AGENDA
REGULAR MEETING
CYPRESS CITY COUNCIL
January 26, 2026
6:00 P.M. Regular Meeting
www.cypressca.org 5275 Orange Avenue
Cypress, California
If you are interested in speaking during the City Council meeting, details on how to participate are provided on the last page of the agenda.
ROLL CALL
Cypress City Council, also acting as the Ex-Officio Governing Board of Directors of the Cypress Recreation and Park District
Mayor Leo Medrano
Mayor Pro Tem Kyle Chang
Council Member Bonnie Peat
Council Member David Burke
Council Member Rachel Strong Carnahan
INVOCATION: Pastor Brandon Beukelman, West Cypress Church
PLEDGE OF ALLEGIANCE
PRESENTATIONS
Recognition of the Cypress High School Girls Volleyball Team Division II State Championship
ORAL COMMUNICATIONS
This portion of the meeting is set aside for public comments regarding any matter within the jurisdiction of the City Council. Comments on non-agenda items will be heard at this time.
Comments related to a specific agenda item will be heard following the staff report for that item and prior to the City Council action, unless the speaker prefers to make the comment during the general public comment period. The City Council cannot discuss or take action on matters not on the agenda for this meeting, but Council members may provide brief responses. Please complete a Speaker’s Card to address the City Council in-person. Please follow the instructions at the end of the agenda and wait for the Mayor or City Clerk to call on you to address the City Council virtually. Speakers providing in-person comments will be called first. Time allotted for public comment (subject to change by the presiding officer).
General Public Comment (not on agenda): 3 minutes
Consent Calendar (any or all items): 3 minutes Agenda Items (not on consent calendar): 3 minutes per item
CONSENT CALENDAR
All matters listed on the Consent Calendar are to be approved with one motion unless a Council Member requests separate action on a specific item. Council Members voting no or abstaining on a Consent Calendar item may do so without removing the item from the Consent Calendar.
1. Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025
Prepared by: Steve Charelian, Interim Director of Finance and Administrative Services Recommendation: Receive and file the Annual Comprehensive Financial Report and Related Reports for the Fiscal Year Ended June 30, 2025.
2. Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2025 Prepared by: Steve Charelian, Interim Director of Finance and Administrative Services Recommendation: Receive and file the District's Basic Financial Statements and Independent Auditors' Report and Related Reports for the Fiscal Year Ended June 30, 2025.
3. Approve the 2026 Proposed City Council Regular Meeting Schedule Prepared by: Lisa Berglund, City Clerk
Recommendation: Approve the proposed 2026 City Council Regular meeting schedule.
4. Second Reading of Ordinance No. 1223 Changing the City Council Meeting Day from Monday to Tuesday
Prepared by: Lisa Berglund, City Clerk
Recommendation: Approve the second reading and adopt Ordinance No. 1223 by title only and waive further reading, amending the Cypress Municipal Code Section 2-1 related to the time and day of regular City Council meetings.
January 26, 2026 | Page 2
5. Recognize the 75th Anniversary of the Kiwanis Club of Cypress Prepared by: Lisa Berglund, City Clerk
Recommendation: Recognize the 75th Anniversary of the Kiwanis Club of Cypress.
6. Adoption of Policy Establishing Procedures for Responding to Disruption of Airing Meetings of the City Council and Other Legislative Bodies Subject to SB 707
Prepared by: Sean Joyce, Interim City Manager
Recommendation: Approve the attached policy concerning disruption of service procedures associated with the airing and/or streaming of the meetings of the city's legislative bodies as defined by applicable state statute, as may be amended.
7. Adopt the FY 2026-2027 Budget Calendar
Prepared by: Steve Charelian, Interim Director of Finance and Administrative Services Recommendation: Adopt the Fiscal Year 2026-2027 budget calendar.
8. Receive and File the Investment Reports for the Months Ended November 30, 2025, and December 31, 2025.
Prepared by: Steve Charelian, Interim Director of Finance and Administrative Services Recommendation: Receive and file the attached investment reports.
9. Approve the Urban Area Security Initiative Sub-Recipient Agreement Prepared by: Jason Machado, Senior Administrative Analyst Recommendation:
1. Approve the Fiscal Year 2024 Urban Area Security Initiative (UASI) grant for calendar years 2025-2027 through the UASI Sub-Recipient Agreement with the City of Anaheim; and
2. Authorize the City Manager to execute all UASI related documents.
10. Adopt the 2026 Federal and State Legislative Platform Prepared by: Jason Machado, Senior Administrative Analyst Recommendation: Adopt the 2026 Federal and State Legislative Platform.
PUBLIC HEARINGS (Three minutes per speaker)
January 26, 2026 | Page 3
PUBLIC HEARINGS (Three minutes per speaker)
The public may address the City Council on public hearing items prior to any action taken.
Please complete a Speaker's Card to address the City Council in-person. Please follow the instructions at the end of the agenda and wait for the Mayor/City Clerk to call on you to address the City Council virtually. Speakers providing in-person comments will be called first.
Council Members should disclose communications with anyone relevant to a Public Hearing item.
11. Approve Conditional Use Permit No. 2025-02 for an Adult Day Health Care Facility at 6269 Ball Road
Prepared by: Christopher Wong, Business Development Manager Recommendation: Adopt a Resolution approving Conditional Use Permit No. 2025-02, subject to the attached conditions, and confirm the project is exempt from the California Environmental Quality Act (CEQA).
NEW BUSINESS
12. Adopt an Ordinance on Campaign Finance Reform
Agendized by: Council Member David Burke
Recommendation: Introduce an Ordinance of the City Council of the City of Cypress, California, Amending Chapter 2, Article X of the Cypress Municipal Code by Adding New Sections 2-128.1 and 2-128.2 Establishing a Local Campaign Contribution Limit and Disclosure of Top Contributors, to be read by title only and waive further reading.
13. Introduce an Ordinance of the City Council of the City of Cypress, California, Amending Cypress Municipal Code Section 1-13 and Adding Subsections 1-13.1 and 1-13.2 to Regulate Use of the City Seal and Logo
Prepared by: Sean Joyce, Interim City Manager
Recommendation: Introduce an Ordinance of the City Council of the City of Cypress, California, Amending Section 1-13 and Adding Subsections 1-13.1 and 1-13.2 of the Cypress Municipal Code to Regulate Use of the City Seal and Logo, to be read by title only and waive further reading.
14. Timing for Transition of City Attorney Representative In Light of Change of Council Meeting Dates
Prepared by: Fred Galante, City Attorney
Recommendation: Provide direction on the timing of transitioning City Attorney representative in light of the change of Council meeting dates.
January 26, 2026 | Page 4
ITEMS REMOVED FROM CONSENT CALENDAR
CONTINUED ITEMS
ITEMS FROM CITY COUNCIL MEMBERS
15. Consideration of a Council Member Request to Discuss City Council Declaration of a Commitment to Protection of Public Safety and Civil Rights with Regard to ICE Enforcement
Agendized by: Council Member Rachel Strong Carnahan
Recommendation: Consider Council Member Strong Carnahan's request (seconded by Mayor Pro Tem Chang) and provide direction concerning adopting a resolution of the City Council affirming "the protection of our constituents' civil rights and to condemn the use of excessive force by federal and immigration authorities."
COUNCIL MEMBER REPORTS FROM CITY-AFFILIATED BOARDS AND COMMITTEES
AND REMARKS
COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION
CITY MANAGER REMARKS
ADJOURNMENT
The next meeting will be an adjourned Regular Meeting, to be held on Monday, February 9, 2026, beginning at 5:30 p.m. in the Executive Board Room.
Council Members and the public should promptly exit the meeting room following adjournment.
I, Lisa Berglund, City Clerk, certify under penalty of perjury under the laws of the State of California, that the foregoing Agenda was posted on the City Hall bulletin board and City website not less than 72 hours prior to the meeting. Dated January 21, 2026.
January 26, 2026 | Page 5
PUBLIC PARTICIPATION
Members of the public can participate in the City Council meeting in the following ways:
1. Attend In-Person. First-come, first-served seating is available. All attendees must be free of any symptoms associated with contagious illnesses.
2. Attend Virtually via Webinar. Follow this link:
https://attendee.gotowebinar.com/register/1927842359575725919. Advanced registration is recommended.
The public may address the City Council virtually during Oral Communications on Agenda Items and Public Hearings. Virtual participants must click the 'hand raise' button prior to the end of the first in-person speaker to indicate they wish to address the City Council. Upon clicking the 'hand raise' button, please unmute your microphone and wait for the Mayor/City Clerk to call on you.
= Hand Raise = Unmute
3. Submit Public Comments Prior to the Meeting. The public may submit comments via email to [email protected]. Comments submitted by 3:00 p.m. on the day of the meeting will be added to the meeting record.
4. Watch the Meeting. The City Council meeting can be viewed on Spectrum Cable Channel 36 or on the City's website at www.cypressca.org/watchlive.
5. Listen to the Meeting. Listen-only teleconferencing is available by calling +1 (631) 992-3221 and entering Access Code 966-937-013. No registration or audio pin is necessary.
INVOCATION POLICY
The City Council does not endorse the content of the invocation and does not endorse the invocational speaker’s particular faith, belief and/or religious denomination. The City Council has an established neutral policy for selecting and scheduling invocational speakers. The City Council’s policy on invocations is available from the City Clerk.
AMERICANS WITH DISABILITIES ACT
In compliance with the Americans With Disabilities Act, if you need special assistance to participate in this meeting, you should contact the City Clerk at (714) 229-6685 at least 72 hours prior to the meeting to enable the City to make reasonable arrangements to assure accessibility to this meeting.
January 26, 2026 | Page 6
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 1.
FROM: Steve Charelian, Interim Director of Finance and Administrative Services DATE: 01/26/2026
SUBJECT: Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025
RECOMMENDATION
Receive and file the Annual Comprehensive Financial Report and Related Reports for the Fiscal Year Ended June 30, 2025.
SUMMARY
The Director of Finance is required to annually submit a complete financial statement and report to the City Council. Additionally, the State requires all California cities complete an annual audit. The Basic Financial Statements contained in the Annual Comprehensive Financial Report (ACFR) have been audited by the firm of Eide Bailly LLP. Based on the results of this audit, the City has received an unmodified opinion, also known as a “clean”, opinion, which is the possible audit outcome. The City has received national recognition for more than 30 years for its ACFR by receiving a "Certificate of Achievement of Excellence in Financial Reporting” from the Government Finance Officers Association of the United States and Canada (GFOA). The current year’s ACFR has been submitted to the GFOA for FY 2024-2025 award consideration.
DISCUSSION
The Basic Financial Statements contained in the Annual Comprehensive Financial Report have been audited and the following reports prepared by the firm of Eide Bailly LLP.
Annual Comprehensive Financial Report (ACFR)
The ACFR is comprised of three major sections: Introductory, Financial, and Statistical.
Each of these sections contains required information in a prescribed format.
The Introductory Section contains a transmittal letter, a directory of City officials, and an organizational chart.
The Financial Section incorporates critical information on the financial condition of the City and includes all the information in the ACFR which is part of the scope of the audit, as well as required supplementary information and supplemental schedules.
The Financial Section includes the basic financial statements, note disclosures and a management discussion and analysis (MD&A) narrative. The basic financial statements contain two types of statements: the government-wide financial statements and the fund financial statements. The government-wide financial statements present a broad overview of the City’s financial information on a full accrual basis, similar to the private sector, which provides a long-term perspective on the City's finances. The fund financial statements are presented on a modified accrual basis focusing on a short-term view of the City’s current and available financial resources. When both sets of financial statements are reviewed in conjunction with the other information presented in the Financial Section (note disclosures and the MD&A), the reader of the ACFR should be able to gain a thorough and complete picture of the City’s financial condition.
The Statistical Section includes a variety of financial and demographic information related to financial trends, revenue and debt capacity, and operating and economic data. The contents of the statistical section are intended to provide the reader with additional analysis to help in the understanding of the overall financial health of the City.
Audit Communication Letter
Auditing standards require auditors to issue an audit letter to communicate any significant findings, disagreements with management, immaterial misstatements, or difficulties performing the audit. The audit identified one material misstatement in the prior year's ACFR related to the presentation of the West Cities Police Communications Joint Powers Authority (West-Comm), which is a separate stand-alone entity. For the last four years, the ACFR presented West-Comm's pension, compensated absences, and other post-employment benefit obligations as long-term liabilities since the implementation of new guidance as recommended by the prior audit firm. For fiscal year 2024-2025, our new independent audit firm reviewed the appropriate accounting regulations and determined these obligations should not be presented as liabilties in the City's ACFR because they are not imminent. The presentation was corrected in the 2024-2025 ACFR.
Independent Auditors' Report on Internal Control
During the annual audit, the auditors review and observe the City's internal controls and operations to determine if there are any deficiencies. As reported in the Audit Communication Letter, the misstatement of West-Comm's liabilities is discussed and explained in detail in this Internal Control Report.
Independent Accountants' Report on Agreed-Upon Procedures Applied to the City's Appropriations Limit
All governments in California are required to have specific review procedures performed by independent accountants on the annual appropriation limit. There were no exceptions or findings related to this review.
BUDGET IMPACT
Sufficient amounts are included in the General Fund budget to pay for the cost of the annual audit and ACFR preparation.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Annual Comprehensive Financial Report
Audit Communication Letter
Auditors' Report on Internal Control
Report on the City's Appropriation Limit for the fiscal year ended June 30, 2025 City of Cypress, California
Annual Comprehensive Financial Report
Year Ended June 30, 2025
Prepared by the Department of Finance & Administrative Services
City of Cypress, California
Table of Contents
June 30, 2025
INTRODUCTORY SECTION
Letter of Transmittal ................................................................................................................................................ i Directory of City Officials ...................................................................................................................................... vii Organizational Chart ............................................................................................................................................ viii GFOA Certificate of Achievement for Excellence in Financial Reporting .............................................................. ix
FINANCIAL SECTION
Independent Auditor’s Report .................................................................................................................................. 1 Management’s Discussion and Analysis .................................................................................................................... 5 Basic Financial Statements
Government Wide Financial Statements
Statement of Net Position ................................................................................................................................... 32 Statement of Activities ........................................................................................................................................ 33 Fund Financial Statements
Balance Sheet - Governmental Funds ................................................................................................................. 34 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ....................... 35 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ......................... 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................................................... 37 Proprietary Fund Financial Statements
Statement of Net Position ................................................................................................................................... 38 Statement of Revenues, Expenses, and Changes in Fund Net Position .............................................................. 39 Statement of Cash Flows ..................................................................................................................................... 40 Fiduciary Funds Financial Statements
Statement of Fiduciary Net Position ................................................................................................................... 41 Statement of Changes in Fiduciary Net Position ................................................................................................. 42 Notes to Basic Financial Statements ....................................................................................................................... 44 Required Supplementary Information
Budgetary Comparison Schedule – General Fund ............................................................................................... 94 Budgetary Comparison Schedule – Recreation and Park District Special Revenue Fund ................................... 95 Budgetary Comparison Schedule – Streets Special Revenue Fund ..................................................................... 96 Schedules of Proportionate Share in Net Pension Liability ................................................................................. 97 Schedule of Changes in the Net Pension Liability and Related Ratios ................................................................ 98 Schedules of Plan Contributions .......................................................................................................................... 99 Schedule of Changes in Total OPEB Liability and Related Ratios ...................................................................... 100 City of Cypress, California
Table of Contents
June 30, 2025
Supplementary Information
Budgetary Comparison Schedules for Other Major Governmental Fund ......................................................... 102 Other Major Governmental Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - City Capital Projects Fund .................................................................................................................................. 103 Nonmajor Governmental Funds:
Combining Balance Sheet .................................................................................................................................. 105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ......................................... 109 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Local Drainage Special Revenue Fund ............................................................................................................... 113 Stanton Channel Maintenance District Special Revenue Fund ......................................................................... 114 Lighting District Special Revenue Fund ............................................................................................................. 115 Cable TV PEG Grant Special Revenue Fund ....................................................................................................... 116 AB 2766 Special Revenue Fund ......................................................................................................................... 117 Traffic Safety Special Revenue Fund ................................................................................................................. 118 Supplemental Law Enforcement Special Revenue Fund ................................................................................... 119 Narcotics Asset Seizure Special Revenue Fund ................................................................................................. 120 Low and Moderate Housing Assets Special Revenue Fund ............................................................................... 121 Internal Service Funds:
Combining Statement of Net Position ............................................................................................................... 123 Combining Statement of Revenues, Expenses, and Changes in Net Position ................................................... 124 Combining Statement of Cash Flows ................................................................................................................. 125
STATISTICAL SECTION
Financial Trends:
Net Position by Component .......................................................................................................................... 127 Changes in Net Position ................................................................................................................................. 129 Fund Balances – Governmental Funds .......................................................................................................... 131 Changes in Fund Balances of Governmental Funds ...................................................................................... 133 Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property ................................................................ 135 Direct and Overlapping Property Tax Rates .................................................................................................. 136 Principal Property Taxpayers ......................................................................................................................... 137 Property Tax Levies and Collections .............................................................................................................. 138 Debt Capacity:
Ratios of Outstanding Debt by Type .............................................................................................................. 139 Direct and Overlapping Governmental Activities Debt ................................................................................. 140 Legal Debt Margin Information ..................................................................................................................... 141 Demographic and Economic Information:
Demographic and Economic Statistics .......................................................................................................... 143 Principal Employers ....................................................................................................................................... 144 City of Cypress, California
Table of Contents
June 30, 2025
Operating Information:
Full-time Equivalent City Government Employees by Function/Program .................................................... 145 Operating Indicators by Function/Program .................................................................................................. 146 Capital Asset Statistics by Function/Program ................................................................................................ 147 This page intentionally left blank.
Introductory Section
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December 19, 2025
To the City Manager, Honorable Mayor, Members of the City Council and Residents of the City of Cypress, California:
We are pleased to submit to you the Annual Comprehensive Financial Report (ACFR) of the City of Cypress for the fiscal year ended June 30, 2025. This report is published in accordance with local ordinance and state law requirements that financial statements be presented in conformity with accounting principles generally accepted in the United States of America and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants.
This ACFR consists of management’s representations concerning the finances of the City of Cypress. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Cypress has established a comprehensive internal control framework designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Cypress’ financial statements. Because the cost of internal controls should not outweigh their benefits, the City of Cypress’ comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The report is presented in three sections: Introductory, Financial and Statistical.
While there have been no significant changes in the City’s fiscal policies that impact the current year financial statements, we urge readers of the report to pay particular attention to the overview and analysis presented in the Management’s Discussion and Analysis (MD&A) found in the financial section of the ACFR.
City policy requires its financial statements are audited by independent certified public accountants. The firm of Eide Bailly, LLP has performed the audit for the fiscal year ended June 30, 2025. The goal of the independent audit is to provide reasonable assurance the financial statements of the City of Cypress are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded there was a reasonable basis for rendering an unmodified opinion that the City of Cypress’ financial statements for fiscal year ended June 30, 2025 are fairly presented in conformity with accounting principles generally accepted in the United States of America. The Independent Auditor’s Report is presented as the first component of the financial section of this report. ii
As a recipient of federal, state and county financial assistance, the City of Cypress is responsible for having an adequate internal control structure in place to ensure compliance with applicable laws and regulations related to such programs. This internal control structure is subject to periodic evaluation by management. In years when over $750,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single audit in conformity with the provisions of the Federal Single Audit Act Amendments of 1996 and the Office of Management and Budget Circular A-133 regulating Single Audits, and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. For the year ended June 30, 2025, more than $750,000 was expended on Federal financial assistance programs and a single audit was required. Information related to this single audit will be available in the City of Cypress’ separately issued Single Audit Report.
CITY OF CYPRESS PROFILE
The City of Cypress, incorporated in July 1956, is located in the northwestern part of Orange County, California, where two of the nation’s largest metropolitan areas, Los Angeles and Orange counties, meet. Cypress is primarily a residential community occupying 6.7 square miles of land and serving a population of 49,499. In addition to its residential communities, Cypress has an 800-acre business park that includes a diverse array of well-known companies. People are drawn to Cypress for its quality housing, business park, educational facilities, citizen-oriented social and recreational activities, and progressive City government.
Some of the major attractions in Cypress include: Los Alamitos Race Course, Forest Lawn Memorial Park, and Cypress Community College.
The City of Cypress is a charter city and operates under the Council-Manager form of government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor, Mayor Pro Tem, and three Council Members. The City Council, among other things, is responsible for the City’s ordinances, operating resolutions, adoption of the annual budget, appointing commissions and committees, and hiring the City Manager, the City Clerk and the City Attorney. The City Manager is responsible for implementing the policies, ordinances and directives of the City Council, for overseeing the day-to-day operations of the City, and for appointing the Directors of the City’s departments. The City Council is elected on a nonpartisan basis across five districts. Council Members, one for each of the five districts, are elected to four-year staggered terms and may serve a maximum of two terms. The Mayor and Mayor Pro Tem are selected annually by the Council Members.
The City of Cypress provides a full range of services, including police protection; the construction and maintenance of streets, public facilities and other infrastructure; sanitary sewer; building safety regulations and inspections; and recreational activities and cultural events. The City is a member of the Orange County Fire Authority which provides fire protection and emergency medical aid services. Independent special districts provide educational and library services, while private entities offer utility services to Cypress residents.
The annual budget serves as the foundation for the City of Cypress’ financial planning and control. The City operates on a fiscal year basis, beginning July 1 and ending June 30. The iii
budget is prepared under the supervision of the City Manager and submitted to the City Council for deliberation and adoption prior to the beginning of the fiscal year.
The City follows these procedures in establishing the budgetary data reflected in the financial statements: After January 1, department directors prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. The operating budget includes a summary of the proposed expenditures and financial resources, as well as data for the preceding fiscal period. Prior to July 1, the budget is legally enacted through passage of an adopting resolution. Upon adoption by the City Council, the City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual budget. The City Manager may make transfers of appropriations within a department if within the same fund. However, appropriation transfers between departments, funds or relating to personnel costs or capital purchases require approval by the City Council, as do any supplemental appropriations.
Budget to actual comparisons are provided in this report for each individual government fund for which an appropriated annual budget has been adopted. With the exception of the General fund, where budgetary control is maintained at the department level, budgetary control is maintained at the fund level. The General fund departments are Legislative, Administration, and Finance (summarized as General government); Police (Public safety); Community Development (which includes the Planning and Building divisions), and Public works (which includes the Engineering and Maintenance divisions). Additional budget information is presented in the Notes to the Basic Financial Statements and Required Supplementary Information Sections of the financial section of this report.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Cypress operates.
Local economy. Cypress is home to a wide range of businesses, particularly in the 800- acre Cypress Business Park, which has historically generated a significant percentage of City General fund revenues. Major industries with headquarters or divisions located within the City’s boundaries include electronic equipment, managed healthcare, horseracing and flooring distribution. A variety of professional businesses, aerospace, hotels, and other retail businesses are also based in Cypress.
The local economy in Orange County has grown steadily for the better part of the last two decades. While a handful of events during this time created economic uncertainty, the local economy has proved resilient and the ongoing negative impacts to Cypress’ revenue base have been more modest than feared. Undoubtedly, new economic challenges and uncertainties will emerge and have an impact on the Orange County region, including Cypress, for the foreseeable future.
iv
The City has been financially vigilant and focused on building up its reserves and limiting growth in operations to be in a position to effectively handle periods of uncertainty. This strategic approach has served Cypress well for more than a quarter century as the City has been able to keep a balanced budget while maintaining service levels, without having to consider any tax increases. Property taxes remain a stable source of income, while sales tax revenues are more volatile and unpredictable. Sales tax concerns exist due to relying on a small number of businesses to generate the majority of annual sales tax receipts, and experiencing substantial revenue declines since the Great Recession (when compared to inflation). These sale tax declines have long-term significance, and City leaders will continue to monitor revenue trends to identify methods for strengthening the City’s economic base.
Volatility in the financial markets will continue to have a direct impact on the City, most significantly in the form of required annual pension costs associated with being a member of the California Public Employees’ Retirement System (CalPERS). Substantial decreases in value of CalPERS assets during periods of financial instability, combined with changes in actuarial assumptions and lowering the discount rates to strengthen the pension system over the long-term, have been passed on to members of CalPERS in the form of higher payments for the foreseeable future. Cypress, like most other California cities, has seen its annual required contributions nearly triple over the last decade.
In recent years, inflation has become an omnipresent threat to the City’s financial health.
The evolving impacts on City expenditures cannot be overstated, as cost increases for all City services and capital projects have far outpaced revenue growth and have yet to stabilize enough to feel confident the City will be able to handle long-term impacts. Of particular concern are the staggering increases in the costs associated with capital project investment, on both the labor and materials front.
Despite being subjected to all the aforementioned issues outside the control of the City’s decision makers, the City has effectively managed its budget and used the positive results of past economic growth to build up fund balances and net position. It has been the City’s practice to set-aside a portion of these fund balances and net position for potential future budget shortfalls and contingencies, and to offset significant long-term liabilities. Over $14.8 million has been accumulated in the General fund for contingencies and budget stabilization at June 30, 2025. In addition, a pension trust was established in 2017 in response to pension and budget stabilization concerns and in early 2024, the City Council set a goal and funding plan for pension trust assets to fully offset unfunded CalPERS pension liabilities by 2030.
The pension trust provides a vehicle to restrict and invest monies for future pension obligations, while maintaining asset control at the local level. More than $37.0 million is invested in the trust at June 30, 2025, and is projected to grow to $53.1 million in 2030.
The remaining fund balances and net position are available for use on non-operating expenditures and provide for the payment of any other long-term obligations. Assuming the City remains fiscally responsible and disciplined with regards to budget decisions in the future, accumulated fund balance and net position amounts are at a level which should allow the City to withstand negative short-term economic impacts without affecting the primary service levels currently provided to its residents and businesses. However, the City’s longterm ability to maintain the high-level of services currently offered to its residents and v
businesses is uncertain due to economic instability and risk of recession, inflation, sales tax stagnation and rising pension costs brought on by market volatility.
Another ongoing financial challenge remains funding the necessary maintenance and improvements required for the City’s facilities and infrastructure systems. The seven-year capital funding plan is updated annually based on the most recent condition assessments of the various infrastructure systems and facilities. While significant progress has been made in the last 30 years by way of improvements and setting aside reserves, there are still major investments necessary to improve aging city and park facilities and storm drainage infrastructure. The funding plans for these assets, as well as the other infrastructure components (sidewalks, trees, streets, traffic signals), indicate a need for additional revenue sources to achieve the City’s goal of maintaining its high standards for infrastructure systems and facilities. One of the largest concerns continues to be the lack of a dedicated revenue source (outside the General fund) to pay for facilities and storm drainage improvements identified in the condition assessments. Due to all the uncertainties discussed previously regarding the City’s long-term financial health, it continues to be necessary to identify viable future funding solutions (other than the General fund) to address aging infrastructure systems and facilities.
Long-term financial planning. The City of Cypress seeks to assure a high quality of life for its residents and businesses. As such, strategic planning is utilized to establish major goals and objectives of the City which provide principal guidance for the budget established by the City Council. The three year goals established for 2023 through 2026 include the following (not in priority order):
Maintain financial stability and promote economic activity. Maintain high quality and high value services for the community. Maintain infrastructure and facilities.
Enhance and maintain public safety.
Enhance recreation facilities and programs.
The City’s pursuit of these goals is achieved by establishing strategic objectives, which are specific actions and tasks that are incorporated into the annual budget. The majority of the identified strategic objectives were completed during the past year and included streamlining the award of capital improvement project contracts to increase efficiency, adjusting the administrative authority for contract approval, hiring a new audit firm, conducting a team building workshop for police department personnel, performing an updated community survey, completing the internal branding and logo development update process, and having a grand opening for the newly rehabilitated Arnold Cypress Park.
The City of Cypress maintains a seven-year Capital Improvement Program to plan for capital and infrastructure needs in conjunction with longer-term revenue projections. It is the City’s policy to fund many capital projects by accumulating and setting aside a portion of excess General fund revenues over General fund expenditures for future infrastructure needs in the City’s Capital Projects fund. However, due to the factors discussed in detail earlier, the ability to continue setting aside sufficient General fund amounts to meet future capital needs will become increasingly difficult, if not impossible, in the coming years. vi
In addition, a five-year forecast for the General fund is included in the budget. This forecast provides a longer-term analysis, which when viewed together with the current year budget, creates parameters for charting a prudent and sustainable financial course. Despite seeing improvements in the last several annual forecasts brought on by higher interest earnings, Cypress remains dogged by a modest, stubborn structural deficit. While these deficits are expected to be manageable, future challenges (both those that we are aware of and those that are currently unknown) make it difficult to create a five-year forecast that can be relied on with strong confidence.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Cypress for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023. This is the 39th consecutive year that the City has received this prestigious award.
The Certificate of Achievement is a national award that recognizes conformance with the highest standards for preparation of state and local government financial reports.
In order to receive a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized ACFR. The report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we will be submitting it to GFOA to determine its eligibility for another certificate.
The preparation of this report could not have been accomplished without the dedicated service of the entire staff of the City’s Finance Division and I want to extend my thanks to all the Finance staff involved in the process. Appreciation must also be extended to the Cypress City Council for their ongoing commitment to fiscal responsibility and allowing the City to remain financially prepared for future challenges. This strategic and disciplined approach has greatly benefited Cypress residents and businesses through the years and staying on a similar course is more important than ever as a variety of threats to the City’s fiscal stability continue to evolve. I have spent the last 25 years dedicated to making Cypress’ financial condition as strong as possible. With that, the City is entering a period of transition which will include hiring a new City Manager and Director of Finance and Administrative Services.
I hope the new City Manager and City Council carry on the tradition of prudent fiscal management so that future generations are successful and able to thrive.
Respectfully submitted,
Matt Burton
Director of Finance and Administrative Services
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Financial Section
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eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Auditor’s Report
To the City Manager, Honorable Mayor and Members of the City Council City of Cypress, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress, California (City) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Correction of Error
As discussed in Note 22 to the financial statements, certain errors resulting in an overstatement of amounts previously recorded in liabilities as of June 30, 2024, were discovered by management of the City during the current year. Accordingly, a restatement has been made to the Custodial Funds’ net position as of July 1, 2024, to correct the error. Our opinions are not modified with respect to that matter.
2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
3 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of changes in the net pension liability and related ratios, the schedule of plan contributions, the schedule of changes in total OPEB liability and related ratios, the budgetary comparison schedule – general fund, the budgetary comparison schedule – Recreation and Park District Special Revenue Fund, and the budgetary comparison schedule – Streets special revenue fund identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The budgetary comparison schedules for other major governmental funds, and combing and individual nonmajor funds financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, budgetary comparison schedules for other major governmental funds, and combing and individual nonmajor funds financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our 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 financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Laguna Hills, California
December 19, 2025
Management’s Discussion and Analysis
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CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
4 As management of the City of Cypress (City), we offer readers of the City’s financial statements this overview and analysis of the financial activities for the fiscal year ended June 30, 2025. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and with the City’s financial statements, which follow this discussion.
Financial Highlights
The assets and deferred outflows of resources of the City exceed its liabilities and deferred inflows of resources at the close of the fiscal year ended June 30, 2025 by $374,086,578 (net position). Of this amount, $77,291,665 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.
The City’s total net position increased by $7,426,532 during the fiscal year. As of June 30, 2025, the City’s governmental funds reported combined ending fund balances of $131,639,031, a decrease of $15,679,082 in comparison with the prior year. A total of $2,079,301 is unassigned within the General fund and is available for spending at the government’s discretion, while a deficit fund balance of $21,426,431 is included in the Recreation and Park District major governmental fund (unassigned fund balance of the governmental funds). As of June 30, 2025, the total fund balance of the General fund was $37,436,094.
Of this total, $10.3 million has been committed by the City Council as part of a stabilization agreement to be used should General fund revenues decrease or expenditures increase unexpectedly due to unforeseen factors or emergencies. In addition to these commitments, nearly $25.0 million of the fund balance has been assigned – including for use on future capital improvements, investment in the City’s pension trust, potential budget shortfalls, future economic development programs and storm drainage purposes. While these assigned amounts are not legally restricted, it continues to be the City Council’s practice to set-aside and annually transfer surplus amounts (if available) both to the City’s Capital Project Fund for future infrastructure improvement projects as outlined in the City’s SevenYear Capital Improvement Plan and for pension investment to offset the City’s unfunded pension liabilities.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (which includes the required supplementary information). This report also contains other supplementary information in addition to the basic financial statements themselves.
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
5 Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between assets/deferred outflows and liabilities/deferred inflows reported as net position.
Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Cypress is improving or deteriorating.
The statement of activities presents how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. unpaid accrued interest).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all, or a significant portion, of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, community development, public safety, public works and recreation. The business-type activities of the City are related to the sanitary sewer system.
The government-wide financial statements include not only the City itself (known as the primary government), but also two legally separate entities: the Cypress Recreation and Park District (District), and the Cypress Recreation and Community Services Foundation (Foundation). The City is financially accountable for both the District and the Foundation, and the financial information for these blended component units is reported within the financial information presented for the primary government itself.
The government-wide financial statements can be found in the financial section of this report immediately following Management’s Discussion and Analysis (MD&A).
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
6 resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains various individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General fund, the Recreation and Park District Special Revenue fund, and the City Capital Projects fund, all of which are considered to be major funds. Also presented is the Streets Special Revenue fund which management has designated as a major fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for each of its major funds. The required supplementary information section of the basic financial statements includes budgetary comparison schedules for the General fund, the Recreation and Park District Special Revenue fund and the Streets Special Revenue fund to demonstrate budgetary compliance with the annual budget. A budgetary comparison schedule has been provided elsewhere in this report for the other major governmental fund, the City Capital Projects fund.
The basic governmental fund financial statements can be found in the financial section of this report immediately following the government-wide financial statements.
As part of this annual discussion and analysis, management will discuss financial highlights of the City’s General fund, all other major funds, and any funds experiencing a significant change in fund balances or any other noteworthy activity.
Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses an enterprise fund to account for its sanitary sewer system. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its central services, the District’s central services, employee benefits, liability insurance and workers’ compensation insurance.
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
7 Because these services benefit governmental functions, they have been included in governmental activities within the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the business-type activities of the Sewer fund, which is considered a major fund of the City. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found immediately following the basic governmental fund financial statements.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the governmentwide financial statement because the resources of those funds are not available to support the City’s own programs. The City’s lone type of fiduciary fund is classified as custodial funds, which are used for assets held in a custodial capacity that cannot be used to support the City’s own programs. These custodial funds include amounts held on behalf of the West Cities Police Communications Joint Powers Authority, which is provided administrative support by the City. The basic fiduciary fund financial statements can be found immediately following the basic proprietary fund financial statements.
Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found in the financial section of this report immediately following the basic fiduciary fund financial statements.
Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. The required supplementary information section includes the City’s progress in funding its obligation to provide pension benefits and post-retirement health care benefits to its employees, and the previously discussed budgetary comparison schedules for the General fund, the Recreation and Park District Special Revenue fund and the Streets Special Revenue fund. Required supplementary information can be found immediately following the notes to the basic financial statements.
The combining statements (referred to previously in connection with nonmajor governmental funds and the internal service funds) are presented immediately following the required supplementary information.
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
8 The blended component units (referred to earlier in connection with the government-wide financial statements), although legally separate, function at the discretion and direction of the City’s management. Their financial position and results of operations, therefore, have been included as an integral part of the primary government, and are presented in the fund financial statements.
Government-wide Financial Analysis
The government-wide financial statements provide long-term and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole.
Net position of the City increased by over $7.4 million (2.0 percent) to $374.1 million at June 30, 2025, of which $219.2 million is invested in capital assets such as land, buildings and improvements, equipment, and infrastructure. Of the remaining total, $77.6 million is restricted as to use by specifically stipulated spending agreements originated by law, contract or other agreements with external parties. The remaining $77.3 million classified as unrestricted net position decreased $14.5 million (15.8 percent) from $91.8 million at June 30, 2024, and while subject to being designated for specific purposes as approved by the City Council and management, these amounts may be used to meet the City’s ongoing obligations. While the decrease in unrestricted net position is due to many factors, the largest impact is the City’s ongoing commitment to invest available unrestricted net position amounts in capital assets. For FY 2024-25, this commitment includes the investment of $21.4 million to complete a $31.0 million park renovation which
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
9 started last fiscal year and was completed in May 2025. Other factors that tend to annually impact unrestricted net position include: tax revenues exceeding estimates, recording the financial impacts of the latest pension plan actuarial valuations, the annual contribution of unrestricted amounts to the City’s pension trust, and realizing budget savings associated with personnel vacancies throughout all departments of the City.
The City’s investment in capital assets (less any related outstanding debt used to acquire those assets) is the largest portion of the City’s net position and represents 58.6 percent of total net position, which is an increase from the percentage of overall net position at the conclusion of the prior year. While the City uses these capital assets to provide services to citizens; these assets are not available for future spending.
The following revenue impacts contributed to the change in net position for governmental activities for the fiscal year ended June 30, 2025:
City program revenues account for 20.8 percent of total revenues and are almost $300,000 higher than the prior year total. Charges for services (which include items such as planning and building fees, city services, and recreation user fees) experienced a 9.3 percent increase due to receiving more building fees and park development fees than in the prior year. Both building fees and park development fees tend to vary year to year based on development activity. Grants and contributions tend to fluctuate annually based on availability and project timing. In the past year, operating grants and contributions decreased by just over $450,000, in most part due to the one-time receipt of additional Measure M2 tax revenue restricted for use on transportation purposes in the prior year.
Revenues
Program Revenues:
Charges for services $ 5,187,476 $ 4,682,667 $ 1,672,705 $ 1,593,387 $ 6,860,181 $ 6,276,054 Operating grants and contributions 5,089,609 5,541,054 36 39 5,089,645 5,541,093 Capital grants and contributions 2,436,411 2,271,831 - - 2,436,411 2,271,831 General Revenues:
Sales tax 12,895,299 12,930,992 - - 12,895,299 12,930,992 Property taxes 24,180,293 22,738,100 43,493 42,876 24,223,786 22,780,976 Other taxes 7,213,328 6,833,479 - - 7,213,328 6,833,479 Other 10,078,987 9,672,762 428,550 381,847 10,507,537 10,054,609 Total Revenues 67,081,403 64,670,885 2,144,784 2,018,149 69,226,187 66,689,034 Expenses
General government 6,735,154 7,620,519 - - 6,735,154 7,620,519 Community development 2,104,581 1,925,409 - - 2,104,581 1,925,409 Public safety 23,967,865 22,380,579 - - 23,967,865 22,380,579 Public works 20,126,091 17,374,277 - - 20,126,091 17,374,277 Recreation 7,892,391 7,007,325 - - 7,892,391 7,007,325
Sewer - - 973,573 908,788 973,573 908,788
Total Expenses 60,826,082 56,308,109 973,573 908,788 61,799,655 57,216,897 Increase (Decrease) in Net Position 6,255,321 8,362,776 1,171,211 1,109,361 7,426,532 9,472,137 Net Position
Beginning Net Position 339,079,173 330,716,397 27,580,873 26,471,512 366,660,046 357,187,909 Ending Net Position $ 345,334,494 $ 339,079,173 $ 28,752,084 $ 27,580,873 $ 374,086,578 $ 366,660,046 Governmental Activites
2025 2024
Total
2025 2024
CITY OF CYPRESS
Changes in Net Position
For the fiscal year ended June 30, 2025 and 2024
Business-type Activites
2025 2024
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
10 The City’s general revenues represent 79.2 percent of total revenues. General revenues increased by $2.2 million (4.3 percent) from the prior year. Sales taxes, which represent 23.5 percent of total general revenues, continued to stagnate across several sectors in FY 2024-25 despite the resiliency of the overall economy.
Property tax revenues, the City’s largest revenue source, experienced very solid year-over-year growth due to new development, turnover of existing properties, and the impacts of Proposition 13 growth and their impacts on assessed values.
The increase in other taxes was largely driven by higher transient occupancy tax receipts, which include a full year of revenues from a new hotel that opened in the prior year. Other general revenues totaled $10.5 million, which is $453,000 more than the prior year. The jump relates almost exclusively to investment earnings and the impact of an accounting pronouncement which requires the value of the City’s portfolio be adjusted to its fair market value. For the past year, this requirement resulted in a significant gain which will never be realized since the City’s policy is to hold all its investments until maturity.
All revenues from governmental activities are summarized in the following graph.
Revenues by Source – Governmental Activities
Total expenses for governmental activities increased by $4.5 million for the fiscal year ended June 30, 2025, (8.0 percent), compared to the prior year. A major contributing factor to the overall rise in expenses is attributed to the annual allocation of changes in the internal service funds’ net position. These changes can fluctuate drastically from one year to the next due to recording the impacts of the latest actuarial valuations on pensions, Sales Tax
19%
Property Taxes
36%
Operating Grants
and Contributions
7%
Other Taxes
11%
Capital Grants and
Contributions
4%
Charges for Services
8%
Other
15%
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
11 net of any transfers from the City for pension trust investment. In addition to these allocations of net position, there are other factors impacting FY 2024-25 expenses associated with governmental activities.
General government expenses decreased due to a significantly higher volume of city attorney litigation activities in the prior year, including a large settlement payment to reimburse for attorney costs and fees on a lawsuit. Community Development expenses increased in the last year, primarily because of the creation of a new economic development program which provides training, education and marketing assistance to help grow small businesses. Public safety (police) continues to account for the largest portion (39.4 percent) of total expenses related to governmental activities. In addition to the increases to overall public safety expenses resulting from the net position allocation discussed earlier, public safety expenses in FY 2024-25 include the impacts of implementing the third year of a four-year labor agreement covering sworn police officers’ salary and benefits. The ongoing impacts of contract cost increases brought on by inflation also contributed to higher year-over-year expenses. Public works expenses include significantly higher amounts expended for arterial and residential street and concrete maintenance projects, along with higher contract costs for right-of-way and park maintenance.
Recreation expenses include higher contract costs for park landscaping and facility maintenance.
Total expenses for business-type activities increased $64,785 (7.1 percent).
Ongoing investments to improve the sewer system occur each year, and the increase in expenses is largely due to updating the Sewer System Management Plan (SSMP), which is required every five years.
The following revenues contributed to the change in net position for business-type activities for the fiscal year ended June 30, 2025:
Program revenues for the sewer system are the major revenue source for the City’s lone business-type activity. Charges for sewer services comprise almost 80 percent of total revenues and increased by 5.0 percent from the prior year. Since sewer fees are directly tied to water consumption, any annual revenue fluctuations can reasonably be attributed to changes in precipitation levels experienced in the last year. The last year was relatively dry when compared to the prior year, so the increase is consistent with expectations. The current sewer fee collections represent a dedicated revenue source which provides full funding for ongoing maintenance and annual capital improvements to the City’s sewer system. General revenues for business-type activities are largely limited to investment earnings on cash balances and a small amount of property tax that is allocated to the City and is restricted to use for sewer purposes. Slightly higher average interest rates earned throughout the year, combined with higher cash balances, yielded more interest income than in the prior year.
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
12 All revenues from business-type activities are summarized in the following graph.
Revenues by Source – Business-type Activities
Financial Analysis of the Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information may be useful in assessing the City’s financing requirements and operating needs.
As of the end of the current fiscal year, the City’s governmental funds reported total combined ending fund balances of $131,639,031, a decrease of $15,679,082 over total fund balances at June 30, 2024. The change in fund balance is the result of a variety of factors, which will be highlighted in the discussion of each of the City’s major funds.
Total fund balance is broken down into five categories – ranging from nonspendable to unassigned. Restricted fund balance totals $14.7 million and decreased by $5.7 million from the prior year end and equals 11.2 percent of total fund balance. The restricted amounts at June 30, 2025 can only be used for specific purposes, with the major restrictions being limited for street maintenance and improvements and street lighting.
Property Taxes
2%
Operating Grants and
Contributions
0%
Charges for Services
78%
Other
20%
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
13 The decrease in restricted fund balance is attributed to spending down accumulated amounts for extensive street and traffic signal projects and low and moderate income housing purposes during the fiscal year ended June 30, 2025. Committed fund balance amounts total $25.0 million (19.0 percent) and are slightly lower than the prior year. An additional $111.2 million of fund balance is categorized as assigned. These assignments of fund balance are made by City management for specific purposes – with the majority of the assignments being for future capital improvements, the repayment of notes from the Park District to the City, potential future budget shortfalls and future economic development programs. It continues to be the City’s strategy to set aside available resources to provide a funding mechanism to pay for future improvements to the City’s infrastructure and public facilities, as well as accumulating monies to offset unfunded pension liabilities. The remaining amount of fund balance is categorized as unassigned and is available in the General fund for any purpose the City Council deems appropriate, while there is a large negative unassigned amount recorded in the Recreation and Park District Fund due to outstanding notes payable to the City Capital Projects Fund.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The City’s major proprietary fund is the Sewer enterprise fund. Net position of the Sewer fund at the end of the fiscal year ending June 30, 2025 total nearly $28.8 million, which is almost $1.2 million higher than the prior year. The increase in net position is largely attributed to allocating resources for the future, ongoing investment in capital improvement projects for the sanitary sewer system.
Major Fund Financial Highlights
General Fund
The General fund is the primary operating fund of the City. At June 30, 2025, the total fund balance of the General fund was $37,436,094 (compared to $32,354,846 at the beginning of the year). The fund balance of the General fund is composed of five different categories – nonspendable, restricted, committed, assigned and unassigned. The City continues to implement the practice of accumulating monies for future infrastructure improvements in the City Capital Projects fund through transfers out of the General fund, as well as setting aside monies to invest in the City’s pension trust. A total of $1.5 million was transferred out for future infrastructure and facility needs, and an additional $1.5 million for pension trust investment, during the fiscal year ended June 30, 2025. It is important to note the annual General Fund monies transferred to the City Capital Projects fund for the intended purpose of providing infrastructure and facility improvements are available for other uses at the City Council’s discretion should the need arise.
As a measure of the General fund’s liquidity, it may be useful to compare the total of assigned and unassigned fund balances to total fund expenditures since assigned and unassigned amounts are essentially available for any purpose. Total assigned and unassigned fund balance represents 240.9 percent (down from 274.2 percent the
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
14 previous year) of the total expenditures in the General fund. The major components of assigned fund balance include amounts set-aside for the future capital improvements, pension trust investments, budget stabilization purposes and future economic development program funding. Despite the City Council’s and management’s policy to diligently and actively set-aside monies for future infrastructure and facility needs, the annual General fund amounts expected to be available for transfer to the City’s Capital Project fund will likely be insufficient to pay for all future capital needs due to expenditure growth outpacing projected revenue growth.
For the fiscal year ended June 30, 2025, cash and investments in the General fund totaled $38,449,615, an increase of $5,538,389 from the prior fiscal year, and is primarily the result of realizing budget expenditure savings and receiving more revenues in FY 2024- 25 than forecast in the adopted budget.
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15 Total General fund revenues for the fiscal year ended June 30, 2025 increased by $3.0 million from the prior year. Individual components of this change are highlighted as follows:
Sales tax receipts, which in recent years have become the second largest revenue source of the General fund after being the largest source for decades, saw a decrease of $35,693 when compared to the prior year. Despite the economy’s resilience, the City’s sales tax growth across all sectors has stagnated in the last two years. This appears to be a concerning trend impacting local governments throughout California.
Annual property tax revenue grew 6.2 percent due to increases in the City’s secured property tax base associated with new development, changes in ownership, and the growth related to the annual Proposition 13 inflation adjustment. Included in General fund property tax revenue is $6.4 million of in lieu Motor Vehicle License Fees (MVLF), which represents a $400,000 increase over the prior year.
Other taxes increased due to multiple factors, including transient occupancy tax increases resulting from having a full year of receipts for a new hotel that opened in the prior fiscal year, as well as higher franchise fees. Revenue from use of property experienced large year over year growth due to unrealized market value increases associated with the City’s portfolio of investments. The higher interest rates earned on government-backed securities experienced in the prior fiscal year, continued into FY 2024-25 and resulted in realized interest earnings for the year being comparable to the prior year.
However, accounting standards require all investments to be recorded at their fair market value on June 30, 2025, which yielded a nearly $1.8 million adjustment to revenue. This is nearly $1.3 million more revenue than the prior year fair market value adjustment. It should be noted that the City’s investment policy provides for all investments to be held to maturity, so any gain or loss required to be recorded at year end will never be realized.
Charges for services increased due to a higher level of building development activity when compared to the prior year. These revenues can vary from year to year, but actual development activity in the City remained strong throughout the fiscal year ended June 30, 2025.
