084,870 437,142 11,522,012 Inventories 276,864 - 276,864
Internal Balances (Note 4) (74,765) 74,765 -
Capital Assets (Note 6):

Nondepreciable Capital Assets 43,352,134 24,633,195 67,985,329 Depreciable Capital Assets, Net of Accumulated Depreciation 506,538,932 36,563,204 543,102,136 Total Assets 961,726,511 140,219,187 1,101,945,698

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pension - CalPERS (Note 12) 60,357,976 - 60,357,976 Deferred Outflows Related to Pension - CCRS (Note 10) 1,743,338 - 1,743,338 Deferred Outflows Related to OPEB - (Note 13) 9,307,368 - 9,307,368 Total Deferred Outflows of Resources 71,408,682 - 71,408,682

LIABILITIES
Accounts, Deposits and Contracts Payable 14,760,846 28,430,115 43,190,961 Accrued Liabilities 2,942,747 19,093 2,961,840 Interest Payable 1,052,211 153,900 1,206,111 Refundable Deposits 7,666,784 - 7,666,784
Unearned Revenue 14,014,656 - 14,014,656
Compensated Absences (Note 7):

Due in Less Than One Year 3,418,948 43,420 3,462,368 Due in More Than One Year 2,670,601 136,882 2,807,483 Claims Payable (Note 17):

Due in Less Than One Year 3,762,480 - 3,762,480 Due in More Than One Year 13,280,537 - 13,280,537 Long-Term Debt (Note 7):

Due in Less Than One Year 5,207,155 1,145,000 6,352,155 Due in More Than One Year 114,584,191 9,190,141 123,774,332 Leases Payable (Note 15):

Due in Less Than One Year 154,924 154,924 Due in More Than One Year 319,547 - 319,547 Subscription Liability (Note 16):

Due in Less Than One Year 615,824 - 615,824 Due in More Than One Year 513,183 - 513,183 Net OPEB Liability, Due in More Than One Year (Note 13) 30,584,584 - 30,584,584 Net Pension Liability CCRS, Due in More Than One Year (Note 10) 18,614,892 - 18,614,892 Net Pension Liability CalPERS, Due in More Than One Year (Note 12) 233,630,264 - 233,630,264 Total Liabilities 467,794,374 39,118,551 506,912,925

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Leases (Note 15) 11,008,492 430,152 11,438,644 Deferred Inflows Related to Pension - CalPERS (Note 12) 124,118 - 124,118 Deferred Inflows Related to OPEB (Note 13) 3,455,736 - 3,455,736 Total Deferred Inflows of Resources 14,588,346 430,152 15,018,498 NET POSITION (Note 1)
Net Investment in Capital Assets 541,793,735 50,861,258 592,654,993 Restricted for:

Streets/Transportation 9,763,669 - 9,763,669 Housing and Community Services 4,888,652 - 4,888,652 Other Special Revenue Programs 8,999,018 - 8,999,018 Capital Projects 8,759,828 - 8,759,828
Debt Service 21,166 - 21,166
Community Development Projects 50,611,774 - 50,611,774 Total Restricted Net Position 83,044,107 - 83,044,107 Unrestricted Net Position (74,085,369) 49,809,226 (24,276,143) Total Net Position 550,752,473$ 100,670,484$ 651,422,957$ See accompanying notes to basic financial statements
23

CITY OF CONCORD

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities:

General Government 52,864,575 $ 2,563,554 $ 1,712,894 $ - $ Public Safety 73,229,387 1,199,134 1,600,733 - Public Works 16,920,422 4,846,873 7,559,117 8,858,605 Economic Development and Base Reuse 3,382,778 10,562 99,165 - Community Development 14,587,310 9,083,836 1,569,323 12,151,397 Recreation Services 8,241,853 4,214,177 292,076 - Interest on Long-Term Debt 3,454,831 - - - Total Governmental Activities 172,681,156 21,918,136 12,833,308 21,010,002 Business-type Activities:

Sewer 37,063,467 43,692,942 - -
Golf Course 1,792,022 2,208,772 - - Total Business-type Activities 38,855,489 45,901,714 - - Total 211,536,645$ 67,819,850$ 12,833,308$ 21,010,002$ General Revenues:

Taxes:

Property taxes
Sales taxes
Sales taxes - Transaction Use Tax
Transient Occu
pancy Taxes
Business License Taxes
Franchise Fees
Motor Vehicle In Lieu, Unrestricted
Gain on sale of
property
Investment Earnings
Transfers, Net
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning
Net Position - Ending
See accompanying notes to basic financial statements
24

Governmental Business-t ype
Activities Activities Total
(48,588,127)$ (48,588,127)$
(70,429,520) (70,429,520)
4,344,173 4,344,173
(3,273,051) (3,273,051)
8,217,246 8,217,246
(3,735,600) (3,735,600)
(3,454,831) (3,454,831)
(116,919,710) (116,919,710)
- 6,629,475$ 6,629,475
- 416,750 416,750
- 7,046,225 7,046,225
(116,919,710) 7,046,225 (109,873,485)
26,509,921 - 26,509,921
40,987,487 - 40,987,487
33,819,526 - 33,819,526
2,259,583 - 2,259,583
4,224,521 - 4,224,521
9,628,418 - 9,628,418
14,205,304 - 14,205,304
18,762 - 18,762
8,422,432 1,285,749 9,708,181
73,443 (73,443) -
140,149,397 1,212,306
141,361,703
23,229,687 8,258,531 31,488,218
527,522,786 92,411,953 619,934,739
550,752,473$ 100,670,484$ 651,422,957$
Net (Expense) Revenue and
Changes in Net Position
25

This Page Left Intentionally Blank

CITY OF CONCORD JUNE 30, 2023

FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.

MAJOR GOVERNMENTAL FUNDS
The funds described below were determined to be Major Funds by the City in fiscal year 2023. Individual non- major governmental funds are aggregated and titled “Other Governmental Funds”.

General Fund – The General Fund is the general operating fund of the City and accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Concord, these services include general government, public safety, public works, economic development, community development, and parks and recreation services.

Concord Housing – The Concord Housing Special Revenue Fund accounts for the activities related to the assets assumed by the City of Concord as the Hous ing Successor to the housing activities of the former Redevelopment Agency of the City of Concord.

ARPA – The ARPA Special Revenue Fund accounts for federal Coronavirus State and Local Fiscal Recovery Funds received as part of the American Rescue Plan.

General Projects Fund – This capital projects fund accounts for all general capital improvement projects not funded from proprietary funds.
2021 COP Projects Fund – This capital projects fund accounts for the projects that will be funded with the proceeds from the issuance of the 2021 Certificates of Participation Bonds. 27

CITY OF CONCORD

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2023
Other Total
Concord General 2021 COP Governmental Governmental
General Housing ARPA Projects Projects Funds Funds
ASSETS:

Cash and Investments (Note 3) 43,616,296$ 1,805,486$ $12,872,296 10,370,574$ -$ 84,673,345$ 153,337,997$ Cash with Fiscal Agents (Note 3) - - - 152,549 113,047,716 97,228 113,297,493 Receivables (Net of Allowances for Uncollectible):

Accounts 4,005,229 - - 134,967 - 99,309 4,239,505 Due from Other Governments 13,517,493 - - 6,895,240 - 1,783,267 22,196,000 Interest 334,300 5,837,652 - - 887,583 158,537 7,218,072 Due from Other Funds (Note 4) 18,001,007 - - - - - 18,001,007 Loans and Notes (Note 5) - 34,557,705 - - - 1,866,133 36,423,838 Leases Receivable (Note 15) 11,084,870 - - - - - 11,084,870 Inventories 276,864 - - - - - 276,864 Advances to Other Funds (Note 4) 11,704,631 1,885,444 - - - - 13,590,075 Total Assets 102,540,690$ 44,086,287$ 12,872,296$ 17,553,330$ 113,935,299$ 88,677,819$ 379,665,721$ LIABILITIES:

Accounts, Deposits and Contracts Payable 11,137,177$ 4,175$ 600 679,452$ 2,551,159 366,391$ 14,738,954$ Accrued Liabilities 2,845,622 12,626 - - - 37,060 2,895,308 Refundable Deposits 7,666,784 - - - - - 7,666,784 Unearned Revenue 479,183 - 12,288,328 1,073,312 - 173,833 14,014,656 Due to Other Funds (Note 4) - - - - 11,580,122 56,637 11,636,759 Advances from Other Funds (Note 4) 4,041,549 - - 14,080,983 - - 18,122,532 Total Liabilities 26,170,315 16,801 12,288,928 15,833,747 14,131,281 633,921 69,074,993 DEFERRED INFLOWS OF RESOURCES:

Related to Leases (Note 15) 11,008,492 - - - - - 11,008,492 Unavailable Revenue - 40,395,357 - 4,224,402 - 2,545,823 47,165,582 Total Deferred Inflows of Resources 11,008,492 40,395,357 - 4,224,402 - 2,545,823 58,174,074 FUND BALANCES:

Fund Balances (Note 8):

Nonspendable 12,057,873 - - - - - 12,057,873 Restricted 1,545,386 3,674,129 - - 99,804,018 47,619,322 152,642,855 Assigned 4,097,068 - 583,368 - - 37,879,685 42,560,121 Unassigned 47,661,556 - - (2,504,819) - (932) 45,155,805 Total Fund Balances 65,361,883 3,674,129 583,368 (2,504,819) 99,804,018 85,498,075 252,416,654 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 102,540,690$ 44,086,287$ 12,872,296$ 17,553,330$ 113,935,299$ 88,677,819$ 379,665,721$ See accompanying notes to basic financial statements
28

CITY OF CONCORD

RECONCILIATION OF THE GOVERNMENTAL

FUNDS BALANCE SHEET TO THE

STATEMENT OF NET POSITION
JUNE 30, 2023
TOTAL FUND BALANCES -- TOTAL GOVERNMENTAL FUNDS 252,416,654$ Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:

CAPITAL ASSETS
Capital assets used in governmental activities are not financial resources an, therefore, are not reported in the funds. 528,754,560

ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and central services and maintenance, to individual governmental funds. The net position and liabilities of the internal service funds are therefore included in governmental activities in the statement of net position. 57,973,019

ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES
Unavailable revenue which are deferred inflows of resources in the Governmental Funds because they are not available currently are taken into revenue in the Statement of Activities. 47,165,582

DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO PENSION The deferred accounts below are related to the net pension liability and are not due and payable in the current period and therefore are not reported in the Funds:

Deferred outflows of resources related to pension - CCRS 1,743,338 Deferred outflows of resources related to pension - CalPERS 60,357,976 Deferred outflows resources related to OPEB 9,307,368
Deferred inflows of resources related to pension - CalPERS (124,118) Deferred inflows of resources related to OPEB (3,455,736)

LONG-TERM ASSETS AND LIABILITIES
The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds:

Long-Term Debt (118,303,469)
Lease Payable (474,471)
SBITA Payable (757,878)
Interest Payable (1,020,612)
Net Pension Liability CCRS (18,614,892)
Net Pension Liability CalPERS (233,630,264)
Net OPEB Liability (30,584,584)
NET POSITION OF GOVERNMENTAL ACTIVITIES 550,752,473$
See accompanying notes to basic financial statements
29

CITY OF CONCORD

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2023
Other Total
Concord General 2021 COP Governmental Governmental
General Housing ARPA Projects Projects Funds Funds

REVENUES
Taxes:

Property 22,287,385$ -$ -$ -$ -$ 4,222,536$ 26,509,921$ Sales Tax:

Sales Tax 40,987,487 - - - - - 40,987,487
Sales Tax - Transaction Use Tax 33,819,526 - - - - - 33,819,526 Transient Occupancy 2,259,583 - - - - - 2,259,583 Franchise Fees 9,269,663 - - - - 358,755 9,628,418 Business License 4,224,521 - - - - - 4,224,521 Motor Vehicle In Lieu, Unrestricted 14,205,304 - - - - - 14,205,304 Licenses and Permits 2,713,917 - - - - 4,329,025 7,042,942 Intergovernmental 1,666,874 - 7,484,621 8,180,502 - 10,152,218 27,484,215 Charges for Services 7,585,729 - - - - 1,647,418 9,233,147 Fines, Forfeitures and Penalties 383,029 - - - - 836 383,865 Recreation Services 2,981,963 - - - - - 2,981,963 Use of Money and Property 3,307,605 482,461 465,206 167,500 2,716,254 1,786,346 8,925,372 Special Assessment Collections 8,307 - - - - - 8,307
Other 1,696,634 360,561 - 690,508 - 465,234 3,212,937 Total Revenues 147,397,527 843,022 7,949,827 9,038,510 2,716,254 22,962,368 190,907,508

EXPENDITURES
Current:

General Government 22,808,897 - 5,622,776 816,083 - 196,657 29,444,413 Public Safety 69,136,108 - - 897,574 - 32,248 70,065,930 Public Works 10,872,342 - 341,054 - 110,825 5,864,732 17,188,953 Economic Development and Base Reuse 1,081,928 - 1,216,483 1,078,371 - - 3,376,782 Community Development 9,271,105 11,419,301 88,200 1,025,161 - 4,210,749 26,014,516 Recreation Services 6,783,467 - 204,383 - - - 6,987,850 Capital outlay - - 11,725 12,947,611 15,031,293 6,229,707 34,220,336 Debt Service:

Principal 30,604 - - 436,500 - 4,640,000 5,107,104 Interest and Fiscal Charges 443,048 - - - - 3,734,786 4,177,834 Total Expenditures 120,427,499 11,419,301 7,484,621 17,201,300 15,142,118 24,908,879 196,583,718

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 26,970,028 (10,576,279) 465,206 (8,162,790) (12,425,864) (1,946,511) (5,676,210)

OTHER FINANCING SOURCES (USES)
Proceeds from sale of property 18,762 - - - - - 18,762
Issuance of debt (Notes 15 and 16) - - - 1,666,291 - - 1,666,291 Transfers in (Note 4) 233,914 - - 700,106 - 22,830,646 23,764,666 Transfers (Out) (Note 4) (23,719,582) - - (229,550) - (615,198) (24,564,330) Total Other Financing Sources (Uses) (23,466,906) - - 2,136,847 - 22,215,448 885,389

NET CHANGES IN FUND BALANCES
BEFORE SPECIAL ITEM 3,503,122 (10,576,279) 465,206 (6,025,943) (12,425,864) 20,268,937 (4,790,821) SPECIAL ITEM:

Loans receivable - change in accounting
policy (Note 1) - (19,890,842) - - - (325,445) (20,216,287) NET CHANGES IN FUND BALANCES 3,503,122 (30,467,121) 465,206 (6,025,943) (12,425,864) 19,943,492 (25,007,108)

FUND BALANCES
AT BEGINNING OF YEAR 61,858,761 34,141,250 118,162 3,521,124 112,229,882 65,554,583 277,423,762

FUND BALANCES (DEFICIT)
AT END OF YEAR 65,361,883$ 3,674,129$ 583,368$ (2,504,819)$ 99,804,018$ 85,498,075$ 252,416,654$ See accompanying notes to basic financial statements
30

CITY OF CONCORD

RECONCILIATION OF THE

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
TO THE

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis.

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS (25,007,108)$ Amounts reported for governmental activities in the Statement of Activities are different because of the following:

CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Capitalized expenditures are therefore added back to fund balance 35,912,489 Depreciation expense is deducted from the fund balance (26,185,621) (Depreciation expense is net of internal service fund depreciation of $4,510,305 which has already been allocated to the internal service funds.)

LONG-TERM DEBT PROCEEDS AND PAYMENTS
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position.

Repayment of bond principal is an expenditure in the Governmental Funds, but in the Statement of Net Position the re
payment reduces long-term liabilities.

Repayment of debt principal 4,640,000
Issuance of lease (639,413)
Repayment of lease principal 198,104
Issuance of SBITA (1,026,878)
Repayment of SBITA principal 269,000
Amortization of bond premium 764,359

ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide (or require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):

Pension expense CCRS 2,036,927
Pension expense CalPERS (9,341,627)
OPEB expense 3,028,535
Deferred inflow of resources - Unavailable revenues 34,887,653 Interest Payable 46,948

ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds.