Changes in General fund expenditures, by function, occurred as follows during the year ended June 30, 2025:
General government expenditures declined by $1.0 million (14.6 percent) due to lower legal expenditures. In the prior year, there was a higher volume of litigation activities, as well as the City Council approving an $835,000 settlement payment for the reimbursement of fees and litigation expenses associated with a lawsuit. Community development expenditures increased $93,631 (5.3 percent) due to two offsetting factors. Higher contract costs were incurred in the prior fiscal year to provide support for the implementation of the City’s state-mandated Housing
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
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16 Element. Implementing the components of the housing element approved by the State in 2022 will take several years and cost in excess of $1 million. In the fiscal year ended June 30, 2025, significant costs were incurred in the implementation of the second phase of the business recovery and support plan, which assisted the business community through the creation of the Cypress University program. This program, with costs of $380,000, provided training, education and marketing assistance intended to help grow small businesses located in Cypress. Public safety (police) expenditures increased by $765,828 (3.7 percent) when compared to the prior fiscal year. Cost increases associated with implementing the third year of a four-year labor agreement, which provided substantial salary and benefit increases for sworn officers, and inflationary impacts driving contract cost increases, accounted for the change in expenditures.
Public works expenditures were $899,124 (11.6 percent) higher than the prior year due to many factors, including incurring additional contract costs for right-of-way parkway and tree maintenance, parks landscaping maintenance and building/engineering plan checking and inspections. Plan checking and inspection costs, which are directly tied to development activity in the City and fully offset by fee revenue, tend to fluctuate from year to year. In addition to these contract cost increases, the relatively dry winter resulted in higher water costs for the irrigation of all City parks and right-of-way.
The difference in General fund net transfers is $5.4 million lower when compared to the prior fiscal year and is summarized as follows:
The General fund transferred $1,662,583, as compared to $1,606,912 in the prior year, to the City’s Capital Projects fund for current year projects. Additionally, $1.5 million of accumulated fund balance, down from $2.67 million in the prior year, was transferred from the General fund to the City’s Capital Projects fund for future infrastructure projects.
$1.5 million was transferred to the City’s Internal Service Employee Benefits fund during the past year, compared to $5.05 million in the prior year. This annual transfer is typically limited to available prior year budget savings which are used to fund the City’s pension trust. The pension trust was established in 2017 to help offset the City’s growing pension liabilities and in March 2024 the City Council established a goal to have pension trust assets fully offset unfunded pension liabilities by 2030. In response to this new goal, in the fiscal year ended June 30, 2024 an additional $2.5 million of General fund monies were transferred for pension trust investment in the Employees’ Benefit Internal Service fund.
General Fund Budgetary Highlights
Differences between the original appropriations budget and the final amended budget totaled a net increase of $2,579,655. The annual carryover of appropriations to the new fiscal year for encumbrances and services not completed in the prior fiscal year accounted for $1,458,332 of the change. The majority of the carryover appropriations
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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17 related to contingency amounts, unexpended grant awards, one-time allocations of pandemic recovery support for businesses, and contract planning services for the implementation of State-mandates associated with the City’s housing element. The remaining major changes in appropriations are summarized as follows:
$74,127 increase in Legislative for legal services which tend to fluctuate based on the legal matters that arise during the year. While general attorney services and litigation costs were within budget, several personnel matters handled by the City’s labor attorneys resulted in a budget overage.
$99,800 increase in Administration for higher required contributions for regional homelessness efforts. The City contributes a portion of the annual costs to operate two navigation centers in the County, and these charges vary each year depending on cash flow needs and available State funding.
$80,000 increase in Administration for the expansion of a City program (Cypress University) which focuses on supporting, growing and incentivizing small businesses located in the City through education and outreach initiatives. $125,000 increase across multiple departments for a one-time retirement incentive that was offered to a group of represented City employees. $49,700 increase in Police for the purchase and installation of a fixed automated license plate reader system that was donated by the Cypress Police Foundation. $253,000 increase in Community Development for contract inspections, plan checking and building official services due to higher levels of building activity than conservatively estimated in the adopted budget. Forecasting annual building contract costs is difficult due to many external factors, including the economy’s impact on local development activity, which tends to result in large fluctuations in both fees collected and the contract costs associated with providing the services. $32,622 increase in Maintenance for a new custodial contract which resulted in higher charges than the previous agreement.
Total actual General fund revenues exceeded the final amended revenue budget by over $2.6 million. Tax revenue exceeded the amended budget by almost $0.8 million due to several factors. Property tax growth is a product of new development, parcel turnover and the ongoing strength of the housing market and resulted in revenues exceeding budget by just over $600,000. Sales tax revenues are budgeted using an approach to conservatively, but realistically, estimate revenues directly tied to the overall economy.
During the past year, sales tax revenue growth was largely stagnant both locally and statewide and fell below budget estimates by $45,000. Other tax sources contributed to the overall overage and include transient occupancy tax impacts from a new hotel and higher franchise taxes. Revenues from other agencies was below budget due to unexpended grant monies in both the Police and Community Development departments.
These grants include a one-time County grant for a homeless liaison officer which will be carried over and expended during the next fiscal year, as well as Community Development Block Grant monies for housing programs that are no longer offered by the City and will lapse as of June 30, 2025. However, the largest contributor to the overall budget excess is revenue from the use of property (which includes interest earnings on
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18 the City’s investments). While actions by the Federal Reserve over the last few years have drastically raised the interest rate earned on the City’s investment portfolio, the large overage in FY 2024-25 is primarily due to an accounting requirement that mandates all investments are adjusted to their fair market value at the end of the fiscal year. Interest rate fluctuations during the year have caused the underlying value of many City-owned securities to rise above their purchase price and trigger gains of nearly $1.8 million in FY 2024-25. Since the City’s investment policy provides for all investments to be held to maturity, these gains will never be realized. So in many ways, the additional revenue created by this accounting pronouncement is misleading and gives a false impression to the reader of the financial statements.
Total operating expenditures were $5.5 million below the final amended budget (before any carryover amounts to the fiscal year ended June 30, 2026) and these savings were across all departments throughout the City. The reason for the large budget variance is similar to prior fiscal years, in that a significant portion is related to personnel savings created during periods with staffing vacancies over the course of the year. The majority of these staffing vacancies are associated with positions (such as police officers) in which active recruitments are ongoing and the periods of vacancy are intended to be temporary.
Further savings were realized due to one-time amounts budgeted for contingency purposes, delays in awarding contracts for an organizational review and a traffic impact fee study, and contract housing element implementation services not being expended prior to June 30, 2025. These unexpended amounts have been carried over and appropriated in FY 2025-26 budget and are expected to be expended prior to June 30, 2026.
Other Major Funds and Other Funds
Management annually discusses financial highlights of the City’s major funds and any other funds experiencing significant changes in fund balance during the year. Also included in the annual discussion are any activities management considers relevant to the operations of the City.
Recreation and Park District Special Revenue Fund
The Recreation and Park District special revenue fund is the sole operating fund of the Cypress Recreation and Park District. At the end of the current fiscal year, total fund balance was a negative $21,424,863 as compared to a negative $2,905,952 at the beginning of the year. This represents a $18.5 million decrease and gives the impression the District’s financial health has greatly deteriorated over the past year – which is both misleading and inaccurate. The reason for the large decrease is solely the result of a GASB accounting pronouncement that requires loans between the City and District be recorded as a liability on the District’s books. There are two loans outstanding between the City and District – $3.2 million for the construction of Lexington Park and $30.5 million for the reconstruction of Arnold Cypress Park. During the past year, construction
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19 continued on the $33.5 million Arnold Cypress Park facility which had been approved in the prior fiscal year. The project is funded by loans from the City to the District. These loans are long-term and will be repaid over 20 years using available property tax revenues. If the District had used other forms of financing to pay for the two projects, the long-term debt would not be presented as a liability in the District’s governmental funds.
However, since the loans are considered an advance between funds of the City and District (a component unit) GASB requires the full amount of the advances be recorded as liabilities even though repayment will be made over two decades. The outstanding amount of all advances ($33.6 million) is required to be recorded as a negative amount, netted against unassigned fund balance. While this results in an inaccurate portrayal of the District’s financial condition on the face of the financial statements, it is important to understand the underlying health of the District remains strong and is essentially unchanged from the prior year.
For fund balance analysis purposes, it is probably best to remove the negative $33.6 million netted against unassigned fund balance from the calculations to yield a useful comparison. By doing so, fund balance represents 182.5 percent (compared with 207.4 percent from the previous year) of the fund’s total current Recreation operating expenditures and the adjusted, remaining fund balance would be properly categorized as restricted since these amounts can legally only be used for recreation purposes. These adjusted fund balance amounts at June 30, 2025 are required to be used for improvements to open space, for use on youth league renovations and general recreation activities. Since the bulk of the District’s operations are funded with annual property tax revenues, a portion of the fund balance for general recreation usage is needed to meet cash flow shortages between property tax receipts. The remaining amounts (for both open space and recreation) are being accumulated for future non-recurring expenditures such as facility and infrastructure improvements.
For the fiscal year ended June 30, 2025, the cash and investments balance (including restricted amounts) in the Recreation and Park District special revenue fund was $14,226,015, a decrease of $578,466 from the prior fiscal year. Total receivables at the end of the fiscal year were $256,937, a decrease from the prior year total of $600,136.
These balances tend to vary from year to year based on the timing of receipts and disbursements, and the volume of capital project expenditures.
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20 Total Recreation and Park District Special Revenue fund revenues for the fiscal year ended June 30, 2025 increased by nearly $0.8 million from the prior year. Individual components of this change are highlighted as follows:
Property tax revenues, the District’s largest recurring revenue source, were 6.7 percent more than the prior year. The District continues to benefit from higher assessed values and new developments being added to the tax roll, which were larger in the past year than the prior year.
Revenues from the use of property increased due to having a full year of facility rentals at the Community Center. In the prior year, rentals were curtailed for a portion of the year due to HVAC and roof replacement projects. The increase to charges for services relates to park development fee receipts, which are difficult to predict due to uncertainties associated with development activity and economic conditions, and revenues can fluctuate drastically from year to year. A few major developments generated fees of $609,000 in the fiscal year ended June 30, 2025, which represents an increase over the $445,000 generated in the prior year. All eligible park development fee receipts are used to pay down the District’s outstanding advances from the City’s General fund associated with the construction of Lexington Park.
CITY OF CYPRESS
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21 Notable changes in expenditures during the fiscal year ended June 30, 2025 follow:
Recreation expenditures increased $535,550 (9.7 percent) due to many factors, including cost of living salary and benefit increases for all full-time employees, higher contract costs for facility and landscape maintenance, additional water expenditures resulting from the relatively dry winter, and enhanced senior citizen and youth programs.
Capital expenditures rose by over $5.2 million due investing an additional $21.6 million on the rehabilitation of Arnold Cypress Park. The Arnold Cypress Park project was completed in late FY 2024-25 and rebuilt the 75 year-old, 14.5 acre park at a budgeted cost of $33.5 million. The new park provides a variety of sports courts and softball fields. In addition to this once in a generation project, the District continued to invest in other park facility improvements as amounts were expended in the fiscal year ended June 30, 2025 for sports lighting replacement and security improvements at Oak Knoll Park, and playground resurfacing at six park sites throughout Cypress.
Debt service expenditures relate exclusively to interest incurred on the two outstanding loans between the City and District for the construction of Lexington Park and Arnold Cypress Park. The year-over-year increase is attributed to the large loan balance increase on the Arnold Cypress Park loan, which went from $10.6 million at June 30, 2024 to nearly $30.5 million at June 30, 2025.
District net transfers increased by $15,039 and totaled a net outflow of $170,582. These District transfers occur each year and are generally comprised of two recurring components, including a $150,000 annual transfer to the employees’ benefits internal service fund to help offset any unfunded pension liability owed to the Orange County Employees Retirement System (OCERS). This liability represents monies owed on behalf of vested District employees who earned OCERS pension benefits prior to 2000 when all employees were transitioned to CalPERS. The other annual component of net transfers is for new and replacement capital outlay acquisitions paid for in the equipment replacement internal service fund, and these amounts have been modest in each of the last two years.
Streets Special Revenue Fund
The Streets Special Revenue Fund accounts for receipts and expenditures of amounts apportioned under Streets and Highway Code (Highway Users’ Tax), the Road Repair and Accountability Act of 2017, Measure M2 sales tax revenues, and Traffic Mitigation Fees charged by the City. These funds are used to maintain and improve streets and traffic signals.
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22 Total revenues for the fiscal year ended June 30, 2025 decreased by more nearly $0.4 million from the prior fiscal year. The largest recurring income source in this fund is revenue from other agencies which includes State Gas Tax, Road Repair and Accountability Act of 2017 and County Measure M2 allocations. As expected, these allocations decreased modestly during the year due to a one-time delay in receipt of FY 2022-23 Measure M2 allocations which became available during FY 2023-24 and resulted in higher revenues than in a normal year. Charges for services, which includes traffic mitigation fees and regional traffic impact fees, decreased $338,023 year over year and these annual receipts tend to fluctuate based on development activity within the City.
Total expenditures and net transfers also tend to vary from year-to-year depending on resource availability and the specific timing and scope of recurring projects such as the arterial and residential street rehabilitation and concrete/sidewalk improvements.
Expenditures and net transfers out increased in the past year due to the use of prior year State Gas Tax receipts for annual street maintenance. The use of these prior year fund balance amounts were delayed until FY 2024-25 due to having to invest additional General fund amounts to meet Maintenance of Effort requirements in the prior fiscal year.
City Capital Projects Fund
The City Capital Projects Fund provides a cost center for City projects funded (either partially or in full) with General fund monies. In accordance with City Council policy, an annual transfer is made from the General fund to the Capital Projects Fund to pay for a portion of the projects approved as part of the Seven-Year Capital Improvement Program.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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23 Annual transfers are also made from the General fund to accumulate monies for future projects. The following table summarizes the activity during the past two years.
Total revenues for the fiscal year ended June 30, 2025 decreased $570,285 from the prior fiscal year. The decrease is due to lower interest income earned on cash balances.
While the average rate earned on cash balances throughout the year was higher than the prior year, actual cash balances held decreased significantly over the course of the past year. This decrease was anticipated and is directly attributed to loaning the Recreation and Park District an additional $21.6 million for the rehabilitation of Arnold Cypress Park.
Total expenditures tend to vary from year-to-year depending on the status of nonrecurring projects such as public facility renovations, median improvements and other major infrastructure improvements such as storm drainage construction. Expenditures increased by nearly $1.5 million year over year due to a higher volume of activity in both the annual residential street resurfacing program and the curb and sidewalk concrete rehabilitation program.
The amounts recorded as net transfers are typically comprised of annual transfers in from the Streets Special Revenue Fund and two transfers from the General fund. However, in the prior fiscal year the City Council approved additional funding for the City’s pension trust in FY 2023-24 to reach a goal of having pension trust assets fully offset pension liabilities by 2030. A one-time transfer out of $2.0 million for additional funding required to meet this goal took set-asides for future capital improvements in the City’s Capital
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24 Projects fund and transferred them to the Employees’ Benefits Internal Service fund for investment in the pension trust in the fiscal year ended June 30, 2024.
During the past year, net transfers were just over $1.0 million more than the prior year due to last year’s one-time $2.0 million transfer out for pension trust investment. The two recurring transfers out are discussed below:
Total transfers in from restricted funds increased by just over $150,000 year over year, due to the use of more restricted Gas Tax funds on residential street resurfacing projects in FY 2024-25 than the prior year. The two annual General fund transfers in are for 1) the annual funding requirement approved by the City Council to fund current year projects, and 2) an allocation for future infrastructure improvements that will be appropriated in upcoming years.
The amount available for future improvements is directly tied to available General fund surplus amounts from the prior fiscal year and these amounts can fluctuate greatly from year to year due to a variety of factors. The available surplus amounts from FY 2023-24, and transferred to the City Capital Projects fund in FY 2024-25, decreased $1,170,000 from the prior year.
Sewer Enterprise Fund
The Sewer Enterprise fund accounts for the maintenance and improvements made to the City’s sewer system. The primary revenue source associated with this fund is fees collected from users of the sewer system. The Sewer fund is an enterprise fund in accordance with the requirements of GASB Statement No. 54 and all infrastructure assets associated with the sanitary sewer system are recorded as assets in the Sewer fund and the full-accrual method of accounting is used to account for sewer activities within the fund. The net position increased by nearly $1.2 million during the year and the following is a comparison of the enterprise activity in the fund for the past two years:
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
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25 Total Sewer fund operating revenues for the fiscal year ended June 30, 2025 are comprised primarily of sewer fee revenues, which increased by $79,318 from the prior year. Sewer fees are charged to both residential and commercial accounts based on water consumption and can change from year to year based on many factors, including precipitation levels and drought restrictions. The 5.0 percent year over year increase appears reasonable given the relatively dry winter experienced in FY 2024-25 when compared to the prior year.
Maintenance expenditures tend to be consistent from year to year except in years in which the comprehensive update to the Sewer System Management Plan (SSMP) is required.
This update occurs every five years and the most recent update was initiated in the fiscal year ended June 30, 2025 with $53,000 of costs incurred prior to the end of the year.
Most non-operating revenues and expenses remain consistent over a typical two-year period. However, interest income can vary year to year due to changes in the City’s investment portfolio earnings rate of return and average cash balances held for sewer purposes. In addition to higher cash balances held for sewer purposes, the Sewer fund experienced a full year of earning a higher market rate than the average rate earned in the prior fiscal year.
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26 Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets as of June 30, 2025 amounts to $222,831,862 (net of accumulated depreciation) and consists of $204,535,502 for governmental activities and $18,296,360 for business-type activities. The investment in capital assets for governmental activities includes land, buildings and improvements, vehicles and equipment, furniture and fixtures, roads, storm drains, sidewalks, streetlights, and construction in progress. The investment in business-type activities is limited to the City’s sanitary sewer system. The City’s investment in capital assets for governmental activities increased during the past fiscal year by over $36.4 million (10.4 percent) before depreciation. The following table summarizes capital asset activity for the fiscal year ended June 30, 2025.
Major governmental activities capital asset transactions during the fiscal year ended June 30, 2025 included the following:
The large decrease to construction in progress is due to finishing construction on the rehabilitation of Arnold Cypress Park. This $31.7 million, multi-year project was less than half complete at June 30, 2024, but the newly renovated park was reopened to the public in May 2025.
While the completion of the Arnold Cypress Park project comprised the majority of the $34.9 million increase to buildings and improvements, there were several other smaller dollar park improvements completed in the fiscal year ended June 30, 2025. These projects include a new picnic pavilion, sports field lighting replacements, and a new roof at the Community Center.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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27 The increase to machinery and equipment is attributed to the purchase of a replacement data center and network switches for information technology, six replacement marked police vehicles, and three replacement trucks for the maintenance division in public works.
Infrastructure additions of $0.8 million are comprised of a variety of traffic signal improvement projects and median improvements along Cerritos Avenue.
Major business-type activities capital asset transactions during the most recent fiscal year included the following:
Just over $397,000 was invested in sewer capacity and condition improvement projects at various locations and recorded as capital asset additions to the sewer system at June 30, 2025.
Additional information on the City’s capital assets can be found in the Capital Assets and Depreciation/Amortization note (6) and the Subscription-Based Information Technology Arrangements note (7) in the notes to the basic financial statements section of this report.
Long-Term debt. The City had total debt outstanding of $81,882,236 at June 30, 2025.
The following schedule summarizes the City’s long-term liabilities.
Long-term debt activity during the fiscal year ended June 30, 2025 included:
The net change in claims payable is a result of lower outstanding claims for workers’ compensation matters which is partially offset by a small increase to general liability claims payable when compared to the prior year. These liabilities tend to fluctuate from year to year based on the timing of when claims are filed and eventually finalized and closed. In recent years workers compensation claims, especially those involving police officers, had trended upward but tapered off modestly in the last year and total nearly $2.2 million at June 30, 2025. Compensated absences increased by $15,969. Compensated absence liabilities experience growth in years where there are few retirements or resignations of longterm employees, and when there are significant impacts related to negotiated cost
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28 of living wage adjustments. In the past year, a few long-tenured police officers with significant leave balances retired which substantially offset the liability increases associated with the cost of living wage adjustments provided to all employees.
In conjunction with GASB 75, the City had an actuarial valuation performed to determine the liability for other postemployment benefit (OPEB) plans as of June 30, 2025. The results of the actuarial valuation resulted in a fairly substantial decrease to the City’s liability for retiree’s health benefits. Any changes in liability from year to year are due to many factors, including adjustment of the discount rate, as well as the ongoing impact of the actuarial requirement of an “implied subsidy” which results when the premiums paid by both active employees and retirees are the same. In these situations, such as with the City, the underlying assumption is the value of benefits to retirees exceed those provided to active employees.
The City’s pension liability associated with its defined benefit plans decreased by $865,918 during the fiscal year ended June 30, 2025. Year to year fluctuations in the pension liability are common and can be large in any given year, with the annual changes being directly attributable to the results of the annual actuarial valuations performed by the plan’s administrators, CalPERS and OCERS.
The City has set aside over $3.5 million in the Employees Benefits Internal Service Fund to offset and pay a portion of both the OPEB and pension liabilities. However, these monies have not been placed in an irrevocable trust and therefore are not considered funded assets for actuarial purposes. In addition to these cash balances, $37.0 million is invested in the City’s pension trust as of June 30, 2025. These trust amounts are legally restricted and may only be used to pay pension obligations.
Additional information on the City’s long-term debt, pension plans and other postemployment retirement benefits can be found in the Subscription-Based Information Technology Arrangements note (7), the Other Long-Term Liabilities note (9), the Public Employees’ Retirement System (CalPERS) note (10), the Terminated Orange County Employees Retirement System (OCERS) Defined Benefit Pension Plan note (12) and the Post-Employment Health Care Benefits note (13) in the notes to the basic financial statements section of this report.
Economic Factors and their impact on future City Budgets Cypress has achieved enviable fiscal health through strategic financial management and oversight. Its long history of fiscal discipline has enabled Cypress to successfully handle economic downturns; maintain a commitment to first class infrastructure; and further establish its reputation as one of Southern California’s best cities for families and businesses.
The City’s long-term financial position remains strong despite the uncertainties of the past year which have roiled markets and triggered chaotic federal fiscal/economic policy.
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29 Recognizing the most likely short-term outcome of these conditions is upward pressure on costs and downward pressure on growth, the FY 2025-26 Budget presents a cautious, status quo approach while the Five-Year Forecast presented as part of the Budget projects a structural deficit that limits options to absorb cost increases or enhance service levels.
The City has projected similar small deficits for the past several years that, fortunately, have proven to be on paper only and were resolved when revenues exceeded sensible projections and/or some planned spending did not occur. Nonetheless, Cypress’ longterm financial future must remain a top consideration for the City Council. This is especially true if Cypress is to remain one of the few established cities in southern California that have not increased the local sales tax rate nor assess a utility user tax.
It is important to note that the deficits projected in the Five-Year Forecast are driven by both economic conditions and the City’s annual contribution of current year General Fund operating revenue to infrastructure projects. Historically, City Councils have made this important annual investment in Cypress' high-quality infrastructure and public facilities recognizing that infrastructure is a service the City provides to the community. Like any other City department or function, the City Council’s commitment to infrastructure as a service is funded with revenues that would otherwise be available for operations and budget balancing.
The investment of $1.55 million of current year General Fund revenues in infrastructure has not grown since it began approximately 30 years ago. If it had been indexed to Consumer Price Index increases, it would be about $3.25 million in 2025, and if it had grown at the same rate as construction costs, it would be well above $5 million. To account for construction costs increases of as much as 40% since 2020, the FY 2025-26 Budget includes an increase of the ongoing contribution of current year General Fund revenue for infrastructure investment from $1.55 million to $1.8 million. The recommendation underscores the City’s commitment to infrastructure as a service but only restores a fraction of the investment’s original purchasing power.
Our industry-leading financial management practices are a justifiable source of community pride. Cypress is the only city to be recognized twice by former State Senator (and Certified Public Accountant) John Moorlach for having the strongest unrestricted net (fiscal) position of Orange County’s 34 cities.
FY 2025-26 finds the City’s short-term financial condition healthy, but navigating a variety of inflation-related challenges, an extraordinarily difficult employment market, and wobbling sales tax revenues.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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30 Personnel costs continue to increase and place considerable strain on City finances.
While spending on personnel is an important investment in ensuring Cypress is served by highly capable professionals who are committed to preserving and promoting our community, the costs will be a challenge to sustain.
Employer pension cost forecasts continue to be volatile as CalPERS navigates higher interest rates, international crises, and rising employee wages. Fortunately, in FY 2023- 24 the City Council approved a plan to fully offset Cypress’ unfunded pension liabilities by 2030, likely making Cypress one of the first cities in the state with a public safety department to fully offset its pension liability without issuing debt. This accomplishment not only strengthens the City’s long-term financial position by providing additional flexibility in battling pension liabilities, but it is also an indelible commitment to our employees and their retirement security.
Revenues. The City’s projected revenues for Fiscal Year 2025-26 are $54.5 million and do not include any tax rate increases from the previous year. The Fiscal Year 2025-26 revenues included in the budget are two percent higher than the Fiscal Year 2024-25 adopted revenue budget.
The City’s largest General fund revenue sources remain property tax ($14.8 million including State backfills) and sales tax ($12.6 million). Together, these two sources comprise nearly two-thirds of General Fund revenues. Budgeted property tax revenues have increased by $0.8 million (5.8 percent) from the FY 2024-25 Budget. The increase is primarily attributed to higher assessed property values due to ownership turnover and new construction within the community. Sales tax receipts are volatile, especially during periods of economic uncertainty. Sales tax receipts have not grown as much as forecasted in recent years and a $335,000 decline from the prior year is projected for FY 2025-26.
Over the last few years, interest rates on Treasury notes have gone from close to zero to well over four percent. As such, investment earnings in FY 2025-26 are $2.2 million and represents a ten-fold revenue increase over the amount included in the Budget from three years ago. In short, the growth in investment earnings over this period are largely responsible for the last three Budgets being balanced without the use of reserves.
Expenditures. Fiscal Year 2025-26 expenditures accomplish Strategic Plan goals and operating costs grow in response to a variety of factors, which includes the ongoing impacts inflation has on the cost of goods and services. Major expenditure highlights in the Fiscal Year 2025-26 Budget are as follows:
Maintaining current service levels.
Funding required CalPERS unfunded pension liability amortization increases.
CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
31 Incorporating negotiated and anticipated employee salary and benefit increases. Year one of the City’s updated Seven Year Capital Improvement Program which totals $35.3 million.
Capital Outlay funding of just over $0.7 million to acquire and/or replace computer software/hardware items, 11 vehicles and various tools and equipment.
Requests for Information
This financial report is designed to provide a general overview of the financial position of the City for all interested parties. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 5275 Orange Avenue, Cypress, CA 90630.
Basic Financial Statements
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See Notes to Basic Financial Statements 32
City of Cypress, California
Statement of Net Position
June 30, 2025
Governmental Business-Type
Activities Activities Total
Assets
Cash and investments 170,166,111 $ $ 10,325,258 $ 180,491,369 Restricted cash and investments 38,497,422 - 38,497,422 Receivables
Taxes 2,479 3,138,177 3,140,656
Interest 1,172,528 72,470 1,244,998
Notes, net of allowance 104,049 - 104,049
Accounts 1,751,978 143,689 1,895,667
Leases 24,472 - 24,472
Prepaid items 270,139 - 270,139
Inventory 7,364 - 7,364
Net pension asset 822,513 - 822,513
Capital assets, nondepreciable 17,867,057 292,924 18,159,981 Capital assets, net of depreciation/amortization 186,668,445 18,003,436 204,671,881 Total assets 420,490,255 28,840,256 449,330,511
Deferred Outflows of Resources
Deferred amount from CalPERS Pension 19,134,549 19,134,549 - Deferred amount from OPEB 291,137 - 291,137
Deferred amount from OCERS 85,329 - 85,329
Total deferred outflows of resources 19,511,015 19,511,015 - Liabilities
Accounts payable and other accrued liabilities 7,364,863 88,172 7,453,035 Deposits 1,559,384 1,559,384 -
Unclaimed property 111,395 - 111,395
Unearned revenue 1,001,880 1,001,880 -
Due to bondholders 153,575 - 153,575
Due to other governments 55,687 - 55,687
Long-term liabilities
Due within one year
Subscriptions/Leases payable 425,053 - 425,053
Claims payable 645,543 - 645,543
Retirees' health payable (OPEB liability) 488,289 - 488,289 Compensated absences 651,052 - 651,052
Due in more than one year
Subscriptions/Leases payable 725,841 - 725,841
Claims payable 1,936,629 1,936,629 -
Retirees' health payable (OPEB liability) 7,556,552 7,556,552 - Compensated absences 1,953,154 1,953,154 -
Net pension liability 65,231,964 65,231,964 -
Total liabilities 89,860,861 88,172 89,949,033
Deferred Inflows of Resources
Deferred amount from leases 23,735 - 23,735
Deferred amount from CalPERS Pensions 1,715,554 1,715,554 - Deferred amount from OPEB 2,705,395 2,705,395 -
Deferred amount from OCERS 361,231 - 361,231
Total deferred inflows of resources 4,805,915 4,805,915 - Net Position
Net investment in capital assets 202,423,809 18,235,211 220,659,020 Restricted
Pension trust 37,033,883 37,033,883 -
Net pension asset 822,513 822,513
Public safety 704,506 - 704,506
Public works 13,515,986 13,515,986 -
Recreation 14,014,142 14,014,142 -
Sanitary sewer 10,516,873 - 10,516,873
Low and moderate income housing 88,019 - 88,019
Cable television equipment 889,535 - 889,535
Unrestricted 75,842,101 75,842,101 -
Total net position $ 345,334,494 $ 28,752,084 $ 374,086,578 See Notes to Basic Financial Statements 33
City of Cypress, California
Statement of Activities
Year Ended June 30, 2025
Operating Capital
Charges for Grants and Grants and Governmental Business-type Expenses Services Contributions Contributions Activities Activities Total Governmental Activities
General government $ 6,735,155 $ 228,360 $ 143,545 $ 61,450 $ (6,301,800) $ (6,301,800) - $ Community development 2,104,581 1,453,000 39,801 - (611,780) - (611,780) Public safety 24,036,183 437,167 1,284,278 - (22,314,738) - (22,314,738) Public works 20,126,091 1,231,262 2,764,789 2,374,961 (13,755,079) - (13,755,079) Recreation 7,824,072 1,837,687 857,196 - (5,129,189) - (5,129,189) Total governmental activities 60,826,082 5,187,476 5,089,609 2,436,411 (48,112,586) (48,112,586) - Business-type Activities
Sewer 973,573 1,672,705 36 - 699,168 - 699,168
Total $ 61,799,655 $ 6,860,181 $ 5,089,645 $ 2,436,411 (48,112,586) 699,168 (47,413,418) General Revenues
Taxes
Property tax, levied for general purpose 8,177,801 8,177,801 - Property tax, levied for recreation purposes 7,815,068 7,815,068 - Property tax, levied for lighting purposes 1,774,844 1,774,844 - Property tax, levied for sewer purposes 43,493 - 43,493 Property tax, backfill of vehicle license fees 6,412,580 6,412,580 - Sales tax 12,895,299 12,895,299 -
Transient occupancy tax 3,361,552 3,361,552 -
Franchise tax 2,048,695 2,048,695 -
Other taxes 1,803,081 1,803,081 -
Total taxes 44,288,920 43,493 44,332,413
Investment earnings 11,426,327 428,550 11,854,877
Miscellaneous 57,040 57,040 -
Gain on disposal of equipment 17,328 17,328 -
Loss on sale of land held for resale (1,421,708) (1,421,708) - Total general revenues 54,367,907 472,043 54,839,950
Change in Net Position 6,255,321 1,171,211 7,426,532
Net Position at Beginning of Year 339,079,173 27,580,873 366,660,046 Net Position at End of Year $ 345,334,494 $ 28,752,084 $ 374,086,578 Program Revenues Net (Expense) Revenues and
Changes in Net Position
See Notes to Basic Financial Statements 34
City of Cypress, California
Balance Sheet - Governmental Funds
June 30, 2025
City Nonmajor
Recreation and Capital Projects Governmental
General Park District Streets Fund Fund Total
Assets
Cash and investments 38,449,115 $ $ 12,776,451 $ 6,534,143 $ 68,559,519 $ 8,122,008 $ 134,441,236 Restricted cash and investments 500 1,449,564 - 13,475 - 1,463,539 Receivables
Taxes 2,963,139 101,235 - - 73,803 3,138,177
Accrued interest 480,127 125,578 50,389 452,780 23,858 1,132,732 Notes, net of allowance 58,689 - - - 45,360 104,049
Accounts 627,636 30,124 774,679 2,000 55,853 1,490,292
Leases 24,472 - - - - 24,472
Prepaids 22,156 250 - - - 22,406
Inventory - 1,318 - - - 1,318
Due from other funds 66,606 - - - - 66,606
Advances to other funds - - - 33,645,345 - 33,645,345
Total assets 42,692,440 $ 14,484,520 $ 7,359,211 $ 102,673,119 $ 8,320,882 $ 175,530,172 $ Liabilities Deferred Inflows of Resources,
and Fund Balances
Liabilities
Accounts payable and other accrued liabilities 2,827,793 $ $ 2,000,425 $ 81,121 $ 1,727,649 $ 422,436 $ 7,059,424 Deposits 1,534,589 24,795 - - - 1,559,384
Unclaimed property 111,095 300 - - - 111,395
Unearned revenue 535,762 238,518 - 87,000 140,600 1,001,880 Due to other funds - - 27,258 - 39,348 66,606
Advances from other funds - 33,645,345 - - - 33,645,345 Due to bondholders 153,575 - - - - 153,575
Due to other governments 55,687 - - - - 55,687
Total liabilities 5,218,501 35,909,383 108,379 1,814,649 602,384 43,653,296 Deferred Inflows of Resources -
Unavailable revenue 14,110 - 200,000 - - 214,110
Leases 23,735 - - - - 23,735
Total deferred inflows of resources 37,845 - 200,000 - - 237,845 Fund Balances
Nonspendable 80,845 1,568 - - 45,360 127,773
Restricted - - 7,050,832 - 7,673,138 14,723,970
Committed 10,329,235 - - 14,652,471 - 24,981,706
Assigned 24,946,713 - 86,205,999 - 111,152,712 -
Unassigned 2,079,301 (21,426,431) - - (19,347,130) -
Total fund balances 37,436,094 (21,424,863) 7,050,832 100,858,470 7,718,498 131,639,031 Total liabilities, deferred inflows of
resources and fund balances $ 42,692,440 $ 14,484,520 $ 7,359,211 $ 102,673,119 $ 8,320,882 $ 175,530,172 Major Funds
Special Revenue
See Notes to Basic Financial Statements 35
City of Cypress, California
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025
Fund Balances of Governmental Funds $ 131,639,031
Amounts reported for governmental funds in the Balance Sheet differ from the amounts reported in the Statement of Net Position for governmental activities due to the following:
Capital assets of governmental activities are not financial resources and, therefore, are not reported in the governmental funds. Except for the internal service fund amount of $4,933,655 which is included in the amount reported below, the capital assets net of accumulated depreciation were equal to the following amount. 199,601,837
Unavailable revenue is comprised of long-term receivables, which are not current available resources, and grants, which are resources not received within the proper revenue recognition period, and are therefore offset by deferred inflow of resources amounts equal to the receivable in the governmental funds. 214,110
Long-term liabilities are not reported in the governmental funds. Except for the internal service fund amount of $72,127,794 which is included in the amount reported below, the long-term liabilities were equal to the following amounts.
Leases payable (51,858)
Subscriptions payable (434,425)
Internal service funds are used by management to charge the costs of certain activities (including central services, employee benefits, liability insurance, and workers compensation insurance) to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in the Statement of Net Position for governmental activities. 14,365,799
Net Position of Governmental Activities 345,334,494 $
See Notes to Basic Financial Statements 36
City of Cypress, California
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds Year Ended June 30, 2025
City Nonmajor
Recreation and Capital Projects Governmental
General Park District Streets Fund Fund Total
Revenues
Taxes 35,075,724 $ $ 7,815,068 $ - $ 1,836,295 - $ $ 44,727,087 Licenses and permits 1,062,915 - - - - 1,062,915
Fines and forfeitures 258,859 - - - 65,439 324,298
Use of property 4,646,733 1,127,615 340,980 3,649,010 380,692 10,145,030 From other agencies 708,133 125,421 3,987,130 - 266,566 5,087,250 Charges for services 4,295,291 1,408,333 42,350 - 102,766 5,848,740 Other revenue 213,722 33,514 231,831 - 97,306 576,373
Total revenues 46,261,377 10,509,951 4,602,291 3,649,010 2,749,064 67,771,693 Expenditures
Current
General government 5,881,249 - - - - 5,881,249
Community development 1,802,907 - - - 11,737 1,814,644
Public safety 21,461,796 - - - 407,252 21,869,048
Public works 8,644,398 - 3,899,528 3,163,007 1,113,190 16,820,123 Recreation - 6,003,608 - - - 6,003,608
Capital outlay 183,386 22,163,164 311,020 1,676,626 2,528,574 26,862,770 Debt service
Principal 151,648 82,812 - - - 234,460
Interest and fiscal charges 608,696 - - - 608,696 -
Total expenditures 38,125,384 28,858,280 4,210,548 4,839,633 4,060,753 80,094,598 Excess (Deficiency) of Revenues
Over Expenditures 8,135,993 (18,348,329) 391,743 (1,190,623) (1,311,689) (12,322,905) Other Financing Sources (Uses)
Transfers in 1,544,637 - 4,495,836 - 6,040,473 -
Transfers out (4,782,768) (170,582) (2,645,585) (815,490) - (8,414,425) Gain (loss) on sale of land held for resale - - - (1,421,708) - (1,421,708) Issuance of subscriptions liabilities 136,258 - - 256,097 - 392,355 Issuance of leases (lessee) 47,128 - - - - 47,128
Total other financing sources (uses) (3,054,745) (170,582) (2,645,585) 4,495,836 (1,981,101) (3,356,177) Net Change in Fund Balances 5,081,248 (18,518,911) (2,253,842) 3,305,213 (3,292,790) (15,679,082) Fund Balance - Beginning of Year 32,354,846 (2,905,952) 9,304,674 97,553,257 11,011,288 147,318,113 Fund Balances - End of Year $ 37,436,094 $ (21,424,863) $ 7,050,832 $ 100,858,470 $ 7,718,498 $ 131,639,031 Major Funds
Special Revenue
See Notes to Basic Financial Statements 37
City of Cypress, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2025
Net Change in Fund Balances - Total Governmental Funds $ (15,679,082) Amounts reported for governmental activities in the Statement of Activities differ from the amounts reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances as follows:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense, or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. This activity is reconciled as follow:
Cost of assets capitalized 26,837,042
Depreciation/amortization expense (less $1,073,272) recorded in the Internal Service Funds) (6,661,969)
The issuance of long-term debt, including leases and subscription-based information technology arrangements, provides current financial resources to governmental funds, while repayment of the principal of long-term debt consumes the current financial resources of the governmental funds.
Issuance of subscriptions (392,355)
Principal payments on subscriptions 198,001
Issuance of leases (47,128)
Principal payments on leases 36,459
Certain revenues in the governmental funds are classified as deferred inflows of resources year-end because they are not collected within the prescribed time period after to provide for current operations. However, the revenues are included under the accrual basis used in the government-wide statements and are as follows:
Unavailable revenue 125,387
Internal service funds are used by management to charge the costs of certain activities (including central services, employee benefits, liability insurance, and workers compensation insurance) to individual funds. The changes in net position of the internal service funds are reported with governmental activities. 1,838,966
Change in Net Position of Governmental Activities $ 6,255,321 See Notes to Basic Financial Statements 38
City of Cypress, California
Statement of Net Position
Proprietary Funds
June 30, 2025
Business-type
Activities -
Enterprise Governmental
Funds Activities -
Sewer Internal Service
Fund Funds
Assets
Current Assets
Cash and investments $ 10,325,258 $ 35,724,875
Restricted cash with fiscal agents 37,033,883 -
Receivables
Taxes - 2,479
Accrued interest 39,796 72,470
Accounts 261,686 143,689
Prepaid items - 247,733
Inventory - 6,046
Total current assets 10,543,896 73,314,019
Noncurrent Assets
Net pension asset - 822,513
Construction in progress 292,924 513,389
Equipment (net) 3,624,694 -
Subscription assets (net) - 795,582
Infrastructure (net) 18,003,436 -
Total non-current assets 18,296,360 5,756,178
Total assets 28,840,256 79,070,197
Deferred Outflows of Resources
Deferred amount from PERS pension plans 19,134,549 -
Deferred amount from OPEB - 291,137
Deferred amount from OCERS pension plans - 85,329
Total deferred outflows of resources 19,511,015 -
Liabilities
Current
Accounts payable and other accrued liabilities 88,172 305,439 Subscriptions - 227,628
Accrued claims and judgments - 645,543
Total OPEB liability - 488,289
Compensated absences - 651,052
Total current liabilities 88,172 2,317,951
Noncurrent
Subscriptions - 436,983
Accrued claims and judgments 1,936,629 -
Total OPEB liability 7,556,552 -
Compensated absences 1,953,154 -
Net pension liability 65,231,964 -
Total noncurrent liabilities 77,115,282 -
Total liabilities 88,172 79,433,233
Deferred Inflows of Resources
Deferred amount from PERS pension plans 1,715,554 -
Deferred amount from OPEB 2,705,395 -
Deferred amount from OCERS pension plan - 361,231
Total deferred inflows of resources 4,782,180 -
Net Position
Net investment in capital assets 18,296,360 4,269,054
Restricted
PARS trust 37,033,883 -
Net Pension Asset - 822,513
Sanitary sewer 10,455,724 -
Unrestricted (deficit) (27,759,651) -
Total net position $ 28,752,084 $ 14,365,799
See Notes to Basic Financial Statements 39
City of Cypress, California
Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds
Year Ended June 30, 2025
Business-type
Activities -
Enterprise Governmental
Funds Activities -
Sewer Internal Service
Fund Funds
Operating Revenues
Charges for services 1,672,705 $ $ 20,687,717
Other revenue - 1,426,624
Total operating revenues 1,672,705 22,114,341
Operating Expenses
Personnel services - 1,357,965
Contractual services - 16,511,137
Supplies and other services - 6,914,070
Claim payments and changes in estimates - 566,113
Sewer maintenance 382,488 -
Depreciation/amortization 591,085 1,073,272
Total operating expenses 973,573 26,422,557
Operating Income 699,132 (4,308,216)
Nonoperating Revenues (Expenses)
Taxes 43,493 -
From other agencies 36 -
Interest income 428,550 3,755,902
Gain on disposal of equipment - 17,328
Total non-operating revenues (expenses) 472,079 3,773,230 Income before Transfers 1,171,211 (534,986)
Transfers
Transfers in - 2,373,952
Change in Net Position 1,171,211 1,838,966
Net Position - Beginning of Year 27,580,873 12,526,833
Net Position - End of Year 28,752,084 $ 14,365,799 $
See Notes to Basic Financial Statements 40
City of Cypress, California
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2025
Business-type
Activities -
Enterprise Governmental
Funds Activities -
Sewer Internal Service
Fund Funds
Operating Activities
Cash received from users 1,670,463 $ $ 22,076,085
Cash payments to suppliers for goods and services (161,532) (7,568,034) Cash payments to employees (176,478) (13,184,247)
Net Cash from Operating Activities 1,332,453 1,323,804
Noncapital Financing Activities
From taxes and other agencies 42,015 -
Transfers in 2,373,952 -
Net Cash from Noncapital Financing Activities 42,015 2,373,952 Capital and Related Financing Activities
Proceeds from disposal of capital assets - 17,328
Acquisition of capital assets (397,246) (1,703,221)
Interest payments - (11,141)
Net Cash used for Capital and Related Financing Activities (397,246) (1,697,034) Investing Activities
Interest on investments 408,737 3,783,858
Net Cash used for Investing Activities 408,737 3,783,858 Increase in Cash and Cash Equivalents 1,385,959 5,784,580 Cash and Cash Equivalents - Beginning of Year 8,939,299 66,974,178 Cash and Cash Equivalents - End of Year $ 10,325,258 $ 72,758,758 Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income $ 699,132 $ (4,308,216)
Adjustments to reconcile operating income to net cash provided by operating activities
Depreciation/amortization 591,085 1,073,272
Changes in assets and liabilities:
Accounts receivable decreased (increased) (2,242) (38,256) Prepaid items decreased (increased) - (108,444)
Inventory decreased (increased) - (1,270)
Deferred outflows decreased (increased) - 7,234,929
Accounts payable and other accrued liabilities increased (decreased) 44,478 128,472 Insurance claims payable increased (decreased) - (100,998) Accrued retirees' health payable increased (decreased) - (1,255,772) Accrued leave payable increased (decreased) - 15,968
Accrued pension liability increased (decreased) - (1,046,956) Deferred inflows increased (decreased) - (268,925)
Total adjustments 633,321 5,632,020
Net Cash Provided by Operating Activities $ 1,332,453 $ 1,323,804 See Notes to Basic Financial Statements 41
City of Cypress, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
Custodial
Funds
Assets
Cash and cash equivalents 4,985,736 $
Receivables
Accrued interest 36,046
Accounts 25,863
Prepaid items 69,317
Total assets 5,116,962
Liabilities
Accounts payable and other accrued liabilities 91,951
Unearned revenue 73,521
Total liabilities 165,472
Net Position
Restricted for
Member agencies 4,951,490
Total net position 4,951,490 $
See Notes to Basic Financial Statements 42
City of Cypress, California
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
Year Ended June 30, 2025
Custodial
Funds
Additions
Member contributions 3,150,931 $
Investment income 221,918
Other revenue 173,051
Total additions 3,545,900
Deductions
Dispatch services 3,102,165
Total deductions 3,102,165
Change in Net Position 443,735
Net Position - Beginning of Year 2,040,834
Adjustments (Note 22) 2,466,921
Net Position - Beginning of Year, as restated 4,507,755 Net Position - End of Year 4,951,490 $
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44 City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
Note 1 - Summary of Significant Accounting Policies
A. Reporting Entity
The City of Cypress (City) is a municipal corporation, incorporated in 1956, and governed by an elected fivemember council which, along with the Cypress Recreation and Park District (District), and Cypress Recreation and Community Services Foundation (Foundation), comprise the reporting entity. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The District and Foundation, although legally separate entities, are in substance part of the City’s operations and, accordingly, District and Foundation data are combined with the data of the City within these financial statements. The balances and transactions of the District and Foundation are blended within this report in all fund types except the General Fund. Separate financial statements are prepared for the District and Foundation and are available from the City. A description of the District and Foundation and discussion of the criteria used for inclusion in the reporting entity follows.
Cypress Recreation and Park District
The Cypress Recreation and Park District was formed in 1949 to provide park and recreational facilities for the areas now known as the cities of Cypress and La Palma and adjacent unincorporated areas plus small portions of the adjacent cities of Los Alamitos, Buena Park and Anaheim. The District was under the control of the Orange County Board of Supervisors until 1971, when the City of La Palma and the other aforementioned cities withdrew from the District. On June 29, 1971, the District was established as a subsidiary district of the City, effective July 1, 1971. The members of the City Council act as the governing board of the District. The District is managed by employees of the City and overhead expenses are billed to the District each year. The fiscal yearend is June 30, the same as the City.
Cypress Recreation and Community Services Foundation
The Cypress Recreation and Community Services Foundation was created in 2019 to support and enhance safe, attractive, and high quality recreation facilities, programs, and services in the City of Cypress. The Foundation is organized and operates under section 501(c)(3) of the Internal Revenue Code as a charitable organization. The members of the City Council act as the Board of Directors for the Foundation. The Foundation is managed by employees of the City. The fiscal year-end is also June 30 and is accounted for and reported under GASB.
B. Accounting and Reporting Policies
The City has conformed to the pronouncements of the Governmental Accounting Standards Board (GASB), which are primary authoritative statements of accounting principles generally accepted in the United States of America applicable to state and local governments.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
45 C. Basis of Accounting, Measurement Focus and Financial Statement Presentation Government–Wide Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its component units.
Generally, the effect of interfund activity has been removed from the government- wide financial statements, except for interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project, function or segment. Program revenues of the City include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment of the City. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes and other items that are properly not included among program revenues.
The government-wide financial statements are reported using the flow of economic resources measurement focus and the accrual basis of accounting. With the flow of economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources associated with the government are included on the statement of net position. Net position is segregated into three primary components: net investment in capital assets, restricted net position and unrestricted net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met.
Governmental Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With the current financial resources measurement focus, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resources, are generally included on the balance sheet. Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to other long-term liabilities, are recorded only when payment is due.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
46 Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual, and are therefore recognized as revenues of the current fiscal period. Grant funds earned but not collected within 60 days of the end of the fiscal year are reported as a receivable and deferred inflow of resources, and grant funds received before the revenue recognition criteria have been met are reported as unearned revenue. Other revenue items are considered to be measurable and available only when cash is received by the City.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.
The City reports the following major governmental funds:
The General Fund – The General Fund is the City’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Recreation and Park District Special Revenue Fund – This fund accounts for all resources, and operating and capital project activity of the Cypress Recreation and Park District. The primary resources of the District include a portion of the base property tax rate and user fee revenues.
The Streets Special Revenue Fund – This fund accounts for receipts and expenditures of money apportioned under the State of California Streets and Highway Code Sections 2103, 2105, 2106, 2107 and 2107.5 (Gas Tax) and Section 2032(h) (Road Maintenance and Rehabilitation Act); Measure “M2” money from Orange County; and Traffic Mitigation Fees charged by the City.
The City Capital Projects Fund – This fund accounts for construction of major transportation infrastructure, storm drainage and public facilities. The resources of the fund are limited to transfers from the City’s General fund and grant reimbursements for eligible projects.
The City reports the following major proprietary fund:
The Sewer Fund – This fund accounts for all of the operating and capital project activities associated with the City’s sanitary sewer system. The resources of the fund are primarily fees charged to the users of the system.
Additionally, the City reports the following fund types:
Governmental Funds
The Special Revenue Funds – These funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
47 Proprietary Funds
Internal Service Funds – Internal Service Funds are used to account for the financing of goods and services provided by one department of the City to other departments or agencies of the City on a pro-rata cost-sharing basis. The City currently uses internal service funds for the following activities: central services (which includes print shop, information systems, phone and equipment maintenance, building and grounds maintenance for the City’s Civic Center and Corporate Yard, fleet maintenance for City vehicles and equipment, and for accumulating and expending monies for capital equipment acquisition and replacement), recreation central services (which includes the District’s maintenance of equipment and the accumulation and expending of monies for the acquisition and replacement of District capital equipment items), employees’ benefits, general liability insurance, and workers’ compensation.
Proprietary funds are accounted for using the economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All proprietary funds are accounted for on a cost of services or economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on the Statement of Net Position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise fund are charges to customers for use of the sanitary sewer system, while the principal operating revenues of the internal service funds are charges to departments in the governmental funds of the City for services. Operating expenses for the enterprise fund and the internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
The City’s internal service funds are presented in the proprietary funds financial statements. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental activities column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (general government, public safety, public works, etc.) Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are reported in a separate Statement of Fiduciary Net Position. These funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s operations. Fiduciary funds are reported using the economic resources measurement focus and accrual basis of accounting.
Custodial Funds – Custodial funds are used to report fiduciary activities in which the City acts as an agent. The City’s only custodial funds are the amounts held on behalf of the West Cities Police Communications Joint Powers Authority.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
48 D. Cash and Investments
Investments are classified within the financial statements as “Cash and investments” and are stated at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement.
All cash and investments of proprietary funds are held in the City’s investment pool. Therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for purposes of the statement of cash flows as these cash pools have the general characteristics of a demand deposit account.
Restricted Cash and Investments
The City established a Post-Employment Benefits Trust (Trust) as a tax-exempt trust within the meaning of Section 115 of the Internal Revenue Service Code to accumulate resources for the CalPERS pension obligations.
The trust may also be used to stabilize the amount of General Fund resources needed to meet future required contributions to CalPERS. The balances and activities of the Trust are irrevocably dedicated to funding future obligations to CalPERS. These amounts are reflected as restricted cash and investments in the Employees’ Benefit Internal Service Fund.
Restricted cash and investments also includes the City’s cash in escrow. Cash in escrow represents amounts withheld for retainage related to construction project(s) as required by the Escrow Agreement for Security Deposits in Lieu of Retention. The Escrow Agreement requires that retention earnings withheld from construction progress payments be deposited with an escrow agent and held for the benefit of the contractor until released by the City upon satisfactory completion of the project.
E. Inventories and Prepaid Items
Inventories are valued at average cost and consist primarily of fuel and postage. The City follows the consumption method for inventory control whereby inventory items are reported as expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to a future accounting period and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items are recorded as expenditures/expenses when consumed rather than when purchased.
F. Advances to Other Funds
Long-term interfund advances are reported as a receivable in the advancing fund, and a long-term liability is recorded in the fund receiving the advance.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
49 G. Property Taxes
Property taxes include assessments on both secured and unsecured property. Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County of Orange (County) bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied to the extent that they result in current receivables, defined as being received within 60 days after year-end.
The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year. The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period adjusted by State mandated transfers to the various school districts in fiscal years ended June 30, 1993 and June 30, 1994.
H. Capital Assets
Capital assets, which include land, machinery and equipment (vehicles, computers, etc.), buildings and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.), are reported in governmental activities and business-type activities columns of the government-wide financial statements and in the proprietary fund statements. Capital assets are defined by the City as all land, vehicles, computers and equipment with an initial individual cost of more than $1,000; and building and improvements, and infrastructure assets with costs of more than $10,000, and a life in excess of one year. Purchased or constructed assets are recorded at historical cost or estimated historical cost. Donated or annexed capital assets are recorded at acquisition value at the date of donation or annexation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Depreciation/amortization is recorded in the government-wide financial statements on a straight-line basis over the estimated useful life of the assets as follows:
Building and improvements 10 to 40 years
Machinery and equipment 3 to 10 years
Infrastructure 20 to 65 years
Leased assets 2 to 10 years
Subscription assets 2 to 10 years
I. Compensated Absences
Compensated leave for all permanent employees is paid by the Employees’ Benefit Internal Service Fund.
Compensated absences represents the estimated liability for all accrued vacation, compensatory time, and 50% of the sick leave, as noted below, for all employees of the reporting entity. However, amounts greater than 50% of the sick leave have been accrued for certain Police Association members eligible for Service Retirement. The Employee Benefit Fund is funded by payroll charges to other funds based on benefits earned during that year.
Compensated absences are primarily considered a long-term liability, as accruals earned in each fiscal year are generally sufficient to cover leave taken during the same fiscal year. For sick leave, the City includes only the portion that is more likely than not to be used in the liability which is based off of a two-year average of sick leave usage per employee group.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
50 Permanent employees may accumulate unlimited sick leave hours. Employees with 5 or more years of service terminated for any reason, and having 60 days or more of accumulated sick leave (equal to 480 hours), will be paid for 50% of their accumulated sick leave. Employees with 5 or more years of service terminated for any reason, and having between 240 hours and 480 hours, will be paid for 50% of their accumulated sick leave in excess of 240 hours. Employees having less than 240 hours will not be paid for their accumulated sick leave. The accumulation of vacation leave is generally limited to twice an employees’ annual accrual. Employees who terminate for any reason are paid 100% of their accumulated vacation pay.
J. Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary fund type statement of net position. Bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
K. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and governmental funds’ Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represent a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expenditure) until that time. The deferred outflows of resources relate to pensions and other postemployment benefits.
There are various deferred outflow amounts related to CalPERS pensions. First is the amount of employer contributions made after the measurement date of the net pension liability, which will be recognized in the following fiscal year. The second item is a deferred outflow related to pensions for the net difference between projected and actual earnings on pension plan investments, which will be amortized over five years, beginning with the year in which they occur. Other items include the difference between expected and actual experience, changes in assumptions, and the adjustments due to differences in proportions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions determined for the June 30, 2024 measurement date, which is 3.8 years for both Safety Plan and Miscellaneous Plan members.
The deferred outflows related to the OCERS pension plan is the combined difference between expected and actual experience and assumption changes, which will be recognized over the average expected remaining service lives of all employees that are provided with pensions through OCERS, which for this measurement period is 5.31 years.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
51 The deferred outflows related to other postemployment benefits is combined of the difference between expected and actual experience and assumption changes. These amounts are amortized over the average expected remaining active and inactive service lives as of the June 30, 2025 measurement date, which is 8.8 years.
In addition to liabilities, the Statement of Net Position and governmental funds’ Balance Sheet may report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
The City reported three items in this category. The first item, which arises only under the modified accrual basis of accounting, is unavailable revenues, which is reported only in the governmental funds’ Balance Sheet. The governmental funds report unavailable revenues from one source, accounts receivable. Unavailable revenues are primarily capital project grants, or other revenues, which have been earned, but not received within 60 days after year-end. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available.
The second item is a deferred inflow related to pensions. For CalPERS pensions, the deferred inflow is the result of differences in expected and actual actuarial experience, adjustments due to changes in proportions, and differences between employer’s contributions, and the proportionate share of contributions. The remaining items are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions. For CalPERS pensions, the remaining service life as determined for the June 30, 2025 measurement date is 3.8 years for both the Safety Plan and the Miscellaneous Plan.
The deferred inflow related to the OCERS pension plan is the result of differences in expected and actual actuarial experience, changes of assumptions, and the net difference between projected and actual earnings on pension plan investments, which will be recognized over a period of five years, beginning with the year in which they occur. The third item is a deferred inflow related to other postemployment benefits. The deferred inflow is the result of changes in actuarial assumptions and experience. This amount is amortized over a closed period equal to the expected average remaining service lives of plan participants.
L. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the City’s fiduciary net position in the California Public Employees’ Retirement System (CalPERS) and Orange County Employees Retirement System (OCERS) plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS and OCERS, respectively. 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. The Employees’ Benefit Internal Service Fund, which is funded primarily through charges from the General Fund and the Recreation and Park District General Fund, is typically used to liquidate CalPERS and OCERS pension liabilities, respectively.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
52 M. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.
The Employees’ Benefit Internal Service Fund, which is funded primarily through charges from the General Fund, is typically used to liquidate OPEB liabilities.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2025
Measurement Date June 30, 2025
Measurement Period July 1, 2024 to June 30, 2025
Gains and losses related to changes in total OPEB liability are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.
The recognition period may differ depending on the source of the gain or loss. The net difference between projected and actual earnings on OPEB plan investments are amortized over a closed 5-year period. The City, however, does not have an OPEB trust, so there are no deferred inflows or outflows related to this item. All other amounts are amortized over the expected average remaining service lifetime of plan participants.
N. Net Position and Fund Equity
In the government-wide financial statements and the proprietary fund financial statements, net position is classified in the following categories:
Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation, and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This component of net position is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – This component of net position consists of all net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
53 In the governmental fund financial statements, fund balances are classified in the following categories in accordance with GASB Statement No. 54:
Nonspendable – Nonspendable fund balances encompass Items that cannot be spent because they are not in spendable form, such as prepaid items, inventories, and long-term receivables, and items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.
Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.
Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City and the adoption of a formal resolution or the formal award of a contract by the City Council is required to establish a fund balance commitment. Additionally, commitments (other than those associated with the award of a contract) can only be modified or rescinded by the adoption of a formal resolution of the City Council.
Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by an official designated for that purpose. The City Council has adopted a resolution that authorizes the Director of Finance to assign fund balances.
Unassigned – Unassigned fund balances encompass the residual balance for the City’s General Fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.
O. Spending Policy
In the government-wide financial statements, when expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.
In the governmental fund financial statements, when expenditures are incurred for purposes for which all categories of fund balances are available, the City’s general policy is to, when appropriate, apply the expenditures against fund balance in the following order: restricted, committed, assigned, and unassigned.
P. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates and assumptions.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
54 Q. New Accounting Pronouncements
Current Year Standards:
The City adopted the following new accounting pronouncements:
GASB Statement No. 101 – “Compensated Absences” effective for fiscal years beginning after December 15, 2023.
GASB Statement No. 102 – “Certain Risk Disclosures” effective for fiscal years beginning after June 15, 2024.
Effective in Future Fiscal Years:
The GASB has issued the following pronouncements that have effective dates which may impact future financial statement presentation. The City has not determined the effect of the following statements:
GASB Statement No. 103 – “Financial Reporting Model Improvements” GASB Statement No. 104 – “Disclosure of Certain Capital Assets” Note 2 - Cash and Investments
The City follows the practice of pooling cash and investments for all funds. Certain restricted funds that are held and invested by independent outside custodians through contractual bond indenture agreements are not pooled, and are reported as restricted cash and investments.
Investment income earned on pooled cash and investments is allocated quarterly to the various funds based on the average cash balance in each fund. Investment income from cash and investments with fiscal agents is credited directly to the fund earning the income.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
55 Authorized Investments
Under provision of the City’s annually adopted investment policy, and in accordance with Section 53601 of the California Government Code, the City may deposit and invest in the following:
Maximum
Percent of
Diversification by Investments Portfolio
Securities of the U.S. Government 100%
Federal Agency Issues 100%
Certificates of Deposits (of Time Deposits) placed with with commercial banks and/or savings and loan companies 25% Bankers' Acceptances 25%
Commercial Paper 25%
Negotiable Certificates of Deposit 25%
Medium-term Corporate Notes 25%
Local Agency Investment Fund (LAIF) $75M per account
Investment Trust of California (CalTRUST) $50 million
Money Market Mutual Fund 20%
Municipal Bonds 5%
A five-year maximum maturity for each investment is allowed unless an extension of maturity is expressly permitted by the City Council, with the exception of Certificates of Deposit, Bankers’ Acceptances, and Commercial Paper, which are one year, 180 days, and 270 days respectively.
Investments Authorized by Debt Agreements
The above policy does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy.
Deposits and Risks
At June 30, 2025, the carrying amount of the City’s demand deposits was $1,161,059. The bank balances of these funds totaled $1,821,495 and were either covered by federal depository insurance or were held in collateralized accounts. If there were amounts not covered by federal depository insurance, the California Government Code requires California banks and savings and loans associations to secure a City’s deposit by pledging government securities with a value of 110% of a City’s deposits, or by pledging first trust deed mortgage notes having a total value of 150% of the City’s total deposits.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
56 The following is a summary of pooled cash and investments, including restricted cash and investments, as of June 30, 2025:
Fiduciary
Funds
Governmental Business-type Statement of
Activities Activities Net Position Totals
Cash and investments 170,166,111 $ 10,325,258 $ 4,985,736 $ 185,477,105 $ Restricted cash and investments 38,497,422 - - 38,497,422 Totals 208,663,533 $ 10,325,258 $ 4,985,736 $ 223,974,527 $ Government Wide Statement
of Net Position
Restricted cash and investments held by the fiscal agent which are reported in governmental activities include the pension trust fund, which includes restricted pension obligations. Restricted cash held in escrow which are reported in governmental activities include the Cypress Recreation and Park District’s construction retention.
Cash and investments, as of June 30, 2025, consist of the following deposits, and investments and maturities:
12 Months 13 to 24 25 to 60
Total or Less Months Months
Deposits
Demand Deposits $ 1,161,059 1,161,059 $ - $ - $
Restricted Cash
Escrow Deposits 1,463,539 - - 1,463,539
Investments
State of California Local Agency
Investment Fund 78,093,468 78,093,468 - -
Federal Farm Credit Bank 32,232,620 12,039,720 - 20,192,900 Federal Home Loan Mortgage Corporation 4,981,950 - - 4,981,950 Federal Home Loan Bank 33,628,161 - 12,789,243 20,838,919 Federal National Mortgage Association 10,615,997 - - 10,615,997 United States Treasury 24,763,850 9,853,000 - 14,910,850 Restricted Cash and Investments
PARS Mutual Funds 37,033,883 37,033,883 - -
Total cash and investments $ 223,974,527 $ 138,181,130 $ 12,789,243 $ 73,004,155 Remaining Maturity
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
57 Concentration of Credit Risk
Concentration of credit risk is the heightened risk of potential loss when investments are concentrated in one issuer. The City’s investment policy and the California Government Code generally limit the amount that can be invested in any one issuer, except for U.S. Treasury securities and U.S. government-sponsored enterprises to no more than 5% for municipal bonds and 10% of the City’s total investments for commercial paper, medium-term corporate notes and money market mutual funds. At June 30, 2025, investments in one issuer representing 5% or more of the City’s total investments were as follows:
Fair Value
Federal Farm Credit Bank U.S. Government-Sponsored Enterprise Securities 32,232,620 $ Federal Home Loan Bank U.S. Government-Sponsored Enterprise Securities 33,628,161 $ Federal National Mortgage Association U.S. Government-Sponsored Enterprise Securities 10,615,997 $ Issuer Investment Type
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy provides that final maturities of securities cannot exceed five years. At June 30, 2025, the approximately 55% of the City’s pooled cash and investment portfolio had a maturity of less than one year with an average life of the portfolio of approximately 730 days.
Credit Risk
State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations (NRSROs). It is the City’s practice to limit its investments in these investment types to the top rating issued by NRSROs, including raters Standard & Poor’s and Moody’s Investors Service. At June 30, 2025, the City’s money market mutual accounts were rated AAAm by Standard & Poor’s. The Federal Farm Credit Bank and Federal Home Loan Bank investments were rated AA+ rated by Standard & Poor’s and Aaa by Moody’s. The California Local Agency Investment Fund (LAIF) is not rated, but has a separate investment policy governed by Government Code Sections 16480-16481.2 that provides credit standards for its investments. There is no minimum legal rating.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
58 Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. All securities owned by the City with the exception of LAIF and CalTRUST are deposited in trust for safekeeping with a custodial bank. Securities are not held in broker accounts. 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: California Government Code requires a financial institution to secure deposits made by local governments by pledging securities in an undivided collateral pool held by a depository regulated under state law. The fair value of pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the governments. The investment in a Repurchase Agreement is uninsured with the collateral for the repurchase agreement held in the name of the bank but not the name of the City. For investments identified herein as held by a fiscal agent, the trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the City.
External Investment Pool
The City is a voluntary participant in LAIF, which is an external investment pool regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California through which local governments may pool investments. The City and the District each may invest up to $75,000,000 in the fund. Investments in LAIF are considered highly liquid, as deposits can be converted to cash within 24 hours without loss of interest.
The City values its investments in LAIF at a fair value provided by LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available, and on amortized cost or best estimate for those securities where market value is not readily available. At June 30, 2025, the factor used was 1.001198310. The City’s investment with LAIF includes a portion of pool funds invested in structured notes and asset-backed securities. As of June 30, 2025, the City and the District each had total deposits of $39,000,000 invested in LAIF, with a fair value of $39,046,734. LAIF had invested 3.81% of its portfolio in structured notes and medium-term asset- backed securities.
The City may participate in 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 comprised of experienced local agency finance professionals, members of the governing body, or officers or personnel of public agency CalTrust members. The City reports any investment in CalTrust at the fair value amount provided by CalTrust, which is the same as the value of the pool shares. There is no legal minimum or maximum investment in CalTrust, however, the City has set a policy limit of $50,000,000.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
59 Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by Generally Accepted Accounting Principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets that the City has the ability to access.
Level 2: Inputs to the valuation methodology include:
Quoted prices for similar assets in active markets;
Quoted prices for identical or similar assets in inactive markets; Inputs other than quoted prices that are observable for the asset; Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.
The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The determination of what constitutes observable requires judgment by the City’s management. City management considers observable data to be that market data which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market.
The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to City management’s perceived risk of that investment.
The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are based on evaluated prices received by the City’s asset broker or custodian.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
60 The City has the following recurring fair value measurements as of June 30, 2025:
Investments
not Subject to
Totals Hierarchy 1 2 3
Deposits
Demand Deposits 1,161,059 $ $ 1,161,059 $ - $ - $ -
Restricted Cash
Escrow Deposits 1,463,539 1,463,539 - - -
Investments
State of California Local Agency
Investment Fund 78,093,469 78,093,469 - - -
Federal Farm Credit Bank 32,232,620 - - 32,232,620 -
Federal Home Loan Mortgage Corporation 4,981,950 - - 4,981,950 - Federal Home Loan Bank 33,628,161 - - 33,628,161 -
Federal National Mortgage Association 10,615,997 - - 10,615,997 - United States Treasury 24,763,850 - - 24,763,850 -
Restricted Cash and Investments
PARS Mutual Fund 37,033,883 37,033,883 - - -
Total Investments 223,974,528 $ 117,751,950 $ - $ 106,222,578 $ - $ Level
Note 3 - Notes Receivable
Changes in Notes Receivable
The following is a summary of note receivable transactions for governmental activities for the year ended June 30, 2025:
Balance Balance Due Within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year than One Year Home Loans $ 351,390 $ (86,394) - $ $ 264,996 $ 96,130 $ 168,866 Housing Covenants 10,960,135 1,929,667 - 12,889,802 - 12,889,802 Other Notes 4,281 - (428) 3,853 428 3,424
Subtotal 11,315,806 1,929,667 (86,822) 13,158,651 96,558 13,062,092 Less: Allowance (11,189,960) (1,929,667) 65,025 (13,054,602) - (13,054,602) Total 125,846 $ - $ (21,797) $ 104,049 $ 96,558 $ 7,490 $ Classification
Description
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
61 Home Loans
The dissolved Cypress Redevelopment Agency (Agency) administered two loan programs to assist qualified low and/or moderate income applicants. Upon dissolution of the Agency, the administration and the outstanding notes associated with these two loan programs were transferred to the City’s Low and Moderate Housing Assets Special Revenue Fund. The Home Equity Loan Program (HELP provided loans in the form of notes up to $25,000 for down payment assistance to eligible first time homebuyers. Payments on the notes were deferred for the first five (5) years with no interest during the deferral period. The loan becomes due and payable on a monthly basis in years 6 through 30 with a 5% interest rate assessed during the amortization period. Effective with the dissolution of the Agency on February 1, 2012, the HELP I program assets were transferred to the City’s Low and Moderate Housing Assets Fund and no new HELP I loans are expected to be issued.
The Home Enhancement Loan Program (HELP II) provides loans to assist single family homeowners with home improvement costs. Moderate income applicants are eligible for loans of up to $20,000 with a 5% interest rate and payment deferred for the full 15-year term of the loan. The loans become due and payable in full upon sale, transfer of title, cash out refinances, or the end of the loan term, whichever comes first. Lower income applicants can qualify for no interest, forgivable loans of up to $20,000. The principal amounts for the forgivable loans are reduced by ten percent (10%) annually and are completely forgiven after ten years. Some of the HELP II notes are eligible for federal grant reimbursement to the City upon issuance and are recorded in the General Fund. Effective with the dissolution of the Agency on February 1, 2012, the HELP II program assets previously funded by the Agency were transferred to the City’s Low and Moderate Housing Assets Special Revenue Fund.
Any new loan issuances will be limited to those that are funded with federal grant reimbursements and recorded in the General Fund.
In the fund financial statements and government-wide statements for all loans, a note receivable is recorded when issued to the homeowner and is decreased upon repayment. The City holds notes due from homeowners totaling $100,196 (which is net of an allowance of $164,800 for forgivable loans) at June 30, 2025, in both the fund financial statements and the government-wide statements.
Housing Covenants
The City holds notes receivable totaling $12,889,802 (including accrued interest) related to affordability covenants entered into by the dissolved Agency associated with the following five projects described below.
Upon dissolution of the Agency on February 1, 2012, the notes were transferred to the City and are recorded in the Low and Moderate Housing Assets Special Revenue Fund.
In 2004, the 13-unit Lincoln Glen townhome project was constructed in the Lincoln Avenue Redevelopment Project Area. To address the inclusionary affordability requirement triggered by the development, five (5) units were restricted for sale to affordable households. Silent second first-time homebuyer loans were provided to secure long term (45 year) affordability covenants on these units. The loans provide for interest to accrue at a rate of 7% per year. Two (2) units received $57,700 loans and were reserved for low income households (80% or less of County median income), and three (3) units received $37,350 loans and were reserved for moderate income households (up to 120% of County median income). Four of the loans (and their associated affordability covenants) were recorded in late 2004 and the remaining loan closed in early 2005. These loans, totaling $227,450 plus accrued interest of $652,710 at June 30, 2025, will be forgiven at the end of the 45 year covenant term.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
62 To address the inclusionary affordability requirement triggered by the construction of the 63-unit Lincoln Square town project in 2007, ten (10) units received $35,000 silent second loans which covenanted them as affordable to moderate income households for a period of 45 years. All the loans were recorded in 2007 and provide for interest to accrue at a rate of 7% per year. All of the loans, totaling $350,000 plus accrued interest of $786,542 at June 30, 2025, are forgivable at the end of the covenant term.
In 2004, the Agency entered into an affordable housing agreement to provide a $774,473 loan to Habitat for Humanity of Orange County to acquire a property and build seven (7) townhome units known as the Cypress Heather development. The units were sold to very low income families (with incomes not exceeding 50% of the County’s median). Each family assumed one-seventh of the Agency’s loan with Habitat and these loans were recorded in 2007 and secured 45 year affordability covenants on the units. The loans provide for interest to accrue at a rate of 7% and be added to the loan principal each year. The loans, totaling $774,473 plus accrued interest of $1,671,944 at June 30, 2025, are forgivable at the end of the 45 year term.
In 2009, the Agency entered into an agreement to purchase long-term affordability covenants at the Tara Village apartment complex. The agreement provided a $6,788,996 loan to the owner of the apartment complex in exchange for reserving 80 units for rental to lower income households for 55 years, with 40 units reserved for very low income families and 40 units reserved for low income families. The loan is forgivable at the end of the covenant term.
In May 2025, the City entered into an agreement which provided a $1,629,000 loan to Olson Urban VI – Cypress 3, LLC (the Olson Company) to acquire the property at 5732 Lincoln Avenue and build a twenty-unit townhome development with five (5) units restricted for sale to low-income households (80% or less of County median income). The project is currently under construction. Upon sale of the low-income units, each homeowner will assume one-fifth of the City’s loan from the Olson Company, securing the affordability covenant for a term of 45 years. The City loan to the Olson Company provides for interest to accrue at a rate of 4% per annum to be added to the loan principal each year. When transferred to the low-income homeowner, interest will not accrue. The loans, totaling $1,629,000 plus accrued interest of $8,688, are forgivable at the end of the 45-year term.
In the fund financial statements, a note receivable is recorded upon initial funding of the loan with a corresponding amount recorded as an allowance for uncollectable amount since these notes will likely be forgiven prior to payment being due. This results in no impact to the fund balance reported in the fund financial statements. Similarly, in the government-wide statements, a note receivable is recorded when issued to the homeowner and would be decreased upon a repayment. However, since all the loans associated with covenants are forgivable and will likely never be repaid, an allowance for forgivable loans of $12,889,802 has fully offset the amount reported as notes receivable in the government-wide statements at June 30, 2025.
Other Notes
The City receives an annual refund from Golden State Water related to the extension of a main water line in 1994. This annual payment of $428 will end in 2034.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
63 Note 4 - Interfund Transactions
Interfund Balances
The following summarizes the total due and due from other funds as of June 30, 2024:
Amount
General Fund Street Fund 27,258 $
Nonmajor Governmental Funds 39,348
$ 66,606
Receivable Fund Payable Fund
The outstanding balances between funds result from interfund borrowings and to cover cash flow deficits resulting from annual operating transfers to other funds.
Interfund Advances
Payable Fund Amount
City Capital Projects Fund Recreation and Park District 33,645,345 $ $ 33,645,345
Receivable Fund
On February 8, 2021, the City approved an advance of up to $12,800,000 from the City Capital Projects Fund to the Cypress Recreation and Park District Special Revenue Fund for the construction of Lexington Park. Note repayment will use eligible park development fee revenues, with the majority of revenues available for repayment expected to be associated with the development of the Los Alamitos Race Course. The note has an initial repayment term of five years, with the understanding the note will be renewed and repayment deferred until sufficient park development receipts are available. The District will pay annual interest to the City on the outstanding note balance at the rate earned by the California Local Agency Investment Fund (LAIF) until June 30, 2026. Beginning June 30, 2026, the District will pay annual interest to the City on the outstanding note balance at the rate of 2%.
A total of $12,293,975 was loaned to the District for Lexington Park construction, and repayments to the City using available park development fees total $9,109,308 through June 30, 2025. All interest has been paid through the end of the fiscal year and the outstanding balance on the note totaled $3,184,667 at June 30, 2025.
The project is complete and no further advances will be made. Future repayments will be determined based on the availability of park development revenues.
On November 13, 2023, the City approved an advance of up to $33,500,000 from the City Capital Projects Fund to the Cypress Recreation and Park District Special Revenue Fund for the reconstruction of Arnold Cypress Park.
The note establishes an interest rate of 2.0% per annum. Annual payments of $2 million per year, inclusive of interest, will be made from District resources beginning June 30, 2025. A total of $32,009,479 has been loaned to the District since the note was approved. Interest of $451,199 has been paid as of year-end. The total outstanding balance on the note was $30,460,678 at June 30, 2025. Additional proceeds up to $1,490,251, which represents the remaining authorized limit on the note, may occur in the coming year.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
64 Interfund Transfers
With City Council approval, resources may be transferred from one City fund to another. The purpose of transfers is to move funding from its original source to the fund in which the authorized expenditures occur.
Transfers between funds during the fiscal year ended June 30, 2025, are as follows:
Recreation Non-major
General and Park Streets Governmental
Fund District Fund Fund Funds Totals
Transfer In
General Fund - $ - $ 1,312,332 $ 232,305 $ 1,544,637 $
Capital Projects
Fund - City - 3,162,583 1,333,253 - 4,495,836
Internal Service Funds 1,620,185 170,582 - 583,185 2,373,952 Totals 4,782,768 $ 170,582 $ 2,645,585 $ 815,490 $ 8,414,425 $ Transfers Out
The transfer to the General Fund from the Streets Fund provided resources for street maintenance.
The transfer to the General Fund from the non-major Governmental Funds provided resources for Traffic Safety and administrative costs associated with the Stanton Channel Maintenance District and Lighting District funds.
The transfers to the Capital Projects Fund – City from the General Fund were for capital projects approved by City Council as part of the first year of the Seven-Year Capital Improvement Program and for the set-aside of monies for future capital improvement projects.
The transfer to the Capital Projects Fund – City from the Streets Fund provided funding for eligible capital improvements for residential street resurfacing, concrete and sidewalk rehabilitation, frontage road landscape improvements, and a water conservation study.
The transfer to the Internal Service Funds from the General Fund provided $1,500,000 to the Employees’ Benefit Fund for investment in the pension trust and $120,185 for vehicle and equipment purchases.
The transfers to the Internal Service Funds from the Recreation and Park District fund provided $150,000 for future OCERS pension costs and $20,582 for the purchase of capital outlay items in the City’s Central Services Funds.
The transfer to the Internal Service Funds from the Non-major Governmental Funds provided funds for the purchase of Police equipment and closed-captioning equipment for City Council meetings.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
65 Note 5 - Assets Available for Resale
During the fiscal year ended June 30, 2004, the former Redevelopment Agency acquired a parcel of land with a cost of $1,421,708 located at 5732 Lincoln Avenue. At the time of purchase, it was the intent of the Agency to resell this parcel for the development of low and moderate income housing units. The parcel was transferred to the City upon dissolution of the Agency on February 1, 2012 and recorded on the City’s books as Assets Available for Resale. In March 2024, the City entered into a purchase and sale agreement with Olson Urban Housing, LLC (Olson) to build 20 residential units, including five units for affordable to low-income households.
The sale was finalized in May 2025 and under the terms of the agreement, Olson acquired the land for its appraised value of $1,629,000, however Olson will retain the full $1,629,000 to subsidize the affordable units, with each unit receiving $325,000 as a second loan from the City. Covenants will be recorded against the affordable units, ensuring adherence to low-income affordability for 55 years. It is anticipated all covenants will be forgiven at the end of the 55 years and the City will never receive any compensation for the sale of the land.
Therefore, the land has been removed from the City’s books and a loss of $1,421,708 has been recorded during the fiscal year ended June 30, 2025 to reflect the transfer of land. If Olson fails to develop the project pursuant to the approved schedule, control of the property would return to the City.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
66 Note 6 - Capital Assets and Depreciation/Amortization In accordance with GASB 34, the City has reported all capital assets including infrastructure in the GovernmentWide Statement of Net Position. The City elected to use the basic approach (as defined by GASB 34) for all infrastructure reporting in which depreciation expense and accumulated depreciation/amortization has been recorded. At June 30 2025, the City’s capital assets consisted of the following:
Balance Balance
July 01, 2024 Additions Deletions Transfers June 30, 2025 Capital Assets, Not Depreciated/Amortized
Land $ 12,442,593 $ - $ - $ 12,442,593 - $
Construction in Progress 14,203,401 26,111,010 - (34,889,947) 5,424,464 Total, not depreciated 26,645,994 26,111,010 - (34,889,947) 17,867,057 Capital Assets, Being Depreciated
Buildings and Improvements 63,665,962 529,109 - 34,368,485 98,563,556 Machinery and Equipment 12,499,613 902,151 (695,681) 17,258 12,723,341 Infrastructure 237,297,391 296,559 - 504,204 238,098,154 Total, being depreciated 313,462,966 1,727,819 (695,681) 34,889,947 349,385,051 Less Accumulated Depreciation
Buildings and Improvements (23,076,834) (1,939,627) - - (25,016,461) Machinery and Equipment (8,950,251) (814,056) 670,651 - (9,093,656) Infrastructure (125,434,719) (4,515,325) - - (129,950,044) Total accumulated depreciation (157,461,804) (7,269,008) 670,651 - (164,060,161) Total depreciated, net 156,001,162 (5,541,189) (25,030) 34,889,947 185,324,890 Right to Use Lease Assets Being Amortized
Equipment 65,484 47,128 - - 112,612
Less Accumulated Amortization for Right to Use
Lease Assets (15,397) (22,064) - - (37,461)
Right to Use Lease Assets, being amortized, net 50,087 25,064 - - 75,151 Right to Use Subscription IT Assets 1,800,688 481,562 (168,004) - 2,114,246 Less Accumulated Amortization for Right to Use
Subscription IT Assets (500,989) (444,169) 99,316 (845,842) - Right to Use Subscription IT Asset being amortized, net 1,299,699 37,393 (68,688) 1,268,404 - Total capital assets, net of depreciation/amortization 157,350,948 (5,478,732) (93,718) 34,889,947 186,668,445 Governmental Activities Capital Assets $ 183,996,942 $ 20,632,278 $ (93,718) $ 204,535,502 - $ Governmental Activities
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
67 Depreciation/amortization expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2025 as follows:
General Government $ 436,595
Community Development 37,187
Recreation 1,186,463
Public Safety 281,813
Public Works 4,719,911
Internal Service Funds Depreciation/Amortization
(Charged to Programs Based on Usage) 1,073,272
Total depreciation/amortization expense - governmental activities $ 7,735,241 The following is a summary of changes in the capital assets for business-type activities during the fiscal year:
Balance Balance
July 01, 2024 Additions Deletions Transfers June 30, 2025 Capital Assets, Not Depreciated
Construction in Progress $ 23,042 $ 269,882 $ - $ - $ 292,924 Total, not depreciated/amortized 23,042 269,882 - 292,924 - Capital Assets, Being Depreciated
Infrastructure 35,468,602 127,364 - 35,595,966 -
Total, being depreciated 35,468,602 127,364 - 35,595,966 - Less Accumulated Depreciation
Infrastructure (17,001,445) (591,085) - (17,592,530) -
Total accumulated depreciation (17,001,445) (591,085) - (17,592,530) - Total depreciated/amortized, net 18,467,157 (463,721) - 18,003,436 - Business-type Activities, Capital Assets, Net $ 18,490,199 $ (193,839) $ - $ - $ 18,296,360 Business-type Activities
Depreciation expense for business-type activities for the fiscal year ended June 30, 2025, was charged as follows:
Sewer $ 591,085
Total depreciation expense - business-type activities 591,085 $ City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
68 Construction Commitments
The City has active construction projects as of June 30, 2025. The projects include traffic signals, streets, and sewers. At fiscal year-end, the City’s encumbrances with contractors were as follows:
Remaining
Commitment
Capital Projects - Park District $ 2,755,201
Capital Projects - City 1,684,223
Streets Fund 445,339
Lighting Fund 1,162,617
Totals $ 6,047,380
Note 7 - Subscription-Based Information Technology Arrangements For the year ended June 30, 2025, the City reported the following Subscription-Based Information Technology Arrangements under GASB Statement No. 96. The primary objective of this statement is to enhance the relevance and consistency of information about governments’ subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this statement, an organization is required to recognize a subscription liability and an intangible right-to-use subscription asset. Information on the subscription asset and liability as of June 30, 2025, is as follows:
Amount of
Subscription Accumulated
Major Class of Underlying Asset Assets Amortization
Software as a service $ 2,114,246 $ 845,842
Balance Balance Due Within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Subscription Liability $ 1,171,147 $ 481,562 $ 553,673 $ 1,099,036 $ 388,751 $ 710,285 Description
The future principal and interest subscription payments as of June 30, 2025, are as follows:
Principal Interest Total
Payments Payments Payments
$ 388,751 $ 20,968 $ 409,719
13,239 294,966 308,205
8,888 261,335 270,223
2,465 153,984 156,449
$ 45,560 1,099,036 $ 1,144,596 $
2029
2026
2027
2028
Fiscal Year
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
69 Note 8 - Leases
For the year ended June 30, 2025, the City reported the following leases under GASB Statement No. 87:
Amount of
Leased Accumulated
Assets Amortization
Equipment
Governmental Funds 112,612 $ 37,461 $
Totals 112,612 $ 37,461 $
Major Class of Underlying Asset
Balance Balance Due Within Due in More
July 1, 2024 Additions Deletions June 30, 2025 One Year Than One Year Lease Liability
Governmental Funds $ 41,189 $ 47,128 $ 36,459 $ 51,858 $ 36,302 $ 15,556 $ 47,128 41,189 $ 36,459 $ 51,858 $ 36,302 $ $ 15,556
Description
The future principal and interest lease payments as of June 30, 2025, are as follows:
Principal Interest Total
Payments Payments Payments
$ 36,302 $ 1,325 $ 37,627
366 13,262 13,628
61 2,294 2,355
$ 1,752 51,858 $ 53,610 $
2026
2027
2028
Fiscal Year
Note 9 - Other Long-Term Liabilities
During the year ended June 30, 2025, in addition to the subscription-based information technology arrangements in Note 7, leases in Note 8, net pension liability in Notes 10 and 12, other post-employment benefits in Note 13, and claims payable in Note 15, the City had the following changes in Other Long-Term Liabilities:
Balance Balance Due Within Due in More
July 1, 2024 Net Change June 30, 2025 One Year than One Year Compensated Absences 2,588,237 $ $ 15,969 $ 2,604,206 $ 651,052 $ 1,953,154 $ 15,969 2,588,237 $ 2,604,206 $ 651,052 $ 1,953,154 $
Classification
Description
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
70 Note 10 - Public Employees’ Retirement System (CalPERS) Pension Plan Summaries
Pension
Net Pension Deferred Outflows Deferred Inflows Expense/ Liability/(Asset) of Resources of Resources (Revenue)
CalPERS
Safety 37,551,626 $ $ 11,271,496 $ 776,497 $ 7,427,409
Miscellaneous 27,680,338 7,863,053 939,057 4,844,492
OCERS * (822,513) 85,329 361,231 (120,878)
$ 19,219,878 64,409,451 $ 2,076,785 $ 12,151,023 $
*See Note 12 for information on the OCERS Pension Plan
A. General Information about the Pension Plan
Plan Descriptions: All qualified permanent and probationary employees are eligible to participate in the City’s Safety (Police) or the Miscellaneous (all other employees) cost-sharing multiple-employer defined benefit pension plan, administered by the California Public Employees Retirement System (CalPERS). CalPERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and city resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided: CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law. The plans’ provisions and benefits in effect at June 30, 2025, are summarized as follows:
Prior to On or After
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.0% at 55 2.0% at 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-63 52-67
Monthly benefits, as a percentage of eligible compensation 1.426% - 2.418% 1.000% - 2.500% Required employee contribution rates 7.00% 8.25%
Required employer contribution rates:
Normal cost rate 13.31% 8.18%
Payment of unfunded liability $ 2,422,875 $ 3,446
Miscellaneous
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
71 Prior to On or After
Hire date January 1, 2013 January 1, 2013
Benefit formula 3.0% at 50 2.7% at 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50 50-57
Monthly benefits, as a percentage of eligible compensation 3.00% 2.00% - 2.70% Required employee contribution rates 9.00% 14.50%
Required employer contribution rates:
Normal cost rate 29.30% 14.72%
Payment of unfunded liability $ 3,026,452 $ 17,617
Safety
Contributions: Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employees be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount necessary 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 rates may change if plan contracts are amended. Payments made by the City to satisfy contribution requirements identified by the pension plan as member contributions are classified as plan member contributions.
B. Net Pension Liability
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability.
The net pension liability of each Plan is measured as of June 30, 2024, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Actuarial Assumptions: The total pension liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions:
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by entry age and service
Mortality Rate Table (1) Derived using CalPERS membership data for all funds 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) The mortality table used was developed based on the CalPERS-specific data. The probabilities are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full 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 2021 experience study from November 2021 that can be found on the CalPERS website.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
72 Change of Assumptions: There were no changes in assumptions.
Discount Rate: The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-Term Expected Rate of Return: The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points. The expected real rates of return by asset class are as follows:
Assumed
Asset
Allocation Real Return (1),(2)
Global Equity - Cap- Weighted 30.00% 4.54%
Global Equity - Non-Cap- Weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage- backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(1) An expected inflation rate of 2.30% was used for this period. (2) Figures are based on the 2021 Asset Liability Management Study.
Asset Class
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
73 C. Changes in the Net Pension Liability
Proportionate Share of Net Pension Liability: As of June 30, 2024, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
Proportionate Share
of Net Pension Liability
Safety Plan $ 37,551,626
Miscellaneous Plan 27,680,338
Total net pension liability 65,231,964 $
The City’s net pension liability for both the Safety and Miscellaneous Plans is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the Plans relative to the projected contributions of all participating employers, as actuarially determined. The City’s proportionate share of the net pension liability for the Plans as of June 30, 2023 and 2024 was as follows:
Miscellaneous Safety
Proportion - June 30, 2024 0.56074% 0.50915%
Proportion - June 30, 2025 0.57231% 0.51505%
Change - Increase (Decrease) 0.01157% 0.00590%
Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of each plan, as well as what the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Miscellaneous Safety
Discount Rate Plan Plan Total
1 % Decrease 5.90% 41,513,292 $ $ 55,088,335 $ 96,601,627 Current Discount Rate 6.90% 27,680,338 37,551,626 65,231,964 1 % Increase 7.90% 16,293,781 23,209,064 39,502,845
Net Pension Liability
Pension Plan Fiduciary Net Position: Detailed information about each pension plan’s fiduciary net position is available in the separately-issued CalPERS financial reports.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
74 D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2025, the City recognized pension expense of $4,844,492 in the Miscellaneous Plan; $7,427,409 in the Safety Plan; and ($120,878) in the Terminated OCERS Plan (Note 14) for a total of $12,151,023. At June 30, 2025, the City reported deferred outflows and deferred inflows of resources related to CalPERS pensions as follows:
Deferred Deferred
Outflows Inflows
of Resources of Resources
City contributions subsequent to measurement date 3,164,869 $ $ - Changes of assumptions 711,442 -
Differences between expected and actual experience 2,393,219 (93,382) Net difference between projected and actual earnings
on pension plan investments 1,593,523 -
Adjustments due to differences in proportions - (429,863) Changes in proportion and differences between
contributions and proportionate share of Contributions - (415,812) Total 7,863,053 $ (939,057) $
Miscellaneous Plan
Deferred Deferred
Outflows Inflows
of Resources of Resources
City contributions subsequent to measurement date 4,429,976 $ $ - Changes of assumptions 925,195 -
Differences between expected and actual experience 3,064,547 (99,642) Net difference between projected and actual earnings
on pension plan investments 1,815,075 -
Adjustments due to differences in proportions 298,797 (315,660) Changes in proportion and differences between
contributions and proportionate share of 737,906 (361,195) Total 11,271,496 $ (776,497) $
Safety Plan
The amount reported as deferred outflows of resources related to contributions subsequent to the measurement date of $3,164,869 for the Miscellaneous Plan and $4,429,976 for the Safety Plan, totaling $7,594,845, will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2026.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Plan Safety Plan Total
$ 1,051,944 $2,329,546 3,381,490 $
4,333,022 3,317,399 7,650,421
23,491 (64,133) (40,642)
(621,036) (546,083) (1,167,119)
$ 6,065,023 3,759,127 $ 9,824,150 $
2028
2029
Fiscal Year
Ending June 30,
2026
2027
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
75 Note 11 - Other Defined Contribution Pension Plans
Nationwide Retirement Solutions Deferred Compensation Plan Under the Omnibus Budget Reconciliation Act of 1990 (OBRA), the City is required to provide a retirement plan to all City employees, including part-time temporary and seasonal employees. OBRA law allows the City to provide any retirement plan in which benefits are comparable to those provided under Social Security and meet certain criteria or “safe harbor formulas” for defined benefit retirement systems. To comply with this Federal law, the City currently provides a 457 deferred compensation plan through Nationwide Retirement Solutions for part-time temporary and seasonal employees. These employees pay a mandatory contribution of 7.5% of their compensation to the plan, which may be withdrawn upon employment separation.
For the year ended June 30, 2025, the City’s payroll covered by the plan was $836,440. Employee contributions to the plan totaled $62,733. The City does not contribute to the plan.
Note 12 - Terminated Orange County Employees Retirement System Defined Benefit Pension Plan A. General Information about the Pension Plan
Plan Description: The Cypress Recreation and Park District (District) participated in the Orange County Employees’ Retirement System (OCERS), a cost-sharing multiple-employer defined benefit pension plan, for employees’ service prior to October 12, 2000.
OCERS was established in 1945, under the provisions of the County Employees Retirement Law of 1937. OCERS is governed by a ten-member Board of Retirement comprised of nine voting members and one alternate member. Board membership consists of four members appointed by the County of Orange Board of Supervisors and five members elected by the members of the pension system – two by the general members, two by the safety members (one voting and one alternate), and one by the retired members. The County of Orange Treasurer-Tax Collector, who is elected by the voters registered in the County, serves as an ex-officio member.
The OCERS Board of Retirement is responsible for establishing policies governing the administration of the retirement plan, making disability determinations, assuring benefit payments, establishing investment policies, and monitoring execution of its policies.
OCERS issues a publicly available financial report that includes financial statements and required supplementary information for the cost-sharing plans administered by OCERS. The report can be obtained online at www.ocers.org, or from its executive office at 2223 Wellington Avenue, Santa Ana, CA 92701.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
76 Benefits Provided: OCERS provides retirement, disability, and death benefits to safety and general members.
Safety membership includes those members serving in active law enforcement, fire suppression, and probation officers. General membership applies to all other occupations, including all eligible District employees. Plan retirement benefits are tiered based upon date of OCERS membership. Members employed prior to September 21, 1979, are designated as Tier I members and will have their highest one-year average salary used to determine their retirement allowance. Tier II members, hired on or after September 21, 1979, will have their highest three-year average salary used to determine their retirement allowance. Member rate groups are determined by the employer, bargaining unit, and benefit plan. The benefit plan represents the benefits formula and tier that will be used in calculating a retirement benefit.
Contributions: The participating entities in OCERS share proportionately in all risks and costs, including benefit costs. The District’s discontinuance of the OCERS plan precludes the District from sharing the risks and costs of the plan in the same manner as actively participating entities, but the District remains liable for its share of pension liabilities. To ensure the District pays its fair share of the costs associated with its eligible employees, OCERS and the District entered into a Withdrawing Employer and Continuing Contribution Agreement (Agreement) on October 15, 2018.
Per the terms of the Agreement, OCERS will recalculate the unfunded actuarial accrued liability (UAAL) attributable to the District every three years beginning December 31, 2020, and at least every three years thereafter. For purposes of the recalculation, the District’s employees are treated as a closed group and the District’s assets and liabilities will be segregated from the remaining assets of the retirement system. Based on the recalculation, in the event there is any new pension liability, the District shall satisfy the obligation to OCERS within three years following the effective date of the recalculation, including accrued interest. If the recalculation determines there is a surplus attributable to the District, it shall remain with OCERS as a credit against future pension liabilities.