The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with Governmental Funds is reported with governmental activities, because they service those activities.

Change in Net Position - All Internal Service Funds, less contributions from Governmental Funds 3,646,319
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 23,229,687$ See accompanying notes to basic financial statements
31 Page 64 of 233

CITY OF CONCORD

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES:

Taxes:

Property 21,077,000 $ 21,577,000 $ 22,287,385 $ 710,385 $ Sales Tax:

Sales Tax 37,800,000 42,000,000 40,987,487 (1,012,513) Sales Tax - Transaction Use Tax 28,000,000 31,300,000 33,819,526 2,519,526 Transient Occupancy 2,500,000 2,500,000 2,259,583 (240,417) Franchises 8,152,000 8,152,000 9,269,663 1,117,663 Business License 3,571,800 3,571,800 4,224,521 652,721 Motor Vehicle In Lieu, Unrestricted 13,342,000 13,342,000 14,205,304 863,304 Licenses and Permits 1,862,920 1,862,920 2,713,917 850,997 Intergovernmental 974,000 974,000 1,666,874 692,874 Charges for Services 6,117,839 6,037,839 7,585,729 1,547,890 Fines, Forfeitures and Penalties 335,000 335,000 383,029 48,029 Recreation Services 3,151,830 3,151,830 2,981,963 (169,867) Use of Money and Property 1,882,958 1,882,958 3,307,605 1,424,647 Special Assessment Collections - - 8,307 8,307
Other 723,670 508,670 1,696,634 1,187,964 Total Revenues 129,491,017 137,196,017 147,397,527 10,201,510 EXPENDITURES:

Current:

General Government:

Council 574,374 588,240 460,750 127,490 Manager 3,260,426 3,757,255 3,635,429 121,826 Attorney 1,614,513 1,973,436 1,857,560 115,876 Human Resources 2,613,657 2,888,497 2,866,771 21,726 Finance 10,667,450 15,714,699 13,988,387 1,726,312 Total General Government 18,730,420 24,922,127 22,808,897 2,113,230 Public Safety 63,374,368 67,092,484 69,136,108 (2,043,624) Public Works 11,184,124 11,723,409 10,872,342 851,067 Economic Development and Base Reuse 823,399 1,220,545 1,081,928 138,617 Community Development 9,741,181 9,877,003 9,271,105 605,898 Recreation Services 7,043,220 6,872,374 6,783,467 88,907 Capital Outlay 119,509 1,204,354 - 1,204,354 Debt Service:

Principal - - 30,604 (30,604)
Interest and Fiscal Charges 366,246 370,246 443,048 (72,802) Total Expenditures 111,382,467 123,282,542 120,427,499 2,855,043

EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES 18,108,550 13,913,475 26,970,028 13,056,553

OTHER FINANCING SOURCES (USES)
Proceeds from sale of property - - 18,762 18,762
Transfers In 309,399 233,914 233,914 - Transfers (out) (16,830,680) (24,602,741) (23,719,582) 883,159 Total Other Financing Sources (Uses) (16,521,281) (24,368,827) (23,466,906) 901,921 NET CHANGE IN FUND BALANCE 1,587,269$ (10,455,352)$ 3,503,122 13,958,474$ FUND BALANCE AT BEGINNING OF YEAR 61,858,761
FUND BALANCE AT END OF YEAR 65,361,883$
See accompanying notes to basic financial statements
32 Page 65 of 233

CITY OF CONCORD

CONCORD HOUSING SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES:

Use of Money and Property 52,116 $ 52,116$ 482,461$ 430,345$ Other Revenue - - 360,561 360,561
Total Revenues 52,116 52,116 843,022 790,906 EXPENDITURES:

Current:

Community and Economic Development 409,695 613,578 11,419,301 (10,805,723) Total Expenditures 409,695 613,578 11,419,301 (10,805,723)

EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES (357,579) (561,462) (10,576,279) (10,014,817)

OTHER FINANCING SOURCES (USES)
Transfers in 130,266 164,146 - (164,146)

NET CHANGE IN FUND BALANCE
BEFORE SPECIAL ITEM (227,313) (397,316) (10,576,279) (10,178,963) SPECIAL ITEM:

Loans receivable - change in accounting policy - - (19,890,842) (19,890,842) NET CHANGE IN FUND BALANCE (227,313)$ (397,316)$ (30,467,121) (30,069,805)$ FUND BALANCE AT BEGINNING OF YEAR 34,141,250
FUND BALANCE AT END OF YEAR 3,674,129$
See accompanying notes to basic financial statements
33

CITY OF CONCORD

ARPA SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES:

Intergovernmental - $ -$ 7,484,621$ 7,484,621$
Use of Money and Property - - 465,206 465,206 Total Revenues - - 7,949,827 7,949,827
EXPENDITURES:

Current:

General Government 873,478 873,478 5,622,776 (4,749,298) Public Works 429,214 429,214 341,054 88,160 Economic Development and Base Reuse - - 1,216,483 (1,216,483) Community Development - - 88,200 (88,200)
Recreation Services 192,786 192,786 204,383 (11,597) Capital Outlay 18,400,000 18,400,000 11,725 18,388,275 Total Expenditures 19,895,478 19,895,478 7,484,621 12,410,857 NET CHANGE IN FUND BALANCE (19,895,478)$ (19,895,478)$ 465,206 20,360,684$ FUND BALANCE AT BEGINNING OF YEAR 118,162
FUND BALANCE AT END OF YEAR 583,368$
See accompanying notes to basic financial statements
34

CITY OF CONCORD JUNE 30, 2023

PROPRIETARY FUNDS
Proprietary funds account for City operations financ ed and operated in a manner similar to a private business enterprise. The intent of the City is that th e cost of providing goods and services be financed primarily through user charges.

The concept of major funds extends to Proprietary Funds. Generally accepted accounting principles do not provide for the disclosure of budget vs. actual comp arisons regarding proprietary funds. The City reports the Sewer Enterprise Fund as a major fund:

Sewer Fund. To account for activities associated with sewage transmission and treatment.

The City reports the Golf Course Fund as a non-major fund.

Golf Course Fund. To account for activities associated with the development, operation and maintenance of the Diablo Creek Golf Course.
35

CITY OF CONCORD

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2023
Business-type Activities-Enterprise Funds Governmental
Non-Major Activities-
Enterprise/ Internal Service
Sewer Golf Course Total Funds
ASSETS:

Current Assets:

Cash and Investments (Note 3) 74,856,386$ 3,207,453$ 78,063,839$ 52,604,592$ Cash with Fiscal Agents (Note 3) 1,533 - 1,533 -
Accounts Receivable 199,307 163,710 363,017 11,230,979 Interest Receivable 81,823 669 82,492 -
Total Current Assets 75,139,049 3,371,832 78,510,881 63,835,571 Non-Current Assets:

Advances to Other Funds (Note 4) 848,413 - 848,413 4,457,692 Lease Receivable (Note 15) - 437,142 437,142 - Capital Assets (Note 6):

Land 334,838 60,344 395,182 - Construction In Progress 24,238,013 - 24,238,013 2,743,802 Buildings and Improvements 2,832,944 5,876,042 8,708,986 48,362,156 Machinery and Equipment 320,142 136,177 456,319 40,254,036 Sewer Collection System 219,772,435 - 219,772,435 - Intangible Asset - - - 882,178
Less: Accumulated Depreciation (187,741,691) (4,632,845) (192,374,536) (71,105,666) Net Capital Assets 59,756,681 1,439,718 61,196,399 21,136,506 Total Non-Current Assets 60,605,094 1,876,860 62,481,954 25,594,198 Total Assets 135,744,143 5,248,692 140,992,835 89,429,769 LIABILITIES:

Current Liabilities (Payable from Current Assets):

Accounts and Contracts Payable 28,425,932 4,183 28,430,115 21,892 Accrued Liabilities 18,642 451 19,093 47,439
Due to Other Funds (Note 4) - - - 6,364,248
Interest Payable 153,878 22 153,900 31,599 Compensated Absences Payable (Note 7) 43,420 - 43,420 3,418,948 Capital Lease Payable (Note 7) - - - 357,155
Revenue Refunding Bonds (Note 7) 1,145,000 - 1,145,000 - Subscription Liability (Note 16) - - - 371,129
Claims Payable (Note 17) - - - 3,762,480
Total current liabilities 29,786,872 4,656 29,791,528 14,374,890 Noncurrent Liabilities:

Compensated Absences Payable (Note 7) 136,882 - 136,882 2,670,601 Advance from Other Funds (Note 4) - 773,648 773,648 -
Long-Term Debt
Due in More Than One Year (Note 7) 9,190,141 - 9,190,141 1,130,722 Claims Payable
Due in More Than One Year (Note 17) - - - 13,280,537 Total Noncurrent Liabilities 9,327,023 773,648 10,100,671 17,081,860 Total Liabilities 39,113,895 778,304 39,892,199 31,456,750

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Leases (Note 15) - 430,152 430,152 - NET POSITION:

Net Investment in Capital Assets 49,421,540 1,439,718 50,861,258 19,277,500 Unrestricted 47,208,708 2,600,518 49,809,226 38,695,519 Total Net Position 96,630,248 $ 4,040,236 $ 100,670,484 $ 57,973,019 $ See accompanying notes to basic financial statements
36 Page 69 of 233

CITY OF CONCORD

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2023
Business-type Activities-Enterprise Funds Governmental
Non-Major Activities-
Enterprise/ Internal Service
Sewer Golf Course Totals Funds

OPERATING REVENUES
Service Fees 43,692,942$ -$ 43,692,942 $ -$
Charges for Services - - - 37,943,028
Golf Course Fees and Charges - 2,125,006 2,125,006 - Other - 83,766 83,766 3,107,018
Total Operating Revenues 43,692,942 2,208,772 45,901,714 41,050,046

OPERATING EXPENSES
Operating and Maintenance 32,332,844 1,644,743 33,977,587 24,990,791 Cost of Sales and Services - - - 61,368
Depreciation (Note 6) 4,403,944 147,257 4,551,201 4,579,683 Claims and Judgments - - - 9,902,641
Total Operating Expenses 36,736,788 1,792,000 38,528,788 39,534,483 Operating Income (Loss) 6,956,154 416,772 7,372,926 1,515,563

NON-OPERATING REVENUES (EXPENSES)
Investment Income 1,205,303 80,446 1,285,749 1,345,953 Interest Expense (326,679) (22) (326,701) (88,304) Total Non-Operating Revenues (Expenses) 878,624 80,424 959,048 1,257,649 Income (Loss) Before Contributions and Transfers 7,834,778 497,196 8,331,974 2,773,212 Transfers In (Note 4) 226,557 - 226,557 1,150,000 Transfers Out (Note 4) (300,000) - (300,000) (276,893) Net Contributions and Transfers (73,443) - (73,443) 873,107 Changes in Net Position 7,761,335 497,196 8,258,531 3,646,319 Total Net Position - Beginning 88,868,913 3,543,040 92,411,953 54,326,700 Total Net Position - Ending 96,630,248$ 4,040,236$ 100,670,484$ 57,973,019$ See accompanying notes to basic financial statements
37

CITY OF CONCORD

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2023
Business-type Activities-Enterprise Funds Governmental
Non-Major Activities-
Enterprise/ Internal Service
Sewer Golf Course Totals Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers 43,660,911$ 2,159,300$ 45,820,211$ 29,315,240$ Payments to Suppliers (26,716,724) (1,480,629) (28,197,353) (15,023,854) Payments to Employees (1,855,551) (163,881) (2,019,432) (4,727,403) Claims Paid - - - (10,106,563)
Net Cash Provided by (Used for) Operating Activities 15,088,636 514,790 15,603,426 (542,580)

CASH FLOWS FROM NON-CAPITAL

FINANCING ACTIVITIES
Borrowings of Advances From/(To) Other Funds 624,058 - 624,058 3,119,475 Transfers In 226,557 - 226,557 1,150,000
Transfers (Out) (300,000) - (300,000) (276,893) Net Cash Provided by (Used for)
Non-Capital Financing Activities 550,615 - 550,615 3,992,582

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (4,760,716) - (4,760,716) (2,704,555) Principal Paid on Lease - (8,478) (8,478) -
Principal Paid on Subscription Liability - - - (374,060) Principal Paid on Debt (1,110,000) - (1,110,000) (347,712) Interest and Fiscal Charges Paid (413,361) (22) (413,383) (139,905) Net Cash Provided by (Used for) Capital and Related
Financing Activities (6,284,077) (8,500) (6,292,577) (3,566,232)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received (Paid) 1,142,659 80,474 1,223,133 1,345,953 Net Cash Provided by (Used for) Investing Activities 1,142,659 80,474 1,223,133 1,345,953 Net Increase (Decrease) in Cash and Cash Equivalents 10,497,833 586,764 11,084,597 1,229,723 Cash and Cash Equivalents at Beginning of Period $64,360,086 $2,620,689 66,980,775 51,374,869 Cash and Cash Equivalents at End of Period 74,857,919$ 3,207,453 $ 78,065,372 $ 52,604,592 $ Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Operating Income (Loss) 6,956,154$ 416,772 $ 7,372,926 $ 1,515,563 $ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Depreciation 4,403,944 147,257 4,551,201 4,579,683 Change in assets and liabilities:

Receivables, Net (32,031) (45,901) (77,932) (6,889,219) Accounts payable and other accrued expenses 3,748,276 1,294 3,749,570 (98,971) Accrued Liabilities 3,293 (1,061) 2,232 5,864
Compensated Absences 9,000 - 9,000 548,422
Leases-related activity - (3,571) (3,571) -
Self Insurance Claims Payable - - - (203,922)
Net Cash Provided by (Used for) Operating Activities 15,088,636$ 514,790$ 15,603,426$ (542,580)$ See accompanying notes to basic financial statements
38

CITY OF CONCORD JUNE 30, 2023

FIDUCIARY FUNDS
Trust funds ar
e used to account for assets held by the City as a trustee agent for individuals, private organizations, and other governments.

Custodial Funds account for assets held by the City in a custodial capacity for individuals or other government units. The City reports one custodial fund, the Tourism Improvement District Fund.

Th
e financial activities of these funds are excluded from the City-wide financial statement, but are presented in separate Fiduciary Fund financial statements.
39

CITY OF CONCORD

FIDUCIARY FUNDS

STATEMENTS OF FIDUCIARY NET POSITION
JUNE 30, 2023
City of Concord Successor Tourism
Retirement Agency Improvemen t
System Private District
Pension Purpose Custodial
Trust Trust Fund Fund
ASSETS:

Cash and Investments (Note 3)
U.S. Treasury Notes 4,940,610 $ - $ -$
U.S. Government Agencies Obligations 5,600,123 - -
Medium-Term Corporate Notes 4,281,202 - -
Municipal Bonds 395,580 - -
Foreign Bonds 102,952 - -
Mutual Funds 14,710,782 - -
Pooled Investments 1,950,720 1,631,780 58,774 Cash with Fiscal Agents (Note 3) - 4,445 -
Total Cash and Investments 31,981,969 1,636,225 58,774 Receivables (Net of Allowances for Uncollectibles):

Accounts - 80,219 -
Interest on Loan Receivable (Note 19) - 451,950 -
Loan Receivable (Note 19) - 230,003 -
Total Assets 31,981,969 2,398,397 58,774 DEFERRED OUTFLOW OF RESOURCES:

Deferred Charge on Refunding - 118,410 -
LIABILITIES:

Accounts Payable and Due to Others - - 58,774
Interest Payable - 82,000 -
Long-Term Debt (Note 19):

Due in One Year - 2,400,000 -
Due in More Than One Year - 3,508,723 -
Total Liabilities - 5,990,723 58,774
NET POSITION:

Net Position Restricted for Pension
Benefits and Held in Trust for Other Purposes 31,981,969 (3,473,916) - Total Net Position (Deficit) 31,981,969$ (3,473,916)$ -$ See accompanying notes to basic financial statements
40

CITY OF CONCORD

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2023
City of Concord Successor Tourism
Retirement Agency Improvement
System Private-Purpose District
Pension Purpose Custodial
Trust Trust Fund Fund

ADDITIONS
Employer Contributions 6,606,208$ -$ -$
Property Taxes, Net of Pass Through Payments - 4,204,647 - Net Investment Income:

Investment Income 1,646,780 42,783
Investment Management Fees (159,256) - -
Total Additions 8,093,732 4,247,430 -

DEDUCTIONS
Retirement and Other Benefits 5,282,819 - -
Economic Development and Base Reuse - 431,715 -
Community Planning and Economic Development - 2,586 -
Interest Expense - 460,432 -
Total Deductions 5,282,819 894,733 - NET CHANGES IN NET POSITION 2,810,913 3,352,697 - Net Position (Deficit) Held in Trust, Beginning of Year 29,171,056 (6,826,613) - Net Position (Deficit) Held in Trust, End of Year 31,981,969$ (3,473,916) $ - $ See accompanying notes to basic financial statements
41

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CITY OF CONCORD JUNE 30, 2023

NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Concord (City) was incorporated in 1905 and operates under the Council-Manager form of government. The City provides the following servi ces: public safety (police services and building inspection), streets and roads, sewer collection, recreation services, public improvements, planning and zoning, economic development and general administration services.

The financial statements and accounting policies of the City of Concord conform with generally accepted accounting principles applicable to governments. The Governmental Accounting Standard Board (GASB) is the accepted standard-setting body for establishi ng governmental accounting and financial reporting principles. The following is a summary of the more significant policies:

Reporting Entity
The accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financial ac tivities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City's operations (i.e. the City has operatio nal responsibility for the component unit) or a financial benefit / burden relationship exist, and are reported as an integral part of the City's financial statements.

The City's component units which are described below are all blended.

The City of Concord Joint Powers Financing Authority is a joint powers authority organized by the City of Concord and the former Concord Redevelopment Agency under the laws of the State of California. The Authority was organized to provide financial assistance to the City by financing real and personal properties and improvements for the benefit of the residents of the City and surrounding areas. Administrative and related normal business expenses incurred in the day- to-day operations of the Authority are provided by the City. Such expenses are insignificant to the Authority's operations. The Authority obtains financing for City and the former Agency sponsored projects using leases signed by the City or former Agency as collateral. The amounts of the leases are calculated to provide sufficient resources to repay the debt incurred to finance the projects.

The Concord/Pleasant Hill Health Care District is a local health care district organized under Local Hospital District Law, as set forth in the Health and Safety Code of the State of California and is governed by the City's Council. City staff provides management assistance to the District.

The City of Concord Retirement System is governed by the City's Retirement System Ordinance, Article II, Chapter 8 of the City of Concord Municipal C ode, and is used to account for contributions and investment income restricted to pay retirement and death benefits of genera l and police employees. The Plan's benefit provisions are frozen and retirement and death benefit payments are restricted to eligible employees who retired or left the City of Concord eligible for a pension prior to June 28, 1999. Contribution provisions are established by the City Council. Elig ibility, actuarial interest rates, administration and certain other tasks are the responsibility of the Retirement Board established by the above ordinance.

Financial statements for the City of Concord Joint Powers Financing Authority and the Concord/Pleasant Hill Health Care District can be obtained from the City of Concord, 1950 Parkside Drive, Concord, California 94519. The City of Concord Retirement System does not issue separate financial statements. 44

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

Government-wide Statements: The Statement of Net Position and th e Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, exce pt for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activ ities generally are financed through taxes, intergovernmental revenues, and other non-exchange tran sactions. Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs , (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues th at are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blen ded component units. Separate st atements for each fund category:
governmental, proprietary, and fiduciary, are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.

Proprietary fund operating revenues, such as charges for services , result from exchange transactions associated with the principal activit y of the fund. Exchange transactio ns are those in which each party receives and gives up essentially equal values. Operating expenses result from the cost of providing those services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Nonoperating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

Major Funds
The City's major governmental and enterprise funds ar e identified and presented separately in the fund financial statements. All other governmental and ente rprise funds, called non-major funds, are combined and reported in single columns.

The City reported the following major governmental funds in the accompanying financial statements:

General Fund – The General Fund is the general operating fund of the City and accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Concord, these services include general government, public safety, public works, economic development, community development, and parks and recreation services. 45

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Major Funds (Continued)
Concord Housing – The Concord Housing special revenue fund accounts for the activities related to the assets assumed by the City of Concord as the Hous ing Successor to the housing activities of the former Redevelopment Agency of the City of Concord.

ARPA – The ARPA Special Revenue Fund accounts fo r federal Coronavirus State and Local Fiscal Recovery Funds received as part of the American Rescue Plan Act (ARPA).

General Projects Fund – This capital projects fund accounts for all general capital improvement projects not funded from proprietary funds.
2021 COP Projects Fund – This capital projects fund accounts for the projects that will be funded with the proceeds from the issuance of the 2021 Certificates of Participation Bonds.

The City reported the following enterprise fund as a major fund in the accompanying financial statements:

Sewer Fund – To account for activities associated with sewage collection, transmission and treatment.

The City also reports the following fund types:

Internal Service Funds – These funds account for workers' compensation costs, non-reimbursable portion of insurance claims, post-employment health care benefits, City facilities' maintenance expenses, maintenance and replacement costs of City licensed vehicles, motorized equipment, technology equipment and office equipment and funding for compensated abse nces balances; all of wh ich are provided to other departments on a cost-reimbursement basis.

Fiduciary Funds – Fiduciary Funds account for assets held by the City as trustee agent for other governmental units, private organizations or individuals. The City of Concord Retirement System (CCRS) Pension Trust Fund accounts for accumulation of resources to be used for retirement annuity payments at appropriate amounts and times in the future. The Successor Agency to the Redevelopment Agency of the City of Concord is reported in a Private Purpose Trust Fund that is used to account for the activities of the Successor Agency. The Custodial Fund accounts for charges collected by the government on behalf of other governments. The financial activities of these funds are excluded from the City-wide financial statement, but are presented in separate Fiduciary Fund financial statements.

Basis of Accounting
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
46

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting (Continued)
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available.

The City considers all revenues reported in the gove rnmental funds to be available if the revenues are collected within sixty days after year-end, except for sales tax reve nue which has a 90 day period of availability. General capital asset acquisitions, including entering into contracts giving the City the right to use leased assets, are reported as expenditures in governmental funds. Proceeds of long-term debt and financing through leases are reported as other financing sources.

Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, sales tax, grants entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Other revenues susceptible to accrual include intergovernmental revenues, interest and charges for services.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted Net Position may be available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include accumulated unpaid vacation, sick pay and other employee amounts which are recognized as expenditures to the extent they have matured, and principal and interest on general long-term debt, including lease liabilities, which is recogni zed when due. Financial resources usually are appropriated in other funds for transfer to a debt service fund in the period in which maturing debt principal and interest must be paid. Such amounts thus are not current liabilities of the debt service fund, as their settlement will not require expenditure of existing fund assets.

Inventory and Prepaid Items
Inventories are valued at cost (on the first-in, first- out basis). Inventories of the General Fund consist of expendable supplies held for consumpt ion. The cost is recorded as an expenditure in the General Fund at the time individual inventory items are consumed. Reported General Fund inventories are equally offset by amounts included in Nonspendable Fund Balance whic h indicates that they do not constitute available spendable resources even though they are a component of net position.

Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items in governmental funds are equally offset by amounts included in Nonspendable Fund Ba lance which indicates that they do not constitute available spendable resources even though they are a component of net position. 47

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property Taxes and Special Assessment Revenue
The County of Contra Costa levies, bills and collect s property taxes for the City; the County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1 of the preceding fiscal year.

Secured property tax is due in two installments, on November 1 and February 1, and becomes a lien on those dates. It becomes delinquent on December 10 a nd April 10, respectively. Unsecured property tax is due on July 1 and becomes delinquent on August 31.

Sales Tax
Since 1956 the Bradley Burns Uniform Local Sales and Use Tax Law has imposed a tax (Bradley Burns tax) on the retail sale of merchandise or goods within the State of California. In order to provide for uniform administration, reporting, sales and use tax rates and, collection of local sales and use taxes, the State collects the Bradley Burns tax on beha lf of cities and counties, and distributes the revenue to those local governments. On September 27, 1956, the City adopted Ordinance No. 354 to contract with the State of California to provide for the collection and administration of City’s sales and use taxes under the Bradley- Burns Uniform Local Sales and Use Tax Law.

Compensated Absences
In governmental funds, Compensate d Absences (unpaid vacation and sick leave) are recorded as expenditures in the year paid, as it is the City's policy to liquidate any unpaid vacation or sick leave at June 30 from future resources rather than currently avai lable expendable resources. The City's liability for Compensated Absences is determined annually. For al l governmental funds, amounts expected to be paid out for permanent liquidation are recorded as fund liabi lities; the long term portion is recorded in the Statement of Net Position.

Compensated Absences are included in accrued liabilities. Compensate d Absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. Compensated Absences are accounted for by Proprietary funds as expenditures in the year earned. The changes in Compensated Absences of governmental and business- type activities are summarized in Note 7.

Capital Assets
All capital assets are valued at historical cost or estim ated historical cost if act ual historical cost is not available, except for intangible right to use leased assets, the measuremen t of which is discussed in Note 15 below. Contributed capital assets are valued at their acquisition value on the date contributed. The City's policy is to capitalize all assets wi th costs exceeding certain minimum thresholds and with useful lives exceeding two years.

The City has recorded all its public domain (infrastructure) capital asse ts, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems in the government-wide financial statements.

All capital assets with limited useful lives are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. 48

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets (Continued)
The amount charged to depreciation expense each year repr esents that year's pro rata share of the cost of capital assets.

Depreciation of capital assets in service is provided using the straight line method which means the cost of the asset is divided by its expected useful life in year s and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives and capitalization thresholds listed below to capital assets.

Capitalization
Useful Lives Threshold
Ground improvements 33 Years 100,000$
Buildings and improvements 33 Years 100,000
Right-to-use leased buildings and improvements 2 Years 7,500 Right-to-use subscription assets 2 to 5 years 100,000
Machinery and equipment 10 Years 7,500
Vehicles 5 Years 7,500
Streets 30 Years 100,000
Sidewalks 50 Years 100,000
Storm drains/catch basins 100 Years 100,000
Traffic signals 30 Years 100,000
Sewer lines 50 Years 100,000
Major outlays for capital assets and improvements are capitalized as projects are constructed.

Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and Statement of Fiduciary Net Position may report a separate section for deferred outflows of resources. Th is separate financial statement element represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an

expense/expenditure until then.

In addition to liabilities, the Statement of Net Positi on and the balance sheet of the governmental funds reports a separate section for deferred inflows of re sources. This separate financial statement element represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as revenue until that time. The governmental funds have only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the gove rnmental funds balance sheet. The governmental funds report unavailable revenues from intergovernmental revenue and deferred inflows of resources related to leases. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

Net Position and Fund Balances
Net Position is measured on the full accrual basis, while Fund Balance is measured on the modified accrual basis.
49

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position and Fund Balances (Continued)
Net Position is the excess of all the City's assets and deferred outflows of resources over all its liabilities and deferred inflows of resources. Net Position is divided into three captions, and is described below:

Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City's capital assets, less the ou tstanding balance of any debt issued to finance these assets.

Restricted describes the portion of Net Position which are re stricted as to use by the terms and conditions of agreements with outside parties, governmental re gulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements.

Unrestricted describes the portion of Net Position which are not restricted as to use.

The City's fund balances are classified based on spending constraints imposed on the use of resources. For programs with multiple funding sour ces, the City prioritizes and expe nds funds in the following order:

Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:

Nonspendable represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are incl uded. However, if proceeds realiz ed from the sale or collection of nonspendable assets are restricted, committed or assi gned, then Nonspendable amounts are required to be presented as a component of the applicable category.

Restricted fund balances have external restrictions impose d by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires th e resources to be used only for a specific purpose.

Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources.

Committed fund balances have constraints imposed by City Council resolution which may be altered only by resolution of the City Council. This category may include encumbrances.

Assigned fund balances are amounts constrained by the City's intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expre ssed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. City policy and procedure No. 168 delegates the authority to assign to the City Manager. This ca tegory may include encumbra nces and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds have not been restricted or committed.

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

This includes the residual general fund balance and re sidual fund deficits, if any, of other governmental funds. The general fund is the only fund that reports a positive unassigned fund balance amount. 50

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Minimum Fund Balance Policy
To address financial uncertainties, the City maintains various General Fund reserves and contingency funds that, when combined, total not le ss than 17 percent of the General Fund’s operating expenditures. The reserve and contingency funds include: the General Fund Operating Contingency Reserve fund; the Benefit Reserve fund; the Capital Maintenance Reserve fund; the Economic Contingency Reserve fund; and the Unforecasted Reserve fund. The total combined unassigned fund balance for these funds was $46.7 million or 40% percent of General Fund Operating Expenditu res. These funds, along with the Pavilion Fund, SLEFS Fund, Community Court Fund, and Forfeited De posit Fund are included within the financial statements as the “General Fund”. Including these additional funds, and the Pavilion Fund, the total combined unassigned fund balance was $47,661,556.

Use of Estimates
The preparation of financial statements in confor mity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at th e date of the financial statements and the reported amounts of revenues and expenses duri ng the reporting period. Actual results could differ from those estimates.

Pensions
For purposes of measuring the net pension liability and deferred inflows/outflows of resources related to pensions, and pensions expense, information about the fiduciary net position of the miscellaneous plan and the safety plan of the City of Concord, an ag ent multiple-employer defined benefit pension plan participating in the California Public Employees’ Retirement System (CalPERS) plan and Concord Retirement System (CCRS) plan and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reporte d by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability and deferred inflows/outflows of resources related to OPEB, and OPEB expense, information about the fiduciar y net position of the OPEB plans of the City of Concord, an agent multiple-employer defined benefit pension plan partic ipating in the California Public Employees’ Retirement System (CalPERS) plan and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contri butions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Fair Value Measurement
The City categorizes the fair value measuremen ts of its investments based on the hierarchy established by generally accepted accounting principles . The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
51

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New Effective Accounting Pronouncements
GASB Statement No. 91 – In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associ ated with (1) commitment s extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The requirements of the statement are effective for reporting periods beginning after December 15, 2021. GASB Statement No. 91 did not have an effect on the fiscal year 2023 financial statements.

GASB Statement No. 94 – In March 2020, GASB issu ed GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for availability payment a rrangements (APAs). The requirement s of the statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. GASB Statement No. 94 did not have an effect on the fiscal year 2023 financial statements.

GASB Statement No. 96 – In May 2020, GASB issu ed GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) de fines a SBITA; (2) establishes that a SBITA results in a right to use subscription asset – an intangible asset – and a corresponding subscrip tion liability; (3) provides the capitalization criteria for outlays ot her than subscription payments, in cluding implementation costs of a SBITA; and (4) requires note disclosures regardi ng a SBITA. The requirements of the statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. The City implemented the provisions of the Statement No. 96 during the year ended June 30, 2023. As a result, the City determined that beginning the balances of capital assets and subscription liabilities were $745,189 as of July 1, 2022, and restated and increased the balances in that amount, and the net effect on beginning net position was zero. See the disclosure in Note 16.

GASB Statement No. 99 – In April 2022, GASB issu ed GASB Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accountin g and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB statements and (2) accounting and financial reporting for financial guarantees. Th e requirements of the statement ar e effective as follows: (1) the requirements related to extension of the use of LIBOR, accounting for SNAP distri butions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance; (2) the requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting pe riods thereafter; and (3) the requirements related to financial guarantees and the cla ssification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

GASB Statement No. 99 did not have an effect on the fiscal year 2023 financial statements. 52

CITY OF CONCORD JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Future Accounting Pronouncements
The Governmental Accounting Standards Board (GASB) releases new accounting and financial reporting standards which may have a signifi cant impact on the City's financia l reporting process. Future new standards which may impact the City, include the following:

GASB Statement No. 100 – In June 2022, GASB issued GASB Statement No. 100, Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62 . The requirements of this Statement are effective for fiscal years ending after June 15, 2023. The City has not determined the effect of this Statement.