B. Pension Liability/(Asset), Pension Expenses, and Deferred Outflows/Inflows of Resources As of December 31, 2024, the District reported a net pension asset for the OCERS plan of $822,513. The net pension liability(asset) was measured as of December 31, 2023, and 2022. The Plan’s Fiduciary Net Position (plan assets) was valued as of the measurement date while the Total Pension Liability (TPL) was determined based upon rolling forward the TPL from actuarial valuations as of December 31, 2023 and 2022, respectively.
The District’s net pension liability/(asset) and proportionate share of the total net pension liability as of December 31, 2024 and 2023 was as follows:
Proportionate
OCERS Share
Net Pension Liability/(Asset) - December 31, 2023 (641,475) -0.013% Net Pension Liability/(Asset) - December 31, 2024 (822,513) -0.021% Change in Liability/(Asset) 181,038 0.008%
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
77 Actuarial Assumptions: The actuarial valuation was determined using the following actuarial assumptions:
Valuation Date December 31, 2023
Measurement Date December 31, 2024
Actuarial Experience Study Three-year period ended December 31, 2022 and dated August 11, 2023.
Actuarial Cost Method Entry age normal
Actuarial Assumptions
Inflation 2.50%
Salary Increases General: 4.0% to 11.0%
Investment Rate of Return 7%, net of pension plan investment expense Discount Rate 7.00%
Mortality Assumptions: The underlying mortality assumptions used in the actuarial valuation were based on the results of the actuarial experience study for the period January 1, 2020 through December 31, 2022 using the Public Retirement Plans Mortality tables (Pub-2010) published by the Society of Actuaries. Within the Pub-2010 family of mortality tables, OCERS has adopted both the General and Safety Amount-Weighted Above-Median Mortality Tables (adjusted for OCERS experience), projected generationally with the two-dimensional mortality improvement scale MP- 2021, and adjusted separately for healthy and disabled for both general and safety members.
Discount Rate: The discount rate used to determine the total pension liability was 7.00% as of December 31, 2024 and 2023. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and employer contributions will be made at rates equal to the actuarially determined contribution rates. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability as of December 31, 2024 and December 31, 2023.
Long-Term Expected Rate of Return: The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns 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, adding expected inflation and subtracting expected investment expenses (beginning with December 31, 2024, including only investment consultant fees, custodian fees and other miscellaneous investment expenses and fees but excluding investment manager fees) and a risk margin. Beginning with December 31, 2024 this portfolio return is further adjusted to an expected geometric real rate of return for the portfolio. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation, are shown in the following table. For December 31, 2023 these rates are before deducting investment management expenses while for December 31, 2024 they are after deducting applicable investment management expenses. This information was used in the derivation of the long-term expected investment rate of return assumption in the actuarial valuations for December 31, 2024 and December 31, 2023. This information will change every three years based on the results of an actuarial experience study.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
78 Sensitivity of the Net Pension Liability/(Asset) to Changes in the Discount Rate: The following presents the net pension liability of the OCERS plan, as well as what the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Long-Term Expected
Target Arithmetic Real
Allocation Rate of Return (1)
Global Equity 45.00% 7.05%
Investment Grade Bonds 9.00% 1.97%
High Yield Bond 0.50% 4.63%
TIPS 2.00% 1.77%
Emerging Market Debt 0.50% 4.72%
Long-Term Government Bonds 3.30% 2.82%
Real Estate 3.00% 3.86%
Private Equity 15.00% 9.84%
Private Credit 3.50% 6.47%
Value Added Real Estate 3.00% 7.38%
Opportunistic Real Estate 1.00% 9.74%
Energy 2.00% 10.89%
Infrastructure (Core Private) 1.00% 5.98%
Infrastructure (Non-Core Private) 3.00% 8.88%
Global Macro 1.70% 3.17%
CTA (Trend Following) 3.30% 3.15%
Alternative Risk Premia 1.70% 3.24%
Special Situations Lending 1.50% 8.96%
Total 100.00% 6.55%
(1) Arithmetic real rates of return are net of inflation.
Asset Class
Discount Rate
1% Decrease Current Rate 1% Increase
6.00% 7.00% 8.00%
$ 158,320 $ (822,513) $ (1,624,622)
Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position: Detailed information about the pension plan’s fiduciary net position is available in the separately-issued OCERS financial reports.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
79 C. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2025, the District recognized pension income of $120,878 in the OCERS Plan. At June 30, 2025, the District reported deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual experience $ 72,060 $ (336,165) Net difference between projected and actual earnings
on pension plan investments - (22,985)
Changes of assumptions 13,269 (2,081)
Total $ 85,329 $ (361,231)
OCERS Plan
The amounts reported as deferred inflows, net of the remaining deferred outflows, will be recognized as pension expense as follows:
OCERS Plan
Deferred Outflows/
(Inflows) of Resources
2026 (53,007) $
2027 99
2028 (165,395)
2029 (59,650)
Thereafter 2,051
$ (275,902)
Measurement Periods
Ending June 30,
Note 13 - Post-Employment Health Care Benefits
Plan Description
The City, through a single-employer defined benefit plan, provides post-employment health care benefits to eligible retirees through the CalPERS healthcare program entitled Public Employees’ Medical and Hospital Care Act (PEMHCA). All eligible employees become participants in PEMHCA in the month following their date of hire.
Upon retirement, the City pays the PEMHCA minimum amount ($158 per month in 2025) for all eligible retirees who choose to continue with their coverage through PEMHCA. Retired PEMHCA members receiving benefits make contributions at premium rates identical to active City employees, less the PEMHCA minimum.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
80 In addition to the PEMHCA minimum amount, certain members of all retiree groups with at least ten years of continuous service receive a Supplemental Health Care Benefit directly from the City. The benefits are based on negotiated memorandums of understanding with the various employee associations. The City provides a monthly contribution from $100 to $300 based on years of continuous service and employee classification, which can be used by the retiree to either continue their health care benefits as may be available under the City’s current health care contract through PEMHCA or to use the monthly contribution amount to purchase alternative health care benefits. The Supplemental Health Care Benefit terminates for retirees on the date the retiree reaches age 65 or becomes Medicare eligible whichever comes first. This plan is closed to new members.
New employees are only eligible for the PEMHCA benefit and the Retiree Health Savings plan.
All other City employees that are either ineligible or have elected out of the above Supplemental Health Care Benefit are members of the City’s Retiree Health Savings defined-contribution plan in which the City contributes monthly amounts on behalf of the employee to an account in the employee’s name. These monthly contributions are $75, $125, or $185 per month for full-time employees based on employee association.
Employees Covered
As of the June 30, 2025 actuarial valuation, the following current and former employees were covered by the benefit terms under the OPEB plans:
Defined
Contribution
Supplemental Retiree
PEMHCA Health Care Health
Minimum Benefit Savings
Active Employees 124 6 118
Eligible Retirees - Enrolled 68 21 n/a
Eligible Retirees - Not Enrolled 97 0 n/a
Defined Benefits Plans
The minimum contribution for PEMHCA is established and amended by CalPERS. The City’s contribution towards the Supplemental Health Care Benefit and Retiree Health Savings OPEB plans are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units.
The City pays the monthly contribution for all employees and retirees on a pay-as-you-go basis. As of June 30, 2025, 68 retirees were receiving the PEMHCA benefit and the cost to the City for the year ended June 30, 2025 was $130,725. The City paid an additional $78,597 to 21 retirees during the year for the Supplemental Health Care Benefit. For the measurement date ended June 30, 2025, the City’s cash contributions were $209,322, which were recognized as a reduction to the OPEB liability.
While the City does not directly make contributions above the required pay-as-you-go amounts, the ability of the retiree to obtain health insurance at an active employee rate constitutes a significant economic benefit to the retiree, called an implicit subsidy. The implicit subsidy is considered to be an other post-employment benefit (OPEB) of the City. For the year ended June 30, 2025, the City’s contribution towards the implicit subsidy was $256,869.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
81 The Retiree Health Savings Plan (RHS) is a defined contribution plan. Eligible employees receive either $75, $125, or $185 per month, depending on bargaining unit, deposited in an individual Retiree Health Savings Account.
During the fiscal year ended June 30, 2025, the City paid $246,210 into RHS accounts for eligible employees, which includes $60,000 of retirement incentives. The monthly payments are recognized as expenditures when the payments are made into the RHS. Because the RHS is a defined contribution plan there is no unfunded liability associated with it.
Total OPEB Liability
The City’s total OPEB liability of $8,044,841 was based on an actuarial valuation as of June 30, 2025, a measurement date of June 30, 2025 and a discount rate of 5.20%. The total OPEB liability was determined using the following assumptions:
Actuarial Cost Method Entry Age, Level Percent of Pay
Actuarial Assumptions
Discount Rate (1)
As of 6/30/25 5.20%
Inflation 2.50%
Salary increases 2.75%
Mortality rate (2)
Healthcare cost-trend rates 7.50 percent for 2025 decreasing to 5.80 percent for 2029, 5.50 percent for 2030-2024, 4.70 percent for 2035-2044, 4.60 percent for 2045-2054, 4.50 percent for 2055-2074, and 4.00 percent for 2075 and later years; Medicare ages: 5.50 percent 2025, 5.00 percent for 2026, 4.75 for 2027, 4.50 percent for 2028-2074, and 4.00 percent for 2075 and later years.
(1) The discount rate increased from 3.97% to 5.20%. The discount rate for both 2024 and 2025 was based on the Bond Buyer’s 20-year bond General Obligation Index. (2) Mortality rates were based on the 2000-2019 CalPERS Experience Study Mortality Rates for Safety and Miscellaneous Employees, as appropriate for the population.
Changes in the OPEB Liability
The changes in the Total OPEB Liability for the Plan are as follows:
Balance at June 30, 2024 $ 9,300,612
Changes recognized for the measurement period:
Service cost 377,233
Interest 375,047
Difference between expected and actual experience (910,412) Changes of assumptions * (631,448)
Benefit payments, including implicit subsidy (466,191)
Net changes (1,255,771)
Balance at June 30, 2025 8,044,841 $
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
82 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability as of June 30, 2025 calculated using the discount rate of 5.20%, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (4.20%) or one percentage point higher (6.20%) than the current rate:
1% Decrease Current Rate 1% Increase
(4.20%) (5.20%) (6.20%)
Plan's net OPEB liability/(asset) $ 9,041,166 $ 8,044,841 $ 7,209,873 Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability as of June 30, 2025, as well as what the total OPEB liability would be if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current health care cost trend rates:
Current
Healthcare
1% Decrease Trend Rate 1% Increase
Plan's net OPEB liability/(asset) $ 7,096,410 $ 8,044,841 $ 9,222,351 OPEB Expense
The annual OPEB expense can be calculated as the change in the amounts reported on the Statement of Net Position that are not attributable to employer contributions. It is the change in total liability minus the changes in deferred outflows plus the changes in deferred inflows. For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $573,289.
Deferred Outflows/Inflows of Resources Related to OPEB
As of the fiscal year ended June 30, 2025, the City reported deferred outflows and deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 174,957 $ $ (940,834) Changes of assumptions 116,180 (1,764,561)
Total $ 291,137 $ (2,705,395)
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
83 OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB Amounts reported as deferred outflows and deferred inflows of resources will be recognized in OPEB expense as follows:
Deferred Outflows/
(Inflows) of Resources
2026 (411,266) $
2027 (411,266)
2028 (411,266)
2029 (399,479)
2030 (272,447)
Thereafter (508,534)
Total $ (2,414,258)
Ending June 30,
Fiscal Year
Note 14 - Public Agency Retirement Services (PARS) Post-Employment Benefits Trust The City established the PARS Post-Employment Benefits Trust (Trust) as a tax-exempt trust within the meaning of Section 115 of the Internal Revenue Service Code to accumulate resources to “stabilize” the amount of General Fund resources that it will need to meet future contribution requirements to the California Public Employees Retirement System (PERS). The balances and activities of the Trust are not part of the pension plan or OPEB plan. Instead, the assets will benefit the employer through reduced future cash flow demands on the General Fund resources and continue to be assets of the City. At June 30, 2025, $37,033,883 in restricted cash and investment in the Employees’ Benefit Internal Service Fund is restricted for pension contribution stabilization.
Note 15 - Self Insurance
At June 30, 2025, the City was self-insured for workers’ compensation and general liability. The self-insured portion for workers’ compensation and general liability is limited to the first $300,000 and $150,000 respectively, of liability per occurrence. Coverage in excess of these amounts is maintained in layers to a maximum of $43,000,000 for general liability and the statutory limit for workers compensation (of which $3,000,000 per occurrence is for each employee accident or disease) through the California Insurance Pool Authority (CIPA). CIPA is a consortium of 14 cities in Southern California, established to pool resources, share risks, purchase excess insurance and to share costs for professional risk management and claims administration.
Member agencies make payments based on underwriting estimates. Each agency may be assessed the difference between funds available and the $43,000,000 annual aggregate in proportion to their annual premiums.
The Governing Board is comprised of one member from each City and is responsible for the selection of management, and for the budgeting and financial management of CIPA. No determination has been made as to each participant’s proportionate share of the fund equity as of June 30, 2025. Upon termination of CIPA, and after settlement of all claims, any excess or deficit will be divided among the cities in proportion to the amount of their contributions.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
84 Liabilities associated with the self-insurance program area are accrued when incurred in the internal service funds (using the accrual basis of accounting). The amount accrued represents estimates of amounts to be paid for reported claims and incurred-but-not-yet-reported claims based upon past experience, modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2025 is dependent on future developments, based upon information from the City Attorney, the City’s claims administrators and others involved with the administration of programs, City management believes the accrual is adequate to cover such losses. Settled claims have not exceeded commercial coverage during the last three years. There have been no significant reductions in insurance coverage from the prior year.
All City departments participate in the self-insurance program. Payments made to the Liability Insurance and Workers’ Compensation Internal Service Funds are based on estimates of amounts needed to pay prior and current year claims and to establish a reserve for catastrophic losses. At June 30, 2025, the Liability Insurance Fund and the Workers’ Compensation Fund had reserves for catastrophic losses of $1,638,141 and $1,478,342, respectively, which are reported as net position in these funds. The claims liabilities of $399,714 and $2,182,458 reported in the Liability Insurance and Workers’ Compensation Funds, respectively, at June 30, 2025, are based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that the liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.
Changes in the claims liability amounts during the fiscal years ended June 30, 2023 and June 30, 2024 are as follows:
Liability Workers' Total
Insurance Compensation Claims
Liability - June 30, 2023 $ 201,740 $ 1,944,132 $ 2,145,872 Current year claims 48,135 136,829 184,964
Changes in estimates 130,993 406,304 537,297
Claims payments (48,135) (136,829) (184,964)
Liability - June 30, 2024 $ 332,733 $ 2,350,436 $ 2,683,169 Current year claims $ 155,562 $ 186,512 $ 342,074
Changes in estimates 243,755 231,285 475,040
Claims payments (332,336) (585,775) (918,111)
Liability - June 30, 2025 $ 399,714 $ 2,182,458 $ 2,582,172 Due within one year $ 99,929 $ 545,614 $ 645,543
Due in more than one year 299,785 1,636,844 1,936,629
$ 399,714 $ 2,182,458 $ 2,582,172
Copies of CIPA’s annual financial statements may be obtained from its offices located at 366 San Miguel Drive, Suite 312, Newport Beach, CA 92660.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
85 Note 16 - Classification of Net Position
Governmental Business-type
Activities Activities Totals
Capital Assets $ 369,478,966 $ 35,888,890 $ 405,367,856 Less: Accumulated Depreciation (164,943,464) (17,592,530) (182,535,994) Add: Restricted cash in escrow 1,449,564 - 1,449,564
Less: Capital Accounts Payable and Retention Payable (2,410,363) (61,149) (2,471,512) Less: Subscriptions and Leases Payable (1,150,894) - -
Net Investment in Capital Assets 18,235,211 202,423,809 220,659,020 Restricted for
Other-Pension Trust 37,033,883 - 37,033,883
Net pension asset 822,513 - 822,513
Public Safety 704,506 704,506 -
Public Works-Street Maintenance and Improvements 7,278,009 7,278,009 - Public Works-Street Lighting 4,614,001 4,614,001 -
Public Works-Clean Air Act Programs 34,752 - 34,752
Public Works-Local Drainage Improvements 1,175,358 1,175,358 - Public Works-Community Develop. Block Grant 200,000 200,000 - Public Works-Other 213,866 213,866 -
Total - Public Works 13,515,986 13,515,986 -
Sanitary Sewer System 10,516,873 - 10,516,873
Recreation 13,968,840 13,968,840 -
Recreation-Open Space Improvements 57 - 57
Recreation-Facility and Service Enhancements 45,245 - 45,245 Total-Recreation 14,014,142 14,014,142 -
Low and Moderate Income Housing 88,019 - 88,019
Cable Television Equipment 889,535 889,535 -
Total Restricted 67,068,584 10,516,873 77,585,457
Unrestricted 75,842,101 75,842,101 -
Total Net Position $ 345,334,494 $ 28,752,084 $ 374,086,578 Government Wide Statement
of Net Position
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
86 The City’s Net Position at June 30, 2025 is summarized as follows:
Net Investment in Capital Assets – This net position amount represents capital assets, net of accumulated depreciation and reduced by outstanding debt attributed to acquisition, construction, or improvement of the assets.
Restricted for Public Safety – These funds are restricted for law enforcement purposes, supplementing but not supplanting other public safety funding.
Restricted for Public Works – Street Maintenance and Improvements – This restriction represents amounts received from State and Local governments and developers that are required to be used for the construction and maintenance of streets within the City.
Restricted for Public Works – Street Lighting – This restriction represents property tax amounts assessed for expenditures for streetlights, traffic signal maintenance and construction.
Restricted for Public Works – Local Drainage Improvements – These amounts received from developers are restricted for expenditures for master planned drainage projects.
Restricted for Public Works – Other Purposes – These amounts are restricted to support a variety of grant funded and special programs as designated by law, the grant terms, or administrative regulations.
Restricted for Sanitary Sewer System – These amounts received from system users are restricted for maintenance and capital expenditures for the City’s sanitary sewer system.
Restricted for Recreation – This restriction represents amounts required to be used for future Recreation and Park District operating and capital activities.
Restricted for Recreation – Open Space Improvements – This restriction represents amounts received from developers that are required to be used for Recreation and Park District open space use.
Restricted for Recreation – Facility and Service Enhancements – This restriction represents amounts received from grants or other funding that are required to be used for the support of Recreation and Park District facilities, programs and services.
Restricted for Other – Pension Trust – This restriction represents the balance of the Pension Trust, a tax-exempt, irrevocable pension trust designed to pre-fund retirement plan obligations.
Restricted for Other – Low and Moderate Income Housing – This restriction represents amounts received to the City from the Agency upon dissolution that are required to be used for the rehabilitation and/or replacement of low and moderate income housing within the City.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
87 Restricted for Other – Net Pension Asset – This restriction represents the Net Pension Asset for the Terminated Orange County Employees Retirement System.
Restricted for Other – Cable Television Equipment – These amounts are restricted to provide enhancements to the City’s equipment used for video PEG access services as designated by the terms of the cable franchise transfer agreement.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
88 Note 17 - Classifications of Fund Balances
The City has adopted the provisions of GASB Statement No. 54, “Fund Balance and Governmental Fund Type Definitions”. GASB 54 establishes fund balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The governmental fund statements conform to the new classification and are summarized as follows.
Recreation Nonmajor
General and Park Streets City Capital Governmental
Fund District Fund Fund Projects Fund Funds Totals
Nonspendable
Prepaids $ 22,156 $ 250 $ - $ - $ - $ 22,406
Notes Receivable 58,689 - - - 45,360 104,049
Inventory - 1,318 - - - 1,318
Total nonspendable 80,845 1,568 - - 45,360 127,773
Restricted -
Streets - - 7,050,832 - - 7,050,832
Local Drainage - - - - 1,175,358 1,175,358
Landscape Maintenance - - - - 213,865 213,865
Street Lighting - - - - 4,614,002 4,614,002
Cable Television Equipment - - - - 889,535 889,535
Clean Air Act Programs - - - - 34,752 34,752
Police - - - - 702,968 702,968
Low and Moderate Income Housing - - - - 42,658 42,658
Total restricted - - 7,050,832 - 7,673,138 14,723,970
Committed
Stabilization Agreement 10,329,235 - - - - 10,329,235
Captial Improvements - - - 14,652,471 - 14,652,471
Total committed 10,329,235 - 14,652,471 - 24,981,706 -
Assigned
Future Capital Improvements 8,950,000 - 52,560,654 - 61,510,654 - Advance to Other Funds - - 33,645,345 - 33,645,345 -
Pension Investment 4,500,000 - - - 4,500,000 -
Business Relocation Stabilization 2,500,000 - - - 2,500,000 - Budget Stabilization 2,000,000 - - - 2,000,000 -
Storm Drainage 2,304,320 - - - 2,304,320 -
Future Economic Development
Programs 1,931,665 - - - 1,931,665 -
Clean Fleet Transition 1,500,000 - - - 1,500,000 -
Public Safety Capital Improvement 600,000 - - - 600,000 - Business Continuity Plan 50,000 - - - - 50,000
Carryover Appropriations 610,728 - - - 610,728 -
Total assigned 24,946,713 - 86,205,999 - 111,152,712 -
Unassigned 2,079,301 (21,426,431) - - (19,347,130) -
Total fund balances $ 37,436,094 $ (21,424,863) $ 7,050,832 $ 100,858,470 $ 7,718,498 $ 131,639,031
The stabilization agreement amount of $10,329,235 presented as committed fund balance in the General Fund has been formally approved by the City Council and is for unforeseen situations (such as a temporary revenue interruption due to business activity or disaster). The amount is equal to 25% of the General Fund’s original annual operating budget for the upcoming fiscal year and may only be used should annual estimated revenues decrease by a minimum of 10 percent or annual expenditures are estimated to increase by over 10 percent. In addition to these variances in revenues or expenditures, it is further established that in order for these fund balance amounts to be expended such variances must create a situation in which the City’s ability to provide basic services (as defined by the City Council) is threatened. Further, City Council authorization is required for use of this amount.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
89 Note 18 - Contingent Liabilities
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the Federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. The City is a defendant in various other lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the City.
Note 19 - Joint Venture
On December 23, 1996, the West Cities Police Communications Joint Powers Authority (JPA) was created under a joint exercise of powers agreement. It was formed to consolidate law enforcement communications for the cities of Cypress, Los Alamitos and Seal Beach. The governing board consists of one member appointed from each participating agency. The approval of budget and assumption of financial obligations must be approved by all members. The participant contributions are City of Cypress 45.3%, City of Los Alamitos 24.4% and the City of Seal Beach 30.3%.
The purpose of the JPA is to save the participants some individual expense through the sharing of communication obligations. The JPA intends to utilize the personnel and resources of the member agencies to provide financial, legal, personnel, risk management and other services as needed. The City of Cypress provides the JPA with financial and human resources services. The City has no equity interest in the JPA and does not receive a share of the operating results. Accordingly, the assets and liabilities of the JPA are shown in the City’s Custodial Fund. Separate audited financial statements of the West Cities Police Communications Joint Powers Authority are available by contacting the City of Cypress, 5275 Orange Ave., Cypress, CA 90630.
Note 20 - Economic Assistance Agreement Tax Abatement
On November 27, 2017, the City Council adopted Ordinance No. 1171, approving a Third Amendment to a development agreement with a commercial landlord located in the City. The purpose of the amendment is to provide a sales tax reimbursement to the landlord in exchange for attracting and retaining a tenant who can provide significant employment opportunities to Cypress residents and increase sales tax revenue to the City.
To be eligible for a sales tax reimbursement the landlord was required to enter into a lease with a qualified tenant who could reasonably be expected to generate gross sales tax revenue to the City of at least $10 million over any 10-year period during the term of the lease.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
90 Effective January 1, 2018, the City pays a monthly sales tax reimbursement payment to the landlord, who in turn credits the amount toward the tenant’s lease. The payment amount is based on annual sales tax generated by the tenant as follows:
Annual Reimbursement
Annual Sales Tax Generated Payment to Landlord
$0-$699,999 $0
$700,000-$799,999 $360,000
$800,000 and up $450,000
If the sales tax generated falls below the $700,000 minimum annual threshold, the reimbursement payments are suspended until sales tax meets or exceeds the minimum annual threshold. The agreement also includes periodic cumulative review periods to ensure the City receives sufficient sales tax revenue to meet predefined minimum thresholds over defined time periods. If the sales tax received during these review periods does not meet the minimum threshold, the tenant is required to pay the City the amount of the shortfall in accordance with the following schedule:
Minimum Cumulative
Cumulative Review Period Threshold
January 1, 2018 - June 30, 2019 $1,500,000
July 1, 2019 - June 30, 2024 $5,000,000
July 1, 2024 - June 30, 2029 $5,000,000
During the fiscal year ended June 30, 2025, the landlord received $450,000 in economic assistance under this Third Amendment, and the minimum cumulative threshold was met.
Note 21 - Other Required Fund Disclosures
The Recreation and Park District Special Revenue Fund had a deficit fund balance of ($21,424,863) at June 30, 2025 due to outstanding advances payable to the City Capital Project Fund. The proceeds from these advances, totaling $33,645,345 at June 30, 2025, were used to pay for the reconstruction of Arnold Cypress Park, will be repaid at a rate of $2,000,000 annually and are scheduled to be fully paid off on June 30, 2044.
The Employees’ Benefit Internal Service Fund had a deficit net position of ($15,491,516) at June 30, 2025 primarily due to the net pension liability associated with the City’s CalPERS pension plans. The City has made all required annual contributions toward this long-term liability, and has restricted funds set aside in the form of a trust to reduce or offset the liability.
City of Cypress, California
Notes to Basic Financial Statements
June 30, 2025
91 Note 22 - Restatement
During fiscal year 2025, the City identified liabilities related to compensated absences, pension and OPEB, and the related deferred inflows and outflows for pension and OPEB that should not have been recorded within the Custodial Funds in the prior year. Accordingly, liabilities were overstated by $2,466,921 as of June 30, 2024 resulting in a restatement of the beginning net position. The effect of this correction is shown in the table below.
If these amounts had been properly excluded in the prior year, the change in net position in the prior year would have been adjusted from $235,749 to $457,086.
July 1, 2024,
As Previously Error July 1, 2024,
Reported Correction As Restated
Custodial Funds 2,040,834 $ $ 2,466,921 $ 4,507,755
Total Custodial Funds 2,040,834 $ 2,466,921 $ 4,507,755 $ Required Supplementary Information
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92 City of Cypress, California
Required Supplementary Information
Budgetary and Budgetary Accounting
Year Ended June 30, 2025
Budgets and Budgetary Accounting
A. Budgetary Control and Budgetary Accounting
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. The City follows these procedures in establishing the budgetary data reflected in the financial statements: After January 1, department heads prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes a summary of the proposed expenditures and financial resources of the City, as well as historical data for the preceding two fiscal periods. Prior to July 1, the budget is legally enacted through passage of an adopting resolution. All of the Governmental Funds have legally adopted budgets.
The City Manager is authorized to transfer budgeted amounts as follows: (1) Appropriations budgeted within a department or activity and capital outlay, may be transferred between accounts within the department; (2) Transfers of appropriations between departments and funds, and additional appropriation of fund balances may be made only by authority of the City Council. For budgeting purposes, the general fund is composed of several departments with budgetary control at the department level, while all other budgeted funds are considered a single department with budgetary control at the fund level. Formal budgetary integration is employed as a management control device during the fiscal year for governmental fund types. The budgets are adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts contained within this report are the original and final amended amounts, as approved by the City Council. No budgetary comparisons are presented for the Internal Service and Fiduciary funds.
B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds, and the Capital Projects Fund. Encumbrances outstanding at year-end do not constitute expenditures or liabilities.
Since unexpended and encumbered appropriations of the governmental funds automatically lapse at the end of the fiscal year, they are not included in reported expenditures and the authorization for expenditure must be reestablished through inclusion in the subsequent year’s appropriation. 93 City of Cypress, California
Required Supplementary Information
Budgetary and Budgetary Accounting
Year Ended June 30, 2025
C. Budgetary Comparison Schedules
The following are the budget comparison schedules for the General Fund, the Recreation and Park District Special Revenue Fund, and the Streets Special Revenue Fund.
The following funds had expenditures in excess of appropriations for the year ended June 30, 2025:
Variance
Positive
Appropriations Expenditures (Negative)
Non-major Governmental
Special Revenue Funds:
Narcotics Asset Seizure - $ $ 256,097 $ (256,097)
Low and Moderate Housing Assets - 1,421,708 (1,421,708) 94 City of Cypress, California
Required Supplementary Information
Budgetary Comparison Schedule – General Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Taxes 34,288,400 $ $ 34,288,400 $ 35,075,724 $ 787,324
Licenses and permits 952,330 1,053,430 1,062,915 9,485
Fines and forfeitures 244,000 244,000 258,859 14,859
Use of property 2,306,739 2,306,739 4,646,733 2,339,994 From other agencies 703,436 1,215,272 708,133 (507,139) Charges for services 4,048,783 4,356,383 4,295,291 (61,092) Other revenue 97,500 147,200 213,722 66,522
Total revenues 42,641,188 43,611,424 46,261,377 2,649,953 Expenditures
Current
General government - Legislative 959,372 1,046,169 1,021,513 24,656 General government - Administration 2,939,452 3,475,042 2,618,136 856,906 General government - Finance 2,547,189 2,763,189 2,241,600 521,589 Public safety - Police 23,515,025 23,875,038 21,461,796 2,413,242 Community development - Planning 1,695,147 2,706,428 1,802,907 903,521 Public works - Building 629,020 882,020 873,645 8,375
Public works - Engineering 2,420,908 2,411,868 1,989,803 422,065 Public works - Maintenance 6,331,666 6,457,680 5,780,950 676,730 Capital outlay - 183,386 - (183,386)
Debt service
Principal - 151,648 - (151,648)
Total expenditures 41,037,779 43,617,434 38,125,384 5,492,050 Excess of revenues
over expenditures 1,603,409 (6,010) 8,135,993 (2,842,097) Other Financing Sources (Uses)
Transfers in 1,019,113 1,752,356 1,544,637 207,719
Transfers out (2,845,678) (6,132,620) (4,782,768) 1,349,852 Issuance of subscription liabilities - 136,258 - (136,258) Issuance of leases (lessee) - - 47,128 (47,128)
Total other financing sources (uses) (1,826,565) (4,380,264) (3,054,745) 1,374,185 Net Change in Fund Balance $ (223,156) $ (4,386,274) 5,081,248 $ (1,467,912) Fund Balance - Beginning of Year 32,354,846
Fund Balance - End of Year $ 37,436,094
95 City of Cypress, California
Required Supplementary Information
Budgetary Comparison Schedule – Recreation and Park District Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Taxes $ 7,376,000 $ 7,376,000 $ 7,815,068 $ 439,068
From use of property 926,250 926,250 1,127,615 201,365
From other agencies 548,852 548,852 125,421 (423,431)
Charges for services 732,582 732,582 1,408,333 675,751
Other revenue - - 33,514 33,514
Total revenues 9,583,684 9,583,684 10,509,951 926,267
Expenditures
Current
Recreation 6,574,293 6,586,293 6,003,608 582,685
Capital outlay 1,572,500 25,266,903 22,163,164 3,103,739 Debt service
Principal - - 82,812 (82,812)
Interest and fiscal charges - - 608,696 (608,696)
Total expenditures 8,146,793 31,853,196 28,858,280 2,994,916 Excess of Revenues Over Expenditures 1,436,891 (22,269,512) (18,348,329) (2,068,649) Other Financing Sources (Uses)
Transfers out (186,240) (201,240) (170,582) 30,658
Total other financing sources (uses) (186,240) (201,240) (170,582) 30,658 Net Change in Fund Balance $ 1,250,651 $ (22,470,752) (18,518,911) $ (2,037,991) Fund Balance - Beginning of Year (2,905,952)
Fund Balance - End of Year $ (21,424,863)
96 City of Cypress, California
Required Supplementary Information
Budgetary Comparison Schedule – Streets
Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
From other agencies 4,122,082 $ $ 4,122,082 $ 3,987,130 $ (134,952) Charges for services 500 500 42,350 41,850
Use of property 260,000 260,000 340,980 80,980
Other revenue - 155,000 231,831 76,831
Total revenues 4,382,582 4,537,582 4,602,291 64,709
Expenditures
Current
Public works 4,000,000 4,270,925 3,899,528 371,397
Capital outlay 125,000 504,530 311,020 193,510
Total expenditures 4,125,000 4,775,455 4,210,548 564,907 Excess of Revenues Over Expenditures 257,582 (237,873) 391,743 (500,198) Other Financing Sources (Uses)
Transfers out (1,797,862) (3,224,604) (2,645,585) 579,019 Total other financing sources (uses) (1,797,862) (3,224,604) (2,645,585) 579,019 Net Change in Fund Balance $ (1,540,280) $ (3,462,477) (2,253,842) $ 78,821 Fund Balance - Beginning of Year 9,304,674
Fund Balance - End of Year $ 7,050,832
97 City of Cypress, California
Required Supplementary Information
Schedules of Proportionate Share in Net Pension Liability Year Ended June 30, 2025
Last Ten Fiscal Years (1)
Proportionate Proportionate
Reporting Proportionate Share of the Net Plan's Fiduciary Share of Date 2 Proportion of the Share of Net Pension Liability Net Position as a Aggregate as of Net Pension Pension Covered as a % of % of the Total Employer June 30, Liability/(Asset)* Liability/(Asset) Payroll Covered Payroll Pension Liability Contributions 2025 0.5723% $ 27,680,338 $ 6,819,050 405.9% 78.1% 2,856,314 2024 0.5607% 28,039,268 6,189,228 453.0% 76.2% 2,992,113 2023 0.5649% 26,433,257 5,866,594 450.6% 76.7% 3,613,771 2022 0.6929% 13,156,618 6,135,709 214.4% 85.7% 3,094,471 2021 0.5362% 22,615,628 6,072,109 372.5% 74.7% 2,980,733 2020 0.5219% 20,897,731 6,385,921 327.2% 75.9% 2,722,708 2019 0.5078% 19,136,711 6,863,694 278.8% 76.8% 2,418,263 2025 0.5151% $ 37,551,626 7,085,166 530.0% 78.1% 3,354,618 2024 0.5092% 38,058,614 $ 6,596,839 576.9% 76.2% 3,382,844 2023 0.5149% 35,382,213 6,228,738 568.0% 76.7% 5,468,129 2022 0.5579% 19,580,447 5,651,021 346.5% 82.1% 4,784,748 2021 0.4574% 30,471,506 5,590,681 545.0% 71.4% 3,927,236 2020 0.4457% 27,821,165 5,953,364 467.3% 72.5% 3,222,885 2019 0.4377% 25,683,654 5,823,413 441.0% 73.4% 2,986,119 2018 0.4392% 25,320,193 5,539,232 457.1% 72.7% 2,331,004 2017 0.4014% 21,996,187 5,634,190 390.4% 73.9% 2,149,038 2016 0.4440% 16,900,538 5,200,954 325.0% 79.0% 2,163,119 2025 -0.0210% $ (822,513) $ N/A - 119.3% N/A
2024 -0.0130% (641,475) N/A - 115.2% N/A
2023 0.0010% 61,016 N/A - 98.7% N/A
2022 -0.0050% (103,379) N/A - 102.2% N/A
2021 0.0040% 185,117 N/A - 96.0% N/A
2020 0.0050% 262,415 N/A - 94.2% N/A
2019 0.0700% 408,781 N/A - 90.8% N/A
Benefit Changes: None
Changes of Assumptions: None
*RSI was restated to conform with current presentation
1 The City's CalPERS Miscellaneous Plan was previously administered and reported as an agent multiple-employer plan, however, multiple-employee because the number of active members in the plan fell below 100, it is now administered as a cost-sharing plan, effective with the reporting for the fiscal year ended June 30, 2019.
The Cypress Recreation and Park District (District) withdrew from OCERS in October 2000. At that time, OCERS did not have a policy addressing how the District's liability would be funded, nor was a liability recognized by the District. The District and OCERS entered into a Withdrawing Employer and Continuing Contribution Agreement on October 15, 2018, therefore, fiscal year 2018-19 is the first year reporting the OCERS pension liability/(asset).
CalPERS Miscellaneous Cost-Sharing, Multiple Employer Pension Plan CalPERS Safety Cost-Sharing, Multiple Employer Pension Plan Terminated Orange County Employees Retirement System Plan (OCERS) 98 City of Cypress, California
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios Year Ended June 30, 2025
Last Ten Fiscal Years (1)
CalPERS Miscellaneous Plan
2018 2017 2016
Total Pension Liability
Service cost 1,241,908 $ $ 1,042,402 $ 983,336
Interest on total pension liability 5,374,496 5,227,927 4,985,622 Differences between expected and actual experience (726,719) 177,725 (249,155) Changes in assumptions 4,509,183 (1,246,317) -
Changes in benefits - - -
Benefit payments, including refunds of employee contributions (3,538,721) (3,108,674) (2,909,007) Net Change in Total Pension Liability 6,860,147 3,339,380 1,564,479 Total Pension Liability - Beginning of Year 72,533,703 69,194,323 67,629,844 Total Pension Liability - End of Year (a) 79,393,850 72,533,703 69,194,323 Plan Fiduciary Net Position
Contributions - employer 1,298,683 1,242,386 997,118
Contributions - employee 552,260 622,404 529,141
Net investment income 6,191,774 274,070 1,253,565
Benefit payments (3,538,721) (3,108,674) (2,909,007)
Administrative expense (81,255) (34,153) (63,073)
Plan to plan resource movement - - (406)
Net Change in Plan Fiduciary Net Position 4,422,741 (1,003,967) (192,662) Plan Fiduciary Net Position - Beginning of Year 55,035,012 56,038,979 56,231,641 Plan Fiduciary Net Position - End of Year (b) 59,457,753 55,035,012 56,038,979 Net Pension Liability - Ending (a)-(b) 19,936,097 17,498,691 13,155,344 Plan fiduciary net position as a percentage of the
total pension liability 74.89% 75.88% 80.99%
Covered Payroll 6,994,962 7,139,555 6,539,007
Net pension liability as percentage of
covered payroll 285.01% 245.09% 201.18%
Notes to Schedule:
Benefit Changes: There were no changes to benefits.
Changes in Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan adminstrative expense.) (1) Historical information is required only for measurement periods for which GASB 68 is applicable. The fiscal year ended June 30, 2015 was the first year of implementation.
(1) The CalPERS Miscellaneous Plan was previously administered and reported as an agent multiple-employer plan, however, because the number of active members in the plan fell below 100, it is now administered as a cost-sharing multiple-employer plan, effective with the reporting for the fiscal year ended June 30, 2019.
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99 City of Cypress, California
Required Supplementary Information
Schedules of Plan Contributions
Year Ended June 30, 2025
Last Ten Fiscal Years (1)
Fiscal Year Actuarially Contriubution Contribution as a Ended Determined Actual Employer Deficiency/ Covered % of Covered June 30, Contribution Contributions (Excess) Payroll Payroll 2025 $ 3,164,869 $ (3,164,869) $ 7,174,449 - $ 44.1%
2024 2,767,382 (2,767,382) 6,819,050 - 40.6%
2023 2,718,424 (2,718,424) 6,189,228 - 43.9%
2022 2,447,524 (2,447,524) 5,866,594 - 41.7%
2021 2,230,654 (2,230,654) 6,135,709 - 36.4%
2020 2,002,390 (2,002,390) 6,072,109 - 33.0%
2019 1,729,721 (1,729,721) 6,385,921 - 27.1%
2018 1,487,869 (1,487,869) 6,863,694 - 21.7%
2017 1,298,683 (1,298,683) 6,994,942 - 18.6%
2016 1,244,868 (1,244,868) 7,139,555 - 17.4%
2025 $ 4,429,976 $ (4,429,976) $ 6,911,681 - $ 64.1%
2024 4,043,188 (4,043,188) 7,085,166 - 57.1%
2023 3,869,536 (3,869,536) 6,596,839 - 58.7%
2022 3,558,957 (3,558,957) 6,228,738 - 57.1%
2021 3,130,711 (3,130,711) 5,651,021 - 55.4%
2020 2,821,054 (2,821,054) 5,590,681 - 50.5%
2019 2,546,099 (2,546,099) 5,953,364 - 42.8%
2018 2,222,915 (2,222,915) 5,823,413 - 38.2%
2017 1,967,405 (1,967,405) 5,539,232 - 35.5%
2016 1,807,579 (1,807,579) 5,634,190 - 32.1%
2025 $ - $ - $ - $ N/A -
2024 - - - - N/A
2023 595,600 (595,600) - - N/A
2022 - - - - N/A
2021 - - - - N/A
2020 - - - - N/A
2019 739,966 (739,966) - - N/A
1 In accordance with the Withdrawing Employer and Continuing Contribution Agreement between the Cypress Recreation and Park District (District) and OCERS, OCERS will recalculate the District's unfunded accrued actuarial liability commencing December 31, 2020 and every three years thereafter.
The next UAAL payment is due on or before December 31, 2026. Refer to the notes to the basic financial statements.
CalPERS Miscellaneous Cost-Sharing, Multiple Employer Pension Plan CalPERS Safety Cost-Sharing, Multiple Employer Pension Plan Terminated Orange County Employees Retirement System Plan (OCERS) 100
City of Cypress, California
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios Year Ended June 30, 2025
Last Ten Fiscal Years (1)
2025 2024 2023
Total OPEB Liability:
Service cost $ 377,233 $ 388,301 $ 362,667
Interest on the total OPEB liability 375,047 359,579 323,301 Actual and expected experience difference (910,412) - (211,113) Changes in assumptions (631,448) (117,938) 183,206
Changes in benefit terms - - -
Benefit payments, including implicit subsidy (466,191) (508,262) (508,262) Net Change in Total OPEB Liability (1,255,771) 121,680 163,865 Total OPEB Liability - Beginning of Year 9,300,612 9,178,932 9,015,067 Total OPEB Liability - End of Year (a) 8,044,841 $ 9,300,612 $ 9,178,932 $ Plan fiduciary net position as a percentage of the
Total OPEB liability 0.00% 0.00% 0.00%
Covered-employee payroll 16,670,902 $ $ 16,605,071 $ 14,021,323 Total OPEB liability as percentage of
covered- employee payroll 48.26% 56.01% 65.46%
Notes to Schedule:
Benefit Changes:
Changes in Assumptions: The discount rate, which is based on the Bond Buyer 20-year bond, changed as follows:
Fiscal year ended June 30, 2025 - The discount rate was increased from 3.97% to 5.20% Fiscal year ended June 30, 2024 - The discount rate was increased from 3.86% to 3.97% Fiscal year ended June 30, 2023 - The discount rate was increased from 3.54% to 3.86% Fiscal year ended June 30, 2022 - The discount rate was increased from 2.16% to 3.54% Fiscal year ended June 30, 2021 - The discount rate was decreased from 2.20% to 2.16% Fiscal year ended June 30, 2020 - The discount rate was decreased from 3.50% to 2.20% Fiscal year ended June 30, 2019 - The discount rate was decreased from 3.90% to 3.50% (1) Historical information is required only for measurement periods for which GASB 75 is applicable.
The fiscal year ended June 30, 2018 was the first year of implementation.
GASB Statement No. 75 also requires the presentation of a 10-year schedule of contributions if an actuarially determined contribution is calculated. The City's plan is not funded by an OPEB trust; therefore, an actuarially determined contribution is not calculated nor presented here. 101
City of Cypress, California
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios Year Ended June 30, 2025
Last Ten Fiscal Years (1)
2022 2021 2020 2019 2018
$ 411,807 $ 382,033 $ 370,906 $ 293,425 $ 304,903
232,699 227,512 232,807 330,023 306,496
428,577 2,850 (155,120) 63,400 10,351
(593,595) (1,671,292) 1,491,035 447,917 (324,881)
- - - - -
(460,068) (562,914) (394,969) (397,959) (329,123)
(10,354) (1,592,037) 1,544,659 736,806 (32,254)
10,617,458 10,607,104 9,072,799 8,335,993 8,368,247
$ 10,607,104 9,015,067 $ 10,617,458 $ 9,072,799 $ 8,335,993 $
0.00% 0.00% 0.00% 0.00% 0.00%
$ 14,464,271 $ 13,846,871 $ 14,180,802 $ 14,518,971 $ 14,482,504
62.33% 76.60% 74.87% 62.49% 57.56%
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Supplemental Schedules
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102
City of Cypress, California
Budgetary Comparison Schedules for Other Major Governmental Fund June 30, 2025
Budgetary comparison schedules are presented as part of the basic financial statements for the General Fund and all Major Special Revenue Funds as provided for by GASB 34. The budgetary comparison schedules for the remaining Major Fund is presented to aid in additional analysis and is not a required part of the basic financial statements. The other Major Fund is a follows:
City Capital Projects – To account for construction of major transportation infrastructure and public facilities. 103
City of Cypress, California
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - City Capital Projects Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues
Use of property 2,000,000 $ $ 2,000,000 $ 3,649,010 $ 1,649,010 Other revenue - 20,000 - (20,000)
Total revenues 2,000,000 2,020,000 3,649,010 1,629,010
Expenditures
Current
Public works 2,600,000 3,534,180 3,163,007 371,173
Capital outlay 2,970,000 6,033,108 1,676,626 4,356,482
Total expenditures 5,570,000 9,567,288 4,839,633 4,727,655 Excess (deficiency) of revenues
over expenditures (3,570,000) (7,547,288) (1,190,623) (3,098,645) Other Financing Uses
Transfers in 3,750,000 6,059,672 4,495,836 (1,563,836)
Net Change in Fund Balance $ 180,000 $ (1,487,616) 3,305,213 $ (4,662,481) Fund Balance - Beginning of Year 97,553,257
Fund Balance - End of Year $ 100,858,470
104
City of Cypress, California
Non-Major Governmental Funds
June 30, 2025
The combining statements for Nonmajor Governmental Funds represent a consolidation of the information for specific funds contained in the Supplementary Financial Statements. These statements, along with the budgetary comparison schedules, summarize the financial information contained in the other Special Revenue Funds.
Special Revenue Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues required to be set aside in accordance with law or administrative regulation for a specific purpose. A brief description of each of the City’s Special Revenue Funds follows:
Local Drainage – To account for developer receipts and expenditures for master planned drainage projects.
Stanton Channel Maintenance District – To account for a special assessment for maintenance of the Stanton Channel landscaped berm in the business park.
Lighting District – To account for property taxes assessed specifically for expenditures for city street lights, traffic signal maintenance and construction.
CATV PEG Grant - To account for monies received from the City’s cable franchise transfer agreement that are restricted to use for costs associated with the City’s video PEG access services.
AB 2766 – To account for receipts and expenditures of money funded under AB 2766 legislation for emission reduction.
Traffic Safety – To account for receipts of vehicle code violation fines and expenditures for traffic safety.
Supplemental Law Enforcement – To account for receipts and expenditures of money funded under AB 3229 legislation for law enforcement.
Narcotics Asset Seizure – To account for funds seized by the Police Department during narcotic investigations and allocated to the City.
Low and Moderate Housing Assets – To account for housing assets transferred to the City upon the dissolution of the Redevelopment Agency on February 1, 2012.
105
City of Cypress, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Stanton
Channel
Local Maintenance Lighting
Drainage District District
Assets
Cash and investments $ 1,167,154 $ 223,525 $ 5,091,052
Receivables
Accounts - - -
Taxes - - 23,052
Notes, net of allowance - - -
Accrued interest 8,204 - 38,325
Total assets $ 1,175,358 $ 223,525 $ 5,152,429
Liabilities and Fund Balances
Liabilities
Accounts payable and other
accrued liabilities $ - $ 9,659 $ 397,828
Unearned revenues - - 140,600
Due to other funds - - -
Total liabilities - 9,659 538,428
Fund Balances
Nonspendable - - -
Restricted 1,175,358 213,866 4,614,001
Unassigned - - -
Total fund balances 1,175,358 213,866 4,614,001
Total liabilities and fund balances $ 1,175,358 $ 223,525 $ 5,152,429 Special Revenue Funds
106
City of Cypress, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Assets
Cash and investments
Receivables
Accounts
Taxes
Notes, net of allowance
Accrued interest
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable and other
accrued liabilities
Unearned revenues
Due to other funds
Total liabilities
Fund Balances
Nonspendable
Restricted
Unassigned
Total fund balances
Total liabilities and fund balances
CATV Traffic
PEG Grant AB 2766 Safety
$ 875,031 $ 17,529 $ -
13,698 17,176 4,184
806 - -
- - -
- 47 -
$ 889,535 $ 34,752 $ 4,184
$ - $ - $ -
- - -
- - 4,184
- - 4,184
- - -
889,535 34,752 -
- - -
889,535 34,752 -
$ 889,535 $ 34,752 $ 4,184
Special Revenue Funds
107
City of Cypress, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Assets
Cash and investments
Receivables
Accounts
Taxes
Notes, net of allowance
Accrued interest
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable and other
accrued liabilities
Unearned revenues
Due to other funds
Total liabilities
Fund Balances
Nonspendable
Restricted
Unassigned
Total fund balances
Total liabilities and fund balances
Low &
Supplemental Narcotics Moderate
Law Asset Housing
Enforcement Seizure Assets
$ - $ 699,460 $ 48,257
25,415 13,330 -
- - -
- - 45,360
569 8,381 327
$ 25,984 $ 721,171 $ 93,944
$ 4,150 $ 4,874 $ 5,925
- - -
21,834 13,330 -
25,984 18,204 5,925
- - 45,360
- 702,967 42,659
- - -
- 702,967 88,019
$ 25,984 $ 721,171 $ 93,944
Special Revenue Funds
108
City of Cypress, California
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
Assets
Cash and investments
Receivables
Accounts
Taxes
Notes, net of allowance
Accrued interest
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable and other
accrued liabilities
Unearned revenues
Due to other funds
Total liabilities
Fund Balances
Nonspendable
Restricted
Unassigned
Total fund balances
Total liabilities and fund balances
Total
Nonmajor
Governmental
Funds
$ 8,122,008
73,803
23,858
45,360
55,853
$ 8,320,882
$ 422,436
140,600
39,348
602,384
45,360
7,673,138
-
7,718,498
$ 8,320,882
109
City of Cypress, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2025
Stanton
Channel
Local Maintenance Lighting
Drainage District District
Revenues
Taxes - $ $ 1,774,844 - $
From other agencies - - 6,130
Use of property 50,001 - 256,435
Fines and forfeitures - - -
Charges for services - 102,766 -
Other revenue - - 41,569
Total revenues 50,001 102,766 2,078,978
Expenditures
Current
Public safety - - -
Community development - - -
Public works - 70,794 1,042,396
Capital outlay - - 2,272,477
Total expenditures - 70,794 3,314,873
Excess (deficiency) of revenue
over expenditures 50,001 31,972 (1,235,895)
Other Financing Uses
Transfers out - (10,507) (156,359)
Gain (loss) on sale of land held for resale - - -
Issuance of subscription liabilities - - -
Total other financing uses - (10,507) (156,359)
Net Change in Fund Balances 50,001 21,465 (1,392,254)
Fund Balance - Beginning of Year 1,125,357 192,401 6,006,255 Fund Balance - End of Year 1,175,358 $ 213,866 $ 4,614,001 $ Special Revenue Funds
110
City of Cypress, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2025
Revenues
Taxes
From other agencies
Use of property
Fines and forfeitures
Charges for services
Other revenue
Total revenues
Expenditures
Current
Public safety
Community development
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenue
over expenditures
Other Financing Uses
Transfers out
Gain (loss) on sale of land held for resale
Issuance of subscription liabilities
Total other financing uses
Net Change in Fund Balances
Fund Balance - Beginning of Year
Fund Balance - End of Year
CATV Traffic
PEG Grant AB 2766 Safety
$ 61,451 $ - $ -
65,773 - -
101 - -
- - 65,439
- - -
- - -
65,874 61,451 65,439
- - -
- - -
- - -
- - -
- - -
65,874 61,451 65,439
- (18,270) (65,439)
- - -
- - -
- (18,270) (65,439)
65,874 43,181 -
(31,122) 846,354 -
$ 34,752 889,535 $ - $
Special Revenue Funds
111
City of Cypress, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2025
Revenues
Taxes
From other agencies
Use of property
Fines and forfeitures
Charges for services
Other revenue
Total revenues
Expenditures
Current
Public safety
Community development
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenue
over expenditures
Other Financing Uses
Transfers out
Gain (loss) on sale of land held for resale
Issuance of subscription liabilities
Total other financing uses
Net Change in Fund Balances
Fund Balance - Beginning of Year
Fund Balance - End of Year
Low &
Supplemental Narcotics Moderate
Law Asset Housing
Enforcement Seizure Assets
$ - $ - $ -
- 194,663 -
55,278 3,067 15,810
- - -
- - -
53,787 - 1,950
109,065 197,730 17,760
209,522 197,730 -
- - 11,737
- - -
256,097 - -
465,619 197,730 11,737
(356,554) - 6,023
(564,915) - -
- - (1,421,708)
256,097 - -
(308,818) - (1,421,708)
(665,372) - (1,415,685)
1,368,339 - 1,503,704
$ 702,967 - $ 88,019 $
Special Revenue Funds
112
City of Cypress, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2025
Revenues
Taxes
From other agencies
Use of property
Fines and forfeitures
Charges for services
Other revenue
Total revenues
Expenditures
Current
Public safety
Community development
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenue
over expenditures
Other Financing Uses
Transfers out
Gain (loss) on sale of land held for resale
Issuance of subscription liabilities
Total other financing uses
Net Change in Fund Balances
Fund Balance - Beginning of Year
Fund Balance - End of Year
Total
Nonmajor
Governmental
Funds
$ 1,836,295
266,566
380,692
65,439
102,766
97,306
2,749,064
407,252
11,737
1,113,190
2,528,574
4,060,753
(1,311,689)
(815,490)
(1,421,708)
256,097
(1,981,101)
(3,292,790)
11,011,288
$ 7,718,498
113
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Local Drainage Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of property 45,000 $ $ 45,000 $ 50,001 $ 5,001
Total revenues 45,000 45,000 50,001 5,001
Excess (deficiency) of revenues
over expenditures $ 45,000 $ 45,000 50,001 $ (5,001)
Fund Balance - Beginning of Year 1,125,357
Fund Balance - End of Year $ 1,175,358
114
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Stanton Channel Maintenance District Special Revenue Fund Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Charges for service $ 101,285 $ 101,285 $ 102,766 $ 1,481 Expenditures
Current
Public works 108,251 108,251 70,794 37,457
Excess (deficiency) of revenues
over expenditures (6,966) (6,966) 31,972 (38,938)
Other Financing Uses
Transfers out (16,238) (16,238) (10,507) 5,731
Excess (deficiency) of revenues
over expenditures and
other financing uses $ (23,204) $ (23,204) 21,465 $ (33,207) Fund Balance - Beginning of Year 192,401
Fund Balance - End of Year $ 213,866
115
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Lighting District Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes 1,689,600 $ $ 1,689,600 $ 1,774,844 $ 85,244
From other agencies 6,300 6,300 6,130 (170)
Use of property 200,000 200,000 256,435 56,435
Other revenue 10,000 10,000 41,569 31,569
Total revenues 1,905,900 1,905,900 2,078,978 173,078
Expenditures
Current
Public works 1,242,750 1,242,750 1,042,396 200,354
Capital outlay 2,375,000 4,218,070 2,272,477 1,945,593
Total expenditures 3,617,750 5,460,820 3,314,873 1,945,593 Excess (deficiency) of revenues
over expenditures (1,711,850) (3,554,920) (1,235,895) (2,319,025) Other Financing Uses
Transfers out (186,413) (186,413) (156,359) 30,054
Excess (deficiency) of revenues
over expenditures and
other financing uses $ (1,898,263) $ (3,741,333) (1,392,254) $ (2,288,971) Fund Balance - Beginning of Year 6,006,255
Fund Balance - End of Year $ 4,614,001
116
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Cable TV PEG Grant Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes 72,000 $ $ 72,000 $ 61,451 $ (10,549)
Other Financing Uses
Transfers out - (35,000) (18,270) 16,730
Excess (deficiency) of revenues
over expenditures and
other financing uses 72,000 $ 37,000 $ 43,181 27,279 $
Fund Balance - Beginning of Year 846,354
Fund Balance - End of Year 889,535 $
117
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual AB 2766 Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of other property - $ $ - $ 101 $ 101
From other agencies 66,500 66,500 65,773 (727)
Total revenues 66,500 66,500 65,874 (626)
Other Financing Uses
Transfers out (32,100) (32,100) - 32,100
Excess (deficiency) of revenues
over expenditures and
other financing uses 34,400 $ 34,400 $ 65,874 32,726 $
Fund Balance - Beginning of Year (31,122)
Fund Balance - End of Year 34,752 $
118
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Traffic Safety Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Fines and forfeitures 68,600 $ $ 68,600 $ 65,439 $ (3,161) Other Financing Uses
Transfers out (68,600) (68,600) (65,439) 3,161
Excess (deficiency) of revenues
over expenditures and
other financing uses - $ - $ - 6,322 $
Fund Balance - Beginning of Year -
Fund Balance - End of Year - $
119
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Supplemental Law Enforcement Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of property 500 $ $ 500 $ 3,067 $ 2,567
From other agencies 188,000 197,250 194,663 (2,587)
Total revenues 188,500 197,750 197,730 (20)
Expenditures
Current
Public safety 188,500 197,750 197,730 20
Excess (deficiency) of revenues
over expenditures - - - -
Fund Balance - Beginning of Year -
Fund Balance - End of Year $ -
120
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Narcotics Asset Seizure Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
From use of property 21,000 $ $ 21,000 $ 55,278 $ 34,278 Other revenue 20,000 20,000 53,787 33,787
Total revenues 41,000 41,000 109,065 68,065
Expenditures
Current
Public safety 334,052 342,318 209,522 132,796
Capital Outlay - 256,097 - (256,097)
Total expenditures 334,052 342,318 465,619 (123,301)
Excess (deficiency) of revenues
over expenditures (293,052) (301,318) (356,554) 55,236
Other Financing Uses
Transfers out (268,930) (756,173) (564,915) 191,258
Issuance of subscription liabilities - 256,097 - (256,097) Total other financing uses (268,930) (756,173) (308,818) (64,839) Excess (deficiency) of revenues
over expenditures and
other financing uses $ (561,982) $ (1,057,491) (665,372) $ (9,603) Fund Balance - Beginning of Year 1,368,339
Fund Balance - End of Year $ 702,967
121
City of Cypress, California
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Low and Moderate Housing Assets Special Revenue Fund
Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Use of property - $ $ - $ 15,810 $ 15,810
Other revenue 1,000 1,000 1,950 950
Total revenues 1,000 1,000 17,760 16,760
Expenditures
Current
Community development 40,596 49,896 11,737 38,159
Excess (deficiency) of revenues
over expenditures (39,596) (48,896) 6,023 (54,919)
Other Financing Uses
Gain (loss) on sale of land held for resale - - (1,421,708) (1,421,708) Total other financing uses - - (1,421,708) (1,421,708)
Excess (deficiency) of revenues
over expenditures and
other financing uses (39,596) $ (48,896) $ (1,415,685) (1,476,627) $ Fund Balance - Beginning of Year 1,503,704
Fund Balance - End of Year $ 88,019
122
City of Cypress, California
Internal Service Funds
June 30, 2025
The Internal Service Funds are used to finance and account for goods and services provided by one City department to other City departments on a cost-reimbursement basis, including depreciation.
Central Services – To account for the costs of the strategic technology plan, building maintenance, vehicle and equipment maintenance, print production, and accumulated equipment replacement funds.
Recreation District Central Services – To account for the costs of building maintenance, vehicle and equipment maintenance, and accumulated equipment replacement funds for the Recreation District.
Employees’ Benefit – To account for employee fringe benefits.
Liability Insurance – To account for the cost of the City’s public liability/risk management program.
Workers’ Compensation Insurance – To account for the cost of the City’s workers’ compensation insurance program.
123
City of Cypress, California
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
Recreation
District
Central Central Employees' Liability Workers'
Services Services Benefit Insurance Compensation Total
Assets
Current Assets
Cash and investments 21,684,413 $ $ 782,232 $ 7,541,463 $ 2,037,855 $ 3,678,912 $ 35,724,875 Restricted cash and investments - - 37,033,883 - - 37,033,883 Receivables
Accounts 127 - 261,559 - - 261,686
Accrued interest - - 39,796 - - 39,796
Prepaid items 239,372 - 8,361 - - 247,733
Inventory 6,046 - - - - 6,046
Total current assets 21,929,958 782,232 44,885,062 2,037,855 3,678,912 73,314,019 Noncurrent Assets
Construction in Progress 513,389 - - - - 513,389
Net pension asset - - 822,513 - - 822,513
Equipment (net) 3,318,919 305,775 - - - 3,624,694
Subscription assets (net) 795,582 - - - - 795,582
Total non-current assets 4,627,890 305,775 822,513 - - 5,756,178 Total assets 26,557,848 1,088,007 45,707,575 2,037,855 3,678,912 79,070,197 Deferred Outflows of Resources
Deferred amount from PERS pension plans - - 19,134,549 - - 19,134,549 Deferred amount from OPEB - - 291,137 - - 291,137
Deferred amount from OCERS pension plan - - 85,329 - - 85,329 Total deferred outflows of resources - 19,511,015 - - 19,511,015 - Liabilities
Current Liabilities
Accounts payable and other accrued liabilities 240,412 - 46,915 - 18,112 305,439 Subscriptions 227,628 - - - - 227,628
Compensated absences - - 651,052 - - 651,052
Accrued claims and judgments - - - 99,929 545,614 645,543 Total OPEB liability - - 488,289 - - 488,289
Total current liabilities 468,040 1,186,256 - 99,929 563,726 2,317,951 Noncurrent liabilities
Subscriptions payable 436,983 - - - - 436,983
Compensated absences - 1,953,154 - - 1,953,154 -
Accrued claims and judgments - - - 299,785 1,636,844 1,936,629 Total OPEB liability - 7,556,552 - - 7,556,552 -
Net pension liability - 65,231,964 - - 65,231,964 -
Total noncurrent liabilities 436,983 74,741,670 - 299,785 1,636,844 77,115,282 Total liabilities 905,023 75,927,926 - 399,714 2,200,570 79,433,233 Deferred Inflows of Resources
Deferred amount from PERS pension plans - 1,715,554 - - 1,715,554 - Deferred amount from OCERS pension plan - - 361,231 - - 361,231 Deferred amount from OPEB - 2,705,395 - - 2,705,395 -
Total deferred inflows of resources - 4,782,180 - - 4,782,180 - Net Position
Net investment in capital assets 3,963,279 305,775 - - 4,269,054 - Restricted for PARS trust - 37,033,883 - - 37,033,883 - Restricted for Net Pension Asset - - 822,513 - - 822,513 Unrestricted 21,689,546 782,232 (53,347,912) 1,638,141 1,478,342 (27,759,651) Total net position $ 25,652,825 $ 1,088,007 $ (15,491,516) $ 1,638,141 $ 1,478,342 $ 14,365,799 124
City of Cypress, California
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
Year Ended June 30, 2025
Recreation
District
Central Central Employees' Liability Workers'
Services Services Benefit Insurance Compensation Total
Operating Revenues
Charges for services 3,965,359 $ $ 55,800 $ 15,197,971 $ 666,500 $ 802,087 $ 20,687,717 Other revenue 386 1,260,144 - 13,578 152,516 1,426,624
Total operating revenues 3,965,745 55,800 16,458,115 680,078 954,603 22,114,341 Operating Expenses
Personnel services 1,290,246 - - - 67,719 1,357,965
Contractual services 234,214 5,611 16,088,631 182,681 - 16,511,137 Supplies and other services 1,311,856 4,762,993 - 574,416 264,805 6,914,070 Claim payments and changes in estimates - - 399,317 - 166,796 566,113 Depreciation/amortization 1,001,523 71,749 - - 1,073,272 - Total operating expenses 3,837,839 77,360 20,851,624 973,733 682,001 26,422,557 Operating Income (Loss) 127,906 (21,560) (4,393,509) (293,655) 272,602 (4,308,216) Nonoperating Revenues (Expenses)
Interest income (expense) (11,141) 3,767,043 - - 3,755,902 - Gain (loss) on disposal of equipment 17,328 - - - - 17,328 Total non-operating revenues (expenses) 6,187 3,767,043 - - 3,773,230 - Income (Loss) before Transfers 134,093 (21,560) (626,466) (293,655) 272,602 (534,986) Transfers
Transfers in 703,370 20,582 1,650,000 - 2,373,952 -
Total transfers 703,370 20,582 1,650,000 - 2,373,952 -
Change in Net Position 837,463 (978) 1,023,534 (293,655) 272,602 1,838,966 Net Position - Beginning of Year 24,815,362 1,088,985 (16,515,050) 1,931,796 1,205,740 12,526,833 Net Position - End of Year $ 25,652,825 $ 1,088,007 $ 1,638,141 (15,491,516) $ $ 1,478,342 $ 14,365,799 125
City of Cypress, California
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2025
Recreation
District
Central Central Employees' Liability Workers'
Services Services Benefit Insurance Compensation Total
Operating Activities
Cash received from users 3,965,618 $ $ 55,800 $ 16,419,986 $ 680,078 $ 954,603 22,076,085 Cash payments to suppliers for goods and services (1,296,810) (5,611) (4,759,549) (906,752) (599,312) (7,568,034) Cash payments to employees (1,524,460) (11,409,387) - (250,400) - (13,184,247) Net Cash Provided by Operating Activities 1,144,348 50,189 251,050 (226,674) 104,891 1,323,804 Noncapital Financing Activities
Transfers in 703,370 20,582 1,650,000 - 2,373,952 -
Net Cash Provided by Noncapital Financing Activities 703,370 20,582 1,650,000 - 2,373,952 - Capital and Related Financing Activities
Proceeds from disposal of capital assets 17,328 - - - - 17,328 Acquisition of capital assets (1,676,935) (26,286) - - (1,703,221) - Interest payments (11,141) - - - (11,141) -
Net Cash (Used) by Capital and Related Financing Activities (1,670,748) (26,286) - - (1,697,034) - Investing Activities
Interest on investments - 3,783,858 - - 3,783,858 -
Net Cash Provided by Investing Activities - 3,783,858 - - 3,783,858 - Increase in Cash and Cash Equivalents 176,970 44,485 5,684,908 (226,674) 104,891 5,784,580 Cash and Cash Equivalents - Beginning of Year 21,507,443 737,747 38,890,438 2,264,529 3,574,021 66,974,178 Cash and Cash Equivalents - End of Year $ 21,684,413 $ 782,232 $ 44,575,346 $ 2,037,855 $ 3,678,912 $ 72,758,758 Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities
Operating income (loss) $ 127,906 $ (21,560) $ (4,393,509) $ (293,655) $ 272,602 (4,308,216) Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation/amortization 1,001,523 71,749 - - 1,073,272 - Changes in assets and liabilities:
Accounts receivable decreased (increased) (127) (38,129) - - (38,256) - Prepaid items decreased (increased) (108,953) - 509 - (108,444) - Inventory decreased (increased) (1,270) - - - - (1,270) Deferred outflows decreased (increased) - 7,234,929 - - 7,234,929 - Accounts payable increased (decreased) 125,269 - 2,935 - 268 128,472 Insurance claims payable increased (decreased) - - - 66,981 (167,979) (100,998) Accrued retirees' health payable increased (decreased) - (1,255,772) - - (1,255,772) - Accrued leave payable increased (decreased) - - 15,968 - - 15,968 Accrued pension liability increased (decreased) - (1,046,956) - - (1,046,956) - Deferred inflows increased (decreased) - (268,925) - - (268,925) - Total adjustments 1,016,442 71,749 4,644,559 66,981 (167,711) 5,632,020 Net Cash Provided (Used) by Operating Activities $ 1,144,348 $ 50,189 $ 251,050 $ (226,674) $ 104,891 $ 1,323,804 Statistical Section
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126
City of Cypress, California
Statistical Section
Year Ended June 30, 2025
This part of the City of Laguna Hills’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.
Operating Information
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
Note: The City of Cypress did not have General Bonded Debt Outstanding or Pledged Revenue during the Fiscal Year Ended June 30, 2025.
2025 2024 2023 2022
GOVERNMENTAL ACTIVITIES
Net investment in capital assets $ 200,974,245 $ 182,784,606 $ 170,286,779 $ 172,804,367 Restricted for:
Debt service - - - -
Specific projects and programs 67,068,584 64,540,657 51,055,320 40,650,390 Total restricted 67,068,584 64,540,657 51,055,320 40,650,390 Unrestricted 77,291,665 91,753,910 109,374,298 95,515,524 Total governmental activities net position $ 345,334,494 $ 339,079,173 $ 330,716,397 $ 308,970,281
BUSINESS-TYPE ACTIVITIES
Net investment in capital assets $ 18,235,211 $ 18,490,199 $ 18,871,533 $ 18,876,495 Restricted for:
Specific projects and programs 10,516,873 9,090,674 7,599,979 6,638,371 Total business-type activities net position $ 28,752,084 $ 27,580,873 $ 26,471,512 $ 25,514,866
TOTAL GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES
Net investment in capital assets $ 219,209,456 $ 201,274,805 $ 189,158,312 $ 191,680,862 Restricted for:
Debt service - - - -
Specific projects and programs 77,585,457 73,631,331 58,655,299 47,288,761 Total restricted 77,585,457 73,631,331 58,655,299 47,288,761 Unrestricted 77,291,665 91,753,910 109,374,298 95,515,524 Total governmental and business-type activities net position 374,086,578 $ $ 366,660,046 $ 357,187,909 $ 334,485,147
CITY OF CYPRESS
Schedule 1
LAST TEN FISCAL YEARS
NET POSITION BY COMPONENT
Fiscal Year
2021 2020 2019 2018 2017 2016
$ 160,408,903 166,272,625 $ 162,147,445 $ 162,818,741 $ 161,714,951 $ 153,270,346 $ - - - 522,200 979,010 420,185
37,532,553 43,597,947 39,458,651 36,012,698 25,872,294 26,169,565 37,532,553 43,597,947 39,458,651 36,534,898 26,851,304 26,589,750 88,119,499 85,931,038 82,530,908 75,803,724 89,651,389 107,623,380 $ 291,924,677 $ 289,937,888 $ 284,137,004 $ 275,157,363 $ 278,217,644 $ 287,483,476 $ 19,322,767 $ 19,672,894 $ 19,764,241 $ 20,004,444 $ 19,788,397 $ 18,245,712 5,253,793 3,871,515 2,820,977 1,463,331 524,701 930,903 $ 24,576,560 $ 23,544,409 $ 22,585,218 $ 21,467,775 $ 20,313,098 $ 19,176,615 $ 185,595,392 $ 180,081,797 $ 181,911,686 $ 182,823,185 $ 181,503,348 $ 171,516,058 - - - 522,200 979,010 420,185
42,786,346 47,469,462 42,279,628 37,476,029 26,396,995 27,100,468 42,786,346 47,469,462 42,279,628 37,998,229 27,376,005 27,520,653 88,119,499 85,931,038 82,530,908 75,803,724 89,651,389 107,623,380 $ 316,501,237 $ 313,482,297 $ 306,722,222 $ 296,625,138 $ 298,530,742 $ 306,660,091 2025 2024 2023 2022
EXPENSES - GOVERNMENTAL ACTIVITIES:
General government 6,735,154 $ 7,620,519 $ 4,434,609 $ 5,477,433 $ Community development 2,104,581 2,566,292 2,109,834 2,333,245 Public safety 23,967,865 22,380,579 16,762,572 19,494,326 Public works 20,126,091 16,733,394 11,321,069 12,737,505 Recreation 7,892,391 7,007,325 5,137,475 5,583,107
Interest on long-term debt - - - -
Total government activities expenses 60,826,082 56,308,109 39,765,559 45,625,616 PROGRAM REVENUES - GOVERNMENTAL ACTIVITIES:
Charges for services:
General government 228,360 284,795 290,454 420,799
Community development 1,453,000 1,152,110 1,628,632 1,985,828 Public safety 437,167 408,438 455,417 277,816
Public works 1,231,262 1,322,443 1,305,718 873,072
Recreation 1,837,687 1,514,881 3,196,855 6,947,677
Operating grants and contributions 5,089,609 5,541,054 4,789,491 16,061,186 Capital grants and contributions 2,436,411 2,271,831 2,153,338 1,638,108 Total governmental activities program revenues 12,713,496 12,495,552 13,819,905 28,204,486 NET (EXPENSE/REVENUE) - GOVERNMENTAL ACTIVITIES (48,112,586) (43,812,557) (25,945,654) (17,421,130) GENERAL REVENUES AND OTHER CHANGES IN NET POSITION - GOVERNMENTAL ACTIVITIES:
Taxes
Property taxes, levied for general purpose 8,177,801 7,711,466 7,470,455 6,530,911 Property taxes, levied for recreation purposes 7,815,068 7,326,746 7,080,645 6,222,354 Property taxes, levied for lighting purposes 1,774,844 1,675,318 1,618,054 1,425,207 Property taxes, backfill of vehicle license fees 6,412,580 6,024,570 5,698,971 5,322,016 Sales tax 12,895,299 12,930,992 13,561,206 13,292,177
Transient occupancy tax 3,361,552 2,892,555 2,849,004 2,602,233 Franchise tax 2,048,695 2,112,395 1,972,342 1,801,173
Other taxes 1,803,081 1,828,529 1,921,668 1,965,665
Total taxes 44,288,920 42,502,571 42,172,345 39,161,736 Investment earnings 11,426,327 9,618,170 5,420,204 (4,733,571) Contributed capital -
Miscellaneous 74,368 54,592 99,221 38,569
Total governmental activities 55,789,615 52,175,333 47,691,770 34,466,734 SPECIAL ITEMS:
Market value adjustment - land held for resale - - - -
Gain (loss) on sale of land held for resale (1,421,708) - - - Total special items (1,421,708) - - -
EXTRAORDINARY ITEMS:
Gain on approval of repayment agreement - - - -
Loss on re-entered loan settlement agreement - - - -
Total extraordinary items - - - -
CHANGE IN NET POSITION - GOVERNMENTAL ACTIVITIES $ 6,255,321 $ 8,362,776 $ 21,746,116 $ 17,045,604 EXPENSES - BUSINESS-TYPE ACTIVITIES:
Sewer $ 973,573 $ 908,788 $ 892,783 $ 902,389
Total business-type activities expenses 973,573 908,788 892,783 902,389 PROGRAM REVENUES - BUSINESS-TYPE ACTIVITIES:
Charges for services 1,672,705 1,593,387 1,632,171 1,779,495 Operating grants and contributions 36 39 36 35
Capital grants and contributions - - - -
Total business-type activities program revenues 1,672,741 1,593,426 1,632,207 1,779,530 NET (EXPENSE/REVENUE) - BUSINESS-TYPE ACTIVITIES 699,168 684,638 739,424 877,141 GENERAL REVENUES AND OTHER CHANGES IN NET POSITION - BUSINESS TYPE ACTIVITIES:
Taxes
Property taxes, levied for sewer purposes 43,493 42,876 36,250 32,508 Total taxes 43,493 42,876 36,250 32,508
Investment earnings 428,550 381,847 173,575 26,215
Miscellaneous - - 7,397 2,442
Total business-type activities 472,043 424,723 217,222 61,165 CHANGE IN NET POSITION - BUSINESS-TYPE ACTIVITIES $ 1,171,211 $ 1,109,361 $ 956,646 $ 938,306 CHANGE IN NET POSITION - TOTAL PRIMARY GOVERNMENT $ 7,426,532 $ 9,472,137 $ 22,702,762 $ 17,983,910
CITY OF CYPRESS
Schedule 2
LAST TEN FISCAL YEARS
CHANGES IN NET POSITION
Fiscal Year
2021 2020 2019 2018 2017 2016
$ 6,082,701 6,295,641 $ 4,683,324 $ 4,634,173 $ 4,688,064 $ 4,186,025 $ 1,915,912 2,100,332 2,200,508 2,545,902 2,092,444 2,045,322 19,357,512 19,428,392 17,423,654 17,185,826 15,793,707 14,193,759 11,597,788 13,865,043 10,800,313 13,608,594 11,949,123 11,467,198 5,003,445 5,303,581 5,042,590 5,296,640 5,077,877 4,659,025 - - 1,300 25,145 48,597 70,731
46,992,989 43,957,358 40,151,689 43,296,280 39,649,812 36,622,060 498,954 154,716 388,378 477,787 517,051 247,368
1,557,209 899,680 1,156,997 1,125,447 957,395 1,038,354 406,077 268,225 324,497 221,319 217,567 190,861
770,403 741,487 740,542 723,444 773,597 820,048
487,138 573,479 1,727,459 1,509,692 1,489,518 1,499,750 3,862,387 5,998,794 3,728,589 3,625,304 4,550,919 4,474,668 1,869,583 1,488,480 1,299,265 1,029,329 1,462,551 693,977 9,451,751 10,124,861 9,365,727 8,712,322 9,968,598 8,965,026 (37,541,238) (33,832,497) (30,785,962) (34,583,958) (29,681,214) (27,657,034) 6,261,310 6,273,159 5,703,464 5,373,717 4,838,954 4,634,994 5,958,450 5,958,511 5,435,431 5,133,137 4,598,132 4,420,347 1,363,781 1,358,550 1,240,367 1,173,368 1,055,329 1,015,521 5,136,804 4,942,234 4,708,074 4,429,211 4,241,925 4,061,360 11,249,720 11,969,246 12,616,015 11,141,720 11,346,462 12,435,166 1,648,030 2,185,978 2,761,917 2,836,842 2,711,306 2,558,974 1,753,459 1,727,101 1,686,218 1,660,665 1,607,621 1,728,236 1,820,366 1,742,289 1,750,241 1,728,281 1,745,849 1,647,782 35,191,920 36,157,068 35,901,727 33,476,941 32,145,578 32,502,380 2,245,090 3,423,255 3,806,673 1,281,234 694,455 748,457 - - - 1,460,026 - -
37,845 53,058 57,203 55,078 69,209 61,886
37,474,855 39,633,381 39,765,603 36,273,279 32,909,242 33,312,723 - - - - - -
2,053,172 - - - - -
2,053,172 - - - - -
- - - - - -
- - - - (12,493,860) -
- - - - (12,493,860) -
$ 1,986,789 $ 5,800,884 $ 8,979,641 $ 1,689,321 $ (9,265,832) $ 5,655,689 $ 888,283 $ 871,750 $ 897,761 $ 795,737 $ 706,843 $ 757,503 888,283 871,750 897,761 795,737 706,843 757,503
1,861,974 1,733,202 1,721,787 1,829,427 1,768,183 1,714,658 37 39 98,050 43 46 66,716
- - - - - -
1,862,011 1,733,241 1,819,837 1,829,470 1,768,229 1,781,374 973,728 861,491 922,076 1,033,733 1,061,386 1,023,871
30,499 30,076 29,978 30,885 24,060 27,651
30,499 30,076 29,978 30,885 24,060 27,651
25,145 66,013 162,156 84,346 48,316 34,865
2,779 1,611 3,233 5,713 2,721 7,255
58,423 97,700 195,367 120,944 75,097 69,771
$ 1,032,151 $ 959,191 $ 1,117,443 $ 1,154,677 $ 1,136,483 $ 1,093,642 $ 3,018,940 $ 6,760,075 $ 10,097,084 $ 2,843,998 $ (8,129,349) $ 6,749,331 2025 2024 2023 2022
GENERAL FUND
Nonspendable $ 80,845 $ 117,684 $ 176,552 $ 270,596
Restricted - 28,944 28,944 28,944
Committed 10,329,235 9,983,343 9,395,654 8,862,296
Assigned 24,946,713 20,527,813 23,550,418 21,212,203
Unassigned 2,079,301 1,697,062 1,840,440 1,043,486
Total General Fund $ 37,436,094 $ 32,354,846 $ 34,992,008 $ 31,417,525
ALL OTHER GOVERNMENTAL FUNDS
Nonspendable $ 46,928 $ 14,426,177 $ - $ -
Restricted 14,723,970 20,347,084 27,875,379 20,316,479
Committed 14,652,471 14,820,800 12,863,857 11,600,177
Assigned 86,205,999 68,311,625 82,582,086 81,327,970
Unassigned (21,426,431) (2,942,419) (98,133) (163,885)
Total all other Governmental Funds $ 94,202,937 $ 114,963,267 $ 123,223,189 $ 113,080,741 Notes: 1) Nonspendable fund balance amounts related to land held for resale in All Other Governmental Funds have been reclassified to assigned fund balance as of June 30, 2013 to more properly reflect how the proceeds may be used by the City.
Fiscal Year
CITY OF CYPRESS
FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
Schedule 3
2021 2020 2019 2018 2017 2016
$ 4,106 400,475 $ 8,105 $ 54,299 $ 57,474 $ 8,759 $
28,944 140,521 51,035 73,252 73,252 73,252
8,277,669 7,752,199 7,399,045 7,152,556 6,982,083 6,885,909 15,425,574 14,086,964 13,827,127 8,018,278 11,199,276 11,766,464 1,060,000 1,060,000 1,060,000 860,000 921,728 289,297
$ 25,192,662 $ 23,043,790 $ 22,345,312 $ 16,158,385 $ 19,233,813 $ 19,023,681 $ 5,915,695 $ 3,242 $ 28,946 $ 26,013 $ 71,608 $ 59,660 19,174,097 27,679,541 27,277,048 26,328,454 26,466,768 27,039,278 12,824,144 11,600,900 9,332,740 10,568,404 9,174,885 17,680,891 70,479,670 74,307,742 70,811,712 67,828,083 62,830,965 71,429,444 (226,304) (290,643) - - - -
$ 108,167,302 $ 113,300,782 $ 107,450,446 $ 104,750,954 $ 98,544,226 $ 116,209,273 2025 2024 2023 2022
REVENUES:
Taxes
Property tax $ 24,180,293 $ 22,738,100 $ 21,868,125 $ 19,500,488 Sales tax 12,895,299 12,930,992 13,561,206 13,292,177
Transient occupancy tax 3,361,552 2,892,555 2,849,004 2,602,233 Franchise tax 2,110,146 2,180,353 2,047,004 1,876,783
Other taxes 2,179,797 2,224,361 2,327,660 2,348,252
Licenses and permits 1,062,915 1,029,241 1,437,527 1,326,104 Fines and forfeitures 324,298 310,918 285,374 250,414
From use of property 10,145,030 9,442,245 5,400,358 (2,256,444) From other agencies 5,087,250 5,029,681 4,348,451 16,312,535 Charges for services 5,848,740 5,466,915 6,689,289 11,079,347 Other revenues 576,373 592,405 1,341,712 746,421
Total Revenues 67,771,693 64,837,766 62,155,710 67,078,310 EXPENDITURES:
General government 5,903,290 6,914,401 5,071,688 4,833,262 Community development 1,888,599 2,437,084 2,541,511 2,159,679 Public safety 21,912,029 21,008,037 20,099,644 17,939,338 Public works 16,832,794 13,543,103 10,373,878 9,262,250 Recreation 6,086,420 5,550,870 5,260,829 4,532,507
Capital outlay 26,862,770 18,551,740 3,002,215 12,527,779 Debt service
Principal retired - - - -
Interest and charges 608,696 224,922 - -
Total expenditures 80,094,598 68,230,157 46,349,765 51,254,815 Excess of revenues over (under) expenditures (12,322,905) (3,392,391) 15,805,945 15,823,495 OTHER FINANCING SOURCES (USES):
Transfers in 6,040,473 6,398,971 4,740,932 21,115,221
Transfers out (8,414,425) (13,914,583) (6,829,946) (25,800,414) Gain (loss) on sale of land held for resale (1,421,708) Subscription Liabilities 392,355
Leases (as lessee) 47,128 10,918 - -
Total other financing sources (uses) (3,356,177) (7,504,694) (2,089,014) (4,685,193) Net change in fund balances before extraordinary items (15,679,082) (10,897,084) 13,716,931 11,138,302 SPECIAL ITEMS:
Market value adjustment - land held for resale - - - -
Gain (loss) on sale of land held for resale - - - -
Total special items - - - -
EXTRAORDINARY ITEMS:
Gain on approval of repayment agreement - - - -
Loss on re-entered loan settlement agreement - - - -
Total extraordinary items - - - -
Net change in fund balances $ (15,679,082) $ (10,897,084) $ 13,716,931 $ 11,138,302 Debt service as a percentage of noncapital expenditures 1.1% 0.5% 0.0% 0.0% Schedule 4
CITY OF CYPRESS
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
Fiscal Year
2021 2020 2019 2018 2017 2016
$ 18,532,454 18,720,344 $ 17,087,338 $ 16,109,436 $ 14,734,339 $ 14,132,221 $ 11,579,445 12,252,711 12,332,551 11,141,720 11,451,407 12,540,112 1,648,030 2,185,978 2,761,917 2,836,842 2,711,306 2,558,974 1,829,542 1,806,177 1,766,326 1,740,802 1,665,820 1,774,268 2,167,293 2,063,126 2,095,035 2,052,850 2,061,297 1,957,223 884,938 628,630 806,907 675,894 700,437 700,510
345,986 277,716 390,365 275,909 289,271 239,845
88,710 3,511,171 3,890,564 1,660,035 1,027,004 1,044,996 4,103,799 5,300,369 3,878,871 3,856,558 3,113,673 3,021,416 4,051,764 3,293,571 4,317,800 4,700,201 4,397,340 4,376,424 811,084 652,143 673,986 701,596 1,585,339 1,401,191
46,230,935 50,504,046 50,001,660 45,751,843 43,737,233 43,747,180 5,485,769 5,206,978 4,131,110 4,037,765 4,380,176 4,147,614 1,892,213 1,714,979 2,056,311 2,351,459 2,070,995 2,160,255 17,401,215 17,225,985 16,174,228 15,762,018 15,508,454 14,861,961 10,056,426 7,732,879 7,394,724 10,081,750 9,541,509 9,630,040 4,181,884 3,951,650 4,158,366 4,498,225 4,612,076 4,450,788 11,805,601 4,495,945 4,251,602 2,275,198 11,813,186 2,295,678 - - 475,000 445,000 420,000 400,000
- - 13,175 36,826 59,622 80,131
50,823,108 40,328,416 38,654,516 39,488,241 48,406,018 38,026,467 (4,592,173) 10,175,630 11,347,144 6,263,602 (4,668,785) 5,720,713 7,692,812 8,335,896 6,468,442 9,020,684 8,189,632 7,466,801 (8,138,419) (11,962,712) (8,929,167) (12,152,986) (8,481,902) (9,556,558) - - - - - -
(445,607) (3,626,816) (2,460,725) (3,132,302) (292,270) (2,089,757) (5,037,780) 6,548,814 8,886,419 3,131,300 (4,961,055) 3,630,956 - - - - - -
2,053,172 - - - - -
2,053,172 - - - - -
- - - - - -
- - - - (12,493,860) -
- - - - (12,493,860) -
$ (2,984,608) $ 6,548,814 $ 8,886,419 $ 3,131,300 $ (17,454,915) $ 3,630,956
0.0% 0.0% 1.4% 1.3% 1.3% 1.3%
Fiscal Year Total Taxable Total
Ended Public Unsecured Assessed Direct Tax
June 30, Secured * Utility * Valuation * Value * Rate
2025 $ 9,683,816 $ 2,072 $ 519,725 $ 10,205,613 1.0000
2024 $ 9,161,268 $ 2,072 $ 424,756 $ 9,588,096 1.0000
2023 $ 8,701,907 $ 2,072 $ 365,927 $ 9,069,906 1.0000
2022 $ 8,136,669 $ 2,268 $ 331,045 $ 8,469,982 1.0000
2021 $ 7,872,105 $ 2,268 $ 300,844 $ 8,175,217 1.0000
2020 $ 7,516,002 $ 2,268 $ 347,290 $ 7,865,560 1.0000
2019 $ 7,181,037 $ 2,268 $ 309,590 $ 7,492,895 1.0000
2018 $ 6,755,533 $ 595 $ 292,957 $ 7,049,085 1.0000
2017 $ 6,452,310 $ 792 $ 297,917 $ 6,751,019 1.0000
2016 $ 6,180,488 $ 792 $ 282,370 $ 6,463,650 1.0000
Source: Orange County Assessor's Office
Note: In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based on the assessed value of the property being taxes. Each year, the assessed value of propety may be increased by an inflation factor (up to 2%). However, property is re-assessed to its current value when a change of ownership occurs. Other factors that may cause re-assessment include new construction, tenant improvements and appeals of value by the owner.
The assessed value data shown above represents the only data currently available with respect to the actual market value of taxable property and are subject to the limitations described above. * Amount in Thousands
CITY OF CYPRESS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Schedule 5
LAST TEN FISCAL YEARS
Fiscal Year General
Ended Basic Obligation Total School Water
June 30, Rate Debt Service Direct Districts District
2025 1.0000 - 1.0000 0.0788 0.0070
2024 1.0000 - 1.0000 0.0796 0.0035
2023 1.0000 - 1.0000 0.0900 0.0035
2022 1.0000 - 1.0000 0.0973 0.0035
2021 1.0000 - 1.0000 0.1049 0.0035
2020 1.0000 - 1.0000 0.0933 0.0035
2019 1.0000 - 1.0000 0.1002 0.0035
2018 1.0000 - 1.0000 0.0822 0.0035
2017 1.0000 - 1.0000 0.0950 0.0035
2016 1.0000 - 1.0000 0.1045 0.0035
Source: Orange County Assessor's Office
Note: The City's basic property tax rate may only be increased by a majority vote of the City's residents. Rates for debt service are set based on each year's requirements. * Overlapping rates are those of local and county governments that apply to property owners within the City of Cypress. Not all overlapping rates apply to all Cypress property owners.
City Direct Rates Overlapping Rates *
CITY OF CYPRESS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Schedule 6
LAST TEN FISCAL YEARS
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Warland Investments Ltd $ 265,548,747 1 2.60% 222,537,229 $ 1 3.44% Villa Creek LLC 130,273,752 2 1.28% -- --
GLC Cypress LLC 118,605,600 3 1.16% -- --
Katella Holder Street LLC 103,827,146 4 1.02% -- --
Cypress Corporate Center 87,723,859 5 0.86% 73,920,230 3 1.14% Duke Realty LP 75,156,617 6 0.74% -- --
Inland American Cypress Katella 64,387,205 7 0.63% 40,799,200 5 0.63% Cypress Multifamily LLC 53,709,852 8 0.53% -- --
Los Alamitos Racecourse 46,111,278 9 0.45% 38,143,428 7 0.59% Diasorin Molecular LLC 41,875,200 10 0.41% -- --
Mitsubishi Motor Sales -- 0.00% 78,227,213 2 1.21%
Cypress Distribution Center Inc -- 0.00% 61,708,790 4 0.96% Yamaha Motor Corp USA Inc -- 0.00% 38,329,398 6 0.59%
RREEF America REIT -- 0.00% 36,000,000 8 0.56%
C33 LLC -- 0.00% 34,000,000 9 0.53%
IHP Los Alamitos Owner LLC -- 0.00% 32,994,942 10 0.51% Total $ 987,219,256 9.68% 656,660,43 $ 0 10.16%
Source: HdL Coren & Cone and Orange County Assessor's Office
CITY OF CYPRESS
PRINCIPAL PROPERTY TAX PAYERS
Schedule 7
2025 2016
CURRENT YEAR AND NINE YEARS AGO
Fiscal Year Taxes Levied Delinquent
Ended for the Percentage Tax Percentage
June 30, Fiscal Year Amount of Levy Collections Amount of Levy 2025 $ 16,417,328 $ 16,182,605 98.57% 146,651$ $ 16,329,256 99.46% 2024 $ 15,473,642 $ 15,282,850 98.77% 126,991$ $ 15,409,841 99.59% 2023 $ 14,675,706 $ 14,506,750 98.85% 91,094 $ $ 14,597,844 99.47% 2022 $ 23,758,834 $ 23,586,865 99.28% 134,014$ $ 23,720,879 99.84% 2021 $ 22,876,805 $ 22,743,440 99.42% 174,530$ $ 22,917,970 100.18% 2020 $ 21,444,968 $ 21,202,595 98.87% 90,515 $ $ 21,293,110 99.29% 2019 $ 20,072,714 $ 19,889,386 99.09% 137,711$ $ 20,027,097 99.77% 2018 $ 18,670,282 $ 18,516,004 99.17% 89,692 $ $ 18,605,696 99.65% 2017 $ 17,883,255 $ 17,742,578 99.21% 100,982$ $ 17,843,560 99.78% 2016 $ 17,146,468 $ 16,994,275 99.11% 144,980$ $ 17,139,255 99.96% Source: County of Orange Auditor-Controller
Notes: Includes General, Special Revenue and Debt Service Funds.
These amounts consist of "prior year" taxes (excluding penalties and interest) remitted in the subsequent fiscal year from Fiscal Year 2004-05 forward; the Orange County Auditor Controller's Office aggregates these payments and does not provide detail on allocations to particular years.
CITY OF CYPRESS
PROPERTY TAX LEVIES AND COLLECTIONS
Fiscal Year of the Levy
Collected within the
Total Collections to Date
Schedule 8
LAST TEN FISCAL YEARS
Fiscal Year Lease Total Percentage
Ended Revenue Outstanding of Personal Per
June 30, Bonds Leases 1 Debt Income 2 Capita 3
2025 $ - $ 51,858 $ 1,099,036 $ 1,150,894 0.04% $ 23
2024 $ - $ 41,189 $ 1,171,147 $ 1,212,336 0.04% $ 25
2023 $ - $ 42,894 $ 995,346 $ 1,038,240 0.04% $ 21
2022 $ - -$ $ - -$ 0.00% -$
2021 $ - -$ $ - -$ 0.00% -$
2020 $ - -$ $ - -$ 0.00% -$
2019 $ - -$ $ - -$ 0.00% -$
2018 $ 475,000 -$ $ - $ 475,000 0.03% $ 10
2017 $ 920,000 -$ $ - $ 920,000 0.06% $ 19
2016 1,340,000 $ $ - $ - $ 1,340,000 0.08% $ 27
2015 1,740,000 $ $ - $ - $ 1,740,000 0.11% $ 35
Notes: Details regarding the City 's outstanding debt can be f ound in the notes to the f inancial statement.
1 The Leases and Subscription-based Information Technology Arrangements debt presented here do not represent money borrowed by the City. The amounts shown are present-value calculations of estimated future payment by the City for equipment and software based on assumptions specified in Governmental Accounting Standards Board (GASB) Statements No. 87 and 96. The City implemented GASB Statement No. 87 (Leases) for the fiscal year ended June 30, 2022.
The City implemented GASB Statement No. 96 for the fiscal year ended June 30, 2023. 2 See Schedule 12 for personal income.
3 See Schedule 12 f or population data.
Subscriptionbased Information
Technology
Arrangements 1
Schedule 9
RATIOS OF OUTSTANDING DEBT BY TYPE
CITY OF CYPRESS
LAST TEN FISCAL YEARS
Estimated Sharing of
Debt Percentage Overlapping
Direct and Overlapping Tax and Assessment Debt: Outstanding Applicable (1) Debt Metropolitan Water District $ 17,155,000 0.251% $ 43,059 North Orange County Joint Community College District 275,134,676 5.648% 15,539,607 Garden Grove Unified School District 509,370,000 3.561% 18,138,666 Los Alamitos USD School Facilities Improvement District No. 1 213,215,227 2.304% 4,912,479 Anaheim Union High School District 424,313,955 13.744% 58,317,710 Centralia School District 39,351,729 2.263% 890,530
Cypress School District 29,484,042 86.007% 25,358,340
Savanna School District 35,608,134 12.200% 4,344,192
Total Direct and Overlapping Tax and Assessment Debt $ 127,544,583 Direct and Overlapping General Fund Debt:
Orange County General Fund Obligations $ 429,065,000 1.259% $ 5,401,928 Orange County Board of Education General Fund Obligations 9,120,000 1.259% 114,821 North O.C. Regional Occupational Program Certificates of Part. 6,880,000 5.071% 348,885 Anaheim Union High School District Certificates of Participation 26,880,000 13.744% 3,694,387 Los Alamitos Unified School District Certificates of Participation 27,037,816 3.561% 962,817 Cypress School District Certificates of Participation 2,096,000 86.007% 1,802,707 City of Cypress - Leases (2) 51,858 100.000% 51,858
City of Cypress - Subscription-based Information Technology Arrangements (2) 1,099,036 100.000% 1,099,036 Total Gross Direct and Overlapping Tax and Assessment Debt $ 13,476,439 Total Direct Debt $ 1,150,894
Total Overlapping Debt $ 139,870,128
Combined Total Debt $ 141,021,022 (3)
Source: California Municipal Statistics, Inc.