GASB Statement No. 101 – In June 2022, GASB issued GASB Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurem ent guidance under a unified model and by amending certain previously required disclosures. The requireme nts of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. The City has not determined the effect of this Statement.

New Funds
The Cannabis Community Benefit Special Revenue Fund was established during the fiscal year ended June 30, 2023 to account for revenues received from local cannabis bu sinesses for the advancement of community and public purposes. The Opioid Settlement Special Revenue Fund was established during the fiscal year ended June 30, 2023 pursuant to settlement agreements with opioid manufacturers, distributors, and pharmacies, the funds are to be used to fund future opioid-remediation efforts. The settlement agreements include a list of qualifying opioid remediation expenditures.

Special Item - Change in Accounting Policy
During fiscal year 2023, the City changed its accounting policy related to the accounting for long-term loans receivable in governmental funds. Effective Ju ly 1, 2022, all long-term loans receivable are offset with unavailable revenue, rather than fund balance, at the time of issuance. As a result of the change in accounting policy, the City established unavailable revenue of $19,890,842 in the Concord Housing Special Revenue Fund, $185,445 in the Housing Assistance Programs Special Revenue Fund and $140,000 in the Housing and Community Services Special Revenue Fund. The change in accounting policy was recorded as a special item as of July 1, 2022.
53

CITY OF CONCORD JUNE 30, 2023
NOTE 2 – BUDGETS AND BUDGETARY ACCOUNTING
The City follows these procedures in establishing the budgetary data reflected in the financial statements:

1. The City Manager submits to the City Council proposed biennial operating budget by June. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted to obtain taxpayer comments.

3. The budget is legally enacted through passage of separate resolutions for the City.

4. The City Manager is authorized to transfer budgeted amounts from one program, department or account to another within the same fund. All transfers of appropriations affecting Personnel Service type accounts require the Director of Human Resources and City Manager approval. Expenditures may not legally exceed budgeted appropriations at the fund level without City Council approval.

5. The City is required to adopt a biennial operating budget on or before June 30 for all funds on a basis consistent with generally accepted accounti ng principles. From the effective date of the budget, the amounts stated therein as proposed ex penditures become appropriations to the various funds. The City Council may amend the budget during the fiscal year.

6. All governmental fund type annual operating budgets are adopted on a basis consistent with generally accepted accounting principles, except for capital outlay expenditures for Special Revenue Funds which are budgeted on a project time frame rather than on an annual basis, in conjunction with #7 below.

7. The City also adopts budgets for its Capital Projec ts, which are based on the project life rather than a fiscal year. Therefore, capital project budgets ma y span several fiscal years. Project appropriations transfers of $75,000 or more require City Council approval.

Encumbrances
Encumbrance accounting is employed as an extension of formal budgetary integration in the governmental funds. Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation.

Appropriation Lapses
Unexpended appropriations lapse at year end unless budgeted on a project basis.

NOTE 3 – CASH AND INVESTMENTS
The City's dependence on property tax receipts, which are received semi-annually, requires it to maintain significant cash reserves to finance operations during the remainder of the year. The City pools cash from all sources and all funds except Cash with Fiscal Agents so that it can be safely invested at maximum yields.

Individual funds are able to make expenditures at any time during the year.

Policies
All investments are carried at fair value and as a general rule investment income is allocated among funds on the basis of average monthly cash and investment ba lances in these funds. Interest income on certain investments is allocated based on the source of the investment and legal requirements which apply.

California Law requires banks and savings and loan in stitutions to pledge government securities with a market value of 110 percent of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150 percent of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution.
54

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Policies (Continued)
Cash and investments are used in preparing proprietary fund statements of cash flows because these assets are highly liquid and are expended to liquidate liabilities arising during the year.

Classification
Cash and investments are classified in the financial statements as shown below at June 30, 2023:

Internal
Governmental Enterpri se Service Fiduciary
Funds Funds Funds Funds Total
Cash and investments 153,337,997$ 78,063,839$ 52,604,592$ 33,672,523$ 317,678,951$ Cash with fiscal agents 113,297,493 1,533 4,445 113,303,471 Total cash and investments 266,635,490$ 78,065,372$ 52,604,592$ 33,676,968$ 430,982,422$ Investments Authorized by the California Government Code and the City's Investment Policy The City of Concord operates its investment activities under the prudent man rule. This affords the City a broad spectrum of investment opportunities as long as the investment is deemed prudent and is allowable under current statutes of the State of California. The Ci ty is authorized to invest in the following types of instruments, and the table also identifies certain provisions of the California Government Code, or the City's investment policy where it is more restrictive:

Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality* of Portfolio in One Issuer U.S. Treasury Bills, Bonds and Notes 5 years None None None Federal Agency or United States 5 years None None None
Government Sponsored Obligations**
State Obligations - CA & Others 5 years A 30% None
Bankers' Acceptances 180 days A 30% None
Commercial Paper 270 days A-1 25% 10%
Negotiable Certificates of Deposit 5 years A 30% None
Medium-Term Corporate Notes 5 years A 30% None
Money Market Mutual Funds N/A Top rating 20% No Limit
California Local Agency Investment Fund (LAIF) N/A None $75 million
per account
$75 million per
account
Time Certificates of Deposit 5 years Satisfactory None 10% Supranationals 5 years AA 30% None
Shares of Beneficial Interest Issued by a Joint
Powers Authority (local government investment Pursuant to Government pool such as CAMP) N/A Code Section 6509.7 None None
* At time of purchase
**Federal agency securitized securities (including, but not limited to, mortgage-backed securities, collateralized mortgage obl igations and commercial mortgage backed securities) are not permitted.

Under the City's Investment Policy, investments not described above are ineligible investments. In addition, the City may not invest any funds in inverse floaters, range notes, or interest only strips that are derived from a pool of mortgages in accordance with the California Government Code. 55

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trus tees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obli gations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures or State statutes. The table below identifies the investment types that are authori zed for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements:

Minimum
Maximum Credit
Authorized Investment Type Maturity Quality
Federal Agency Securities 5 years Top rating category
State of California Local Agency Investment Fund None None Commercial Paper 270 days Top rating category
Negotiable Certificates of Deposit 180 days Top rating category Bank Deposits None FDIC Insured
U.S. Government Treasury Obligations None None
State/Local Obligations None Top rating category
Federal Securities None Top rating category
Corporate Notes None Top rating category
Repurchase Agreements 1 year Top rating category
Money Market Mutual Funds None Top rating category
Investment Agreements None Top rating category
Contra Costa County Investment Pool None None
Retirement System Authorized Investments
The System's investment policy authorizes the System to invest in financial instruments in three broad investment categories: equity, fixed income, and real estate. These fina ncial instruments can include, but are not limited to, corporate bonds, commercial paper, U.S. government securities, common and preferred stock, real estate investment trus
ts, and mutual funds. Fixed income investments may include bonds and commercial paper in order to provide added flexibility in managing the fixed income portfolio.

The asset allocation ranges for the system are as follows:

Target Mix Minimum Maximum
Large/Medium Cap Domestic Equity 30% 20% 45%
International Equity 7.5% 2% 15%
Small Cap Equity 7.5% 2% 15%
Domestic Real Estate 0% 0% 10%
Domestic Fixed Income 50% 40% 60%
Cash 5% 0% 20%
Allocation Ranges
56

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. One of the ways 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 maturi ng or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City's and Retirement System's investments (including investments held by bond trustees) to mark et interest rate fluctuations is provided by the following tables that show the distribution of the Ci ty's and Retirement System’s investments by maturity or earliest call date:

City and Fiscal Agents
Remaining Maturity (in Months)
12 Months or 13 to 24 25 to 36 37 to 60
Less Months Months Months Total
Investment Type:

U.S. Treasury Notes $ - $ 1,346,808 $ 9,933,262 $ 18,640,795 $ 29,920,865 U.S. Government Agencies Obligations 2,949,848 1,496,534 2,704,566 - 7,150,948 Medium-Term Corporate Notes 1,940,647 7,795,076 2,447,423 3,823,631 16 ,006,777 Negotiable Certificates of Deposit - - 1,722,135 - 1,722,135 Supranationals 921,341 1,102,163 - - 2,023,504 Municipal Bonds - 935,579 1,41 8,215 239,431 2, 593,225 LAIF 165,732,697 - - - 165,732 ,697 CAMP 142,296,941 - - - 142,296 ,941 CalTrust 22,775,642 - - - 22,775,642 Money Market Mutual Funds 19 1,483 - - - 191,483 Total $ 336,808,599 $ 12,676,160 $ 18,225,601 $ 22,703,857 390,414,217 Cash deposits with banks and on hand 8,586,236
Total Cash and Investments $ 399,000,453
Retirement System Pension Trust Fund
Remaining Maturity (in Months)
12 Months or 13 to 24 25 to 36 37 or More
Less Months Months Months Total
Investment Type:

U.S. Treasury Notes - $ $ 578,465 256,994 $ $ 4,105,151 $ 4,940,610 U.S. Government Agencies Obligations - 4, 586 3,688
5,591,849 5,600,123
Medium-Term Corporate Notes 80,300 473,510 140,033 3,587,359 4,281,202 Municipal Bonds - - - 395,580 395,580 Foreign Bonds - - - 102,952 102,952 Total $ 80,300 $ 1,056,561 $ 400,715 $ 13,782,891 15,320,467 Non-Maturing Investments:

Pooled Cash and Accrued Income 1,950,720
Mutual Funds 14,710,782
Total Cash and Investments $ 31,981,969
57

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
The City and the Retirement System are participants in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand and is based on the accounting records maintained by LAIF, which are record ed on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mort gage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. On June 30, 2023, these investments matured in an average of 260 days.

The City is a participant in the Short-Term Fund and the Medium-Term Fund of the Investment Trust of California (CalTRUST), a joint powers authority and public agency established by its members under the provisions of Section 6509.7 of the California Government Code. Members and participants are limited to California public agencies. CalTRUST is governed by a Board of Trustees of seven Trustees, at least seventy-five percent of whom are from the participat ing agencies. The City reports its investment in CalTRUST at the fair value amount provided by CalT RUST, which is the same as the value of the pool shares. The balance is available for withdrawal on demand, and is based on the accounting records maintained by CalTRUST. Included in CalTRUST’s investment portfolio are: United States Treasury Notes, Bills, Bonds or Certificates of Indebtedness; registered state warrants or treasury notes or bonds; California local agency bonds, notes, warrants or ot her indebtedness; federal agency or United States government sponsored enterprise obligations; ba nkers acceptances; commercial paper; negotiable certificates of deposit; repurchase agreements; medi um-term notes; money market mutual funds; notes, bonds or other obligation secured by a first priority security interest in securities authorized under Government Code Section 53651; and mortgage passthrough securities, collateralized mortgage obligations, and other asset – backed securities.

CalTRUST’s Short-Term Fund has a target portfolio duration of 0 to 2 years and the Medium-Term Fund has a target portfolio duration of 1 to 3 years. On June 30, 2023, these investments in each Fund matured in an average of 321 days and 2.15 years, respectivel y. The investment in CalTRUST is valued based on the fair value factor provided by the CalTRUST, which is calculated as the average cost to net asset value per share of the Short-Term Fund or the Medium-Term Fund. At June 30, 2023, the fair value approximated the City’s cost.

The City, as a CAMP shareholder, may withdraw all or any portion of the funds in each CAMP account at any time by redeeming shares. The CAMP Declaration of Trust permits the CAMP trustee to suspend the right of withdrawal from CAMP or to postpone the date of payment of redemption proceeds if the New York Stock Exchange is closed other than for custom ary weekend and holiday closings, if trading on the New York Stock Exchange is restricted, or if, in th e opinion of the CAMP trus tees, an emergency exists such that disposal of the CAMP poo l securities or determination of its net asset value is not reasonably practicable. If the right of withdrawal is suspended, the City may either with draw its request for that withdrawal or receive payment based on the net asse t value of the CAMP pool next determined after termination of the suspension of the right of withdrawal. At June 30, 2023, the fair value approximated the City’s cost. At June 30, 2023, these investments have an average maturity of 26 days. 58

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Credit Risk
Credit risk is the risk that an issuer of an invest ment will not fulfill its obligat ion 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 actual rating as of June 30, 2023 for each investment type as provided by Standard & Poor's and Moody's for the City's investments and for the Retirement System’s investments.

City and Fiscal Agents
Investment Type AAA / AAAm AA+ / AA / AA- Aaf/Aa-f A+ / A / A- BBB+ Total U.S. Government Agencies Obligations -$ 7,150,948$ -$ -$ -$ 7,150,948 $ Medium-Term Corporate Notes - 5,312,538 - 9,598,759 1,095,480 16,006,777 Supranationals 2,023,504 - - - - 2,023,504 Municipal Bonds 164,293 1,644,374 - - - 1,808,667 Negotiable Certificates of Deposit - 861,047 - 861,088 - 1,722,135 CAMP 142,296,941 - - - - 142,296,941 CalTrust - - 22,775,642 - - 22,775,642 Money Market Mutual Funds 191,483 - - - - 191,483 Totals 144,676,221$ 14,968,907$ 22,775,642 $ 10,459,847 $ 1,095,480 $ 193,976,097 Exempt from credit rating disclosure:

U.S. Treasury Notes 29,920,865
Not rated:

Municipal Bonds 784,558
(1)
LAIF 165,732,697
Cash deposits with banks and on hand 8,586,236
Total Investments 399,000,453$
(1) Credit ratings listed above are based on ratings provided by Standard & Poor's (S&P). Municipal Bonds listed as "Not Rated" above have no rating per S&P, although they are rated as "Aa2" per Moody's and "AA" per Fitch.

Retirement System Pension Trust Fund
Investment Type AAA/AAAm AA+/AA/AA- A+/A/A- BBB+/BBB/BBB- Total U.S. Government Agencies Obligations -$ 5,600,123$ -$ -$ 5,600,123$ Medium-Term Corporate Notes 761,656 244,621 1,067,817 1,947,412 4,021,506 Municipal Bonds 43,445 168,375 88,413 - 300,233 Foreign Bonds - - 41,587 61,365 102,952 Totals 805,101$ 6,013,119$ 1,197,817$ 2,008,777$ 10,024,814 Exempt from credit rating disclosure:

U.S. Treasury Notes 4,940,610
Not rated:

Medium-Term Corporate Notes 259,696
(1)
Municipal Bonds 95,347
(1)
Pooled Cash and Accrued Income 1,950,720
Mutual Funds 14,710,782
Total Investments 31,981,969$
(1) Credit ratings listed above are based on ratings provided by Standard & Poor's (S &P). Medium-Term Corporate Notes and Munici pal Bonds listed as "Not Rated" above have no rating per S& P, although are rated as "Aaa" and "Baa3" per Moody's. 59

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
Investments in the securities of any individual issuer, other than U. S. Treasury securities, that represent 5 percent or more of total Retirement Trust Fund investments are as follows at June 30, 2023:

Retirement System Pension Trust Fund
Fund Issuer Type of Investments Amount
Pension Trust Fund Federal National Mortgage Association U.S. Government Agencies 3,161,472 $ Federal Home Loan Mortgage Corporation U.S. Government Agencies 2,438,651 Custodial Credit Risk
The custodial credit risk for deposits is the risk that the City will not be able to recover deposits or will not be able to recover collateral securities that are in possession of an outsid e party. This risk is mitigated in that the City’s bank deposits are insured by Fe deral Depository Insurance Corporation (FDIC). 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 and securities lending transactions: The California Government Code requires that a financial institution secure deposits made by state or local government unit by pledging securities in an undivided collateral pool held by depository regulate
d under state law. The market value of the pledged
securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. As of June 30, 2023, the City’s balance in the financial institutions was $11,830,189 of that amount, $250,000 was covered by FDIC insurance, and $11,580,189 was covered by collateral held in the pledging bank’s trust department.