(1) The percentage of overlapping debt applicable to the City is estmated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping District's assessed value that is within the boundaries of the City divided by the District's total taxable assessed value. (2) The Leases and Subscription-based Information Technology Arrangements debt presented here do not represent money borrowed by the City. The amounts shown are present-value calculations of estimated future payments by the City for equipment and software applications based on assumptions specified in Governmental Accounting Standards Board (GASB) Statements No. 87 (Leases) and 96 (Subscription-based Information Technology Arrangements. The City implemented GASB Statement No. 87 for the fiscal year ended June 30, 2022. The City implemented GASB No. 96 for the fiscal year ended June 30, 2023. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.
CITY OF CYPRESS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Schedule 10
2025 2024 2023 2022 2021
LEGAL DEBT MARGIN CALCULATION:
Assessed valuation $ 10,205,613 $ 9,588,096 $ 9,069,906 $ 8,469,982 $ 8,175,217 Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation $ 2,551,403 $ 2,397,024 $ 2,267,477 $ 2,117,496 $ 2,043,804 Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 382,710 359,554 340,121 317,624 306,571
Total Net Debt Applicable to Limit - - - - -
Legal debt margin $ 382,710 $ 359,554 $ 340,121 $ 317,624 $ 306,571 Total Net Debt Applicable to Limit 0.00% 0.00% 0.00% 0.00% 0.00% as a percentage of Debt Limit
Note: The Government Code of the State of Califonia provides for a legal debt limit of 15 percent of gross assessed valuation. However, this provision was enacted when assess valuation was based upon 25 percent of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100 percent of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25 percent level that was in effect at the time the legal debt margin was enacted.
CITY OF CYPRESS
LEGAL DEBT MARGIN INFORMATION
Schedule 11
(In thousands)
Fiscal Year
2020 2019 2018 2017 2016
$ 7,492,895 7,865,560 $ 7,049,085 $ 6,751,019 $ 6,463,650 $ 25% 25% 25% 25% 25%
$ 1,873,224 1,966,390 $ 1,762,271 $ 1,687,755 $ 1,615,913 $ 15% 15% 15% 15% 15%
294,959 280,984 264,341 253,163 242,387
- - - - -
$ 294,959 $ 280,984 $ 264,341 $ 253,163 $ 242,387
0.00% 0.00% 0.00% 0.00% 0.00%
Personal Per
Fiscal Year Income Capita
Ended (thousands Personal Median School Unemployment
June 30, Population of dollars) Income Age Enrollment ** Rate 2025 49,499 3,229,654 $ 65,247$ * 3,272 41.2 3.8%
2024 49,345 $ 2,986,131 60,515$ * 3,319 41.5 3.4%
2023 49,818 $ 2,692,508 54,047$ * 3,389 39.0 3.4%
2022 49,810 $ 2,308,023 46,337$ * 3,414 41.8 2.4%
2021 48,531 $ 1,957,777 40,341$ * 3,540 41.8 9.5%
2020 49,272 $ 1,841,471 37,374$ * 3,813 41.7 15.4%
2019 49,833 $ 1,790,699 35,934$ * 3,923 41.7 2.4%
2018 49,978 $ 1,713,796 34,291$ * 3,957 41.9 3.4%
2017 49,655 $ 1,645,120 33,131$ * 3,969 41.7 2.4%
2016 49,535 $ 1,642,473 33,019$ * 3,942 41.1 3.0%
Source: MuniServices, LLC/an Avenu Insights & Analytics Company, California Dept of Finance, U.S. Census Bureau, California Department of Education, and Employment Development Department * Amount is estimated based on latest available information. ** Includes Cypress Elementary enrollment only. Cypress residents enrolled in middle and high schools are enrolled through the Anaheim Union High School District and the enrollment breakdown by individual city is not available.
CITY OF CYPRESS
DEMOGRAPHIC AND ECONOMIC STATISTICS
Schedule 12
LAST TEN FISCAL YEARS
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment Cypress College 947 1 3.80% 947 2 3.76%
Cypress School District 443 2 1.78% 0.00%
Raymond Handling Solutions 363 3 1.46% 0.00%
Costco - Cypress 360 4 1.45% 317 8 1.26%
Hybrid Promotions LLC 305 5 1.22% 0.00%
Siemens Industry, Inc 289 6 1.16% 650 3 2.58%
American Honda Finance Corp 286 7 1.15% 0.00%
Healthsmart Management Services 261 8 1.05% 0.00%
iRhythm Technologies 244 9 0.98% 0.00%
Yamaha Motors Corporation USA 239 10 0.96% 424 6 1.68%
UnitedHealth Group 0.00% 2308 1 9.16%
Christie Digital Systems USA Inc 0.00% 225 10 0.89%
Mitsubishi Motor Sales 0.00% 263 9 1.04%
Hybrid Apparel 0.00% 456 4 1.81%
Los Alamitos Race Course 0.00% 400 7 1.59%
Vans 0.00% 450 5 1.79%
Total 3,737 15.01% 6,440 25.56%
Source: MuniServices, LLC/an Avenu Insights & Analytics Company, City Planning Department and State of California Employment Development Department
2016
CITY OF CYPRESS
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Schedule 13
2025
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
General Government
Administrative 4.8 5.8 5.3 5.3 5.3 5.3 5.3 5.3 6.0 6.0
Finance 14.8 14.8 14.3 14.3 14.3 14.3 14.3 14.3 15.0 15.0 Community Development 6.5 6.5 6.5 6.5 5.5 5.5 5.5 6.5 7.5 7.5 Police
Officers 57.9 58.0 58.0 58.0 58.0 58.0 57.0 57.0 57.0 57.0 Civilians 23.9 23.8 23.8 23.8 23.8 22.8 22.8 22.8 23.4 24.4 Public Works
Engineering 9.0 9.0 9.0 9.0 9.0 9.0 8.5 10.5 10.1 10.1
Maintenance 19.5 19.5 19.5 19.5 19.5 20.1 20.1 26.4 27.0 27.0 Parks and Recreation 29.9 29.4 29.4 29.6 28.8 29.2 30.0 28.2 28.4 28.4 Total 166.8 165.8 166.0 164.2 164.2 163.5 171.0 174.4 175.4 166.2 Source: City of Cypress adopted budget.
Schedule 14
Function/Program
CITY OF CYPRESS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Fiscal Years as of June 30
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Police
Physical arrests 1,151 1,587 1,636 1,505 778 834 1,232 1,091 1,130 856 Parking violations 4,884 5,670 6,328 4,485 8,675 4,436 6,264 5,287 3,660 4,587 Traffic violations 2,302 2,304 2,376 2,099 2,368 2,353 3,754 4,260 3,290 2,878 Public Works - Maintenance
Potholes repaired 102 184 212 259 235 108 59 13 109 53
Parks and Recreation
Athletic field permits issued 2,441 2,218 6,130 2,486 2,698 4,812 6,783 7,197 8,383 7,975 Class participants 9,972 10,270 10,968 6,991 3,738 6,370 13,319 13,823 10,739 12,110 Facility rentals 732 533 1,134 1,277 10 653 895 1,127 1,225 1,334 Source: Various City Departments
Function/Program
CITY OF CYPRESS
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Schedule 15
Fiscal Years as of June 30
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 17 18 18 18 19 19 19 19 19 19
Public Works - Maintenance
Streets (miles) 111 111 111 111 111 111 111 111 111 111 Streetlights 302 297 302 302 302 302 302 302 303 303
Traffic signals 61 61 61 61 61 61 61 61 60 60
Parks and Recreation
Acreage 95 95 95 95 95 95 95 95 87 84
Playgrounds 20 20 20 20 19 19 19 19 19 18
Baseball/softball diamonds 9 9 9 9 9 9 9 8 8 8
Soccer/football fields 4 4 4 4 2 2 1 1 1 1
Pickleball courts 10 8 8 6 - - - - - 8
Community centers 1 1 1 1 1 1 1 1 1 1
Senior centers 1 1 1 1 1 1 1 1 1 1
Source: Various City Departments
Function/Program
CITY OF CYPRESS
CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Schedule 16
Fiscal Years as of June 30
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25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE December 19, 2025
To the Honorable Members of City Council
City of Cypress, California
We have audited the financial statements of the City of Cypress, California (City), as of and for the year ended June 30, 2025, and have issued our report thereon dated December 19, 2025.
We are currently performing the audit of the City’s federal awards programs (Single Audit), and anticipating issuing our reports prior to March 31, 2026.
Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our letter dated September 30, 2025, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of the system of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audits, we considered the system of internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
We have provided our comments regarding internal control during our audit in our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated December 19, 2025.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.
Significant Risks Identified
As stated in our auditor’s report, professional standards require us to design our audit to provide reasonable assurance that the financial statements are free of material misstatement whether caused by fraud or error. In designing our audit procedures, professional standards require us to evaluate the financial statements and assess the risk that a material misstatement could occur. Areas that are potentially more susceptible to misstatements, and thereby require special audit considerations, are designated as “significant risks.” In addition to the significant risks communicated to you previously, we have identified the following additional significant risks:
Significant estimates – valuation of claims payables.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by City included in Note 1 to the financial statements. As disclosed in Note 1 to the financial statements, the City has changed accounting policies related to accounting for compensated absences to adopt the provisions of Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences. Accordingly, the accounting changes have been retrospectively applied to the financial statements beginning July 1, 2024, with no restatement necessary. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Accounting Estimates and Related Disclosures
Accounting estimates and related disclosures are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.
The most sensitive accounting estimates affecting the financial statements are related to the net pension and other post-employment benefits (OPEB) liabilities, disclosures, related deferred inflows/outflows of resources, pension/OPEB expense and claims payables.
Management’s estimates of pension and OPEB are based on actuarial valuations. Management’s estimates of claims payables are based on loss run reports. We evaluated the key factors and assumptions used to develop the estimates and determined that they are reasonable in relation to the basic financial statements taken as a whole.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting City’s financial statements relate to:
Pension liabilities, in Notes 10 and 12, are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return and discount rate. As disclosed in the respective notes, a 1% increase or decrease in the discount rate has a significant effect on the City’s pension liability.
OPEB liabilities, in Note 13, are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return, discount rate, and healthcare cost trend rates. As disclosed in the respective note, a 1% increase or decrease in the discount rate or healthcare trend rate has a significant effect on the City’s OPEB liability.
Claims payable, in Notes 15, is sensitive to the underlying assumptions used, including the reserves calculated by the City’s third-party administrator (TPA), as provided in the loss runs to the City.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit. There were no corrected missstatements identified as a result of our audit procedures.
The following summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole and each applicable opinion unit.
Aggregate Remaining Funds – Workers’ Compensation Internal Service Fund Overstatement of accrued claims and judgements $349,917 Overstatement of expenses (claim payments and changes in estimates) $62,178 Understatement of beginning net position $287,739
Understatement of ending net position $349,917
Governmental Activities
Overstatement of claims payable $349,917
Overstatement of expenses (General Government) $62,178
Understatement of beginning net position $287,739
Understatement of ending net position $349,917
The effect of these uncorrected misstatements resulted in an understatement of net income and net position of approximately $62,178.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. As described in Note 22 to the financial statements, due to the correction of an error, the City restated opening balances as of July 1, 2024 in the Custodial Funds. The purpose of the paragraph is to draw attention to the disclosures for the correction of an error. We have included an emphasis of matter in our report regarding this restatement. We did not modify our opinion related to this matter.
Representations Requested from Management
We have requested certain written representations from management which are included in the management representation letter dated December 19, 2025.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as City’s auditors.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in City’s annual reports, does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.
However, in accordance with such standards, we have read the introductory and statistical sections of the City’s annual report and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
Existence of a Material Misstatement that Affects the Financial Statements of a Prior Period in Which There Was a Predecessor Auditor
We have identified the existence of a material misstatement that affects the prior period financial statements on which the predecessor auditor had previously reported without modification.
A restatement was recorded to the Custodial Funds beginning net position to remove long-term liabilities (compensated absences, pension and OPEB) and the related deferred inflows/outflows for pension and OPEB that had been recorded in the prior year totaling $2,466,921. The restatement increased the Custodial Funds beginning net position by $2,466,921 and increased the prior year change in net position for Custodial Funds by $221,337.
This report is intended solely for the information and use of the City Council and management of the City, and is not intended to be, and should not be, used by anyone other than these specified parties.
Laguna Hills, California
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25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
To the Honorable Mayor and Members of the City Council
City of Cypress, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated December 19, 2025. Our report included an emphasis of matter regarding the City’s restatement of the Custodial Funds as described in Note 22.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We identified a deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2025-001 that we considered to be a material weakness.
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
The City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Laguna Hills, California
December 19, 2025
3 City of Cypress, California
Schedule of Findings and Questioned Costs
June 30, 2025
2025-001 Improper Recording of Long-Term Liabilities in Custodial Funds Type of Finding: Material Weakness
Criteria:
Per GASB Statement No. 84, Fiduciary Activities, paragraphs 10-11, custodial funds are for fiduciary activities not held in a trust and should only report resources held for others, not the government’s own obligations. Per GASB 84 paragraph 21, a liability of a fiduciary activity should only be recognized in a fiduciary fund when an event has occurred that compels the government to disburse fiduciary resources. Events that compel a government to disburse fiduciary resources occur when a demand for the resources has been made or when no further action, approval, or condition is required to be taken or met by the beneficiary to release the assets. Employee benefit obligations including compensated absences, pension and OPEB liabilities and their related deferred inflows/outflows are not considered held for others as they are the obligations of the government itself. Therefore, they would not be reported in a custodial fund.
Condition:
The City recorded compensated absences, and pension and OPEB liabilities and their related deferred inflows/outflows within the Custodial Funds in the prior year financial statements. The City’s general ledger allows for tracking of such balances to assist them in preparing standalone reports for the West Cities Policy Communications Joint Powers Authority (Authority).
Cause:
The City did not post the required adjustments to ensure the City properly presented the Custodial Fund. Elimination entries would have been required for presentation purposes in the City’s Annual Comprehensive Financial Report (ACFR).
Effect:
The Custodial Funds’ beginning net position was understated by $2,466,921. A restatement was made to beginning net position to fairly present the financial statements.
Context:
The conditions were noted during our testwork throughout the audit. 4 City of Cypress, California
Schedule of Findings and Questioned Costs
June 30, 2025
Recommendation:
We recommend the City evaluate the custodial fund activities, and make the necessary adjustments to the trial balance during the financial reporting process to remove such liabilities from the custodial fund presentation within the City’s ACFR. The City was properly tracking these items for standalone reporting purposes for the separately issued report for the Authority.
View of Responsible Officials and Planned Corrective Actions:
While the City agrees the Custodial Funds should not include compensated absences, pension, and other post-employment benefit liabilities in the custodial fund presentation of the ACFR, the City’s previous auditors did not provide sufficient reporting guidance in transitioning to Governmental Accounting Standards Board (GASB) Statement No. 84 – Fiduciary Activities in fiscal year 2020-21. The Statement of Fiduciary Net Position has included these liabilities since the implementation of GASB Statement No. 84 and the previous auditors’ direction, inclusive of their annual quality control review, indicated reporting these liabilities conformed to GASB requirements. Further, the reporting of Custodial Funds is largely an inconsequential component of the City reporting entity. That said, we understand the annual financial statements are the City’s responsibility, and we accept the comment and have now included notes in our year-end statement review to ensure these liabilities are not included in future ACFRs. eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Accountant’s Report
To the Honorable Mayor and Members of City Council
Cypress, California
We have performed the procedures enumerated below, on the Appropriations Limit Calculation of the City of Cypress, California (City) prepared in accordance with Article XIII-B of the California Constitution for the fiscal year ended June 30, 2025. The City is responsible for the Appropriations Limit Calculation.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of evaluating the Appropriations Limit Calculation and we will report on findings based on the procedures performed. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the completed worksheets setting forth the calculations necessary to establish the City’s appropriations limits and compare the 2024-25 limits and annual adjustment factors included in those worksheets to the limits and annual adjustment factors that were adopted by resolution of City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council.
Findings: No exceptions were found as a result of this procedure.
2. We added last year’s limit to the annual adjustment amount and compared the resulting amount to the 2024-25 appropriations limit.
Findings: No exceptions were found as a result of this procedure.
3. We compared the current year information to the worksheet described in Procedure #1 above and to the information provided by the California State Department of Finance.
Findings: No exceptions were found as a result of this procedure.
4. We agreed the prior year appropriations limit to the prior appropriations limit adopted by City Council.
Findings: No exceptions were found as a result of this procedure. 2 We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the City’s Appropriations Limit Calculation for the fiscal year ended June 30, 2025. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B of the California Constitution.
This report is intended solely for the information and use of City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Laguna Hills, California
December 19, 2025
3 A. 2023-2024 APPROPRITATIONS LIMIT: $ 101,128,979
B. 2024-2025 CHANGE IN PER CAPITA PERSONAL
INCOME: 3.62%
C. 2024-2025 CHANGE IN POPULATION: 0.31%
D. RATIO OF CHANGE (1.0362 X 1.0031): x 1.03941222
E. 2024-2025 APPROPRIATIONS LIMIT: $ 105,114,697
($101,128,979 x 1.03941222)
CITY OF CYPRESS
FISCAL YEARS 2024-2025
APPROPRIATIONS LIMIT CALCULATION
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 2.
FROM: Steve Charelian, Interim Director of Finance and Administrative Services DATE: 01/26/2026
SUBJECT: Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2025
RECOMMENDATION
Receive and file the District's Basic Financial Statements and Independent Auditors' Report and Related Reports for the Fiscal Year Ended June 30, 2025.
DISCUSSION
The Director of Finance is required to annually submit a complete set of financial statements for the Cypress Recreation and Park District (District) to the Board of Directors.
The State also requires the District undergo an annual financial audit. Attached is the District’s Basic Financial Statements and Independent Auditors' Report for the Fiscal Year ended June 30, 2025. The following reports have been prepared, and an audit opinion issued, by the firm of Eide Bailly LLP. The District has received an unqualified, or “clean”, opinion from Eide Bailly for the audit period.
Component Unit Financial Report
The report presents the activity of the District for the fiscal year. In accordance with the requirements of the Governmental Accounting Standards Board, the report presents a Management’s Discussion and Analysis and the basic financial statements for the District.
The basic financial statements contain two types of statements: 1) the government-wide financial statements, and 2) the fund financial statements. The government-wide financial statements present the District’s information on a full accrual basis which attempts to provide a long-term view of the District’s financial position. The fund financial statements are presented on a modified accrual basis which focuses on a short-term view of the District’s current and available financial resources. When both sets of financial statements are reviewed in conjunction with the notes to the basic financial statements, a complete picture of the District’s financial condition is developed for the reader of the report.
Audit Communication Letter
Audit Communication Letter
Auditing standards require auditors to issue an audit letter to communicate any significant findings, disagreements with management, material and immaterial misstatements, or difficulties performing the audit.
Independent Accountants' Report on Agreed-Upon Procedures Applied to the Recreation and Park District's Appropriations Limit
All governments in California are required to have specific review procedures performed by independent accountants on the annual appropriations limit. There were no exceptions or findings related to this review.
BUDGET IMPACT
The cost of the audit includes the preparation of the financial statements and agreed-upon procedures and sufficient amounts are included in the District's budget to pay for these services.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Cypress Recreation and Park District's Basic Financial Statements and Independent Auditors' Report for the fiscal year ended June 30, 2025.
Audit Communication Letter
Report on the Cypress Recreation and Park District's Appropriation Limit for the fiscal year ended June 30, 2025
eidebailly.com
Financial Statements
June 30, 2025
Cypress Recreation and Park District
(A Component Unit of the City of Cypress, California)
Cypress Recreation and Park District
Table of Contents
June 30, 2025
Independent Auditor’s Report ................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................... 4 Government Wide Financial Statements
Statement of Net Position ..................................................................................................................................... 8 Statement of Activities ........................................................................................................................................... 9 Balance Sheet – Governmental Fund ................................................................................................................... 10 Reconciliation of the Balance Sheet of the Governmental Fund to the Statement of Net Position ................... 11 Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund ........................... 12 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of the Governmental Fund to the Statement of Activities ............................................................................................. 13 Proprietary Funds
Statement of Net Position ................................................................................................................................... 14 Statement of Revenues, Expenses, and Changes in Net Position ........................................................................ 15 Statement of Cash Flows ..................................................................................................................................... 16 Notes to Financial Statements ................................................................................................................................. 17 Required Supplementary Information
CalPERS – Defined Benefit Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability ............................................................................ 46 Schedule of Change in Net Pension Liability and Related Ratios ......................................................................... 48 Schedule of Contributions.................................................................................................................................... 49 OCERS – Defined Benefit Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability ............................................................................ 51 Schedule of Contributions.................................................................................................................................... 53 Schedule of Changes in the Total OPEB Liability and Related Ratios .................................................................. 54 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - General Fund ......... 56 Notes to Required Supplementary Information .................................................................................................. 57 Internal Services Funds
Combining Statement of Net Position ................................................................................................................. 58 Combining Statement of Revenues, Expenses, and Changes in Net Position ..................................................... 59 Combining Statement of Cash Flows ................................................................................................................... 60 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .............................................................................................................................. 61 eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Auditor’s Report
To the Board of Directors
Cypress Recreation and Park District
Cypress, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the general fund and the aggregate remaining fund information of the Cypress Recreation and Park District (the District), a component unit of the City of Cypress, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the general fund, and the aggregate remaining fund information of the District, as of June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the District and are intended to present the financial position, the changes in financial position of only that portion of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress (City) that is attributable to the transactions of the District. They do not purport to, and do not present fairly the financial position of the City, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’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.
3 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and required pension and other postemployment benefit schedules, as listed on the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District’s basic financial statements. The internal service fund combining statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the internal service fund combining statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 District’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 District’s internal control over financial reporting and compliance.
Laguna Hills, California
December 19, 2025
CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2025
4 The discussion and analysis of the Cypress Recreation and Park District’s (District's) financial performance provides an overall review of the District's financial activities for the fiscal year ended June 30, 2025. The intent of this discussion and analysis is to look at the District's financial performance as a whole. Readers should also review the basic financial statements, as well as the prior year's report ending June 30, 2024, to enhance their understanding of the District's financial performance.
The financial section of this report has been prepared to show the results of the financial administration, financial condition, and operations of the District. The combined financial statements in this report have been audited by the firm Eide Bailly, LLP, whose opinion is included.
BASIS OF ACCOUNTING AND FUND GROUPINGS
The government-wide financial statements are presented on an “economic resources” measurement focus and, accordingly, all of the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets and long-term liabilities, are reflected in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. The governmentwide financial statements also are structured to reflect the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
The governmental fund financial statements are presented on a spending or “current financial resources” measurement focus. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balance present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. The governmental fund statements are also presented using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to pay for expenditures of the current period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to other long-term liabilities, are recorded only when payment is due. The District maintains funds in accordance with generally accepted accounting principles set forth by the GASB and other rule-making entities.
The District maintains two internal service funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among the District’s various functions. The District uses internal service funds to account for its central services and employee benefits. Because these services benefit governmental functions, they have been included within governmental activities in the government-wide financial statements.
The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each of the two internal service funds are provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found immediately following the basic governmental fund financial statements.
FINANCIAL DISCUSSION
In the governmental fund financial statements, the District reported an excess of revenues and other financing sources over expenditures and other financing uses of $705,600. At the end of the current fiscal year, the nonspendable fund balance of the District was $1,568, the restricted fund balance was $127,554 (compared to $104,768 at the beginning of the year), the committed fund balance was $182,427 (compared to $515,653 at the beginning of the year), the assigned fund balance was $11,655,928 (compared to $10,655,928 at the beginning of the year), while total fund balance was $12,220,482 (compared to $11,514,882 at the beginning of the year). The total fund balance that is not restricted,
CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2025
5 committed or nonspendable (comprised of assigned and unassigned fund balance amounts) represents 195.7 percent (compared with 196.25 percent from the previous year) of the fund’s total current expenditures. Since the bulk of the District’s operations are funded with annual property tax revenues, a portion of the assigned fund balance is needed to meet cash flow shortages between property tax receipts. The majority of the remaining assigned fund balance amounts are available to cover potential contingency needs of the District, offset retiree pension liabilities and pay for future facility and park infrastructure improvement projects.
For the fiscal year ended June 30, 2025, the District’s balance of cash and cash equivalents (including restricted amounts) was $14,226,015, a decrease of $578,466 from the prior fiscal year. Total receivables at the end of the fiscal year were $256,937, which is a decrease of $343,199 from the prior year total of $600,136.
Total Recreation and Park District revenues for the fiscal year ended June 30, 2025 increased by $781,031 from the prior year. Individual changes during the past year to the District’s major revenues are highlighted as follows:
Property tax revenues, the District’s largest recurring revenue source, were 6.7 percent more than the prior year. The District continues to benefit from higher assessed values and new developments being added to the tax roll, which were larger in the past year than the prior year. The increase to charges for services relates to park development fee receipts, which are difficult to predict due to uncertainties associated with development activity and economic conditions, and revenues can fluctuate drastically from year to year. A few major developments generated fees of $609,000 in the fiscal year ended June 30, 2025, which represents an increase over the Revenues
Taxes $ 7,815,068 $ 7,326,746 $ 488,322
From other agencies 125,421 113,618 11,803
Charges for services 1,408,333 1,202,161 206,172
From use of property 1,127,615 1,029,302 98,313
Other revenue 33,514 57,093 (23,579)
Total Revenues 10,509,951 9,728,920 781,031
Expenditures
Parks and recreation 6,086,422 5,550,867 535,555
Capital outlay 22,310,482 5,359,615 16,950,867
Debt Service - Note repayment to City 2,782,243 1,593,259 1,188,984 Total Expenditures 31,179,147 7,084,154 24,094,993
Other Financing Sources (Uses)
Note proceeds from the City of Cypress 21,398,060 10,632,054 10,766,006 Inception of subscription-based IT arrangements 147,318 - 147,318 Transfers out (170,582) (155,543) (15,039)
Total Other Financing Uses 21,374,796 10,764,333 10,610,463 Increase (decrease) in fund balance $ 705,600 $ (3,755,610) $ 4,461,210 Summary of Changes in Fund Balances
General Fund
For the fiscal year ended June 30, 2025 and 2024
2025 2024 Change
CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2025
6 $445,000 received in the prior year. All eligible park development fee receipts are used to pay down the District’s outstanding advances from the City’s General fund associated with the construction of Lexington Park.
Revenues from the use of property increased due to having a full year of facility rentals at the Community Center. In the prior year, rentals were curtailed for a portion of the year due to HVAC and roof replacement projects.
Notable changes in expenditures during the year ended June 30, 2025 follow:
Recreation expenditures increased $535,555 (9.7 percent) due to many factors, including cost of living salary and benefit increases for all full-time employees, higher contract costs for facility and landscape maintenance, additional water expenditures resulting from the relatively dry winter, and enhanced senior citizen and youth programs.
Capital expenditures rose by over $5.3 million due to investing an additional $21.6 million in the rehabilitation of Arnold Cypress Park. The Arnold Cypress Park project was completed in late FY 2024-25 and rebuilt the 75 year-old, 14.5 acre park at a budgeted cost of $33.5 million. The new park provides a variety of sports courts and softball fields. In addition to this once in a generation project, the District continued to invest in other park facility improvements as amounts were expended in the fiscal year ended June 30, 2025 for sports lighting replacement and security improvements at Oak Knoll Park, and playground resurfacing at six park sites throughout Cypress.
Note repayments to the City are comprised of two components: repayments associated with 1) the construction of Lexington Park and 2) the rehabilitation of Arnold Cypress Park. Park development fees of $624,746 (as compared to $454,795 in the prior year) were available to repay a portion of the Lexington Park note in the fiscal year ended June 30, 2025, while the General fund paid $157,497 of interest on the note. Through June 30, 2025, a total of nearly $12.3 million has been advanced to the District for Lexington Park construction and $9.1 million in park development fees have been used to repay the City, leaving an outstanding note balance of nearly $3.2 million due to the City. For the Arnold Cypress Park note, the first annual payment of $2.0 million in principal and interest was made to the City for construction costs on June 30, 2025.
Additional $2.0 million annual payments will occur until the loan is fully repaid in 2044. Total outstanding principal on the note for Arnold Cypress construction totals nearly $30.5 million at the end of the most recent fiscal year.
Notable changes in other financing sources and uses during the year ended June 30, 2025 follow:
Note proceeds loaned to the District from the City increased by $10.6 million when compared to the prior year. The increase was expected and relates directly to the FY 2024-25 costs incurred on construction of the multi-year, $33.5 million rehabilitation of Arnold Cypress Park. The project was completed in May 2025 and the note will be repaid to the City over a 20 year period. Transfers out were $15,039 more than the prior year and are comprised of two recurring transfers, including a $150,000 annual transfer to the employees’ benefits internal service fund to help offset any unfunded pension liability owed to the Orange County Employees Retirement System (OCERS). This liability represents monies owed on behalf of vested District employees who earned OCERS pension benefits prior to 2000 when all employees were transitioned to the CalPERS pension system. The balance of the annual transfers pays for new capital outlay items purchased in the District’s Central Services Internal Service Fund. In the fiscal year ended June 30, 2025 the District acquired $20,582 of new equipment which was slightly more than the prior year.
CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2025
7 District General Fund Budgetary Highlights
Net increases between the original appropriations budget and the final amended budget totaled nearly $24.3 million. Nearly $23.7 million of these budget increases are related to the annual carryover of appropriations to the new fiscal year for encumbrances and purchases not completed in the prior fiscal year on a variety of capital projects, including $23.0 million for the rehabilitation of Arnold Cypress Park.
An additional appropriation of $624,746 was necessary for the debt repayment to the City on the construction of Lexington Park, which is determined annually based on the availability of park development fees during the year.
REQUEST FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, creditors and investors with a general overview of the District's finances and to show the City's accountability for the money it receives.
Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Cypress, Finance Department, 5275 Orange Avenue, Cypress, California 90630.
See Notes to Financial Statements 8
Cypress Recreation and Park District
Statement of Net Position
June 30, 2025
Governmental
Activities
Assets
Cash and cash equivalents $ 14,927,955
Restricted cash and cash equivalents 1,449,564
Receivables, net
Accounts 52,150
Taxes 101,235
Interest 125,578
Inventories 1,318
Prepaid Items 1,229
Net pension asset 822,513
Capital assets (not being depreciated/amortized) 12,128,965 Capital assets (net of accumulated depreciation/amortization) 62,198,247 Total assets 91,808,754
Deferred Outflow of Resources
Pension-related 1,206,068
OPEB-related 19,273
Total deferred outflow of resources 1,225,341
Liabilities
Accounts payable and accrued liabilities 2,000,531
Unearned revenue 238,518
Compensated absences 44,165
Deposit payable 24,795
Unclaimed property 300
Notes payable to the City of Cypress 1,380,792
Subscription liabilities 15,350
Total OPEB liability 32,325
Noncurrent liabilities:
Notes payable to the City of Cypress 32,264,553
Subscription liabilities 49,156
Compensated absences 132,496
Total OPEB liability 500,365
Net pension liability 3,952,863
Total liabilities 40,636,209
Deferred Inflow of Resources
Pension-related 492,014
OPEB-related 179,097
Total deferred inflow of resources 671,111
Net Position
Net investment in capital assets 40,617,361
Restricted
Open space 57
Senior center enhancements 27,430
Youth league renovations 54,822
Facility & service enhancements 45,245
Net pension asset 822,513
Unrestricted 10,159,347
Total net position $ 51,726,775
See Notes to Financial Statements 9
Cypress Recreation and Park District
Statement of Activities
Year Ended June 30, 2025
Net (Expenses)
Revenues and
Changes in Net
Position
Operating Capital
Charges for Contributions Contributions and Governmental Expenses Services and Grants Operating Grants Activities Primary Government
Governmental activities
Recreation $ 9,478,018 $ 2,641,769 $ 125,421 $ - $ (6,710,828) Total governmental activities 9,478,018 $ 2,641,769 $ 125,421 $ - $ (6,710,828) General Revenues
Property taxes 7,815,068
Franchise taxes 429,163
Business licenses taxes 33,514
Investment earnings 698,452
Total general revenues 8,976,197
Change in Net Position 2,265,369
Net Position at Beginning of Year 49,461,406
Net Position at End of Year $ 51,726,775
Program Revenues
See Notes to Financial Statements 10
Cypress Recreation and Park District
Balance Sheet –
Governmental Fund
June 30, 2025
General Fund
Assets
Cash and investments 12,776,451 $
Restricted cash and investments 1,449,564
Receivables, net
Accounts 30,124
Taxes 101,235
Interest 125,578
Prepaid items 250
Inventories 1,318
Total assets 14,484,520 $
Liabilities
Accounts payable 2,000,425
Unearned revenues 238,518
Deposits payable 24,795
Due to other governments 300
Total liabilities 2,264,038
Fund Balances
Nonspendable 1,568
Restricted 127,554
Committed 182,427
Assigned 8,655,928
Unassigned 3,253,005
Total fund balances 12,220,482
Total liabilities and fund balances $ 14,484,520
See Notes to Financial Statements 11
Cypress Recreation and Park District
Reconciliation of the Balance Sheet of the Governmental Fund to the Statement of Net Position
June 30, 2025
Fund balances of governmental funds $ 12,220,482
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental funds are not current financial resources and therefore are not reported in the Governmental Fund Balance Sheet. This amount does not include the internal service fund amounts of:
fund amounts of $305,775 74,021,437
Internal service funds provide services to other funds on a cost - reimbursement basis.
The assets, deferred outflows of resources, liabilities and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Activities. (805,293)
Long-term liabilites are not due and payable in the current period, and therefore are not reported in the Governmental Fund Balance Sheet.
Notes payable to the City of Cypress (33,645,345)
Subscription liabilities (64,506)
Net Position of Governmental Activities $ 51,726,775
See Notes to Financial Statements 12
Cypress Recreation and Park District
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund
Year Ended June 30, 2025
General Fund
Revenues
Taxes $ 7,815,068
From other agencies 125,421
Charges for services 1,408,333
Use of money and property 1,127,615
Other revenue 33,514
Total revenues 10,509,951
Expenditures
Current:
Parks and recreation 6,003,610
Capital outlay 22,310,482
Debt service
Principal 2,256,359
Interest 608,696
Total expenditures 31,179,147
Excess (deficiency) of revenues
over (under) expenditures (20,669,196)
Other Financing Sources (Uses)
Issuance of notes payable 21,398,060
Issuance of subscriptions 147,318
Transfers out (170,582)
Total other financing sources (uses) 21,374,796
Net Change in Fund Balances 705,600
Fund Balance - Beginning 11,514,882
Fund Balance - Ending 12,220,482 $
See Notes to Financial Statements 13
Cypress Recreation and Park District
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of the Governmental Fund to the Statement of Activities Year Ended June 30, 2025
Net change in fund balances - total governmental funds 705,600 $ Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Government-Wide Statement of Activities, the costs of those assets are allocated over the estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation/ amortization expense in the current period.
Capital outlay 22,310,482
Depreciation/ amortization expense on capital assets is reported in the Governemnt Wide Statement of Activities, but it does not require the use of current resources.
Therefore, depreciation/ amortization expense is not reported as expenditures in the Government Fund. This amount does not include the depreciation/ amortization expense for internal service funds in the amount of $71,749 (1,306,114) Internal service funds provide services to other funds on a cost - reimbursement basis.
The net revenue of certain activities of ineternal service funds is reported with governmental activities. (155,580)
Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term laibilities in the Statement of Net Position.
Payment of notes payable 2,173,547 $
Payments of subscription liabilities 82,812
Issuance of notes payable (21,398,060)
Issuance of subscription liabilities (147,318) (19,289,019) Change in Net Position of Governmental Activities 2,265,369 $ See Notes to Financial Statements 14
Cypress Recreation and Park District
Statement of Net Position
Proprietary Funds
June 30, 2025
Governmental
Activities
Internal
Service Funds
Assets
Current Assets
Cash and cash equivalents 2,151,504 $
Receivables, net
Accounts 22,026
Prepaid expenses 979
Total current assets 2,174,509
Noncurrent Assets
Net pension asset 822,513
Capital assets, net 305,775
Total noncurrent assets 1,128,288
Total assets 3,302,797
Deferred Outflow of Resources
Pension-related 1,206,068
OPEB-related 19,273
Total deferred outflow of resources 1,225,341
Liabilities
Current Liabilities
Accounts payable 106
Compensated absences 44,165
Total OPEB liability 32,325
Total current liabilities 76,596
Noncurrent Liabilities
Compensated absences 132,496
Total OPEB liability 500,365
Net pension liability 3,952,863
Total noncurrent liabilities 4,585,724
Total Liabilities 4,662,320
Deferred Inflow of Resources
Pension-related 492,014
OPEB-related 179,097
Total deferred inflow of resources 671,111
Net Position
Investment in capital assets 305,775
Restricted 822,513
Unrestricted (1,933,581)
Total net position (deficit) (805,293) $
See Notes to Financial Statements 15
Cypress Recreation and Park District
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Year Ended June 30, 2025
Governmental
Activities
Internal
Service Funds
Operating Revenues
Charges for services 1,233,436 $
Total operating revenues 1,233,436
Operating Expenses
Contractual services 711,952
Supplies and other services 775,897
Depreciation/ amortization expense 71,749
Total operating expenses 1,559,598
Operating income (loss) (326,162)
Operating income (loss) (326,162)
Transfers in 170,582
Change in Net Position (155,580)
Net Position - Beginning (649,713)
Net Position - Ending $ (805,293)
See Notes to Financial Statements 16
Cypress Recreation and Park District
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2025
Governmental
Activities
Internal
Service Funds
Operating Activities
Receipts from interfund changes 1,226,139 $
Payments to supplier and service providers (711,951)
Payments to employees for salaries and benefits (418,240) Net Cash Used for Operating Activities 95,948
Non Capital Financing Activities
Transfers from other funds 170,582
Net Cash Used for Non Capital Financing Activities 170,582 Capital and Related Financing Activities
Acquition and construction of capital assets (26,286)
Net Cash Used for Capital and Related Activities (26,286) Net Increase (Decrease) in Cash and Cash Equivalent 240,244 Cash and Cash Equivalents - Beginning 1,911,260
Cash and Cash Equivalents - Ending 2,151,504 $
Reconciliation of Operating Income (Loss) to Net Cash Provided Used For)
Operating Activities
Operating income (loss) (326,162) $
Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:
Depreciation/ amortization expense 71,749
(Increase) decrease in accounts receivable (7,297)
(Increase) decrease in prepaid items (105)
(Increase) decrease in net pension asset (181,038)
Increase (decrease) in accounts payable 106
Increase (decrease) in net pension liability 308,603
Increase (decrease) in compensated absences 51,140
Increase (decrease) in total OPEB liability 178,952
Total Adjustments 422,110
Net cash provided by (used for) operating activities 95,948 $ 17 Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
Note 1 - Summary of Significant Accounting Policies
A. Description of Reporting Entity
The Cypress Recreation and Park District (the "District") was formed in 1949 to provide park and recreational facilities for the area now known as the Cities of Cypress and La Palma and adjacent unincorporated areas plus small portions of the adjacent Cities of Los Alamitos, Buena Park and Anaheim. The District was under the control of the Orange County Board of Supervisors until 1971, when the Cities of Cypress and La Palma withdrew from the District. On June 29, 1971, the District was reestablished as a subsidiary district of the City of Cypress ("City"), effective July 1, 1971.
The Cypress Recreation and Community Services Foundation (the "Foundation") was created in 2019 to support and enhance safe, attractive, and high quality recreation facilities, programs, and services in the City of Cypress.
The Foundation is organized and operates under section 501(c)(3) of the Internal Revenue Code as a charitable organization. The members of the Cypress City Council act as the Board of Directors for the Foundation. The Foundation is managed by employees of the City and operates under the District, and the Foundation's financial activities are blended within in this report in the General Fund. The City, District and Foundation all have a fiscal year-end of June 30.
The Governmental Accounting Standards Board ("GASB") defines the reporting entity as the primary government and those component units for which the primary government is, or has the potential to be, financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's Board and either (a) the primary government has the ability to impose its will or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Since the City Council of the City also serves as the Board of Directors of the District, the City, in effect, has the ability to influence and control operations. Therefore, the City has oversight responsibility for the District. Accordingly, in applying the criteria of GASB, the financial statements of the District are included in the City's Annual Comprehensive Financial Report. The District has the same fiscal year as the City. The Annual Comprehensive Financial Report of the City can be obtained from the Finance Department of the City. These statements do not purport to present fairly the financial position of the City as a whole.
B. Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity with its own self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Government-Wide Financial Statements
The District's Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of Governmental Activities for the District. Fiduciary Activities of the District are not included in these statements.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
18 The government-wide financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the District's assets, deferred outflows of resources, capital assets, long-term liabilities, and deferred inflows of resources, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions reported as program revenues for the District are reported in two categories:
Charges for services
Operating grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated. The following interfund activities have been eliminated:
Transfers in/out
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balance. An accompanying schedule is presented to reconcile and explain the differences in fund balance as presented in these statements to the net position presented in the Government-Wide Financial Statements.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balance presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the District, are property taxes, grant revenues and earnings on investments. Expenditures are recorded in the accounting period in which the related liability is incurred.
The reconciliations of the Fund Financial Statements to the Government-Wide Financial Statements are provided to explain the differences created by the integrated approach of GASB Statement No. 34.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
19 Proprietary Fund Financial Statements
Internal service funds are used to account for the financing of goods or services provided by one department of the District to other departments or agencies of the District on a cost-reimbursement basis. The District uses internal service funds for employees' benefits and central services (which includes print shop, information systems, phone and equipment maintenance, building and grounds maintenance, fleet maintenance, and for accumulating and expending monies for capital equipment acquisition and replacement).
Proprietary funds are accounted for using the "economic resources" measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets, deferred outflows of resources, all liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on the statement of net position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net position.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the internal service funds are charges to departments in the governmental funds of the District for services. Operating expenses for the internal service funds include the cost of services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
The District's internal service funds are presented in the proprietary fund financial statements. Because the principal users of the internal services are the District's governmental activities, the financial statements of the internal service funds are consolidated into the governmental column, within the recreation function, when presented in the government-wide financial statements.
C. Capital Assets
Capital assets, which include land, machinery, and equipment (vehicles, computers, etc.), and buildings and improvements, are reported in the Government-Wide Financial Statements and proprietary fund statements.
Capital assets are defined by the District as all land and buildings, vehicles, computers, and equipment with an initial individual cost of more than $1,000; and improvements with costs of more than $10,000 with a useful life of greater than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated or annexed capital assets are recorded at acquisition value at the date of donation or annexation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Depreciation is recorded in the Government-Wide Financial Statements on a straight-line basis over the estimated useful life of the assets as follows:
Building and improvements 10 to 40 years
Vehicles, computers, and equipment 3 to 10 years
Subscription assets 2 to 10 years
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
20 D. Cash, Cash Equivalents, and Investments
The District's cash and investments are pooled with the City to maximize the yield.
The City pools its available cash for investment purposes. The District considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.
Investments are reported in the accompanying balance sheet at fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value represented by the external pool.
The District participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF), which has invested a portion of the pooled funds in Structured Notes and Asset-Backed Securities.
The investment in LAIF is carried at fair value based on the value of each participating dollar as provided by LAIF.
For purposes of the statement of cash flows, all pooled cash and investments in the proprietary fund type are considered to be short-term and, accordingly, are classified as cash and cash equivalents.
Certain disclosure requirements, if applicable, for Deposits and Investment Risks are provided in the following areas:
Interest Rate Risk
Credit Risk
Overall
Custodial Credit Risk
Concentrations of Credit Risk
Foreign Currency Risk
Fair Value Measurements
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures.
E. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and the Governmental Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The District has the following items that qualify for reporting in this category:
Deferred outflow related to pensions or other post-employment benefits (OPEB) equal to employer contributions made after the measurement date, which are recognized as a reduction to the net pension liability or total OPEB liability, respectfully.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
21 Deferred outflow related to pensions or OPEB are amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with the pension and OPEB plans, except for deferred outflows relating to the net difference between projected and actual earnings on plan investments, which is amortized straight line over 5 years.
In addition to liabilities, the statement of net position and governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The District reported two items in this category.
The first item is a deferred inflow related to pensions. For CalPERS pensions, the deferred inflow is the result of differences in expected and actual experience, changes in actuarial assumptions, adjustments due to changes in proportions, and differences between employer's contributions, the proportionate share of contributions, and differences between projected and actual earnings. The changes in projected and actual investment earnings are recognized over five years, beginning with the year in which they occur. The remaining items are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions. For CalPERS pensions, the remaining service life as determined for the June 30, 2024 measurement date is 3.8 years.
The deferred inflow related to the OCERS pension plan is the net difference between projected and actual earnings on pension plan investments, which will be recognized over a period of five years, beginning with the year in which they occur.
The second item is a deferred inflow related to other postemployment benefits. The deferred inflow is the result of changes in actuarial assumptions. This amount is amortized over a closed period equal to the average expected remaining active and inactive service lives as of the December 31, 2024 measurement date, which is
5.1 years.
F. Net Position Flow Assumption
Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted grant proceeds or developer fees) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the District's practice to consider restricted - net position to have been depleted before unrestricted - net position is applied (if eligible).
G. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
22 Since unexpended and encumbered appropriations of the governmental funds automatically lapse at the end of the fiscal year, they are not included in reported expenditures and the authorization for expenditure must be reestablished through inclusion in the subsequent year's appropriation.
H. Net Position
In the Government-Wide Financial Statements, net position may be classified in the following categories:
Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation.
Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, laws, or regulations of other governments.
Unrestricted Net Position - This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position" as defined above.
I. Fund Balances
In the Governmental Fund Financial Statements, fund balances are classified in the following categories:
Nonspendable - Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.
Restricted - Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws, or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.
Committed - Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body through council resolutions, etc., and that remain binding unless removed in the same manner. The Board of Directors, comprised of the Cypress City Council members, is considered the highest authority for the District.
Assigned - Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the Director of Finance for that purpose.
Unassigned - This category is for any balances that have no restrictions placed upon them.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
23 J. Spending Policy
Governmental Fund Financial Statements
When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the District's policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance:
Nonspendable
Restricted
Committed
Assigned
Unassigned
K. Property Taxes
Property taxes include assessments on both secured and unsecured property. Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County of Orange (the "County") bills and collects the property taxes and remits them to the District in installments during the year. District property tax revenues are recognized when levied to the extent that they result in current receivables, defined as being received within 60 days after yearend.
The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year. The District receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period, adjusted by state mandated transfers to the Educational Revenue Augmentation Fund in fiscal years 1992-93 and 1993-94.
L. Pensions
CalPERS
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District's participation in the City's California Public Employees' Retirement System ("CalPERS") Miscellaneous plans ("Plans") 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 contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following time frames are used:
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
24 CalPERS Miscellaneous
Valuation Date: June 30, 2023
Measurement Date: June 30, 2024
Measurement Period: July 1, 2023 to June 30, 2024
Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (OCERS) For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred inflows of resources related to pension, and pension expense, information about the fiduciary net position of the OCERS and the Extra-Help Defined Benefit Plan and additions to/deductions from OCERS and the ExtraHelp Defined Benefit Plan fiduciary net position have been determined on the same basis as they are reported by OCERS and the Extra-Help Defined Benefit Plan. 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.
GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following time frames used are:
Valuation Date: December 31, 2023
Measurement Date: December 31, 2024
Measurement Period: January 1, 2024 to December 31, 2024 M. Other Post-Employment Benefits (OPEB)
For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and the OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date: June 30, 2024
Measurement Date: June 30, 2025
Measurement Period: July 1, 2024 to June 30, 2025
N. Subscription-Based Information Technology Arrangements The District is a subscriber for noncancellable subscriptions of information technology services. The District recognizes a subscription liability and an intangible right-to-use subscription assets (subscription asset) in the government-wide financial statements. The District recognized subscription liabilities with an initial, individual value of $10,000 or more.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
25 At the commencement of a subscription, the District initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs, if applicable. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to subscription include how the District determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) lease term, and (3) subscription payments.
The District uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provided, the District generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.
The subscriptions term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the District is reasonably certain to exercise.
The District monitors changes in circumstances that would require a measurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.
O. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.
P. Adoption of New Standard
As of June 30, 2025, the District adopted GASB Statement No. 101, Compensated Absences. The provisions of this standard modernize the types of leave that are considered a compensated absence and provides guidance for a consistent recognition and measurement of the compensated absence liability. There was not a significant effect on the District’s financial statements as a result of the implementation of this standard.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
26 Note 2 - Cash and Cash Equivalents
The District's cash and investments are pooled with the City. The District does not own specifically identifiable securities in the City's pool. Investment income earned on pooled cash and investments is allocated quarterly to the various funds based on the average cash balance in each fund. At June 30, 2025, the cash and investments balance of the District was as follows:
GovernmentWide Statement
of Net Position
Governmental Activities
Cash and cash equivalents $ 14,927,955
Restricted cash and cash equivalents 1,449,564
$ 16,377,519
Authorized Investments
Under provision of the City's annually adopted investment policy, and in accordance with Section 53601 of the California Government Code, the City may deposit and invest in the following:
Maximum Maximum
Maximum Percentage of Investment in
Maturity Portfolio One Issuer
United states treasury bills and notes 5 years None N/A Federral agency issues 5 years None None
Certificates of deposits (or time deposits)
placed with commercial banks and/or
savings and loan companies 1 year 25% N/A
Banker's Acceptances 180 days 25% 10%
Negotiable certificates of deposit 5 years 25% 10%
Commercial paper 270 days 25% 10%
Local agency and investment fund N/A $ 75 Million* N/A
Investment trust of california (CALTRUST) N/A $ 50 Million* N/A Money market mutual funds N/A 20% 10%
Medium-term notes 5 years 25% 10%
Autorized Investment Type
* Limit is per entity.
N/A - Not Applicable
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
27 Deposits and Risks
The California Government Code requires California banks and savings and loans associations to secure a City's deposit by pledging government securities with a value of 110% of a City's deposits, or by pledging first trust deed mortgage notes having a total value of 150% of the City's total deposits.
Interest Rate Risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy provides that final maturities of securities cannot exceed five years. At June 30, 2025, approximately 55% of the City's entire pooled cash and cash equivalents had a maturity of less than one year with an average life of the portfolio being slightly more than 481 days.
Credit Risk - State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations (NRSROs). It is the City's practice to limit its investments in these investment types to the top rating issued by NRSROs, including raters Standard & Poor's and Moody's Investors Service. The California Local Agency Investment Fund ("LAIF") is not rated, but has a separate investment policy governed by Government Code Sections 16480-16481.2 that provides credit standards for its investments.
External Investment Pool
The City is a voluntary participant in LAIF, which is an external investment pool regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California through which local governments may pool investments. The City and the District each may invest up to $75,000,000 in the fund. Investments in LAIF are considered highly liquid, as deposits can be converted to cash within 24 hours without loss of interest.
LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available, and on amortized cost or best estimate for those securities where market value is not readily available.
The City values its investments in LAIF at a fair market value provided by LAIF. At June 30, 2025, the factor used was 1.001198310. The City's investment with LAIF includes a portion of pool funds invested in structured notes and asset-backed securities. At June 30, 2025, the City invested in LAIF, which had invested 3.81% of the pool's funds in structured notes and asset-backed securities.
Fair Value Measurements
The District categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The District's investment in the City investment pool is not subject to the fair value hierarchy.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
28 Note 3 - Capital Assets
The following is a summary of capital assets for governmental activities for the year ended June 30, 2025:
Balance at Balance at
July 1, 2024 Additions Deletions Transfers June 30, 2025 Governemntal Activities
Capital assets, not being
depreciated/amortized
Land 11,909,275 $ - $ - $ - $ 11,909,275 $
Construction-in-progress 12,807,705 21,774,293 - (34,362,308) 219,690 Total capital assets, not
being depreciated/amortized 24,716,980 21,774,293 - (34,362,308) 12,128,965 Capital assets, being
Depreciated/Amortized
Buildings and improvements 40,350,697 388,870 - 34,362,308 75,101,875 Internal service equipment 939,536 26,287 (65,758) - 900,065 Subscription assets - 147,318 - - 147,318
Total capital assets
being depreciated/amortized 41,290,233 562,475 (65,758) 34,362,308 76,149,258 Less accumulated depreciation/
amortization
Buildings and improvements (12,056,153) (1,239,701) - - (13,295,854) Internal service equipment (582,753) (71,749) 65,758 - (588,744) Subscription assets - (66,413) - - (66,413)
Total accumulated depreciation/
amortization (12,638,906) (1,377,863) 65,758 - (13,951,011) Total capital assets, being
depreciated/ amorized, net 28,651,327 (815,388) - 34,362,308 62,198,247 Total governmental activities
capital assets, net 53,368,307 $ 20,958,905 $ - $ - $ 74,327,212 $ Depreciation expense for capital assets for the year ended June 30, 2025, is comprised of the following:
General government 1,306,114 $
Internal service funds 71,749
Total depreciation/amortization expense 1,377,863 $
Depreciation expense of $1,377,863 is allocated to recreation activities on the statement of activities.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
29 Note 4 - Compensated Absences
The Employees' Benefits Internal Service Fund pays accrued leave for all permanent employees. The accrued leave payable represents the estimated liability for all vacation, compensatory time, and 50% of the sick leave, as noted below, for all employees of the reporting entity. The Employees' Benefits Fund is reimbursed through payroll charges to other funds based on benefits earned during the fiscal year.
Balance at Balance at Due within
July 1, 2024 Net Change June 30, 2025 One Year
Compensated absences $ 125,521 $ 51,140 $ 176,661 $ 44,165 Permanent employees may accumulate sick leave with no limitation as to the number of hours of accumulation.
However, the accumulation of vacation leave is generally limited to two times their annual accrual. Employees who are terminated for any reason are paid for 100% of their accumulated vacation pay. Employees, terminated for any reason, with 5 years or more of service and having 60 days or more of accumulated sick leave (equal to 480 hours) will be paid for 50% of their accumulated sick leave. Employees, terminated for any reason, with 5 years or more of service and having between 240 hours and 480 hours will be paid for 50% of their accumulated leave for their hours only in excess of 240 hours. All other terminated employees will not be paid for their accumulated sick leave.
Note 5 - Interfund Transactions
Amount
Internal Service Fund General Fund 170,582 $
Transfers In Transfers Out
The transfer to the Internal Service Fund provides resources for the initial purchase of capital outlay items in the Central Services Fund and for future pensions costs in the Employees' Benefit Internal Service Fund.
Note 6 - Net Position and Fund Balance
Government-Wide Financial Statements
Restricted for Open Space - These restrictions represent funds received from developers for open space use.
Restricted for Senior Center Enhancements - These restrictions represent funds required for the use of improvements to the City Senior Center.
Restricted for Youth League Renovations - This restriction represents amounts required to be used for future renovations of youth league facilities.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
30 Restricted for Facility & Service Enhancements - This restriction represents funds donated to the Cypress Recreation and Community Services Foundation to support and enhance safe, attractive, and high quality recreation facilities, programs, and services within the City.
Restricted for Net Pension Asset - This restriction represents funds required to be used for pension-related purposes.
Fund Financial Statements
Classifications of fund balances are based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The governmental fund statements fund balances are summarized as follows:
General Fund
Nonspendable
Prepaid Items $ 250
Inventories 1,318
Total nonspendable 1,568
Restricted
Open Space 57
Senior Center Enhancements 27,430
Youth League Renovations 54,822
Facility & Service Enhancements 45,245
Total restricted 127,554
Committed
Other Park Improvements 182,427
Total committed 182,427
Assigned
OCERS retirement (unfunded) 150,000
Art in public places 5,928
Infrastructure/ Amenities 8,500,000
Total assigned 8,655,928
Unassigned 3,253,005
Total Fund Balances 12,220,482 $
As of June 30, 2025, the unassigned fund balance totaled $3,253,005, which includes the cash flow and contingency reserves of $2,000,000 and $1,000,000, respectively.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
31 Note 7 - Pension Plans
As of June 30, 2025, the District had the following net pension liabilities/(asset) and related deferred inflows and outflows of resources:
Net Pension Deferred Outflows Deferred Inflows
Liability/(Asset) of Resources of Resources
CalPERS Miscellaneous Plan 3,952,863 $ 1,120,739 $ 130,783 $ Orange County Employees Retirement
System Plan (OCERS) (822,513) 85,329 361,231
Total 3,130,350 $ 1,206,068 $ 492,014 $
CalPERS
A. General Information about the Pension Plans
Plan Descriptions
The District participates in the City's Miscellaneous Employee Defined Benefit Pension Plans (the "Miscellaneous Plans") and the District's share of the net pension liability is reported as a cost-sharing plan in these financial statements.
All qualified permanent and probationary employees are eligible to participate in the City's 2% at 55 (Tier I) and 2% at 62 (PEPRA) Miscellaneous Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees or beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. All members are eligible for nonindustrial disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
32 The Miscellaneous Plans' provisions and benefits in effect at the June 30, 2025, reporting date, are summarized as follows:
Prior to On or After
Hire date January 1, 2013 January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50-63 52-67
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.000% to 2.500% Required employee contribution rates 7.000% 8.250%
Required employer contribution rates 13.120% 8.620%
Employer payment of unfunded liability $ 2,119,480 $ 7,950 Miscellaneous
Contributions
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Total contributions for the year ended June 30, 2025 were $468,144.
B. Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2024 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2023 total pension liability. The June 30, 2024 total pension liabilities were based on the following actuarial methods and assumptions:
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry age normal
Actuarial Assumptions
Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 3.00%
Project Salary Increase Varies by entry age and service Investment Rate of Return 6.90% Net of Pension Plan Investment and Administrative Mortality Rate Table (1) Derived using CalPERS' membership data for all funds
*The mortality table used was developed based on CalPERS-specific data. The probabilities are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full 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 2021 experience study from November 2021 that can be found on the CalPERS website.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
33 C. Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90 percent discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The longterm expected discount rate of 6.90 percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called "GASB Crossover Testing Report" that can be obtained at CalPERS' website under the GASB 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both shortterm and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.
Assumed
Asset
Allocation Real Return (1, 2)
Global equity-cap-weighted 30.00% 4.54%
Global equity-non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
Asset Class
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management Study.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
34 D. Change of Assumptions
No changes of assumptions were noted.
E. Changes in the Net Pension Liability
The District is a portion of the City's Miscellaneous Plan. See the City of Cypress Cost-Sharing Employer Miscellaneous Plan for changes in the net pension liability.
F. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability for the Plan as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
5.90% 6.90% 7.90%
Proportionate share of net pension liability/(asset) $ 3,952,863 5,928,264 $ 2,326,817 $ G. Deferred Outflows and Deferred Inflows of Resources Related to Pensions For year ended June 30, 2025, the District incurred a pension expense of $716,587.
As of June 30, 2025, the following were the reported deferred outflows of resources and deferred inflows of resources related to pensions:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the measurement date 468,144 $ - $ Changes of assumptions 95,881 -
Differences between expected and actual experience 346,086 (12,585) Net difference between projected and actual earnings
on pension plan investments 210,628 -
Adjustments due to differences in proportions - (61,669) Differences in actual to proportionate share contribution - (56,529) Total 1,120,739 $ (130,783) $
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
35 The amount reported as deferred outflows of resources related to contributions subsequent to the measurement date, $468,144, will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred
Outflows/(Inflows)
of Resources
2026 155,583 $
2027 490,643
2028 (9,485)
2029 (114,929)
Total 521,812 $
Fiscal year ended June 30,
Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (OCERS) H. General Information about the Pension Plans
Plan Description: The Cypress Recreation and Park District (District) participated in the Orange County Employees' Retirement System (OCERS), a cost-sharing multiple-employer defined benefit pension plan, for employees' service prior to October 12, 2000.
OCERS was established in 1945, under the provisions of the County Employees Retirement Law of 1937. OCERS is governed by a ten-member Board of Retirement comprised of nine voting members and one alternate member. Board membership consists of four members appointed by the County of Orange Board of Supervisors and five members elected by the members of the pension system - two by the general members, two by the safety members (one voting and one alternate), and one by the retired members. The County of Orange Treasurer-Tax Collector, who is elected by the voters registered in the County, serves as an ex-officio member.
The OCERS Board of Retirement is responsible for establishing policies governing the administration of the retirement plan, making disability determinations, assuring benefit payments, establishing investment policies, and monitoring execution of its policies.
OCERS issues a publicly available financial report that includes financial statements and required supplementary information for the cost-sharing plans administered by OCERS.
The report can be obtained online at www.ocers.org, or from its executive office at 2223 Wellington Avenue, Santa Ana, California 92701.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
36 Benefits Provided: OCERS provides retirement, disability, and death benefits to safety and general members.
Safety membership includes those members serving in active law enforcement, fire suppression, and probation officers. General membership applies to all other occupations, including all eligible District employees. Plan retirement benefits are tiered based upon date of OCERS membership. Members employed prior to September 21, 1979, are designated as Tier I members and will have their highest one-year average salary used to determine their retirement allowance. Tier II members, hired on or after September 21, 1979, will have their highest three-year average salary used to determine their retirement allowance. Member rate groups are determined by the employer, bargaining unit, and benefit plan. The benefit plan represents the benefits formula and tier that will be used in calculating a retirement benefit.
Employees Covered: The plan was closed to new members as of October 12, 2000. After that date, all existing and new District employees were enrolled in the CalPERS Miscellaneous Plan. At December 31, 2024, the following employees were covered by the benefit terms of the OCERS Plan:
Retired members or beneficiaries currently receiving benefits 20 Vested terminated members entitled to, but not yet receiving benefits 4 Active memebers -
24 Contributions: The participating entities in OCERS share proportionately in all risks and costs, including benefit costs. The District's discontinuance of the OCERS plan precludes the District from sharing the risks and costs of the plan in the same manner as actively participating entities, but the District remains liable for its share of pension liabilities. To ensure the District pays its fair share of the costs associated with its eligible employees, OCERS and the District entered into a Withdrawing Employer and Continuing Contribution Agreement (Agreement) on October 15, 2018.
Per the terms of the Agreement, OCERS will recalculate the unfunded actuarial accrued liability (UAAL) attributable to the District every three years beginning December 31, 2020, and at least every three years thereafter. For purposes of the recalculation, the District's employees are treated as a closed group and the District's assets and liabilities will be segregated from the remaining assets of the retirement system. Based on the recalculation, in the event there is any new pension liability, the District shall satisfy the obligation to OCERS within three years following the effective date of the recalculation, including accrued interest. If the recalculation determines there is a surplus attributable to the District, it shall remain with OCERS as a credit against future pension liabilities.
I. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources As of December 31, 2024, the District reported a net pension liability/(asset) for the OCERS plan of $(822,513).
The net pension liability/(asset) was measured as of December 31, 2024, and 2023. The Plan's Fiduciary Net Position (plan assets) was valued as of the measurement date while the Total Pension Liability (TPL) was determined based upon rolling forward the TPL from actuarial valuations as of December 31, 2024 and 2023, respectively.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
37 The District’s net pension liability/(asset) and proportionate share of the total net pension liability as of December 31, 2024 and 2023 was as follows:
OCERS Proportionate Share
Net pension asset - December 31, 2023 (641,475) $ -0.013% Net pension asset - December 31, 2024 (822,513) -0.021% Change - Increase (Decrease) (181,038) $ -0.008%
Actuarial Assumptions: The actuarial valuation was determined using the following actuarial assumptions:
Valuation Date December 31, 2023
Measurement Date December 31, 2024
Actuarial Experience Study Three-year period ended January 1, 2020 and dated August 11, 2023.
Actuarial Cost Method Entry age normal
Actuarial Assumptions
Discount Rate 7.00%
Inflation 2.50%
Payroll Growth 2.75%
Project Salary Increase Varies by entry age and service Investment Rate of Return 7.00% Net of Pension Plan Investment and Administrative Mortality Rate Table* Derived using CalPERS' membership data for all funds
Mortality Assumptions: The underlying mortality assumptions used in the actuarial valuation were based on the results of the actuarial experience study for the period January 1, 2020 through December 31, 2022 using the Pub-2010 General Health Retiree Amount-Weighted Above Median Table, projected generationally with the two-dimensional MP-2019 projections scale, with age adjustments, and adjusted separately for healthy and disabled members.
Discount Rate: The discount rate used to measure the TPL was 7.00% as of December 31, 2024 and 2023. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and employer contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employer contributions intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL as of both December 31, 2024 and 2023.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
38 Long-Term Expected Rate of Return: The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns 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, adding expected inflation and subtracting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation but before deducting investment expenses are shown in the following table. This information was used in the derivation of the long-term expected investment rate of return assumption for the December 31, 2024 and 2023 actuarial valuations. This information will change every three years based on the actuarial experience study.
Sensitivity of the Net Pension Liability/(Asset) to Changes in the Discount Rate: The following presents the net pension liability/(asset) of the OCERS plan, as well as what the net pension liability/(asset) would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
6.00% 7.00% 8.00%
Proportionate share of net pension liability/(asset) 158,320 $ (822,513) $ (1,624,622) $ Pension Plan Fiduciary Net Position: Detailed information about the pension plan's fiduciary net position is available in the separately-issued OCERS financial reports.
J. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2025, the District recognized pension expense of $(120,878) in the OCERS Plan. At June 30, 2025, the District reported deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 72,060 $ $ (336,165) Net difference between projected and actual earnings - (22,985) on pensions plan investments
Adjustments due to differences in proportions 13,269 (2,081) Total $ 85,329 $ (361,231)
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
39 The amounts reported as deferred inflows, net of the remaining deferred outflows, will be recognized as pension expense as follows:
Deferred
Outflows/(Inflows)
of Resources
2026 $ (53,007)
2027 99
2028 (165,395)
2029 (59,650)
2030 2,051
Total $ (275,902)
Fiscal year ended June 30,
K. Payable to the Pension Plan
At June 30, 2025, the City had no outstanding contributions to the pension plan required for the year ended June 30, 2025.
Note 8 - Retirees' Health Benefits
A. General Information about the OPEB Plan
Plan Description - The District provides medical benefits to eligible retirees through the CalPERS healthcare program (PEMHCA) as a part of the City's plan. The District pays the PEMHCA minimum amount ($157 per month in 2024 and $158 per month in 2025) for all eligible retirees who choose to continue with their coverage through PEMHCA. All eligible employees become participants in PEMHCA on their date of hire. A portion of the liability attributable to the District, based on the percent of payroll of District employees, has been recorded on the financial statements of the District.
All District employees are members of the City's Retiree Health Savings Plan (the "RHS") in which the District contributes monthly amounts on behalf of the employee to an account in the employee's name. These monthly contributions are $75 per month or $185 per month for full-time employees based on employee association.
As of June 30, 2025, the date of the most recent actuarial valuation, the District's plan has 13 active employees.
Active plan members 13
Inactive plan members or beneficiaries currently receiving benefit payments N/A Inactive plan members or beneficiaries entitled to but currently no receiving benefit payments N/A Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
40 Funding Policy - The contribution for PEMHCA are established and amended by CalPERS. The District pays the monthly contribution for all employees and retirees. The contribution requirements for the supplemental postemployment health care plan are established and amended by the District. The required contribution is based on projected pay-as-you-go financing requirements. The contribution requirements for the RHS are established and amended by the District. The required contribution is based on pay-as-you-go financing requirements. The payments of the benefits are recognized as expenditures when the payments are made.
B. Total OPEB Liability
The District's Total OPEB Liability of $532,690 was based on an actuarial valuation as of June 30, 2025, a measurement date of June 30, 2025, and a discount rate of 5.20%.
C. Actuarial Assumptions
The total OPEB liability was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Cost Method Entry Age, Level Percent of Pay
Amortization Valuation Method/Period 20-year amortization (as a level percent of pay) Asset Valuation Method Market value
Inflation 2.50%
Payroll Growth 2.75%, average, including inflation
Discount Rate
as of 6/30/25 (1) 5.20%, net of investment expense, including inflation Healthcare cost-trend rates 7.50% for 2025 decreasing to 5.80% for 2029, 5.50% for 2030-2024, 4.70% for 2025-2044, 4.60% for 2045-2054, 4.50% for 2055-2074, and 4.00% for 2075 and later years; Medicare ages: 5.50% for 2025, 5.00% for 2026, 4.75% for 2027,
4.50% for 2028-2074, 4.00% for 2075 and later years.
Retirement Age The District offers the same plans to its retirees as to its active employees, with the general exception that upon reaching age 65 and becoming eligible for Medicare, the retiree must join one of the Medicare Supplement coverages offered under PEMHCA.
Mortality Mortality rates were based on the (2000-2019) CalPERS Mortality for Miscellaneous and Schools Employees table
created by CalPERS.
(1)
the Bond Buyer’s 20-year bond General Obligation Index.
The discount rate increased from 3.97% to 5.20%. The discount rate for both 2024 and 2025 was based on Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
41 D. Changes in the OPEB Liability
The change in the Total OPEB Liability for the Plan are as follows:
Total OPEB
Liability
Balance at June 30, 2024 460,993 $
Changes recognized for the
measurement period
Service cost 25,685
Interest on total OPEB liability 18,815
Changes of assumptions (54,036)
Experiences (Gains)/Losses 106,962
Benefit payments, including refunds of
employee contributions (25,729)
Net changes 71,697
Balance at June 30, 2025 532,690 $
E. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (4.20 percent) or 1-percentage-point higher (6.20 percent) than the current discount rate:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
4.20% 5.20% 6.20%
Plan's total OPEB liability/(asset) 598,662 $ 532,690 $ 477,403 $ F. Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the District if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current healthcare cost trend rates:
Health Care Health Care
Trend Rate Current Trend Rate
-1 Percent
Health Care
Trend Rate +1 Percent
5.00% 6.00% 7.00%
Plan's total OPEB liability/(asset) 469,890 $ 532,690 $ 610,659 $ Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
42 G. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2025, the District recognized OPEB expense of $178,952. As of fiscal year ended June 30, 2025, the District reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 11,582 $ (62,283) $ Changes of assumptions 7,691 (116,814)
Total 19,273 $ (179,097) $
Amounts reported as deferred outflows and deferred inflows of resources will be recognized in OPEB expense as follows:
Deferred Deferred
Outflows of Inflows of Total Net
Resources Resources Amount
$ (32,105) 4,879 $ (27,226) $
(32,105) 4,879 (27,226)
(32,105) 4,879 (27,226)
(29,298) 2,852 (26,446)
(19,524) 1,488 (18,036)
Thereafter 296 (33,960) (33,664)
Total 19,273 $ (179,097) $ (159,824) $
2030
Fiscal year ended June 30,
2026
2027
2028
2029
Note 9 - Commitments and Contingencies
The District is a defendant in certain other legal actions arising in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from these actions will not result in a material adverse effect on the District's financial position.
As of June 30, 2025, in the opinion of District management, there were no additional outstanding matters that would have a significant effect on the financial position of the funds of the District.
Note 10 - Risk Management
At June 30, 2025, the District was covered under the City's Risk Management program. The City was self-insured for workers' compensation and general liability. The self-insured portion for workers' compensation and general liability is limited to the first $300,000 and $150,000 respectively, of liability per occurrence. Coverage in excess of these amounts is maintained in layers to a maximum of $43,000,000 for general liability and the statutory limit for workers compensation (of which $3,000,000 per occurrence is for each employee accident or disease) through the California Insurance Pool Authority (CIPA).
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
43 CIPA is a consortium of 14 cities in Southern California, established to pool resources, share risks, purchase excess insurance and to share costs for professional risk management and claims administration. Member agencies make payments based on underwriting estimates.
Each agency may be assessed the difference between funds available and the $43,000,000 annual aggregate in proportion to their annual premiums.
The Governing Board is comprised of one member from each and is responsible for the selection of management and for the budgeting and financial management of CIPA. No determination has been made as to each participant's proportionate share of the fund equity as of June 30, 2025. Upon termination of CIPA, and after settlement of all claims, any excess or deficit will be divided among the cities in proportion to the amount of their contributions.
Note 11 - Deficit Net Position
The Employees' Benefits Internal Service Funds had a deficit of $1,893,300 as of June 30, 2025, due to the net pension liability associated with the District's CalPERS pension plan and the retirees' health liability (see further details at Note 8). The District has made all required annual contributions toward this long-term liability. It is expected the deficit will be eliminated over the next several years as required payments to CalPERS increase.
Note 12 - Long-Term Notes Payable from the City of Cypress Lexington Park
On February 8, 2021, the District entered into a promissory note with the City of Cypress to borrow up to $12.8 million for the construction of Lexington Park. Note repayment will use eligible park development fee revenues, with the majority of revenues available for repayment expected to be associated with the development of the Los Alamitos Race Course. The note has an initial repayment term of five years, with the understanding the note will be renewed and repayment deferred until sufficient park development receipts are available. The District has paid annual interest to the City on the outstanding note balance at the rate earned by the California Local Agency Investment Fund (LAIF). However, beginning July 1, 2025, the interest rate will be fixed at 2.0%.
Since note issuance, a total of $12,293,975 has been loaned to the District for Lexington Park construction and repayments to the City using available park development fees total $9,109,308 through June 30, 2025. Future repayments will be determined based on the availability of park development revenues. All interest has been paid through the end of the fiscal year and the outstanding balance on the note totaled $3,184,667 at June 30, 2025.
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
44 Arnold Cypress Park
On November 13, 2023, the District entered into a promissory note with the City of Cypress to borrow up to $33,500,000 for design costs associated with the reconstruction of Arnold Cypress Park. The note establishes an applicable interest rate of 2.0% per annum. Annual payments of $2,000,000 per year, inclusive of interest, will be made from District resources beginning June 30, 2025.
A total of $32,009,479 has been loaned to the District since the note was approved. Interest of $451,199 has been paid as of year-end. The total outstanding balance on the note was $30,460,678 at June 30, 2025.
Additional proceeds not to exceed $1,490,251, which represents the remaining authorized limit on the note, may occur in the coming year.
The outstanding balance on the Lexington Park and Arnold Cypress Park notes totaled $33,645,345 at June 30, 2025.
Balance at Balance at Due within
July 1, 2024 Additions Deletions June 30, 2025 one year Lexington Construction $ 3,809,413 $ - $ 624,746 $ 3,184,667 $ - Arnold Cypress Construction 10,611,419 21,398,060 1,548,801 30,460,678 1,380,792 Total $ 14,420,832 $ 21,398,060 $ 2,173,547 $ 33,645,345 $ 1,380,792 The future principal and interest payments on the Arnold Cypress Park loan as of June 30, 2025, are as follows:
Principal Interest Total
Payments Payments Payments
$ 1,380,792 $ 619,208 $ 2,000,000
591,593 1,408,407 2,000,000
563,424 1,436,576 2,000,000
534,693 1,465,307 2,000,000
2030 1,494,613 505,387 2,000,000
2031-2035 7,933,588 2,066,412 10,000,000
2036-2040 8,759,322 1,240,678 10,000,000
2041-2045 6,582,073 340,553 6,922,626
$ 30,460,678 $ 6,461,948 $ 36,922,626
Fiscal Year
2026
2027
2028
2029
Cypress Recreation and Park District
Notes to Financial Statements
June 30, 2025
45 Note 13 - Subscription-Based Information Technology Arrangements As of June 30, 2025, the District has 2 active subscriptions. The subscriptions have payments that range from $0 to $14,966 and interest rates that range from 0.7460% to 2.1860%. As of June 30, 2025, the total combined value of the subscription liability is $64,506, as shown in the table below. The combined value of the right-to-use asset as of June 30, 2025, of $147,318 with accumulated amortization of $66,413 is included within the Subscription assets shown in Note 3.
Balance at Balance at Due within
July 1, 2024 Additions Deletions June 30, 2025 one year Subscription liability $ 147,318 - $ $ 82,812 $ 64,506 $ 15,350 Total - $ 147,318 $ 82,812 $ 64,506 $ 15,350 $
The future principal and interest subscription payments as of June 30, 2025, are as follows:
Principal Interest Total
Payments Payments Payments
$ 15,350 $ 364 $ 15,714
250 16,250 16,500
24,046 1,902 25,948
8,860 194 9,054
$ 64,506 $ 2,710 $ 67,216
Fiscal Year
2026
2027
2028
2029
eidebailly.com
Required Supplementary Information
June 30, 2025
Cypress Recreation and Park District
46 Cypress Recreation and Park District
California Public Employees Retirement Systems (CalPERS) Defined Benefit Pension Plan Schedule of Proportionate Share of the Net Pension Liability Last Ten Years (1)
2025 2024* 2023*
CalPERS
Proportion of the Net Pension Liability 0.07905% 0.08533% 0.07605% Porportionate Share of the Net Pension Liability $ 3,952,863 $ 3,992,590 $ 3,558,546 Covered Payroll 980,133 $ $ 971,433 $ 783,017
Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 24.80% 24.33% 22.00%
Plan's proportionate share of the fiduciary net position as a percentage of the Plan's total pension liability 78.10% 76.20% 76.70% Plan's proportionate share of aggregate employer contributions 468,144 $ $ 428,171 $ 514,601 Notes to Schedule: *RSI was restated to conform with current presentation Benefit Changes: There were no changes to the benefits.
Changes of Assumptions: No changes.
(1) The City's CalPERS Miscellaneous Plan was previously administered and reported as an agent multple-employer plan; however, because the number of active members in the plan fell below 100, it is now administered as a cost-sharing multiple-employer plan, effective with the reporting for fiscal year ended June 30, 2019.
47 Cypress Recreation and Park District
California Public Employees Retirement Systems (CalPERS) Defined Benefit Pension Plan Schedule of Proportionate Share of the Net Pension Liability Last Ten Years (1)
2022* 2021* 2020* 2019*
0.09390% 0.07315% 0.07193% 0.06815%
$ 1,783,019 $ 3,085,709 $ 2,880,341 $ 2,568,468
$ 842,114 $ 782,395 $ 921,221 $ 994,394
47.23% 25.36% 31.98% 38.72%
85.70% 74.71% 75.87% 76.84%
$ 416,516 $ 403,889 $ 375,271 $ 324,579
48 Cypress Recreation and Park District
California Public Employees Retirement Systems (CalPERS) Defined Benefit Pension Plan Schedule of Change in Net Pension Liability and Related Ratios Last Ten Years (1)
Measurement Period 2018 2017 2016
Total Pension Liability
Service cost $ 196,966 $ 381,914 $ 88,500
Interest 852,392 1,915,403 448,707
Changes in Benefits Terms - - -
Difference Between expected and Actual Experience (115,257) 65,115 (22,424) Changes in Assumptions 715,153 - (112,169)
Benefit Payments, Including Refunds of employee
Contributions (561,239) (1,138,953) (261,811)
Net Change in Total Opeb Liability 1,088,015 1,223,479 140,803 Total OPEB liability - Beginning 7,450,968 6,227,489 6,086,686 Total OPEB liability - Ending (a) $ 8,538,983 $ 7,450,968 $ 6,227,489 Plan Fiduciary Net Position
Contribution - Employer $ 205,970 $ 455,184 $ 89,741
Contribution - Employee 87,588 228,036 47,623
Net Investment Income 982,011 100,413 112,821
Benefit Payments, Including Refunds of Employee
Contributions (561,239) (1,138,953) (261,811)
Net Plan to Plan Resources Movement - - -
Administrative Expense (12,886) (12,512) (5,714)
Net Change in Fiduciary Net Position 701,444 (367,832) (17,340) Plan Fiduciary Net Position - Beginning 4,675,676 5,043,508 5,060,848 Plan Fiduciary Net Position - Ending (b) $ 5,377,120 $ 4,675,676 $ 5,043,508 Plan Net Pension Liability/(Assets) Ending (a) - (b) $ 3,161,863 $ 2,775,292 $ 1,183,981 Plan Fiduciary Net Position as a Percentage of the
Total Pension Liability 62.97% 62.75% 80.99%
Covered Payroll $ 921,221 $ 1,032,930 $ 642,560
Plan Net Pension Liability/(Asset) as a Percentage of
Cover Payroll 343.23% 268.68% 184.26%
(1) The City's CalPERS Miscellaneous Plan was previously administered and reported as an agent multiple-employer plan; however, because the number of active members in the plan fell below 100, it is now administered as a cost-sharing multiple-employer plan, effective with the reporting for the fiscal year ended June 30, 2019.
Note to Schedule:
Benefit Changes: There were no changes to benefit terms. However, the figures above do not include any liability impact that may have resulted from plan changes which occurred after the measurement dates.
Changes of Assumptions: No changes.
49 Cypress Recreation and Park District
California Public Employees Retirement Systems (CalPERS) Defined Benefit Pension Plan Schedule of Contributions
Last Ten Years (1)
2025 2024 2023 2022
Miscellaneous Plan
Actuarially Determined Contribution 468,144 $ 394,055 $ 387,084 $ 329,495 $ Contribution in Relation to the Actuarially
Determined Contribution (468,144) (394,055) (387,084) (329,495) Contribution Deficiency (Excess) - $ - $ - $ - $
Covered Payroll 1,077,096 $ 980,133 $ 971,433 $ 783,017 $ Contributions as a Percentage of Covered Payroll 43.46% 40.20% 39.85% 42.08% (1) The City's CalPERS Miscellaneous Plan was previously administered and reported as an agent multple-employer plan; however, because the number of active members in the plan fell below 100, it is now administered as a cost-sharing multiple-employer plan, effective with the reporting for fiscal year ended June 30, 2019.
50 Cypress Recreation and Park District
California Public Employees Retirement Systems (CalPERS) Defined Benefit Pension Plan Schedule of Contributions
Last Ten Years (1)
2021 2020 2019 2018 2017 2016
$ 302,304 $ 273,209 $ 238,408 $ 199,697 $ 205,971 $ 185,768 (273,209) (302,304) (238,408) (199,697) (205,971) (185,768) $ - $ - $ - $ - $ - $ -
$ 844,200 $ 842,114 $ 782,395 $ 921,221 $ 994,394 $ 642,560
35.81% 32.44% 30.47% 21.68% 20.71% 28.91%
51 Cypress Recreation and Park District
OCERS Retirement Plan – A Cost Sharing, Multiple-Employer Defined Benefit Pension Plan Schedule of Proportionate Share of the Net Pension Liability Last Ten Years (1)
2025 2024 2023 2022
OCERS
Proportion of the Net Pension Liability -0.02100% -0.01300% 0.00100% 0.00500% Porportionate Share of the Net Pension Liability (822,513) $ (641,475) $ 61,016 $ (10,379) $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 119.32% 115.18% 98.70% 102.18%
Notes to Schedule:
(1) The Cypress Recreation and Park District (the District) withdrew from OCERS in October 2000. At that time, OCERS did not have a policy addressing how the District's liability would be funded, nor was a liability recognized by the District.
The District and OCERS entered into a Withdrawing Employer and Continuing Agreement on October 15, 2018, therefore, fiscal year 2018-19 is the first year reporting the OCERS pension liability. 52 Cypress Recreation and Park District
OCERS Retirement Plan – A Cost Sharing, Multiple-Employer Defined Benefit Pension Plan Schedule of Proportionate Share of the Net Pension Liability
Last Ten Years (1)
2021 2020 2019 2018
0.00400% 0.00500% 0.00700% 0.01500%
$ 185,117 $ 262,415 $ 408,781 $ 718,340
96.03% 94.23% 90.81% 83.78%
53 Cypress Recreation and Park District
OCERS Retirement Plan – A Cost Sharing, Multiple-Employer Defined Benefit Pension Plan Schedule of Contributions
Last Ten Years (1)
2025 2024 2023 2022 2021 2020 2019
OCERS
Actuarially Determined Contribution - $ - $ 595,600 $ - $ - $ - $ 739,966 $ Contribution in Relation to the Actuarially
Determined Contribution - - (595,600) - - - (739,966)
Contribution Deficiency (Excess) - $ - $ - $ - $ - $ - $ - $ (1) The Cypress Recreation and Park District (the District) withdrew from OCERS in October 2000. At that time, OCERS did not have a policy addressing how the District's liability would be funded, nor was a liability recognized by the District. The District and OCERS entered into a Withdrawing Employer and Continuing Agreement on October 15, 2018, therefore fiscal year 2018-19 is the first year reporting the OCERS pension liability.
Note to Schedule
Methods and assumptions used to establish "actuarially determined contribution" rates:
Valuation Date Actuarially determined contribution rates are calculated based on the December 31, 2021 valuation.
Actuarial Cost Method Entry Age Actuarial Cost Method
Amortization Method Level percentage of payroll for total unfunded actuarial accrued liability Remaining amortization period Effective December 31, 2013, the outstanding balance of the UAAL from the December 31, 2012 valuation was combined and re-amortized over a declining 20- year period. Any changes in UAAL due to actuarial gains or losses or due to changes in assumptions or methods will be amortized over separate 20-year periods.
Any changes in UAAL due to plan amendments will be amortized over separate 15-year periods and any change in UAAL due to early retirement incentive programs will be amortized over a separate period of up to 5 years.
Asset valuation method The Actuarial Value of Assets is determined by recognizing any difference between the actual and the expected market return over a five-year period. The Valuation Value of Assets is the Actuarial Value of Assets reduced by the value of the non- valuation reserves.
Investment rate of return 7.00% net of pension plan investment expense, including inflation Inflation rate 2.50%
Real across the board salary increase 0.50%
Projected salary increase 4.00% to 11.00%
Cost of living adjustments 2.75% of retirement income
Other assumptions Same as those used in the December 31, 2021 funding actuarial valuation 54 Cypress Recreation and Park District
Schedule of Changes in the Total OPEB Liability and Related Ratios Last Ten Years (1)
2025 2024 2023 2022
Total OPEB Liability
Service cost 25,685 $ $ 26,503 $ 25,795 $ 24,962
Interest on the total OPEB liability 18,815 18,061 19,511 13,791 Actual and expected experience difference - (34,865) - (14,251) Changes in assumptions (54,036) (6,865) (91,208) (101,308) Experiences (Gains)/Losses 106,962 - - -
Benefit payments (25,729) (35,857) (2,730) (23,512)
Net change in total OPEB liability 71,697 1,842 (83,497) (100,318) Total OPEB liability - beginning (2) 460,993 459,151 542,648 642,966 Total OPEB liability - ending 532,690 460,993 459,151 542,648 Plan fiduciary net position as a percentage
of the total OPEB liability 0.00% 0.00% 0.00% 0.00%
Covered-employee payroll $ 1,273,478 $ 1,193,761 $ 1,182,033 $ 960,668 Total OPEB liability as a percentage of covered
employee payroll 41.83% 38.62% 38.84% 56.49%
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. (2) For the year ended June 30, 2023, the District began using a new actuary. The new actuary used new assumptions and revalued the ending OPEB Liability that is used for fiscal year ended June 30, 2021 and June 30, 2022 beginning OPEB Liabilities.
Notes to Schedule: None
Changes in assumptions: Change in discount rate from 3.97% as of June 30, 2024 to 5.20% as of June 30, 2025.
55 Cypress Recreation and Park District
Schedule of Changes in the Total OPEB Liability and Related Ratios Last Ten Years (1)
2021 2020 2019 2018
$ 27,817 24,299 $ 22,006 $ 22,868 $
17,461 14,801 24,752 22,987
(11,634) 12,835 4,755 776
111,828 (37,755) 33,594 (24,366)
- - - -
(29,623) (14,838) (29,847) (24,684)
115,849 (658) 55,260 (2,419)
680,460 675,314 625,200 627,619
796,309 674,656 680,460 625,200
0.00% 0.00% 0.00% 0.00%
$ 983,633 1,023,903 $ 882,824 $ 1,110,496 $
65.89% 80.96% 77.08% 56.30%
See Note to Required Supplementary Information 56
Cypress Recreation and Park District
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - General Fund
Year Ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts Negative)
Revenues
Taxes 7,376,000 $ $ 7,376,000 $ 7,815,068 $ 439,068
From other agencies 548,852 548,852 125,421 (423,431)
Charges for services 732,582 732,582 1,408,333 675,751
Use of money and property 926,250 926,250 1,127,615 201,365 Other revenue - - 33,514 33,514
Total revenues 9,583,684 9,583,684 10,509,951 926,267
Expenditures
Current
Parks and recreation 6,574,293 6,586,293 6,003,610 582,683 Capital outlay 1,572,500 25,266,903 22,310,482 2,956,421 Debt service
Principal 2,173,547 2,173,547 2,256,359 (82,812)
Interest 451,199 451,199 608,696 (157,497)
Total expenditures 10,771,539 34,477,942 31,179,147 3,298,795 Excess of revenues over
Under expenditures (1,187,855) (24,894,258) (20,669,196) 4,225,062 Other Financing Sources (Uses)
Issuance of note payable 22,991,549 22,991,549 21,398,060 1,593,489 Issuance of subscriptions - 147,318 - (147,318)
Transfer out (186,240) (201,240) (170,582) 30,658
Total other financing sources (uses) 22,805,309 22,790,309 21,374,796 1,415,513 Net Change in Fund Balances $ 21,617,454 $ (2,103,949) 705,600 $ 5,640,575 Fund Balance - Beginning 11,514,882
Fund Balance - Ending $ 12,220,482
57 Cypress Recreation and Park District
Notes to Required Supplementary Information
Year Ended June 30, 2025
Note 1 - Budgets and Budgetary Accounting
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. The District follows the City procedures in establishing the budgetary data reflected in the financial statements: After January 1, department heads prepare estimates for required appropriations for the fiscal year commencing on the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. Prior to June 1, the City Manager submits to the City Council (acting as the ex-officio Board of Directors of the District) a proposed operating budget for the fiscal year commencing on the following July 1.
The operating budget includes a summary of the proposed expenditures and financial resources of the District, as well as historical data for the preceding two fiscal periods. Prior year operating appropriations lapse unless they are re-appropriated through City Council approval. Encumbered appropriations from the previous year are not included in the adopted budget for the current year. Prior to July 1, the budget is legally enacted through passage of an adopting resolution.
The City Manager is authorized to transfer budgeted amounts within a department or activity and capital outlay may be transferred between accounts within a department. Transfers of appropriations between departments or activities and funds, and additional appropriations of fund balances, may be made only if authorized by the Board of Directors. Formal budgetary integration is employed as a management control device during the fiscal year for governmental fund types. The District maintains legally adopted budgets for all governmental funds.
The budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Budgeted amounts presented are as originally adopted or as amended (if applicable) by the Board of Directors.
Note 2 - Pension Required Supplementary Information
The pension liability is 16.7% of the City of Cypress Cost-Sharing Multiple Employer Plan. The schedule of changes to the net pension liability and related ratios can be obtained in the annual comprehensive financial report of the City of Cypress. The Cypress Recreation and Park District has provided the contribution schedules which the District was actuarially required to contribute.
Note 3 - Other Post-Employment Benefits Required Supplementary Information The other post-employment benefits obligation is combined with the benefits of the City of Cypress. 58 Cypress Recreation and Park District
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
Recreation Total
District Central Employees' Internal Service
Services Benefit Funds
Assets
Current Assets
Cash and cash equivalents $ 782,232 $ 1,369,272 $ 2,151,504 Receivables, net
Accounts - 22,026 22,026
Prepaid expenses - 979 979
Total current assets 782,232 1,392,277 2,174,509
Noncurrent Assets
Net pension asset - 822,513 822,513
Capital assets, net 305,775 - 305,775
Total noncurrent assets 305,775 822,513 1,128,288
Total assets 1,088,007 2,214,790 3,302,797
Deferred Outflow of Resources
Pension-related - 1,206,068 1,206,068
OPEB-related - 19,273 19,273
Total deferred outflow of resources - 1,225,341 1,225,341 Liabilities
Current Liabilities
Accounts Payable - 106 106
Compensated absences - 44,165 44,165
Total OPEB liabilty - 32,325 32,325
Total current liabilities - 76,596 76,596
Noncurrent Liabilities
Compensated absences - 132,496 132,496
Total OPEB liability - 500,365 500,365
Net pension liability - 3,952,863 3,952,863
Total noncurrent liabilities - 4,585,724 4,585,724
Total Liabilities - 4,662,320 4,662,320
Deferred Inflow of Resources
Pension-related - 492,014 492,014
OPEB-related - 179,097 179,097
Total deferred inflow of resources - 671,111 671,111
Net Position
Investment in capital assets 305,775 - 305,775
Restricted - 822,513 822,513
Unrestricted 782,232 (2,715,813) (1,933,581)
Total net position (deficit) $ 1,088,007 $ (1,893,300) $ (805,293) 59 Cypress Recreation and Park District
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
Year Ended June 30, 2025
Recreation Total
District Central Employees' Internal Service
Services Benefit Funds
Operating Revenues
Charges for services $ 55,800 $ 1,177,636 $ 1,233,436
Total operating revenues 55,800 1,177,636 1,233,436
Operating Expenses
Contractual services 5,611 706,341 711,952
Supplies and other services - 775,897 775,897
Depreciation/ amortization expense 71,749 - 71,749
Total operating expenses 77,360 1,482,238 1,559,598
Operating income (loss) (21,560) (304,602) (326,162)
Transfers in 20,582 150,000 170,582
Change in Net Position (978) (154,602) (155,580)
Net Position - Beginning 1,088,985 (1,738,698) (649,713) Net Position - Ending $ 1,088,007 $ (1,893,300) $ (805,293) 60 Cypress Recreation and Park District
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2025
Recreation Total
District Central Employees' Internal Service
Services Benefit Funds
Operating Activities
Receipts from interfund changes $ 55,800 $ 1,170,339 $ 1,226,139 Payments to supplier and service providers (5,611) (706,340) (711,951) Payments to employees for salaries and benefits - (418,240) (418,240) Net Cash Used for Operating Activities 50,189 45,759 95,948 Non Capital Financing Activities
Transfers from other funds 20,582 150,000 170,582
Net Cash Used for Non Capital Financing Activities 20,582 150,000 170,582 Capital and Related Financing Activities
Acquition and construction of capital assets (26,286) - (26,286) Net Cash Used for Capital and Related Activities (26,286) - (26,286) Net Increase (Decrease) in Cash and Cash Equivalent 44,485 195,759 240,244 Cash and Cash Equivalents - Beginning 737,747 1,173,513 1,911,260 Cash and Cash Equivalents - Ending $ 782,232 $ 1,369,272 $ 2,151,504 Reconciliation of Operating Income (Loss) to Net Cash Provided Used For)
Operating Activities
Operating income (loss) $ (21,560) $ (304,602) $ (326,162) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:
Depreciation/ amortization expense 71,749 - 71,749
(Increase) decrease in accounts receivable - (7,297) (7,297) (Increase) decrease in prepaid items - (105) (105)
(Increase) decrease in net pension asset - (181,038) (181,038) Increase (decrease) in accounts payable - 106 106
Increase (decrease) in net pension liability - 308,603 308,603 Increase (decrease) in compensated absences - 51,140 51,140 Increase (decrease) in total OPEB liability - 178,952 178,952 Total Adjustments 71,749 350,361 422,110
Net cash provided by (used for) operating activities $ 50,189 $ 45,759 $ 95,948 eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 61 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
To the Board of Directors
Cypress Recreation and Park District
Cypress, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the general fund, the aggregate remaining fund information of the Cypress Recreation and Park District (the “District”), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated December 19, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. 62 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Laguna Hills, California
December 19, 2025
eidebailly.com
25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 December 19, 2025
To the Honorable Members of City Council
City of Cypress, California
We have audited the financial statements of the Cypress Recreation and Park District (District), a blended component unit of the City of Cypress (City), as of and for the year ended June 30, 2025, and have issued our report thereon dated December 19, 2025.
Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our letter dated September 30, 2025, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of the system of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audits, we considered the system of internal control of the District solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
We have provided our comments regarding internal control during our audit in our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated December 19, 2025.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you. 2 Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by District is included in Note 1 to the financial statements. As disclosed in Note 1 to the financial statements, District has changed accounting policies related to accounting for compensated absences to adopt the provisions of Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences. Accordingly, the accounting changes have been retrospectively applied to the financial statements beginning July 1, 2024, with no restatement necessary. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Accounting Estimates and Related Disclosures
Accounting estimates and related disclosures are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.
The most sensitive accounting estimates affecting the financial statements are related to the net pension and other post-employment benefits (OPEB) liabilities, disclosures, related deferred inflows/outflows of resources, and pension/OPEB expense.
Management’s estimates of pension and OPEB are based on actuarial valuations. We evaluated the key factors and assumptions used to develop the estimates and determined that they are reasonable in relation to the basic financial statements taken as a whole.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting District’s financial statements relate to:
Pension liabilities, in Note 7, are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return and discount rate. As disclosed in the respective notes, a 1% increase or decrease in the discount rate has a significant effect on the District’s pension liability. OPEB liabilities, in Note 8, are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return, discount rate, and healthcare cost trend rates. As disclosed in the respective note, a 1% increase or decrease in the discount rate or healthcare trend rate has a significant effect on the District’s OPEB liability.