Fair Value Measurements
The City and the City’s Retirement Trust categorize th eir fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (L evel 3 measurements). The three leve ls of the fair value hierarchy are described as follows:

Level 1 — Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the City has the ability to access.

Level 2 — Inputs to the valu ation methodology include:
• Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; • Inputs that are derived principall y from or corroborated by observable market data by correlation or other means.
60

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements (Continued)
Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best informat ion available in the circumstance s and may include the City's own data.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The City’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

Deposits and withdrawals in governmental investment pools, such as LAIF and JPA Investment Pools are made on the basis of $1 and not fair value. Accordingly, the City’s pr oportionate share in these types of investments is uncategorized input not defined as a Level 1, Level 2, or Level 3 input.

The following is a description of the valuation methods and assumptions used by the City to estimate the fair value of its investments. There have been no changes in the methods and assumptions used at June 30, 2023. The methods described may produce a fair va lue calculation that may no t be indicative of net realizable value or reflective of fu ture fair values. City management believes its valuation methods are appropriate and consistent with other market par ticipants. The use of diffe rent methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The City’s treasury pool asset market prices are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg or Telerate. Where prices are not available from generally recognized sources, the securities are priced using a yield-based matrix system to arrive at an estimated market value. Prices that fall between data points are interpolated. Non-negotiable FDIC-insured bank certificates of deposit are priced at par.

When available, quoted prices are used to determine fa ir value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy.

For investments classified within Level 2 of the fair value hierarchy, the City's custodians generally uses a multi- dimensional relational model. Inputs to their pr icing models are based on observable market inputs in active markets. The inputs to the pricing models are typically benchmark yields, reported trades, broker- dealer quotes, issuer spreads and benchmark secur ities, among others. The City does not have any investments that are measured using Level 3 inputs.

As of June 30, 2023, the City and the Retirement System have th e following recurring fair value measurements:
61

CITY OF CONCORD JUNE 30, 2023
NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
City and Fiscal Agents
Quoted Prices
in A ctive Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Investments by Fair Value Level Fair Value (Level 1) (Level 2) (Level 3) Debt securities:

U.S. Treasury Notes 29,920,865 $ 29,920,865 $ - $ -$ U.S. Government Agencies Obligations 7,150,948 - 7,150,948 - Medium-Term Corporate Notes 16,006,777 - 16,006,777 - Negotiable Certificates of Deposit 1,722,135 - 1,722,135 - Supranationals 2,023,504 - 2,023,504 -
Municipal Bonds 2,593,225 - 2,593,225 -
Total Investments Measured at Fair Value 59,417,454 29,920,865$ 29,496,589$ -$ Investments Measure at Net Asset Value Per Share:

CAMP 142,296,941
Investments Measured at Amortized Cost:

Money Market Mutual Funds 191,483
Not Subject to Fair Value Hierarchy:

LAIF 165,732,697
CalTrust 22,775,642
Cash deposits with banks and on hand 8,586,236
Total Investments 399,000,453$
Retirement System Pension Trust Fund
Quoted Prices
in A ctive Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Investments by Fair Value Level Fair Value (Level 1) (Level 2) (Level 3) Debt securities:

U.S. Treasury Notes 4,940,610$ 4,940,610$ -$ -$ U.S. Gov ernment Agencies Obligations 5,600,123 - 5,600,123 - Medium-Term Corporate Notes 4,281,202 - 4,281,202 - Municipal Bonds 395,580 - 395,580 -
Foreign Bonds 102,952 - 102,952 -
Equity Securities:

Mutual Funds 14,710,782 14,710,782 - - Total Inv estments Measured at Fair Value 30,031,249 19,651,392$ 10,379,857$ -$ Not Subject to Fair Value Hierarchy:

Pooled Cash and Accrued Income 1,950,720
Total Inv estments 31,981,969$
62

CITY OF CONCORD JUNE 30, 2023
NOTE 4 – INTERFUND TRANSACTIONS
Internal Balances
Internal balances represent the net interfund receivables and payable remaining after the elimination of all such balances within governmental and business–type activities.

Current Interfund Balances
Current Interfund Balances arise out of short-term cash flow needs and are due from one fund to another, all of which are expected to be repaid in the normal course of business. At June 30, 2023, the interfund balances are:

Due To Other Funds Due from Other Funds Amount
2021 COP Projects Capital Projects Fund General Fund 11,580,122$ Infrastructure Lease Agreement Debt Service Fund General Fund 56,637 Risk Management/Liability Internal Service Fund General Fund 3,712,397 Post-Retirement Healthcare Benefit
Internal Service Fund General Fund 2,651,851
18,001,007$
Long-Term Interfund Advances
At June 30, 2023, the funds below had made the following advances:

Amount of
Fund Receiving Advance Fund Making Advance Advance
General Fund Concord Housing Special Revenue Fund 1,885,444$ (a) Sewer Enterprise Fund 488,797 (a)
Sewer Enterprise Fund 359,616 (b)
Workers' Compensation Internal Service Fund 1,307,692 (c) General Projects
Capital Projects Fund General Fund 10,930,983 (d) Workers' Compensation Internal Service Fund 3,150,000 (e) Non-Major Enterprise Fund:

Golf Course Enterprise Fund General Fund 773,648 (f) 18,896,180$
(a) This General Fund advance was made during fiscal year 20 09-2010 to fund the retirement of $8.2 million of the 1995 Lease Revenue Bonds. The advance bears interest at the LAIF rate plus 0.5 percent to be paid on a quarterly basis. As a result of this nonrecurring long-term advance, the City is no longer obligated to pay 8.24 percent interest on the retired bonds. The General Fund began making repayments in fiscal year 2014-2015, with a final payment expected in fiscal year 2030 and will pay approximately $1.9 million in interest over the life of the repayment. (b) This General Fund advance was made to fund start-up costs for the Pavilion Expansion. The General Fund began making repayments in fiscal year 2014-2015. The advance bears no interest. 63

CITY OF CONCORD JUNE 30, 2023
NOTE 4 – INTERFUND TRANSACTIONS (CONTINUED)
Long-Term Interfund Advances (Continued)
(c) This General Fund advance was made during the fiscal year 2009-2010 to fund the retirement of $8.2 million of the 1995 Lease Revenue Bonds and bears no interest. The General Fund began making repayment in fiscal year 2014-2015.
(d) The General Projects Fund loan was to the Local Reuse Auth ority for the Naval Weapons Station project. The advance bears interest at the LAIF ra te and will be repaid with sale proceeds of undeveloped land.
(e) The General Projects Fund advance was made during fiscal year 2017-2018 to the Local Reuse Authority (LRA) to support reuse pl anning efforts for the former Na val Weapons Station. This loan will be repaid, with interest, from future proceeds as properties are sold. (f) The Golf Enterprise Fund advance was made during fiscal years 2007 and 2013 and will be factored into the next 10-year budget plan and repaid as business improves within the regional golf market.

Transfers between funds
With Council approval, resources may be transferred from one City fund to another without a requirement for repayment. Transfers between funds during the fiscal year ended June 30, 2023, were as follows:

Amount
Fund Receiving Transfers Fund Maki ng Transfers Purpose Transferred Major Funds:

General Fund Internal Service Fund - Information Technology Fund To Fund Operating Projects 60,000$ General Fund Special Revenue - Storm Water Management Fund To Fund Operating Projects 173,914 General Projects Fund General Fund To Fund Capital Projects 700,000 General Projects Fund General Fund To Fund Capital Projects 106 Special Revenue Fund:

State Gas Tax Fund General Projects Fund To Fund Capital Projects 229,550 Storm Water Management Fund General Fund To Fund Street Sweeping 530,866 Debt Service Funds:

Energy Lease Fund General Fund To Fund Debt Service 305,720 Energy Lease Fund Special Revenue - Maintenance Districts Fund To Fund Debt Service 358,129 Energy Lease Fund Internal Service Fund - Building Maintenance Fund To Fund Debt Service 209,637 Infrastructure Lease Agreement Fund Gene ral Fund To Fund Debt Service 7,496,744 Capital Projects
Measure V Projects Fund General Fund To Fund Capital Projects 13,700,000 Internal Services Funds
Building Maintenance Fund General Fund To Fund Operating Projects 600,000 Fleet Maintenance/Replacement Fund Sewer Fund To Fund Operating Projects 300,000 Fleet Maintenance/Replacement Fund General Fund To Fund Operating Projects 250,000 Proprietary Funds
Sewer Fund General Fund To Fund Operating Projects 136,146 Sewer Fund Special Revenue - State Gas Tax Fund To Fund Operating Projects 83,155 Sewer Fund Internal Service Fund - Fleet Maintenance/Replacement Fund To Fund Operating Projects 7,256 25,141,223$
64

CITY OF CONCORD JUNE 30, 2023
NOTE 5 – LOANS AND NOTES RECEIVABLE
The City and former Redevelopment Agency (the Ag ency) engaged in programs designed to encourage business enterprises or construction or improvement in low-to-moderate income housing or other projects.

Under these programs, grants or loans are provided under favorable term s to businesses, home-owners or developers who agree to spend these funds in accordance with the City 's terms. Although these loans and notes are expected to be repaid in full, their bala nce has been offset by deferred revenue. With the dissolution of the Redevelopment Ag ency, the City agreed to become the Successor Agency and oversee the dissolution. The Successor Agency subsequently assigned the City assets of the Low and Moderate Income Housing Fund to the City, in cluding the loans and notes. They are not expected to be collected during fiscal year 2023. These loans and notes were comprised of the following at June 30, 2023:

Concord Housing Fund
Downtown Revitalization and
Low and Moderate Income Housing Rehabilitation 6, 383,729$ Galindo 7,800,000
Sunset Pines 3,540,000
Coral Court 3,100,000
Concord Plaza Tower 3, 896,618
Virginia Lane 4,795,858
Lakeside Apartments 2,391,500
Camara Circle 2,650,000
Total Concord Housing Fund 34,557,705
Non-major Governmental Funds
Housing Conservation 767,495
Housing Assistance 50,000
Virginia Lane 473,193
Lakeside Apartments 325,445
First-time Homebuyers 250,000
Total Non-major Governmental Funds 1,866,133
Total Loans and Notes Receivable 36,423,838$
Downtown Revitalization and Low and Moderate Income Housing Rehabilitation Low and no interest loans were made by the form er Redevelopment Agency to provide businesses assistance for rehabilitating buildings in the downto wn area and to businesses or individuals for the rehabilitation of housing within the City of Concord owned and/or occupied by pers ons of low and moderate
income.

Galindo
On June 11, 2019, the City ente red into a $7,800,000 loan agreem ent with Galindo L.P. for the development of 62 affordable housing units and the acquisition of the associated property. The outstanding balance of the loan bears interest at a rate of 3 perc ent per annum. The loan is re payable upon the sale of the development or 57 years after the date of execution of the loan. At June 30, 2023, the loan receivable balance was $7,800,000.
65

CITY OF CONCORD JUNE 30, 2023
NOTE 5 – LOANS AND NOTES RECEIVABLE (CONTINUED)
Sunset Pines
On June 30, 2023, the City entered into a loan agreement with Eden Sunset Pine s LLC in the amount of $3,540,000 for the acquisition of property and the development of a 69 unit apartment complex. The outstanding balance of the loan bears interest at a rate of 3 percent per annum. The loan is repayable from residual receipts and is due in full upon the sale of the development or 55 years after the date of execution of the loan. At June 30, 2023, the loan receivable balance was $3,540,000.

Coral Court
On June 30, 2023, the City entered into a loan agreement with Eden Coral Court LLC in the amount of $3,100,000 for the acquisition of property and the development of a 47 unit apartment complex. The outstanding balance of the loan bears interest at a rate of 3 percent per annum. The loan is repayable from residual receipts and is due in full upon the sale of the development or 55 years after the date of execution of the loan. At June 30, 2023, the loan receivable balance was $3,100,000.

Concord Plaza Tower
In 1985, the City and the Former Redevelopment Agency of the City of Concord entered into various loan agreements to effectuate the development of the Co ncord Plaza Tower, a 96 unit low/moderate income senior housing project. On July 22, 2014, council ad opted Resolution 14-60 authorizing the restructure of the loans with Concord Plaza Tower, Inc. over a 55 year period at a 3% simple interest rate, which preserved the affordability of the project for low income seniors through 2069. The restructured loan requires annual payments. The outstanding loan receivable balance as of June 30, 2023 was $3,896,618.

Virginia Lane
In June 1999, the City and the former Redevelopmen t Agency entered into a $1,984,198 loan agreement with Virginia Lane Limited Partnership for the rehabilitation of Golden Glen and Maplewood Apartments. An additional loan of $4 50,000 was made in fiscal year 2007 which brought the loan total to $2,434,198. Of the $450,000, $100 ,000 was funded by Community Development Block Grant funds and $350,000 was funded by California Housing Finance Ag ency funds. The outstand ing balance of the loan bears interest at a rate of 3 percent per annum. The repayments on the loan sha ll be made from residual receipts. On July 15, 2016, the City amended and restated the promissory note of $2,434,198 to $3,470,394.

The City also issued a new promissory note of $1,300,000 on July 15, 2016. The City expects both loans to be repaid on July 15, 2071. At June 30, 2023, the loan receivable balance was $5,269,051.

Lakeside Apartments
The City and the Agency entered into a $3,433,945 loan agreement with Lakeside Apartments, L.P. for the acquisition and rehabilitation of Lakeside Apartments. An additional loan of $283,000 was made in fiscal year 2007 which brought the loan total to $3,716,945. Of the $283,000, $110,000 was funded by Community Development Block Grants, $93,000 was funded by Redevelopment Agency, and $80,000 was funded by California State EAGR funds. The outstanding ba lance of the loan bears interest at a rate of 1 percent per annum. The City expects the loan to be repaid on November 5, 2058. At June 30, 2023, the loan receivable balance was $2,716,945.
66

CITY OF CONCORD JUNE 30, 2023
NOTE 5 – LOANS AND NOTES RECEIVABLE (CONTINUED)
Camara Circle
In 2000, the City and the Former Re development Agency of the City of Concord entered into two loan agreements for $2,650,000 for the acquisition of eleven properties, consisting of 52 apartment units on Camara Circle. The agreement was funded through the former Redevelopment Housing Set-Aside Fund, now known as the Concord Housing Fund. The loan is to be paid in full May 2056, bearing 3% simple interest. The outstanding loan receivable at June 30, 2023, was $2,650,000.

Housing Conservation
This program involves loans made to rehabilitate housing within the City of Concord which are funded by Community Development Block Grant and former Redevelopment Agency monies. The loans bear interest ranging from 0-3 percent with due dates varying from October 2014 through the sa le or transfer of the property. At June 30, 2023, the loan receivable balance was $767,495.

Housing Assistance
This program provides housing assistance to Concor d residents through a variety of housing programs.

These loans bear no interest and principal payment is due upon sale or transfer of the property. At June 30, 2023, the loan receivable balance was $50,000.

First-Time Homebuyers
The First Time Homebuyer Program provides eligible first-time homebuyers with direct loans that enable the purchase of housing at an affordable cost on the open market. At June 30, 2023, the loan receivable balance was $250,000.
67

CITY OF CONCORD JUNE 30, 2023
NOTE 6 - CAPITAL ASSETS
Capital asset transactions and balances comprise the following at June 30, 2023:

Balance at
June 30, 2022 Balance at
(As Restated) Additions Transfers June 30, 2023
Governmental Activities
Capital Assets Not Being Depreciated:

Land 26,379,019 $ - $ -$ 26,379,019$ Construction in Progress 9,672,610 7,815,516 (515,011) 16,973,115 Total Capital Assets Not Being Depreciated 36,051,629 7,815,516 (515,011) 43,352,134 Capital Assets Being Depreciated:

Ground Improvements 23,822,650 - - 23,822,650 Buildings and Improvements 81,664,958 - - 81,664,958 Right to Use Leased Buildings and Improvements 62,448 - - 62,448 Right to Use Lease Equipment - 639,413 - 639,413
Right to Use Subscription Asset 745,189 1,163,867 - 1,909,056 Machinery and Equipment 25,091,093 292,543 - 25,383,636 Vehicles 13,015,993 1,339,396 515,011 14,870,400 Streets 493,375,343 22,558,055 - 515,933,398 Sidewalks 62,242,142 422,567 - 62,664,709 Storm Drains/Catch Basins 444,761,021 424 - 444,761,445 Street Lights 5,864,400 19,622 - 5,884,022 Traffic Signals 32,416,680 4,365,641 - 36,782,321 Total Capital Assets Being Depreciated 1,183,061,917 30,801,528 515,011 1, 214,378,456 Less Accumulated Depreciation For:

Ground Improvements (13,977,453) (550,749) - (14,528,202) Buildings and Improvements (55,933,571) (2,312,679) - (58,246,250) Right to Use Leased Buildings and Improvements (29,975) (29,975) - (59,950) Right to Use Lease Equipment - (119,002) - (119,002)
Right to Use Subscription Asset - (524,368) - (524,368) Machinery and Equipment (21,597,587) (1,836,132) - (23,433,719) Vehicles (12,190,114) (1,080,018) - (13,270,132) Streets (376,519,330) (17,260,546) - (393,779,876) Sidewalks (31,869,409) (1,250,429) - (33,119,838) Storm Drains/Catch Basins (136,092,066) (4,447,612) - (140,539,678) Street Lights (2,298,893) (195,807) - (2,494,700) Traffic Signals (26,565,822) (1,157,987) - (27,723,809) Total Accumulated Depreciation (677,074,220) (30,765,304) - (707,839,524) Capital Assets Being Depreciated, Net 505,987,697 36,224 515,011 506,538,932 Governmental Activities Capital Assets, Net 542,039,326$ 7,851,740$ -$ 549,891,066$ 68

CITY OF CONCORD JUNE 30, 2023
NOTE 6 – CAPITAL ASSETS (CONTINUED)
Balance at Balance at
June 30, 2022 Additions Retirements June 30, 2023
Business-Type Activities
Capital Assets Not Being Depreciated:

Land 395,182$ -$ -$ 395,182$
Construction in Progress 19,477,297 4,760,716 - 24,238,013 Total Capital Assets Not Being Depreciated 19,872,479 4,760,716 - 24,633,195 Capital Assets Being Depreciated:

Buildings and Improvements 8,708,986 - - 8,708,986 Right to Use Leased Buildings and Improvements 25,435 - (25,435) - Machinery and Equipment 456,319 - - 456,319 Sewer Lines 219,772,435 - - 219,772,435
Total Capital Assets Being Depreciated 228,963,175 - (25,435) 228,937,740 Less Accumulated Depreciation For:

Buildings and Improvements (7,158,181) (141,095) - (7,299,276) Right to Use Leased Buildings and Improvements (16,956) (8,479) 25,435 - Machinery and Equipment (341,494) (20,796) - (362,290) Sewer Lines (180,332,139) (4,380,831) - (184,712,970) Total Accumulated Depreciation (187,848,770) (4,551,201) 25,435 (192,374,536) Capital Assets Being Depreciated, Net 41,114,405 (4,551,201) - 36,563,204 Business-Type Activities Capital Assets, Net 60,986,884$ 209,515$ -$ 61,196,399$ Depreciation Allocation – Governmental Activities
Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program was as follows:

Governmental Activities
General Government 24,753,028$
Public Works 430,225
Parks and Recreation Services 1,002,368
Internal Service Funds 4,579,683
Total 30,765,304$
Business-Type Activities
Sewer 4,403,944$
Golf Course 147,257
Total 4,551,201$
69

CITY OF CONCORD JUNE 30, 2023
NOTE 7 – LONG-TERM DEBT
Description and Activity
The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.

The City's governmental activities long-term debt is recorded only in the government-wide financial statements. This debt will be repaid only out of governmental funds but is not accounted for in these funds because this debt does not require an appropriation or expenditure in this accounting period.

In governmental fund types, debt discounts and issu ance costs are recognized in the current period.

Debt discounts and issuance costs incurred by proprieta ry fund types are deferred and amortized over the term of the debt using the bonds-outstanding method, which approximates the effective interest method.

The City's debt issues and compen sated absence transactions are su mmarized on the next page and discussed in detail thereafter.

Current Year Transactions and Balances
Repayment Balance as of Balance as of Current
Source June 30, 2022 Additions Retirements June 30, 2023 Portion Governmental Activities Debt:
2021 Certificates of Participation,

2.00-4.00% due 04/01/41 (a) 105,275,000$ -$ 3,870,000$ 101,405,000$ 4,025,000$ Plus premium on bonds 14,522,828 - 764,359 13,758,469 - Direct Placement:

Lease Purchase Agreement

2.78% due 12/01/26 (b) 3,910,000 - 770,000 3,140,000 825,000 Lease Financing:

Motorola Lease Agreement due 11/15/2026 (c) 1,835,589 347,712 1,487,877 357,155 Subtotal 125,543,417 5,752,071 119,791,346 5,207,155
Compensated Absences (d) 5,541,127 4,288,058 3,739,636 6,089,549 3,418,948 Total Governmental Activity Debt 131,084,544$ 4,288,058$ 9,491,707$ 125,880,895$ 8,626,103$ Business-type Activities Debt:
2012 - Wastewater Revenue Refunding Bonds,

1.50-4.00% due 02/01/29 (e) 4,705,000$ -$ 620,000$ 4,085,000$ 635,000$ 2018 - Wastewater Revenue Refunding Bonds,

1.25-3.24% due 2/01/32 (e) 6,110,000 - 490,000 5,620,000 510,000 Plus premium on refunding bonds 700,157 - 70,016 630,141 - Subtotal 11,515,157 - 1,180,016 10,335,141 1,145,000 Compensated Absences (d) 171,302 74,208 65,208 180,302 43,420 Total Business-Type Activity Debt 11,686,459$ 74,208$ 1,245,224$ 10,515,443$ 1,188,420$ Repayments on the above debt are made from the following sources:
(a) Lease revenue received from the City’s General Fund revenues. (b) The City and the Public Property Financing Corpor ation entered into a direct borrowing Refunding Lease Agreement in the amount of $6,820,000 at the interest rate of 2.78 percent. The proceeds from the Agreement were used to retire the 2011 Equipment Lease/Purchase Agreement. (c) Operating revenues available for lease payment in the Information Technology Replacement Internal Service Funds.
(d) General Fund revenues.
(e) Operating revenues received by the Sewer Enterprise Fund. 70

CITY OF CONCORD JUNE 30, 2023
NOTE 7 – LONG-TERM DEBT (CONTINUED)
Debt Service Requirements
Debt service and capitalized lease requirements are shown below for all long-term debt:

For the Year
Ending June 30, Principal Interest Principal Interest Principal Interest 2024 4,025,000 $ 3,474,300 $ 1,182,155 $ 122,138 $ 5,207,155 $ 3,596,438 $ 2025 4,185,000 3,313,300 1,246,855 89,087 5,431,855 3,402,387 2026 4,350,000 3,145,900 1,321,817 54,243 5,671,817 3,200,143 2027 4,525,000 2,971,900 877,050 17,322 5,402,050 2,989,222 2028 4,705,000 2,790,900 - - 4,705,000 2,790,900 2029-2033 26,510,000 10,975,700 - - 26,510,000 10,975,700 2034-2038 31,835,000 5,649,900 - - 31,835,000 5,649,900 2039 -2041 21,270,000 1,224,519 - - 21,270,000 1,224,519 Total Requirements 101,405,000 33,546,419$ 4,627,877$ 282,790$ 106,032,877 33,829,209$ Plus unamortized premium 13,758,469 13,758,469
Total 115,163,469$ 119,791,346$
Total
Governmental Activities
Certificates of Participatio n Notes and Leases from Placement For the Year
Ending June 30, Principal Interest
2024 1,145,000 $ 369,307 $
2025 1,195,000 327,137
2026 1,235,000 282,126
2027 1,280,000 235,450
2028 1,330,000 185,250
2029 - 2032 3,520,000 291,100
Total Requirements 9,705,000 1,690,370
Plus unamortized premium 630,141 -
Total 10,335,141$ 1,690,370$
Business-Type Activities
The City's bond indentures contain significant limitations and restrict ions regarding annual debt service requirements, maintenance of and flow of monies through various restricted accounts and minimum revenue bond coverage. City management believes the City is in compliance with all such indenture requirements.

Revenue Bonds
On September 18, 2012, the City issued Wastewater Revenue Refunding Bonds, Seri es 2012 in the original
principal amount of $10,080,000 at interest rates that range from 1.50 percent to 4.00 percent to provide for a refunding of the City's outstanding 2004 Certificat es of Participation Wastewater System Improvement Bonds. Principal payments are due annually on February 1, with interest payments payable semi-annually on August 1 and February 1 through February 1, 2 029. Repayment of these bond s is from a pledge of revenue from the Sewer Enterprise Fund. As of June 30, 2023, the principal balance outstanding was $4,085,000.
71

CITY OF CONCORD JUNE 30, 2023
NOTE 7 – LONG-TERM DEBT (CONTINUED)
Revenue Bonds (Continued)
On February 27, 2018, the City issued Wastewater Revenue Refunding Bonds, Series 2018 in the original principal amount of $7,920,000 at interest rates that range from 2.00 percent to 5.00 percent to provide for a refunding of the City's outstanding 2007 Certificat es of Participation Wastewater System Improvement Bonds. Principal payments are paid annually on February 1. Interest is paid semi-annually on August 1 and February 1, through 2032. Repayment of these bonds is from a pledge of revenue from the Sewer Enterprise Fund. As of June 30, 2023, the principal balance outstanding was $5,620,000.

In the event of default on the 2012 and 2018 Bonds, upon notice in writing to the City, the principal and accrued interest of all bonds outstanding will be due and payable immediately.

The City has pledged future wastewater customer reve nues, net of specified operating expenses, to repay the 2012 and 2018 Bonds through 2032. The Sewer Enterprise Fund’s total principal and interest remaining to be paid on the bonds is $11,395,370. The Municipal Sewer Enterprise Fund’s principal and interest paid for the current year and total customer net revenues were $1,519,306 and $12,565,401, respectively.

Certificates of Participation
On April 28, 2021, the City through the Public Property Financing Corporation of California (Corporation) issued the 2021 Capital Improvement Project Certificates of Participation in the original principal amount of $109,480,000 at interest rates that range from 2.00 percent to 4.00 percent to finance the cost of various capital projects and to prepay the 2015 Lease Revenue Financing Agreement. The Bonds are collateralized by revenue received from the City by the Corporation under a lease ag reement and by the Corporation’s interest in the Concord Pavilion and the City’s Police Station through a site and facilities lease. Principal payments are paid annually on Apr il 1. Interest is paid semi-annua lly on October 1 and April 1, through 2041. Repayment of these bonds is from a pledge of lease payments from the City’s General Fund. As of June 30, 2023, the principal balance outstanding was $101,405,000.

In the event of default, the Corporation can use any and all remedies available, however there is no right to accelerate the lease payments or to declare any lease payments immediately due and payable. The City shall continue to remain liable for the payment of the lease payments and any damages for breach of the lease agreement and the performance of all conditions contained in the lease agreement.

Lease Purchase Agreement
On February 21, 2018, the City a nd the Public Property Financing Co rporation entered into a direct placement Refunding Lease Agreement in the amount of $6,820,000 at the interest rate of 2.78%. The proceeds from the Agreement were used to retire the 2011 Equipment Lease/Purchase Agreement. Principal and interest payments are paid semi-annually on Ju ne 1 and December 1, through 2026. As of June 30, 2023, the principal balance outstanding is $3,140,000.

In the event of default, the Corpor ation may exercise any and all remedi es available under the law or the agreement. Those remedies include: enforcement of payments without termination, termination of the lease, proceedings at law or in equity, remedies under the site and facility lease. 72

CITY OF CONCORD JUNE 30, 2023
NOTE 7 – LONG-TERM DEBT (CONTINUED)
Lease Financing
On October 16, 2019, the City entered into a direct placement lease agreement in the amount of $2,503,678 with Motorola Solutions, Inc., for the purchase of radio equipment. Th e City agreed to pay the lease in annual payments of $397,561 for seven years. Since the lease is in essence a financing agreement, the cost of the equipment and the amount of th e lease has been included in the Ci ty's financial statements. As of June 30, 2023, the principal debt outstanding on the lease was $1,487,877.

In the event of default, the lessor may exercise any of the following options: by written notice declare all amounts due and payable under the lease, discontinue the use of equipment and removal and return of the equipment to the lessor.

NOTE 8 – FUND BALANCES
Detailed classifications of the City's Governmental Fund Balances, as of June 30, 2023, are below:

Major Funds
Special Revenue Funds Capital Projects Funds Other
General Concord General 2021 COP Governmental
Fund Balance Classifications Fund Housing ARPA Pro jects Pro jects Funds Total Nonspendable:

Items not in spendable form:

Advance 11,704,631$ -$ -$ -$ -$ -$ 11,704,631$ Leases 76,378 - - - - - 76,378 Inventories 276,864 - - - - - 276,864 Total Nonspendable
Fund Balances 12,057,873 - - - - - 12,057,873 Restricted for:

Debt Service - - - - - 21,166 21,166 Capital Projects - - - - 99,804,018 12,147,950 111,951,968 Housing - 3,674,129 - - 2,626,403 6,300,532 Health Care District - - - - - 7 53,614 753,614 Transportation - - - - - 9,499,941 9,499,941 Development Services - - - - - 21,786,721 21,786,721 Asset Forfeiture - - - - - 405,272 405,272 Tree Maintenance - - - - - 44,159 44,159 Cannabis Community Benefit 333,502 333,502
Public Safety 1,520,617 - - - - 594 1,521,211 Other 24,769 - - - - - 24,769 Total Restricted Fund Balances 1,545,386 3, 674,129 - - 99,804,018 47,619,322 152,642,855 - Assi
gned to:

Capital Projects - - - - 37,879,685 37,879,685 Contracts 1,498,375 - - - - - 1,498,375 Senior Center 58,186 - - - - - 58,186 Music and Market Event 394,685 - - - - - 394,685 Building Deposits 848,937 - - - - 848,937 Transportation 1,000,000 - - - - - 1,000,000 Other 296,885 - 583,368 - - - 880,253 Total Assigned Fund Balances 4,097,068 - 583,368 - - 3 7,879,685 42,560,121 Unassigned:

General Fund 47,661,556 - - - - - 47,661,556 Other Governmental Fund Deficit Residuals - - - (2,504,819) - (932) (2,505,751) Total Unassigned Fund Balances 47,661,556 - - (2,504,819) - (932) 45,155,805 Total Fund Balances 65,361,883$ 3,674,129$ 583,368$ (2,504,819)$ 99,804,018$ 85,498,075$ 252,416,654$ 73

CITY OF CONCORD JUNE 30, 2023
NOTE 8 – FUND BALANCES (CONTINUED)
Restatement
The City implemented the provisions of Governme ntal Accounting Standards Board Statement No. 96 – Subscription-Based Information Technology Arrangements (SBITAs) during the year ended June 30, 2023.

As a result, the City determined that beginning the balances of capital assets and subscription liabilities were $745,189 as of July 1, 2022, and restated and increased the balances in that amount, and the net effect on beginning net position was zero. See the disclosure in Note 16.

NOTE 9 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Expenditures in Excess of Appropriations
Expenditures for the year ended June 30, 2023 exceeded the appropriations in the following funds:

Expenditures in Excess of Appropriations Budget Actual Variance General Fund
Public Safety 67,092,484$ 69,136,108$ (2,043,624)$
Debt Service:

Principal - 30,604 (30,604)
Interest and fiscal charges 370,246 443,048 (72,802) Special Revenue Funds:

Concord Housing Fund 613,578 11,419,301 (10,805,723) Maintenance Districts Fund 1,690,635 1,720,301 (29,666) Tree Fund - 5,075 (5,075)
Infrastructure Lease Agreement Fund 7,500,000 7,501,300 (1,300) The significant variance in the Conc ord Housing Fund is due to the C ity’s change in accounting policy related to the accounting for notes and loans receivabl e discussed in Note 1, under which new loans now result in expenditures in the year of issuance. The issuance of the loans was approved by the City Council, but the appropriations were not amended during the fiscal year to reflec t the change in accounting policy.

The excess expenditures in all departments and funds noted above were covered by revenue received during the fiscal year or available resources within each fund.

Deficit Fund Equity
As of June 30, 2023, the General Projects Capital Proj ects Fund had deficit fund balance of $2,504,819, which is expected to be eliminat
ed by future revenues. The Assessm ent Districts Debt Service Fund had deficit fund balance of $932 which is expected to be eliminated by future revenues. The Successor Agency Private Purpose Trust Fund had deficit net position of $3,473,916 which is expected to continue until the debt service obligations are satisfied from future pr operty tax allocations. In addition, the Compensated Absences Internal Service Fund had deficit net position of $5,792,308 wh ich is expected to be eliminated by future cost reimbursements by City departments.
74

CITY OF CONCORD JUNE 30, 2023
NOTE 10 – CITY OF CONCORD RETIREMENT SYSTEM PLAN
Plan Description and Employees Covered
The City of Concord Retirement System Plan (the pl an) is a closed plan and is a single employer defined benefit pension plan covering all full-time employees of the City retired prior to June 28, 1999 or who left the employment of the City eligible for a pension. Participants are divided into two primary groups for coverage: general employees and police employees. Membership in the Retirement System comprised the following at June 30, 2023:

CCRS
Inactives currently receiving benefits 208
Inactives entitled to but not yet receiving benefits 17 Active employees -
Total 225
On June 21, 1993, the City converted to the Public Employees Retirement System (PERS) as described in

Note 12.

Eligibility, administration, actuarial interest rates an d certain other tasks are the responsibility of the Retirement Board. The Retirement Board consists of eight members, selected as follows: Two members appointed by City Manager, Director of Human Reso urces, Director of Finance and one representative from each of the four employee organizations. The Plan does not issue separate financial statements.

During the year ended June 30, 1999, $56,300,000 was transferred from the Plan to PERS to purchase prior years' service credit for its active vested employees.

Benefits Provided
The plan provides retirement and death benefits fo r general and police employees as well as disability benefits for police employees. General employees are el igible for retirement benefits at age 55, provided the employee has completed 20 years of service or has accumulated cont ributions in excess of $500 and was employed before June 30, 1990 or has completed 5 years of service and was terminated after July 1, 1990. Sworn police employees are eligible for retirement at age 50, provided the employee has completed 20 years of service or has accumulated contributions exceeding $500. Retirement benefits are determined based on the employee's length of service, highest on e-year compensation upon retirement, and age at retirement.

Contributions
Prior to June 21, 1993, contributions were made to the Plan by both the City and the employee participants.

City contributions were actuarially determined annually to provide the Pl an with assets sufficient to pay basic benefits not provided for by employees' contributions. All general employees were required to contribute 6 percent, and all police employees were requ ired to contribute 8 percent of their base salary (decreased by a Social Security allowance) to the Plan. The City is funding the Unfunded Actuarial Accrued Liability with annual contributions from the General Fund.

The City contributed 4 percent to 8 percent of this percentage on behalf of general employees, depending upon job classification, and all of the contribution for sworn police employees. 75

CITY OF CONCORD JUNE 30, 2023
NOTE 10 – CITY OF CONCORD RETIREMENT SYSTEM PLAN (CONTINUED) The City maintains a program of death and disability benefits financed wholly by employer premium payments under a group term life insurance policy and group long-term disability insurance policy.

The pension liability was determined as part of an actuarial valuation at June 30, 2022. Significant actuarial assumptions used in determining the pension liability include: (a) a rate of return on the investment of present and future assets of 5.50 percent per year co mpounded annually, (b) inflation rate of 2.50 percent (c) annual post-employment increases at 5.25 percent per year. Required contributions are determined using the entry age normal actuarial cost method and are made on a level dollar basis. The plan is amortized using the CalPERS Mortality Table on a 13 year closed basis. The contribution amounts are established and may be amended by the City Council.

Rate of Return
For the year ended June 30, 2023, the annual money-weig hted rate of return on pension plan investments, net of pension plan investment expense, was 6.01. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Net Pension Liability
The City’s net pension liability was measured as of Ju ne 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 and rolled forward to June 30, 2023 using standard update procedures.

Actuarial Assumptions – The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions:

CCRS
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 5.50% at June 30, 2023 and June 30, 2022
Investment Rate of Return 5.50% at June 30, 2023 and June 30, 2022 (1) General Inflation 2.50% annually
COLA 2% per annum
Salary Scale Not applicable
Mortality Improvement Mortality projected fully generational with Scale MP-2021 Retirement Age 100% at 59 for general and 54 for police (1) Net of pension plan investment expenses, including inflation Mortality rates were based on the CalPERS 2000-2019 Experience Study fully generational improvement projected based on Scale MP-2021.

The long-term expected rate of return on plan inve stments was determined using a building block method which best estimate ranges of expected future real ra tes of return (expected return, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 76

CITY OF CONCORD JUNE 30, 2023
NOTE 10 – CITY OF CONCORD RETIREMENT SYSTEM PLAN (CONTINUED) The table below reflects geometric average real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These geometric rates of return are net of administrative expenses.

Asset Class
Target
Allocation
Expected Real
Rate of Return
Global Equity 50.00% 4.56%
Fixed Income 45.00% 0.78%
Cash 5.00% -0.50%
Total 100%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 5.50%
Discount Rate –
The discount rate used to measure the total pension liability was 5.50 percent for the plan.

The project of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City ’s contributions will be made at rates equal to the difference between actuarially determined contri bution rates and the employee rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to a ll periods of projected benefit payments to determine the total pension liability.

Changes in the Net Pension Liability
The changes in the net pension liability for the plan are as follows:

CCRS Plan
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2022 50,328,228$ 29,171,056 $ 21,157,172 $ Changes in the year:

Interest on the total pension liability 2,622,775 - 2,622,775 Differences between actual and expected experience 2,842,846 - 2,842,846 Changes in assumptions 85,831 - 85,831
Contribution - employer - 6,606,208 (6,606,208)
Contribution - employees - - -
Net investment income - 1,646,779 (1,646,779)
Administrative expenses - (159,255) 159,255
Benefit payments, including refunds of employee contributions (5, 282,819) (5,282,819) - Net changes 268,633 2,810,913 (2,542,280)
Balance at June 30, 2023 50,596,861$ 31,981,969$ 18,614,892$ Plan net position as a percentage of the total pension liability 63.2% 77

CITY OF CONCORD JUNE 30, 2023
NOTE 10 – CITY OF CONCORD RETIREMENT SYSTEM PLAN (CONTINUED) Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City, calculated using th e discount rate of 5.50 percent as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1- percentage-point lower or 1- percentage-point higher than the current rate.

CCRS Plan
1% Decrease 4.50%
Net Pension Liability 22,515,137$
Current Discount Rate 5.50%
Net Pension Liability 18,614,892$
1% Increase 6.50%
Net Pension Liability 15,203,180$
Pension expenses and deferred outflows/inflows of resources related to pensions For the fiscal year ending June 30, 2023, the City recognized pension expense of $4,569,281 At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

CCRS Plan
Deferred Outflows Deferred Inflows
of Resources of Resources
Net differences between projected and actual earnings
on plan investments 1,743,338$ -$
Total 1,743,338$ -$
Amounts reported as deferred outflows and deferred in flows of resources related to pensions will be recognized in future pension expense as follows:

CCRS Plan
Year Ended Annual
June 30 Amortization
2024 430,695$
2025 337,661
2026 1,000,019
2027 (25,037)
Total 1,743,338$
78

CITY OF CONCORD JUNE 30, 2023
NOTE 11 – CITY OF CONCORD EARLY RETIREMENT PLANS
Plan Description and Provisions
On September 1, 2009, the City adopted a sole employer defined benefit plan to provide supplemental retirement benefit payments to elig ible employees in addition to the benefit payments the employees will receive from the California Public Employees Retirement System (CalPERS).

The City joined Public Agency Retirement Servic es (PARS) and participates in two plans, the Supplementary Retirement Plan and the Excess Benefit Plan. The Excess Benefit Plan consists of the highly compensated members and the Supplementary Plan includes all other eligible employees. To be eligible to participate in the plan the employee must have been classified as a Miscellaneous or Safety employee of the City as of June 1, 2009, be at least 50 years of age as of September 1, 2009, have completed as least 5 years of employment with the City as of September 1, 2009, have terminated employment with the City on or before August 31, 2009, have a pplied for benefits under this plan and must have concurrently retired under CalPERS on or before September 1, 2009 and remains in retired status under CalPERS. A member is considered fully vested upon meeting the eligibilit y requirements listed above. Benefits payments are based on 7 percent of an employee's annual base pay as of June 1, 2009.

As of June 30, 2023, there were 17 members participating in these plans.

Contribution Requirements
The City established a plan within the PARS Trust. The cost of funding the Plan including management fees is roughly equivalent to one year of an employ ee's salary for each participating employee. The City funded the Plan over a period of 5 years, choosing to buy annuities to fund the Plan, and self-fund. The City used general fund salary savings to fund the Plan. The Supplementar y Retirement Plan was fully funded in September 2013. The Excess Benefit Plan has a proj ected actuarial liability in the amount of $187,413 at June 30, 2023. This estimate has not been accrued as a liability in the City’s Statement of Net Position.

NOTE 12 – PENSION PLAN
CalPERS Safety and Miscellaneous Employees’ Pension Plans Plan Description
On June 21, 1993, the City joined the California Public Employees Retirement System (CalPERS), an agent multiple-employer public employee retirement syst em which acts as a common investment and administrative agent for participating member employers.

The City contributes to the California Public Employees Retirement System (CalPERS), an agent multiple- employer defined benefit public employee retiremen t system that acts as a common investment and administrative agent for various local and state governm ental agencies within the State of California. The City’s Safety and Miscellaneous Plans are part of the Public Agency portion of CalPERS. The benefits for the public agencies are established by contract with CalPERS in accordance with the provisions of the Public Employees Retirement Law. CalPERS issues a publicly available financial report that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at https://www.calpers.ca.gov 79

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) The City joined PERS on a prospective basis and participates in two plans, the Safety (Police) Employees Plan and the Miscellaneous Employees Plan. All qu alified permanent and probationary employees are

eligible to participate. CalPERS provides retirem ent and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. The City's employees participate in the separate Safety (police) and Miscellaneous (all other) Employee Plans.

Benefit provisions under both Plans are established by State statute and City resolution. Benefits are based on years of credited service, equal to one year of full time employment. Fund ing contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS; the City must contribute these amounts.

Benefits Provided
The benefits in effect as of June 30, 2023, are summarized as follows:

Miscellaneous
Hire date
Classic Prior to
November 29,
2010
Classic On or after
November 29,
2010 and Prior to
January 1, 2013
PEPRA On or after
January 1, 2013
Benefit formula 2.5% @ 55 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 63 52 - 67

2.0% - 2.50% 1.426% - 2.418% 1.0% - 2.5%
Required employee contribution rates 8.00% 7.00% 6.75%
Required employer contribution rates (1) 10.23% 10.23% 10.23% Monthly benefits, as a % of eligible compensation
Safety
Hire date
Classic Prior to
January 1, 2013
PEPRA On or after
January 1, 2013
Benefit formula 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50 - 57

3.0% 2.0% - 2.7%
Required employee contribution rates 9.0% 11.75%
Required employer contribution rates (1) 19.29% 19.29%
(1) Rates represented blended contribution
rates, from 6.30.20 Valuation
Monthly benefits, as a % of eligible compensation
80

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) Beginning in fiscal year 2016, Ca lPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or the City can elect a lump sum payment option. The City’s required contributions for the unfunded liability in the Miscellaneous and Safety Plans for the year ended June 30, 2023 were $7,000,417 and $9,113,272 respectively, which were made under the lump sum payment option. In addition, the City made an additional contribution of $160,000 toward the unfunded liability of the Miscellaneous Plan during the year ended June 30, 2023.

Employees Covered
The following employees were covered by the benefit terms for each Plan as of the most recent actuarial valuation date of June 30, 2021 and measurement date of June 30, 2022:

Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 488 207 Inactive employees entitled to but not yet receiving benefits 420 61 Active employees 228 130
Total 1,136 398
Contributions
Section 20814(c) of the Californi a Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determin ed on an annual basis by the actuary and shall be effective on the July 1 following no tice of a change in the rate. Fundin g contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the

estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Payments made by the City to satisfy contribution requirements that are identified by the Plan terms as Plan member contribution requirements are classified as Plan member contributions.

Net Pension Liability
The City’s net pension liability for each plan is meas ured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the plans is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods us ed to determine the net pension liability is shown below.
81

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) Actuarial Assumptions – The total pension liabilities in the Ju ne 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

All Plans
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Projected Salary Increase (1)
Investment Rate of Return 6.90% (2)
Mortality Derived using CalPERS Membership
Data for all Funds (3)
Post Retirement Benefit Increase The lesser of contract COLA or 2.30% until Purchasing Power Protection
Allowance floor on Purchasing Power
applies, 2.30% thereafter
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation (3) The 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.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a November 2 021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website at www.calpers.ca.gov.

Discount Rate – The discount rate used to measure the total pension liability for each Plan was 6.90%. The projection of cash flows used to dete
rmine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from empl oyers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF.

Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.

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. 82

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) In determining the long-term expectations rate of return, CalPERS took into account both short-term and long-term market return expectation. Using historical returns of all 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.

The expected real rates of return by asset class are as follows:

Asset Class
1 Assumed
Asset
Allocation Real Return
1,2
Global Equity-Cap Weighted 30.0% 4.54%
Global Equity-Non-Cap Weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
Total 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

Changes of Assumptions – Effective with the June 30, 2021 valuat ion 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 lo ng-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over th e 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
83

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) Changes in the Net Pension Liability
The changes in the net pension liability for each Plan follows:

Miscellaneous Plan
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 (Measurement Date) 253,979,415$ 191,115,687 $ 62,863,728 $ Changes in the year:

Service cost 3,920,979 - 3,920,979
Interest on the total pension liability 17,666,259 - 17,666,259 Differences between actual and expected experience (236,952) - (236,952) Changes of assumptions 7,603,037 - 7,603,037
Plan to plan resource movement - - - Contribution - employer - 9,609,261 (9,609,261)
Contribution - employee - 1,544,698 (1,544,698)
Net investment income - (14,581,709) 14,581,709
Administrative expenses - (119,054) 119,054
Benefit payments, including refunds of
employee contributions (14,546,526) (14,546,526) - Other miscellaneous income/(expense) - - - Net changes 14,406,797 (18,093,330) 32,500,127 Balance at June 30, 2022 (Measurement Date) 268,386,212$ 173,022,357$ 95,363,855$ Safety Plan
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 (Measurement Date) $321,851,818 $231,778,725 90,073,093 $ Changes in the year:

Service cost 5,941,359 - 5,941,359
Interest on the total pension liability 22,916,800 - 22,916,800 Differences between actual and expected experience 1,849,987 - 1,849,987 Changes of assumptions 13,632,640 - 13,632,640
Plan to plan resource movement - - -
Contribution - employer - 11,756,116 (11,756,116)
Contribution - employee - 2,182,048 (2,182,048)
Net investment income - (17,646,310) 17,646,310
Administrative expenses - (144,384) 144,384
Benefit payments, including refunds of
employee contributions (16,355,171) (16,355,171) - Other miscellaneous income/(expense) - - -
Net changes 27,985,615 (20,207,701) 48,193,316 Balance at June 30, 2022 (Measurement Date) 349,837,433$ 211,571,024$ 138,266,409$ Total for Both Plans 618,223,645$ 384,593,381$ 233,630,264$ 84

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each plan, calculated using the discount rate for each plan, as well as what the City’s net pension liability would be if it were calculated using a disc ount rate that is 1- percentage

point lower or 1- percentage point higher than the current rate.

Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability 128,477,892$ 187,318,289$
Current Discount Rate 6.90% 6.90%
Net Pension Liability 95,363,855$ 138,266,409$
1% Increase 7.90% 7.90%
Net Pension Liability 67,822,125$ 98,189,187$
Pension Plan Fiduciary Net Position – Detailed information about eac h pension plans’ fiduciary net position is available in the separately issued CalPERS financial reports.

Pension expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ending June 30, 2023, the City recognized pension expense of $12,308,639 for the Miscellaneous plan and $19,400,911 for the Safety plan, for total pension expense of $31,709,550. At June 30, 2023, the City reported deferred outflows of reso urces and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 9,605,409$ - $ Differences between actual and expected experience 52,464 (124,118) Changes of assumptions 3,982,543 -
Net differences between projected and actual earnings on plan investments 8,621,489
Total 22,261,905$ (124,118)$
Safety Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 12,762,514$ - $ Differences between actual and expected experience 4,547,199 Changes of assumptions 10,137,091 -
Net differences between projected and actual earnings on plan investments 10,649,267
Total 38,096,071$ -$
Combined total 60,357,976$ (124,118)$
85

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) $9,605,409 and $12,762,514 reported as deferred outflows of resources related to pensions for the miscellaneous and safety plans, respectively, result ing from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Miscellaneous Plan:

Year Ended Annual
June 30 Amortization
2024 4,908,022 $
2025 1,546,023
2026 549,476
2027 5,528,857
Total 12,532,378$
Safety Plan:

Year Ended Annual
June 30 Amortization
2024 7,545,414 $
2025 6,546,751
2026 4,533,384
2027 6,708,008
Total 25,333,557$
CalPERS Subsequent Event
On July 12, 2021, CalPERS reported a preliminary 21.30% net return on investments for fiscal year 2020-

21. Based on the thresholds specifi ed in CalPERS Funding Risk Mitigati on policy, the excess return of

14.30% prescribes a reduction in in vestment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPER S was in the final stages of the four-year Asset Liability Management (ALM) cycle, the CalPERS Board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

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

expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from

2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases th at were adopted by the Ca lPERS Board. These new assumptions are reflected in the CalPERS GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
86

CITY OF CONCORD JUNE 30, 2023
NOTE 12 – PENSION PLAN (CONTINUED)
CalPERS Safety and Miscellaneous Employees’ Pension Plans (Continued) Summary Information
For fiscal year 2022-2023, total pension expense for the Miscellaneous, Safety and City of Concord’s Retirement System Plans amounted to $36,220,958.

As of June 30, 2023, the City reported total net pension liability, deferred outflows of resources and deferred inflows of resources for the Miscellaneous, Safety and Concord Retirement System Plans were as follows:

Deferred Deferred
Net Pension Outflows Inflows
Plan Liability of Resources of Resources
CalPERS Plans:

Miscellaneous 95,363,855 $ 22,261,905 $ 124,118 $ Safety 138,266,409 38,096,071 -
CCRS Retirement 18,614,892 1,743,338 -
Total 252,245,156$ 62,101,314$ 124,118 $
Pension liabilities are liquidated by the fund that have recorded the lia bility. The long-term portion of the governmental activities pension liability are liquidated primarily by the General Fund.

NOTE 13 – OTHER POST-EMPLOYMENT HEATH CARE BENEFITS
Plan Description
Substantially all full-time City employees and their e ligible dependents are eligible for post-employment health care benefits under Agent Multiple Employer CalPERS sponsored health plans currently funded during the employees’ active service. During fiscal year 2018, the City implemented the provisions of Governmental Accounting Stan dards Board Statement No. 75, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes uniform financial reporting standards for employers pr
oviding postemployment benefits other than pensions (OPEB).

Required disclosures are presented below. In order to fund retiree health benefits, the City established an irrevocable trust with California Employers Retiree s Benefit Trust (CERBT). CERBT is administered by CalPERS and is managed by an appointed board not unde r the control of City Coun cil. This Trust is not considered a component unit by the City and has been excluded from these financial statements. Separately issued financial statements for CERBT may be obtained from CalPERS at P.O. Box 942709, Sacramento, California 94229-2709.

By Council resolution and through agreements with its labor units, the City provides certain health care benefits for retired employees under third-party in surance plans. A summary of contribution rates is shown below:
87

CITY OF CONCORD JUNE 30, 2023
NOTE 13 – OTHER POST-EMPLOYMENT HEATH CARE BENEFITS (CONTINUED) Benefits Provided
Retiree Couple Family
For employees hired before the summer of 2016 (date depends on bargaining unit), the City pays monthly health insurance premiums up to $ 672 1,344 $ 1,747 $ For employees hired after the summer of 2016 (date depends on bargaining unit), the City contributes the Minimum Employer Contribution amount prescribed by Government Code Section 22892 of the Public Employees' Medical and Hospital Care Act (PEMHCA). For 2023, that amount is $151 per month.

Employees Covered
As of the June 30, 2022 measurement date, membership in the Plan consisted of the following:

Number of
Covered
Participants
Inactives currently receiving benefits 468
Inactives entitled to but not yet receiving benefits 63 Active employees 351
Total 882
88

CITY OF CONCORD JUNE 30, 2023
NOTE 13 – OTHER POST-EMPLOYMENT HEATH CARE BENEFITS (CONTINUED) Net OPEB Liability
The City’s net OPEB liability for the plan is measured as the total OPEB liability, less the OPEB plan’s fiduciary net position. The net OPEB liability of the plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2022. The long-t erm portion of the governme ntal activities Net OPEB Liability is liquidated primarily by the Post-Retirement Health Benefit Internal Service Fund.

Actuarial Assumptions – The total OPEB liability in the plan’s June 30, 2022 actuarial valuation was determined using the following actuarial assumptions:

Actuarial Assumptions
Valuation Date June 30, 2022
Measurement Date June 30, 2022
Actuarial Cost Method Entry age Normal, Level % of pay
Actuarial Assumptions:

Discount Rate 5.75% at June 30, 2022 and 5.75% and June 30, 2021 Inflation 2.5% annually
Payroll Growth Aggregate Increase - 2.75%
Investment Rate of Return 5.75% at June 30, 2022 and 5.75% and June 30, 2021 Mortality CalPERS 2000-2019 Experience Study
Mortality Improvement
Mortality projected fully generational with Society of
Actuaries Scale MP-2021
Non-Medicare - 8.50% for 2024, decreasing to an ultimate rate of 3.45% in 2076 and later years
Medicare (Non-Kaiser) - 7.50% for 2024, decreasing to an ultimate rate of 3.45% in 2076 and later years
Medical Trend
Medicare (Kaiser) - 6.25% for 2024, decreasing to an
ultimate rate of 3.45% in 2076 and later years
Currently covered - 100%
Currently waived - 80%
Healthcare Participation PEHMCA Minimum Only - 60%
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These geometric rates of return are net of administrative expenses.

Expected Real Rate of
Asset Class Target Allocation Return
Global Equity 34.0% 4.56%
Fixed Income 41.0% 1.56%
TIPS 5.0% -0.08%
Commodities 3.0% 1.22%
REITs 17.0% 4.06%
Total 100.0%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 5.75%
89

CITY OF CONCORD JUNE 30, 2023
NOTE 13 – OTHER POST-EMPLOYMENT HEATH CARE BENEFITS (CONTINUED) Discount Rate – The discount rate used to measure the total OPEB liability was 5.75 percent for the plan.

The project of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City ’s contributions will be made at rates equal to the difference between actuarially determined contri bution rates and the employee rate. Based on those assumptions, the plan’s fiduciary ne t position was projected to be ava ilable to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Change of Assumptions – For the measurement date of June 30, 2022, the medical trend was updated. The inflation assumption was lowered from 2.75% to 2.50%. Demographic assump tions were updated to CalPERS 2000-2019. Experience Study and the mortality improvement scale wa s updated to Scale MP- 2021.

Changes in the Net OPEB Liability
The changes in the net OPEB liability for each plan measured as of June 30, 2022, are as follows:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2021 68,991,529$ 41,146,029$ 27,845,500$ Changes in the year:

Service cost 1,466,017 - 1,466,017
Differences between actual and expected (3,578,714) - (3,578,714) Assumption changes (36,145) - (36,145)
Interest 3,900,949 - 3,900,949
Contribution - employer - 4,637,072 (4,637,072)
Net investment income - (5,571,232) 5,571,232
Administrative expenses - (52,817) 52,817
Benefit payment, including refundings
of employee contributions (5,229,919) (5,229,919) - Net Changes (3,477,812) (6,216,896) 2,739,084
Balance at June 30, 2022 65,513,717$ 34,929,133$ 30,584,584$ Fiscal Year Ending
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate – The following presents the net OPEB liability of the City for the plan, calculated using the discount rate for each plan, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1 percentage point higher than the current rate. 1% Decrease Current Rate 1% Increase
(4.75%) (5.75%) (6.75%)
Net OPEB Liability 36, 946,922$ 30,584,584 $ 25,160,651 $ 90

CITY OF CONCORD JUNE 30, 2023
NOTE 13 – OTHER POST-EMPLOYMENT HEATH CARE BENEFITS (CONTINUED) Sensitivity of the net OPEB liability to chan ges in the Healthcare Cost Trend Rates – The following presents the net OPEB liability of the City for the plan , calculated using the healthcare cost trend rate for the plan, as well as what the City’s net OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-percentage point lower or 1-percentage point higher than the current rate. 1% Decrease Current Trend 1% Increase
Net OPEB Liability 28, 589,302$ 30,584,584 $ 33,239,847 $ OPEB expenses and deferred outflows/inflows of resources related to OPEB For the fiscal year ending June 30, 2023, the City recognized OPEB expense of $1,942,274 for the plan. At June 30, 2023, 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
Employer contributions made subsequent to the measurement date 4,970,809$ - $ Changes in assumptions 1,808,258 (274,138) Differences between expected and actual experience 23,821 (3,181,598) Net differences between projected and actual earnings on plan investments 2,504,480 -
Total 9,307,368$ (3,455,736)$
$4,970,809 reported as deferred outflows of resources related to OPEB for the miscellaneous and safety plans respectively resulting from the City’s contributio ns subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Annual
Year Ended June 30, Amortization
2024 2,267 $
2025 (20,132)
2026 15,540
2027 883,148
2028 -
Thereafter -
Total 880,823$
91

CITY OF CONCORD JUNE 30, 2023
NOTE 14 – DEFERRED COMPENSATION PLANS
City employees may also defer a portion of th eir compensation under City sponsored Deferred Compensation Plans. The City offers the opportunity to participate in one of two plans, one created in accordance with Internal Revenue Code Section 457, and one created in accordance with Internal Revenue Code 401k. Under the 457 Plan, diffe rent rules apply and amounts contri buted may be either pre-tax or after-tax depending on applicable plan rules; under the 401k Plan participants are not taxed on the deferred portion of their compensation until distributed to them. Under both plans, distributions may be made only at termination, retirement, death or in an emergenc y as defined by each Plan. The Plans are part of the public agency agent multiple‐employer defined contribution plans that are administered by Mission Square Retirement (formerly ICMA RC). Benefit provisions under the Plans are established by City resolution.

The City has no liability for any losses incurred by the Plans and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has a contract with Mission Square to manage and invest the assets of each Plan. The administrator pools the assets of each Plan with those of other participants and does not make separate investments for the City. The assets in the Plans are the sole property of the participants or their beneficiaries. Since the assets held under the Plans are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements. The Plans require investme nts to be stated at fair market value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.

Under the terms of the employment agreement with the City Manager, the City contributes $15,000 annually to the Section 457 Plan. The City does not make any other contributions to the Section 457 Plan.

The City provides an employer-paid 40 1(k) contribution of 2% of salary plus $2,000 per year for all Confidential employees, and 3% of salary plus $2,000 per year for Executive Management employees. The contributions are made on a per pay-period basis. This is not an “employer match”; rather, it is a contribution made to the 401(k) account on behalf of the employee. The employer contributions vest immediately.

The City’s required contributions for the year ended June 30, 2023 for both plans totaled $492,421.

NOTE 15 – LEASES
Policies
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivables or liabilities in which ther e is $7,500 or more in pa yments for the use of an asset during the fiscal year.

Lessee – The City is a lessee for noncancellable leases of buildings and improvements. The City recognizes a lease liability and an intangible right ‐to‐use lease asset (lease asset) in the government ‐wide financial statements.

At the commencement of a lease, the City initially measures the lease lia bility at the present value of payments expected to be made dur ing the lease term. Subsequently, th e lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight‐line basis over its useful life. 92

CITY OF CONCORD JUNE 30, 2023
NOTE 15 – LEASES (CONTINUED)
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
• The City uses the interest rate charged by the less or as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the lease. • Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

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

Lease assets are reported with other capital assets an d lease liabilities are reported on the statement of net position.

Lessor – The City is a lessor for noncancellable leases of commercial space, land and communication sites.

The City recognizes a lease receivable and a deferred inflow of resources in the government‐wide and fund financial statements.

At the commencement of a lease, the City initially measures the lease receiv able at the present value of payments expected to be received during the lease te rm. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
• The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. • Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would re quire 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. 93

CITY OF CONCORD JUNE 30, 2023
NOTE 15 – LEASES (CONTINUED)
Leases Receivable
The balances related to leases receivable and deferred inflows of resources as of June 30, 2023 were:

Deferred
Lease Inflows of
Receivable Resources
General Fund
Communication sites 2,068,068$ 1,997,091$
Land rentals 4,180,934 4,080,384
Pavilion 4,691,497 4,788,068
Parking lot 144,371 142,949
Golf Enterprise Fund
Communication sites 437,142 430,152
Total 11,522,012$ 11,438,644$
Communication Site Leases – The City leases various locations to third parties for the provisions of mobile/wireless communications services. During the year ended June 30, 2023, the City had eight leases, with original lease terms ranging from twenty to thir ty years, including the optional extension periods for six of the leases that range from five to fifteen years, and as of June 30, 2023, the leases had one to sixteen years remaining. The City recognized $243,955 in lease revenue and $38,629 in interest revenue during the current fiscal year related to these leases. Also, the City has deferred inflows of resources associated with these leases that will be recognized as revenue over the lease term.

Land Leases – The City leases land to third parties for various amusement uses, including a water park, batting cages and an amusement park. During the year ended June 30, 2023, the City had three leases that were subject to being recorded as leases receivable under generally accepted acc ounting principles. The original lease terms were ten, twenty and fifty-five y ears and as of June 30, 2023, the three leases had 1.5 years, 12 years and 26 years, respec
tively, remaining, including optional extension periods. One of the leases can be renewed for two additional five-year te rms and one lease can be renewed for five additional five-year terms. The City recognized $195,459 in lease revenue and $104,619 in interest revenue during the current fiscal year related to these leases. Also, the City has deferred inflows of resources associated with these leases that will be recognized as revenue over the lease term.

Pavilion – The City leases the Concord Pavilion to a third party. The original lease term was fifteen years with an option to renew for one five-year term and as of June 30, 2023, the lease had 5.5 remaining, including the optional extension period. The City re cognized $870,558 in lease revenue and $75,961 in interest revenue during the current fiscal year related to this lease. Also, the Ci ty has deferred inflows of resources associated with the lease that will be recognized as revenue over the lease term.

Parking Lot – The City leases land to a third parties for a parking lot. The original lease terms were nine years and as of June 30, 2023, the lease had 2.5 years remaining. Th e City recognized $57,180 in lease revenue and $1,854 in interest revenue during the current fiscal year related to the lease. Also, the City has deferred inflows of resources associated with the leas e that will be recognized as revenue over the lease term.
94