3 Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit. There were no corrected missstatements identified as a result of our audit procedures.
The following summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole and each applicable opinion unit.
Governmental Activities due to the implementation of Complensated Absences, which was not restated.
Overstatement of change in net position $25,106
Understatement of beginning net position $25,106
The effect of these uncorrected misstatements did not affect net position as of June 30, 2025.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the District’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. As discussed in Note 1, the financial statements present only the District and are intended to present the financial position, the changes in financial position of only that portion of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress (City) that is attributable to the transactions of the District. They do not purport to, and do not present fairly the financial position of the City, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. The purpose of this paragraph is to draw attention to the disclosures for the description of the reporting entity. We have included an emphasis of matter to clarify this description of the reporting entity. We did not modify our opinions related to this matter. 4 Representations Requested from Management
We have requested certain written representations from management which are included in the management representation letter dated December 19, 2025.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the District, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the District’s auditors.
This report is intended solely for the information and use of the City Council and management of the District, and is not intended to be, and should not be, used by anyone other than these specified parties.
Laguna Hills, California
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25231 Paseo De Alicia, Ste. 100 | Laguna Hills, CA 92653-4615 | T 949.768.0833 | F 949.768.8408 | EOE 1 Independent Accountant’s Report
To the Honorable Mayor and Members of City Council
Cypress, California
We have performed the procedures enumerated below, on the Appropriations Limit Calculation of the City of Cypress Recreation and Park District (District) prepared in accordance with Article XIII-B of the California Constitution for the fiscal year ended June 30, 2025. The District is responsible for the Appropriations Limit Calculation.
The City of Cypress (City) has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of evaluating the Appropriations Limit Calculation and we will report on findings based on the procedures performed. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the completed worksheets setting forth the calculations necessary to establish the District’s appropriations limits and compare the 2024-25 limits and annual adjustment factors included in those worksheets to the limits and annual adjustment factors that were adopted by resolution of City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council.
Findings: No exceptions were found as a result of this procedure.
2. We added last year’s limit to the annual adjustment amount and compared the resulting amount to the 2024-25 appropriations limit.
Findings: No exceptions were found as a result of this procedure.
3. We compared the current year information to the worksheet described in Procedure #1 above and to the information provided by the California State Department of Finance.
Findings: No exceptions were found as a result of this procedure.
4. We agreed the prior year appropriations limit to the prior appropriations limit adopted by City Council.
Findings: No exceptions were found as a result of this procedure. 2 We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the District’s Appropriations Limit Calculation for the fiscal year ended June 30, 2025. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B of the California Constitution.
This report is intended solely for the information and use of City Council and management of the District and is not intended to be and should not be used by anyone other than these specified parties.
Laguna Hills, California
December 19, 2025
3 A. 2023-2024 APPROPRITATIONS LIMIT: $ 11,252,215
B. 2024-2025 CHANGE IN PER CAPITA PERSONAL
INCOME: 3.62%
C. 2024-2025 CHANGE IN POPULATION: 0.31%
D. RATIO OF CHANGE (1.0362 X 1.0031): x 1.03941222
E. 2024-2025 APPROPRIATIONS LIMIT: $ 11,695,690
($11,252,215 x 1.03941222)
CYPRESS RECREATION AND PARK DISTRICT
FISCAL YEARS 2024-2025
APPROPRIATIONS LIMIT CALCULATION
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 3.
FROM: Lisa Berglund, City Clerk
DATE: 01/26/2026
SUBJECT: Approve the 2026 Proposed City Council Regular Meeting Schedule
RECOMMENDATION
Approve the proposed 2026 City Council Regular meeting schedule.
SUMMARY
On January 12, 2026, the City Council voted 4-1 to introduce an ordinance changing the meeting day of regular City Council meetings to the second and fourth Tuesdays of the month. The second reading of the ordinance is on tonight's agenda. The ordinance changes Municipal Code Section 2-1 to reflect the City Council's desire to move regular meetings of the City Council from the second and fourth Mondays of the month to the second and fourth Tuesdays of the month. Per City Charter Section 407, any time a regular meeting falls on a holiday, such meeting shall be held on the next business day. In 2026, none of the upcoming regular City Council meetings fall on a holiday.
The 2026 City Council regular meeting schedule accounts for school academic calendars by canceling the first meeting in April, the second meeting in July, and the first meeting in August. This also provides the City Council and staff with the opportunity to utilize vacation time. Traditionally, the City Council has not met a second time in November and December due to the meetings' proximity to major holidays. Preparing for and staffing a City Council meeting involves significant staff time and cost. Consolidating meetings during traditionally slower periods for Council business improves operational efficiency. If urgent matters arise, the City retains the ability to call a special City Council meeting as needed.
BUDGET IMPACT
None.
LEGAL REVIEW
Thisas reviewed by the City Attorney.
Thisas reviewed by the City Attorney.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
2026 Calendar
PROPOSED DRAFT 2026 CITY CALENDAR
CITY OF CYPRESS
CC = CITY COUNCIL MEETING H = CITY HOLIDAY CX = COUNCIL MTG CANCELED SPECIAL MEETINGS MAY BE SCHEDULED, OR STANDING MEETINGS MAY BE CANCELED. REFER TO CITY WEBSITE FOR OFFICIAL NOTICES.
DECEMBER / JANUARY FEBRUARY MARCH
SU M T W TH F SA SU M TU W TH F SA SU M TU W TH F SA
28 29 30 31 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 6 7
4 5 6 7 8 9 10 8 9 10 11 12 13 14 8 9 10 11 12 13 14
11 12 13 14 15 16 17 15 16 17 18 19 20 21 15 16 17 18 19 20 21 18 19 20 21 22 23 24 22 23 24 25 26 27 28 22 23 24 25 26 27 28 25 26 27
SP
28 29 30 31 29 30 31
APRIL MAY JUNE
SU M TU W TH F SA SU M TU W TH F SA SU M TU W TH F SA
1 2 3 4 1 2 1 2 3 4 5 6
5 6 7 8 9 10 11 3 4 5 6 7 8 9 7 8 9 10 11 12 13
12 13 14
CX
15 16 17 18 10 11 12 13 14 15 16 14 15 16 17 18 19 20
19 20 21 22 23 24 25 17 18 19 20 21 22 23 21 22 23 24 25 26 27 26 27 28 29 30 24 25 26 27 28 29 30 28 29 30
31 JULY AUGUST SEPTEMBER
SU M TU W TH F SA SU M TU W TH F SA SU M TU W TH F SA
1 2 3 4 1 1 2 3 4 5
5 6 7 8 9 10 11 2 3 4 5 6 7 8 6 7 8 9 10 11 12
12 13 14 15 16 17 18 9 10 11
CX
12 13 14 15 13 14 15 16 17 18 19
19 20 21 22 23 24 25 16 17 18 19 20 21 22 20 21 22 23 24 25 26 26 27 28
CX
29 30 31 23
30 24 25 26 27 28 29 27 28 29 30
31 OCTOBER NOVEMBER DECEMBER
SU M TU W TH F S SU M TU W TH F S SU M TU W TH F S
1 2 3 1 2 3 4 5 6 7 1 2 3 4 5
4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12
11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 18 19 20 21 22 23 24 22 23 24
CX
25 26 27 28 20 21 22
CX
23 24 25 26
25 26 27 28 29 30 31 29 30 27 28 29 30 31 1 2
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 4.
FROM: Lisa Berglund, City Clerk
DATE: 01/26/2026
SUBJECT: Second Reading of Ordinance No. 1223 Changing the City Council Meeting Day from Monday to Tuesday
RECOMMENDATION
Approve the second reading and adopt Ordinance No. 1223 by title only and waive further reading, amending the Cypress Municipal Code Section 2-1 related to the time and day of regular City Council meetings.
DISCUSSION
On January 12, 2026, the City Council approved (4-1, Council Member Peat dissenting) the first reading of Ordinance No. 1223 amending Cypress Municipal Code Section 2-1 related to the time and day of regular City Council meetings.
Section 2-1 is amended and restated in its entirety to read as follows: Ҥ 2-1 City Council meetings РTime of Regular Meetings. The City Council shall hold regular meetings at 5:30pm, on the second and fourth Tuesdays of each month. Said meetings shall be adjourned no later than 11:30pm, unless the majority of the council waives said adjournment time"
If adopted, the Ordinance will become effective February 26, 2026, and new meeting dates would commence March 10, 2026.
BUDGET IMPACT
None.
LEGAL REVIEW
The City Attorney has reviewed and approved the attached ordinance.
APPROVED BY: Sean Joyce, Interim City
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Ordinance Change of Meeting Day
01004.0001 2066764.2
ORDINANCE NO. 1223
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CYPRESS, CALIFORNIA, AMENDING SECTION 2-1
OF THE CYPRESS MUNICIPAL CODE RELATING TO
THE TIME OF REGULAR CITY COUNCIL MEETINGS
WHEREAS, the City Council (“City Council”) of the City of Cypress (“City”) is authorized to establish rules of conduct for its proceedings pursuant to Government Code section 36813; and
WHEREAS, the conduct of City Council meetings is governed by Article I of the City’s Municipal Code (“CMC”) and Robert’s Rules of Order; and WHEREAS, the City wishes to change the days of the month on which City Council meetings are regularly held; and
WHEREAS, by adoption of this Ordinance, the City Council wishes to amend CMC Section 2-1 to replace the days of the month when regular City Council meetings take place from the second and fourth Mondays to the second and fourth Tuesdays of each month.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS HEREBY ORDAINS AS FOLLOWS:
Section 1. Recitals Incorporated. The City Council finds the foregoing Recitals are true and correct and are incorporated herein by this reference.
Section 2. Amendment to CMC Section 2-1. Section 2-1 of the City of Cypress Municipal Code is hereby amended and restated in its entirety to read as follows:
Ҥ 2-1 City Council meetings РTime of Regular Meetings.
The city council shall hold regular meetings at 5:30pm, on the second and fourth Tuesdays of each month. Said meetings shall be adjourned no later than 11:30pm, unless the majority of the council waives said adjournment time.”
Section 3. Severability. If any section, subsection, sentence, clause, paragraph, or phrase of this Ordinance or any part thereof is for any reason held to be invalid or otherwise unenforceable by any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this 01004.0001 2066764.2
Ordinance or any part thereof. The City Council hereby declares that it would have enacted each and every section, subsection, sentence, clause, paragraph, or phrase thereof, irrespective of any determination of validity.
Section 5. Effective Date. This Ordinance shall take effect 30 days after its adoption.
Section 6. Certification. The City Clerk shall certify as to the passage and adoption of
this Ordinance and shall cause the same to be published and posted at the designated locations in
the City of Cypress.
ADOPTED, SIGNED, and APPROVED this ___ day of ________, 2026. ______________________________
Leo Medrano, Mayor
ATTEST:
___________________________________
Lisa A. Berglund, CMC, City Clerk
01004.0001 2066764.2
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF CYPRESS )
I, LISA BERGLUND, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Ordinance No. ________ was duly adopted at a regular meeting of the City Council of the City of Cypress held on the _____ day of ___________, 2026, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________
_________
Lisa Berglund, City Clerk
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 5.
FROM: Ruthie Marroquin, Deputy City Clerk
DATE: 01/26/2026
SUBJECT: Recognize the 75th Anniversary of the Kiwanis Club of Cypress
RECOMMENDATION
Recognize the 75th Anniversary of the Kiwanis Club of Cypress.
DISCUSSION
Periodically the Mayor receives requests, on behalf of the entire City Council, to publicly declare, recognize, observe, or promote awareness of a special event. Whenever the timing of such requests permit, routine and/or internal proclamation requests are placed on the agenda by the City Manager and City Clerk for consideration by the City Council. The City Manager received a request from Mayor Medrano for the City Council to officially proclaim January 2026 as the 75th Anniversary of the Kiwanis Club of Cypress. A proclamation has been prepared and is attached for the City Council's consideration.
BUDGET IMPACT
None.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Proclamation
CITY OF CYPRESS PROCLAIMS JANUARY
2026 AS THE 75TH ANNIVERSARY OF THE
KIWANIS CLUB OF CYPRESS
~ ~ ~
WHEREAS, Kiwanis International is a global organization of volunteers dedicated to improving the world one child and one community at a time; and WHEREAS, the Kiwanis Club of Cypress was chartered in 1950 and has faithfully served the Cypress community for 75 years through leadership, fellowship, and service; and
WHEREAS, members of the Kiwanis Club of Cypress have devoted countless hours to supporting youth programs, community service projects, scholarships, fundraising efforts, and initiatives that strengthen families and enrich the lives of children; and
WHEREAS, through dedication and commitment, the Kiwanis Club of Cypress has made a positive impact on the quality of life in our community and has exemplified the highest standards of civic engagement and generosity; and WHEREAS, the City of City of Cypress recognizes the significant contributions made by the Kiwanis Club of Cypress and honors its anniversary of service to the citizens of our community; and
NOW, THEREFORE, BE IT PROCLAIMED, that I, LEO MEDRANO, Mayor of the City of Cypress, along with my fellow Council Members, urge all citizens to join in recognizing the 75TH anniversary of the Kiwanis Club of Cypress for its ongoing service and commitment to improving our community.
___________________________
LEO MEDRANO
Mayor of City of Cypress
January 26, 2026
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 6.
FROM: Sean Joyce, Interim City Manager
DATE: 01/26/2026
SUBJECT: Adoption of Policy Establishing Procedures for Responding to Disruption of Airing Meetings of the City Council and Other Legislative Bodies Subject to SB 707
RECOMMENDATION
Approve the attached policy concerning disruption of service procedures associated with the airing and/or streaming of the meetings of the city's legislative bodies as defined by applicable state statute, as may be amended.
SUMMARY
SB 707 (Durazo) amends and restructures the Brown Act (open meeting laws) that are applicable to the State’s legislative bodies (as may be defined within the legislation). In sum, the purpose(s) of the 2025 legislation is to Modernize the Brown Act to reflect recent technological changes to promote greater public access and promote greater public participation in meetings. Some of the changes took effect January 1, 2026, and others are effective July 1, 2026.
One of the new requirements of the new legislation is that cities have in place policies prescribing how the City Council intends to respond to disruption of the airing/streaming of its meetings. The deadline for compliance is July 1, 2026.
DISCUSSION
If, for whatever reason, the airing of City Council meetings is disrupted, the proposed policy outlines the procedures for the Mayor to preside over such circumstances in accordance with the following procedures:
The legislative body must take a recess and try to restore service for at least one hour.
Afterward, if the disruption has not been resolved, the body must either:
Adopt a finding by roll- call vote confirming that A) good- faith efforts were made to resolve the issue and B) that resuming the meeting serves the public interest more than further delay; or
1. Adjourn the meeting to another date, at which time the unresolved agenda items are taken up anew.
2. BUDGET IMPACT
There is no budget impact associated with adoption of this policy.
LEGAL REVIEW
This item has been prepared in collaboration with the City Attorney's office.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Policy - Disruption of Service
City Council Policy/Procedure
Procedures for Disruption of Airing and/or
Streaming of Meetings of the City’s Legislative
Body/Bodies
Reference: Minute Action of XXXXXXXX
Disruption of Service Procedures
1. Purpose
Pursuant to SB 707 (Durazo) and by July 1, 2026, California cities are required to adopt a policy on disruption of service of the airing/streaming of legislative meetings, including good faith attempts to restore service for at least an hour.
2. Policy
As required by Senate Bill 707, each eligible legislative body of the City of Cypress shall provide two-way remote participation, ensuring public participation, not only in person but also through a two-way phone or video platform that includes, but is not limited to, Zoom or Microsoft Teams for applicable meetings.
In the event of a disruption that makes two-way remote participation not possible during a meeting, the legislative body shall recess for no less than one (1) hour to make good faith efforts to restore service. The legislative body may meet in closed session during this period of time, but shall not reconvene the open session of the meeting until at least one (1) hour following the disruption, or until telephonic or internet service is restored, whichever is earlier.
If telephonic or internet service providing for two-way remote participation has not been restored following such efforts, the legislative body shall adopt, by rollcall vote, a formal finding affirming that good faith efforts were taken to resolve the disruption and that resuming the meeting serves the public interest more than further delaying it to find a resolution to the disrupted service.
The City Council adopted this policy to comply with SB 707 and, consistent with such legislation, shall be effective as of July 1, 2026.
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 7.
FROM: Steve Charelian, Interim Director of Finance and Administrative Services DATE: 01/26/2026
SUBJECT: Adopt the FY 2026-2027 Budget Calendar
RECOMMENDATION
Adopt the Fiscal Year 2026-2027 budget calendar.
DISCUSSION
The City Council is required to adopt a budget for both the City and the Recreation and Park District prior to July 1 of each year. The process of creating and adopting the budget involves all departments and encompasses nearly six months from start to finish. Ongoing budget monitoring, year-end audits and financial statement preparation make budget-related matters a year-round cycle. The annual budget calendar provides a schedule of events and target dates to ensure the City Council adopts the budget before the start of the upcoming fiscal year.
The recommended budget calendar is a transparent document informing all parties involved in the budget process of the upcoming schedule. In addition to establishing when the City Council will discuss budget matters, the calendar provides a timeline and overview of the major tasks involved with the creation, monitoring and reporting of the budget.
BUDGET IMPACT
None.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Attachments
FY 26/27 Budget Calendar
City Council - January 26, 2026
Budget Calendar
Fiscal Year 2026-2027
Date Key Activities
January 2026 Budget Calendar is prepared and presented to City Council Annual Comprehensive Financial Report (ACFR) and Audit Results for FY ending June 30, 2025 - presented to City Council
The Annual 2026-2027 Budget Process begins
Monday, February 23, 2026 FY 2025-2026 Mid-Year Budget Review – presented to City Council FY 2025-2026 Capital Improvement Program Update - presented to City Council Tuesday, March 24, 2026 City Council Workshop (Presentation): Overview and Review of Fiscal Strategies, City Reserves, Pension Liabilities, and Pension Trust Assets March and April 2026 City Manager and Finance Director meet with Departments to review budget requests and performance measures
Proposed FY 2026-2027 budget compiled
Thursday, May 7, 2026 Proposed budget and Decision Packages submitted to City Council prior to Budget workshop
Tuesday, May 12, 2026 City Council budget workshop on FY 2026-2027 proposed budget Introduction of Seven Year Capital Improvement Program Additional meetings/workshops may be scheduled (as necessary) Tuesday, May 26, 2026 City Council considers Technology Master Plan for FY 2026-2027 through FY 2030-2031 Tuesday, June 9, 2026 City Council considers FY 2026-2027 City and Park District Budgets with City Council directed changes.
City Council considers Seven Year Capital Improvement Plan Wednesday, July 1, 2026 Beginning of New Fiscal Year 2026-2027 CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 8.
FROM: Steve Charelian, Interim Director of Finance and Administrative Services DATE: 01/26/2026
SUBJECT: Receive and File the Investment Reports for the Months Ended November 30, 2025, and December 31, 2025.
RECOMMENDATION
Receive and file the attached investment reports.
DISCUSSION
California Government Code Section 53607 and Cypress Municipal Code Section 2-18(f) requires submission of a monthly investment report to the City Council. Due to the cancellation of City Council meetings in November and December, two reports are being presented for the months ending November 30, 2025, and December 31, 2025.
Total cash and investments and the investment yields for the two months were as follows:
Nov. 30, 2025 Dec. 31, 2025
Total Cash and Investments $181.7 million $186.9 million Yield on Investments 4.11% 4.17%
As required by the Government Code, all investments are in conformity with the City's investment policy and sufficient cash flows are available to meet the next six months of estimated expenditures.
The attached Summaries of Cash and Investments present the investments held by the City of Cypress as of November 30, 2025, and December 31, 2025. The Investment Reports consist of the following five summaries:
1. Summary of Cash andInvestments - Provides the total portfolio of the City.
Changes in Cash andInvestments - Provides a two-month cash flow analysis by fund type. These separate fund types allow for restricted monies to be segregated and tracked separately. The total ending amount agrees to the current market value shown in the Summary of Cash and Investments.
2. Investments at Market Value by MaturityDate - Provides a list of investments by maturity date, and an indication of the liquidity (ability to turn into cash) of the investments. The California Government Code restricts the type of investments eligible for public funds. The City’s Investment Policy further defines permitted investments. These restrictions in investment types and the terms of allowable investments result in limited yields on City investments.
3. InterfundInvestments - Indicates outstanding loans between City funds. There are currently two loans due to the City's Infrastructure Reserve Fund from the Cypress Recreation and Park District General Fund related to the construction of Lexington Park and the rehabilitation of Arnold Cypress Park.
4. Summary of Cash and Investments Held InTrust - Presents investments held in trust by the Public Agency Retirement Services (PARS) for offsetting unfunded pension liabilities. The pension trust assets can only be used to pay future pension obligations. The legal restrictions on the allowable investment types are less restrictive than those in the City's portfolio, which provides the potential for higher yields to be earned over the long-term on investments held in the pension trust.
5. For each of the two months, the City's portfolio consisted of the following:
Nov. 30, 2025 Dec. 31, 2025
Federal Agency Securities $105.1 million $103.1 million Investment Pools $74.1 million $83.2 million
Bank Accounts $2.5 million $0.6 million
Total $181.7 million $186.9 million
A portion of the investment portfolio is invested in the State Investment Pool (Local Agency Investment Fund or LAIF) which is managed by investment professionals and provides a diversified investment pool for local agencies to invest. By using the combined size of the participating cities and agencies, the State Pool can provide a competitive yield, liquidity and investment knowledge that otherwise would not be available to a single entity.
The amount of cash in the City’s checking accounts fluctuates based on the maturity of investments, daily cash receipts, and when vendors and employees are paid. The daily balances maintained in the checking accounts provide credits which offset monthly bank charges. In addition to the Federal Depository Insurance Corporation (FDIC) which insures the first $250,000, excess checking deposits are secured by banks, government, or mortgage securities valued between 110% and 150% of the deposits.
BUDGET IMPACT
None.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City Manager
Attachments
Investment Report for the Month Ended November 30, 2025 Investment Report for the Month Ended December 31, 2025 Summary of Cash and Investments
Type Description
Investment
Date Maturity Date
Interest
Rate Carrying Value
Current Market
Value (2)
(1) Ckg General Operating Account BMO 12/1/2025 - 2,393,888.29 $ 2,393,888.29 $ Pool Local Agency Investment Fund State Treasurer 12/1/2025 4.096 39,000,000.00 39,075,253.66 Pool Local Agency Investment Fund State Treasurer 12/1/2025 4.096 35,000,000.00 35,067,535.34 FFCB Federal Farm Credit Bank BMO 1/13/2023 1/13/2026 4.000 2,000,000.00 1,999,860.00 FFCB Federal Farm Credit Bank BMO 3/2/2023 3/2/2026 4.478 5,000,500.00 5,009,050.00 FFCB Federal Farm Credit Bank BMO 9/29/2023 4/20/2026 5.000 4,997,138.54 5,018,300.00 FHLB Federal Home Loan Bank BMO 11/30/2023 11/17/2026 4.420 5,009,350.00 5,045,500.00 FHLB Federal Home Loan Bank BMO 12/19/2024 11/17/2026 4.310 4,725,000.00 4,724,858.25 FHLB Federal Home Loan Bank BMO 4/18/2024 4/16/2027 5.000 3,015,000.00 3,022,296.30 FFCB Federal Farm Credit Bank BMO 11/21/2024 11/12/2027 4.210 9,984,069.06 10,106,700.00 FHLMC Federal Home Loan Mortgage Corp BMO 12/19/2024 12/17/2027 4.243 4,971,808.11 5,001,200.00 FNMA Federal National Mortgage Association BMO 11/4/2024 7/21/2028 4.152 6,990,091.52 7,013,020.00 TSY US Treasury Bill BMO 6/24/2024 7/31/2028 4.288 5,010,926.95 5,081,600.00 FHLB Federal Home Loan Bank BMO 2/14/2025 8/14/2028 4.500 5,000,000.00 5,016,900.00 FHLB Federal Home Loan Bank BMO 5/27/2025 11/27/2028 4.300 3,140,210.70 3,167,876.25 FHLB Federal Home Loan Bank BMO 2/15/2024 2/12/2029 4.411 4,648,372.50 4,676,412.00 FFCB Federal Farm Credit Bank BMO 4/18/2024 4/10/2029 4.375 4,954,640.00 5,135,200.00 TSY US Treasury Bill BMO 6/24/2024 5/31/2029 4.241 4,700,114.89 4,874,200.00 TSY US Treasury Bill BMO 12/6/2024 9/30/2029 4.032 4,971,448.62 5,058,550.00 FFCB Federal Farm Credit Bank BMO 2/19/2025 2/19/2030 4.820 5,000,000.00 5,055,100.00 FHLB Federal Home Loan Bank BMO 7/3/2025 7/2/2030 4.000 5,000,000.00 5,028,300.00 FHLB Federal Home Loan Bank BMO 9/12/2025 9/3/2030 4.000 5,000,000.00 4,987,100.00 FFCB Federal Farm Credit Bank BMO 10/1/2025 10/1/2030 3.750 5,000,000.00 5,033,650.00 FHLB Federal Home Loan Bank BMO 11/20/2025 11/20/2030 4.000 5,000,000.00 4,999,950.00 Ckg Worker's Comp Account BMO 12/1/2025 - 50,000.00 50,000.00 Ckg Liability Account California Bank & Trust 12/1/2025 - 8,500.00 8,500.00 Cash Petty Cash City 12/1/2025 - 8,350.00 8,350.00
$ 180,579,409.18 $ 181,659,150.09
Average Weighted Yield to Maturity: 4.11%
Average Weighted Days to Maturity: 577.34
(1) Negative cash balance (if any) shown due to checks being issued at month end, transfer to cover checks not made until early in the following month. (2) Current market value of securities with maturities in excess of 12 months (if any) are provided by third-party safekeeping agents.
I certify that this report reflects all Government Agency pooled investments and is in conformity with the Investment Policy of the City of Cypress. A copy of this Investment Policy is available on the City's website.
The Investment Program herein shown provides sufficient cash flow liquidity to meet six months estimated expenditures.
Signed: ________________________________
Finance Director
City of Cypress
As of November 30, 2025
Bank/Agent
9/30/2025 +RECEIPTS (DISBURSEMENTS) 10/31/2025 +RECEIPTS (DISBURSEMENTS) 11/30/2025
GENERAL
111/114 GENERAL FUND/GENERAL FUND-GRANTS $ 32,976,531 $ 2,982,263 $ (4,347,861) $ 31,610,933 $ 4,765,205 $ (3,923,997) $ 32,452,141
SPECIAL REVENUE
115 PANDEMIC RELIEF - - - - - - -
212 CRPD-GENERAL FUND 11,654,262 244,104 (451,072) 11,447,294 1,423,827 (308,751) 12,562,370 213 CRPD-PARK DEVELOPMENT 58 - - 58 - - 58
221 TRAFFIC SAFETY 3,489 5,663 - 9,152 6,598 - 15,750
230 STREETS 7,856,566 303,399 (43,037) 8,116,928 456,070 (5,384) 8,567,614 251 LIGHTING DISTRICT #2 4,566,588 35,431 (103,080) 4,498,939 308,608 (99,496) 4,708,051 261 STORM DRAIN 2,298,449 48,197 (22,464) 2,324,182 34,518 (145,233) 2,213,467 262 PLANNED LOCAL DRAINAGE FACILITY 1,175,357 7,168 - 1,182,525 - - 1,182,525 271 CORP CNTR MAINT DISTRICT #1 206,710 - (3,685) 203,025 - (3,690) 199,335 280 ASSET SEIZURE 846,797 9,167 (8,720) 847,244 14,889 (18,004) 844,129 291 CABLE TV FRANCHISE AGREEMENT 889,535 804 - 890,339 13,143 - 903,482 301 SUPPLEMENTAL LAW ENFORCEMENT (29,506) 114,849 (14,095) 71,248 25,257 (8,084) 88,421 311 AB 2766 TRIP REDUCTION 34,752 142 - 34,894 - - 34,894 321 SEWER FUND 10,520,827 228,836 (48,756) 10,700,907 153,387 (26,506) 10,827,788 471 LOW AND MODERATE HSG ASSET 43,097 264 (1,908) 41,453 298 (307) 41,444
CAPITAL PROJECTS
415 CITY CAPITAL PROJECTS 15,446,221 9,307 (148,745) 15,306,783 - (251,746) 15,055,037 416 INFRASTRUCTURE RESERVE 51,437,462 411,942 - 51,849,404 - - 51,849,404
TRUST AND AGENCY
600 TRUST AND AGENCY 1,997,183 33,699 (53,587) 1,977,295 28,994 (164,950) 1,841,339 611 BUSINESS ASSESSMENT DISTRICT - - - - - - -
612 CFD #1 ASSESSMENT DISTRICT 153,575 - - 153,575 - - 153,575 620 REC & COMM SERVICES FOUNDATION 45,805 3,388 (1,888) 47,305 1,000 (425) 47,880
INTERNAL SERVICE
710 CENTRAL SERVICES 4,170,233 245,872 (314,516) 4,101,589 244,801 (180,460) 4,165,930 720 CAPITAL REPLACEMENT 16,068,600 109,025 (85,110) 16,092,515 80,336 (15,816) 16,157,035 730 TECHNOLOGY IMPROVEMENT 2,235,841 - - 2,235,841 - - 2,235,841 750 EMPLOYEE BENEFITS 3,474,653 1,857,740 (1,056,122) 4,276,271 1,294,821 (928,902) 4,642,190 760 LIABILITY SELF INSURANCE 1,798,723 69,331 (4,189) 1,863,865 69,331 - 1,933,196 770 WORKERS COMP SELF INSURANCE 3,464,948 96,620 (113,901) 3,447,667 63,432 (46,645) 3,464,454 OTHER
811/812 WESTCOMM JPA 5,255,351 957,304 (431,289) 5,781,366 75,231 (384,797) 5,471,800 $ 7,774,515 178,592,107 $ (7,254,025) $ 179,112,597 $ 9,059,746 $ (6,513,193) $ 181,659,150 $ City of Cypress
Changes in Cash/Investments
City of Cypress
INVESTMENTS AT MARKET VALUE BY MATURITY DATE
1 day 181 days 1 year 2 years 3 years 4 years
to to to to to to
Investments 180 days 1 year 2 years 3 years 4 years 5 years Totals Percent CASH $ - 2,460,738 $ - $ - $ - $ - $ 2,460,738 $ 1.35%
FFCB - 12,027,210 10,106,700 - 5,135,200 10,088,750 37,357,860 20.56% FHLB 9,770,358 - 3,022,296 8,184,776 4,676,412 15,015,350 40,669,193 22.39% FHLMC - - - 5,001,200 - - 5,001,200 2.75%
FNMA - - 7,013,020 - - 7,013,020 3.86%
STATE POOL 74,142,789 - - - - - 74,142,789 40.81%
TSY - - - 5,081,600 9,932,750 - 15,014,350 8.27%
Totals $ 9,770,358 88,630,737 $ 13,128,996 $ 25,280,596 $ 19,744,362 $ 25,104,100 $ 181,659,150 $ 100.00% Percent 48.79% 5.38% 7.23% 13.92% 10.87% 13.82% 100.00% As of November 30, 2025
Scheduled Note
Issue Maturity Interest Authorized Total Repayments Principal Note No. To/From Purpose Date Date Rate Amount Advances To Date Outstanding* 1 CRPD/
City
Lexington Park
Construction 02/08/21 06/30/30 2.00% 12,800,000 $ 12,293,975 $ 9,109,308 $ 3,184,667 $ 2 CRPD/
City
Arnold
Cypress Park
Construction 11/13/23 06/30/45 2.00% 33,500,000 $ 32,335,599 $ 1,548,801 $ 30,786,798 $ $ 33,971,465
1 2
*
CITY OF CYPRESS
INTERFUND INVESTMENTS
As of November 30, 2025
The Lexington Park note is being repaid with park development fees as they become available.
Effective July 1, 2025, the maturity date of the note was extended to June 30, 2030 with an interest rate of 2%.
Beginning June 30, 2025, the CRPD will repay $2 million annually (including principal and interest) from available CRPD property taxes over the next 20 years.
Unaudited; amounts subject to change as part of finalizing the recording of actual FY 2024-25 transactions.
Fund Type Issuer
Maturity
Date
One Year
Return * Cost Amount
Current Market
Value
PARS Public Agencies Post-Employment Benefits Trust
Trustee: Public Agency Retirement Services (PARS)
Section 115 Trust Pension Trust Various Open 9.93% 28,890,000.00 $ 39,340,841.71 $ Total $ 28,890,000.00 $ 39,340,841.71
* 12-month period ending with the current month.
City of Cypress
Summary of Cash and Investments Held In Trust
As of November 30, 2025
10/31/2025 +RECEIPTS (DISBURSEMENTS) 11/30/2025 +RECEIPTS (DISBURSEMENTS) 12/31/2025
GENERAL
111/114 GENERAL FUND/GENERAL FUND-GRANTS $ 31,610,933 $ 4,765,205 $ (3,923,997) $ 32,452,141 $ 5,626,557 $ (3,453,933) $ 34,624,765
SPECIAL REVENUE
115 PANDEMIC RELIEF - - - - - - -
212 CRPD-GENERAL FUND 11,447,294 1,423,827 (308,751) 12,562,370 2,746,777 (846,736) 14,462,411 213 CRPD-PARK DEVELOPMENT 58 - - 58 - - 58
221 TRAFFIC SAFETY 9,152 6,598 - 15,750 - - 15,750
230 STREETS 8,116,928 456,070 (5,384) 8,567,614 414,652 (140,362) 8,841,904 251 LIGHTING DISTRICT #2 4,498,939 308,608 (99,496) 4,708,051 612,853 (163,456) 5,157,448 261 STORM DRAIN 2,324,182 34,518 (145,233) 2,213,467 33,794 (44,465) 2,202,796 262 PLANNED LOCAL DRAINAGE FACILITY 1,182,525 - - 1,182,525 - - 1,182,525 271 CORP CNTR MAINT DISTRICT #1 203,025 - (3,690) 199,335 52,934 (18,307) 233,962 280 ASSET SEIZURE 847,244 14,889 (18,004) 844,129 10,570 (2,709) 851,990 291 CABLE TV FRANCHISE AGREEMENT 890,339 13,143 - 903,482 - - 903,482 301 SUPPLEMENTAL LAW ENFORCEMENT 71,248 25,257 (8,084) 88,421 26,513 (14,775) 100,159 311 AB 2766 TRIP REDUCTION 34,894 - - 34,894 16,855 - 51,749 321 SEWER FUND 10,700,907 153,387 (26,506) 10,827,788 155,072 (49,601) 10,933,259 471 LOW AND MODERATE HSG ASSET 41,453 298 (307) 41,444 - (1,391) 40,053
CAPITAL PROJECTS
415 CITY CAPITAL PROJECTS 15,306,783 - (251,746) 15,055,037 - (248,355) 14,806,682 416 INFRASTRUCTURE RESERVE 51,849,404 - - 51,849,404 - - 51,849,404
TRUST AND AGENCY
600 TRUST AND AGENCY 1,977,295 28,994 (164,950) 1,841,339 54,700 (62,180) 1,833,859 611 BUSINESS ASSESSMENT DISTRICT - - - - - - -
612 CFD #1 ASSESSMENT DISTRICT 153,575 - - 153,575 - - 153,575 620 REC & COMM SERVICES FOUNDATION 47,305 1,000 (425) 47,880 800 - 48,680
INTERNAL SERVICE
710 CENTRAL SERVICES 4,101,589 244,801 (180,460) 4,165,930 254,180 (171,097) 4,249,013 720 CAPITAL REPLACEMENT 16,092,515 80,336 (15,816) 16,157,035 99,675 (1,576) 16,255,134 730 TECHNOLOGY IMPROVEMENT 2,235,841 - - 2,235,841 - - 2,235,841 750 EMPLOYEE BENEFITS 4,276,271 1,294,821 (928,902) 4,642,190 1,472,199 (969,428) 5,144,961 760 LIABILITY SELF INSURANCE 1,863,865 69,331 - 1,933,196 69,330 (3,506) 1,999,020 770 WORKERS COMP SELF INSURANCE 3,447,667 63,432 (46,645) 3,464,454 64,837 (72,528) 3,456,763 OTHER
811/812 WESTCOMM JPA 5,781,366 75,231 (384,797) 5,471,800 100,954 (349,593) 5,223,161 $ 9,059,746 179,112,597 $ (6,513,193) $ 181,659,150 $ 11,813,252 $ (6,613,998) $ 186,858,404 $ Changes in Cash/Investments
City of Cypress
City of Cypress
INVESTMENTS AT MARKET VALUE BY MATURITY DATE
1 day 181 days 1 year 2 years 3 years 4 years
to to to to to to
Investments 180 days 1 year 2 years 3 years 4 years 5 years Totals Percent CASH $ - 575,178 $ - $ - $ - $ - $ 575,178 $ 0.31%
FFCB - 12,025,500 10,105,800 - 5,123,650 10,064,950 37,319,900 19.97% FHLB 5,043,550 - 3,021,090 8,188,850 4,679,342 15,010,000 35,942,832 19.24% FHLMC - - - - 7,856,149 - 7,856,149 4.20%
FNMA - - 7,016,590 - - 7,016,590 3.76%
STATE POOL 83,160,155 - - - - - 83,160,155 44.50%
TSY - - - 5,075,750 9,911,850 - 14,987,600 8.02%
Totals $ 5,043,550 95,760,834 $ 13,126,890 $ 20,281,190 $ 27,570,990 $ 25,074,950 $ 186,858,404 $ 100.00% Percent 51.25% 2.70% 7.03% 10.85% 14.76% 13.42% 100.00% As of December 31, 2025
Scheduled Note
Issue Maturity Interest Authorized Total Repayments Principal Note No. To/From Purpose Date Date Rate Amount Advances To Date Outstanding* 1 CRPD/
City
Lexington Park
Construction 02/08/21 06/30/30 2.00% 12,800,000 $ 12,293,975 $ 9,109,308 $ 3,184,667 $ 2 CRPD/
City
Arnold
Cypress Park
Construction 11/13/23 06/30/45 2.00% 33,500,000 $ 32,335,599 $ 1,548,801 $ 30,786,798 $ $ 33,971,465
1 2
*
CITY OF CYPRESS
INTERFUND INVESTMENTS
As of December 31, 2025
The Lexington Park note is being repaid with park development fees as they become available.
Effective July 1, 2025, the maturity date of the note was extended to June 30, 2030 with an interest rate of 2%.
Beginning June 30, 2025, the CRPD will repay $2 million annually (including principal and interest) from available CRPD property taxes over the next 20 years.
Unaudited; amounts subject to change as part of finalizing the recording of actual FY 2024-25 transactions.
Fund Type Issuer
Maturity
Date
One Year
Return * Cost Amount
Current Market
Value
PARS Public Agencies Post-Employment Benefits Trust
Trustee: Public Agency Retirement Services (PARS)
Section 115 Trust Pension Trust Various Open 12.96% 28,890,000.00 $ 39,400,648.35 $ Total $ 28,890,000.00 $ 39,400,648.35
* 12-month period ending with the current month.
City of Cypress
Summary of Cash and Investments Held In Trust
As of December 31, 2025
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 9.
FROM: Mark Lauderback, Chief of Police
DATE: 01/26/2026
SUBJECT: Approve the Urban Area Security Initiative Sub-Recipient Agreement
RECOMMENDATION
1. Approve the Fiscal Year 2024 Urban Area Security Initiative (UASI) grant for calendar years 2025-2027 through the UASI Sub-Recipient Agreement with the City of Anaheim; and
2. Authorize the City Manager to execute all UASI related documents.
DISCUSSION
The Urban Area Security Initiative provides federal funding to cities to prevent, respond to, and recover from threats or acts of terrorism. In Orange County, the cities of Anaheim and Santa Ana, in their capacity as a "Core City" for the Anaheim/Santa Ana Urban Area, received and accepted a FY 2024 (2025-2027) Urban Area Security Initiative grant.
Anaheim and Santa Ana have the responsibility to enhance the preparedness and response capabilities of the entire urban area of Orange County by administering grant-supported training and funding. In even years the City of Anaheim acts as the lead fiscal agent. Each city in Orange County, including Cypress, as a sub-recipient, may receive UASI funding for projects, services, and training based on availability.
Several years ago, Cypress received UASI funding for personal protective equipment for first responders, security technology for critical asset protection, and terrorism-related training. However, in recent years Cypress has not received any UASI funding for equipment purchases but has attended a variety of training sessions in which UASI participation is required. The FY 2024, the UASI agreement provides the Police Department with the opportunity to attend regional training exercises and request equipment purchases. In approving this agreement, the City is agreeing to the following grant assurances:
To provide all matching funds required for the grant project and that any cash match will be appropriated as required; (this would be brought back to City Council for will be appropriated as required; (this would be brought back to City Council for consideration and approval if an opportunity arises)
Any liability arising out of the performance of this agreement shall be the responsibility of the Applicant and the City Council;
Grant funds shall not be used to supplant expenditures controlled by the City Council; The Applicant is authorized by the City Council to apply for federal assistance, and the institutional, managerial and financial capability (including funds sufficient to pay the non-federal share of project cost, if any) to ensure proper planning, management and completion of the project described in this application; and The official executing this agreement is authorized by the City Council.
The current performance period for the FY 2024 UASI Grant runs through March 31, 2027 and sub-recipient packets are due by February 9, 2026.
BUDGET IMPACT
If Cypress is allocated UASI funding for equipment, a recommendation to approve the grant will be presented for City Council consideration.
LEGAL REVIEW
The agreement was reviewed by the City Attorney and approved as to form.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Sub-Recipient Agreement 2024
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 10.
FROM: Sean Joyce, Interim City Manager
DATE: 01/26/2026
SUBJECT: Adopt the 2026 Federal and State Legislative Platform
RECOMMENDATION
Adopt the 2026 Federal and State Legislative Platform.
DISCUSSION
The legislative platform is a tool to protect and promote the City's interests concerning priority policy initiatives, legislative, and regulatory matters that may impact Cypress.
Annually updating such a platform allows for timely responses to legislative and regulatory issues important to the City and region. As an example, the legislative platform includes language supporting measures that provide increased funding for disaster preparedness, prevention, recovery and responses to all hazardous threats such as the local fires which continue to threaten our region.
The platform is a useful tool to monitor pending legislation and determine if action is warranted. Action may include letters from the Mayor consistent with the adopted platform, as well as conversations with legislators and their staff. Before taking any action or recommending a letter for the Mayor's signature, legislative proposals are evaluated with department input, legislative advocate analysis, legal input, and City Manager guidance.
New or complex policy proposals may lead to additional City Council direction as appropriate.
The platform provides broad guidance when evaluating legislation that may impact local control, fiscal stability, and the City's opportunity to compete for grants and funding.
Additionally, the platform establishes Cypress' legislative priorities to provide the foundation for advocacy efforts at the federal, state, and local levels. The legislative priorities articulate City Council policy direction and are presented in alignment with the League of California Cities.
BUDGET IMPACT
None.
LEGAL REVIEW
None required.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
2026 Legislative Platform
CITY OF CYPRESS
2026 STATE AND FEDERAL LEGISLATIVE PLATFORM
The Legislative Platform is a tool to protect and promote the City’s interests on priority issues, legislative and regulatory matters that may impact Cypress. The Legislative Platform defines the City Council’s policy guidelines and legislative priorities to provide the foundation for advocacy efforts at the federal, state, and local levels. Maintaining a legislative platform allows for timely response to legislative and regulatory issues important to the City, including letters from the Mayor or City Manager to the Legislature and/or Congress consistent with the Platform. The Legislative Platform also summarizes the City Council’s positions on priority issues without precluding the consideration of additional legislative and budget issues that arise during the year.
POLICY GUIDELINES
I. PRESERVE LOCAL CONTROL
Preserve and protect the City’s charter powers, duties and the ability to enact legislation and policy direction concerning local affairs, and oppose legislation that preempts local authority. Local agencies should preserve and enhance authority and accountability for revenues raised and services provided.
II. PROMOTE FISCAL STABILITY
Support measures that promote fiscal stability, predictability, and financial independence. Support measures that preserve the City’s revenue base and local control over local government budgeting, recognizing that economic cost is a factor in considering the merits and/or impacts of proposed legislation or regulation. Oppose measures that make cities more dependent on the County, State or Federal governments for financial stability, such as mandated costs with no guarantee of local reimbursement or offsetting benefits. Oppose measures that shift local funds to the County, State or Federal governments, without offsetting benefits.
III. SUPPORT FUNDING OPPORTUNITIES
Support opportunities that allow the City to compete for its fair share of regional, state and federal funding, and that maintain funding streams. Opportunities may include competitive grant and funding programs. Opportunities could also include dedicated funding streams at the regional, state and federal levels that allow the City to maximize local revenues, offset and leverage capital expenditures, and maintain City standards and goals.
CITY OF CYPRESS
2026 STATE AND FEDERAL LEGISLATIVE PLATFORM
2 LEGISLATIVE PRIORITIES
Community Services
• Support funding, measures, and legislation that provide for constructing, rehabilitating and maintaining public facilities, parks and open space. • Oppose state legislation that might limit local government’s ability to collect or allocate park in-lieu fees.
• Support legislation and grants that facilitate the provision of recreational activities for all segments of the population.
Environmental Quality
• Oppose legislation that imposes undue hardship on local agencies to implement environmental regulations.
• Support measures that expand markets for recyclable materials and maintain local authority and flexibility to regulate solid waste and recyclables. • Oppose waste and resource recovery measures imposing State-mandated costs when there is no guarantee of local cost recovery or offsetting benefit. • Support legislation that establishes funding opportunities that provide for compliance with environmental regulations.
Governance, Transparency and Labor Relations
• Monitor mandates in connection with proposed administrative or legislative action that would modify the governing responsibilities and authority of city councils. • Support legislation that modernizes requirements for publication of legal notices to allow for electronic posting.
• Support measures to achieve and maintain fair and proportionate representation on county-wide and regional boards.
• Support measures to clarify the California Voting Rights Act or permit alternative voting systems (e.g. ranked choice or cumulative voting).
CITY OF CYPRESS
2026 STATE AND FEDERAL LEGISLATIVE PLATFORM
3 • Oppose measures that reduce local control or create additional financial burden related to employee relations and collective bargaining issues that can be negotiated at the bargaining table.
• Support reform measures that provide sustainable and secure public pensions and other post-retirement benefits to ensure responsive and affordable public services.
Housing, Community and Economic Development
• Support legislation that strengthens local control and decision making on land use and zoning matters.
• Oppose legislation that erodes the ability of cities to condition and deny projects that inadequately mitigate impacts to the community.
• Support reforms and improvements to housing element law to provide clear processes and flexibility to allow regional cooperation and establish realistic housing goals and performance standards.
• Support economic development initiatives that preserve and enhance a positive business climate and maintains and grows the business tax base. • Support legislation that provides tangible and productive tools and investment to support job creation, job retention and local business. • Support legislation that provides funding, resources, and flexibility to provide affordable, transitional, supported, and emergency housing to prevent homelessness and assist individuals experiencing homelessness.
Public Safety
• Support legislative efforts to improve local law enforcement, fire suppression and prevention, hazardous materials mitigation, rescue, emergency medical services and disaster preparedness.
• Support legislation and seek funding to assist local law enforcement to reduce crimes related to illicit drugs, burglary, assault, and domestic violence. • Support measures that protect children and youth from tobacco, alcohol and drug use and related products, and that support related prevention and intervention programs.
CITY OF CYPRESS
2026 STATE AND FEDERAL LEGISLATIVE PLATFORM
4 • Support legislation to deter drivers from operating motor vehicles while under the influence of alcohol and drugs.
• Support measures that provide frontline funding for law enforcement services associated with the “early release” of prisoners resulting from State-mandated criminal justice realignment provisions.
• Support increased funding for disaster preparedness, prevention, recovery and responses for all hazard threats.
• Support legislation that strengthens cities’ authority to regulate business that serve as fronts for illegal conduct such as human trafficking, prostitution, etc.
Revenue and Taxation
• Oppose legislation that would increase the City’s dependence on the State for financial stability and policy direction.
• Support the preservation and enhancement of the City’s ability to generate and retain sales and use tax revenue, and local point-of-sale revenue allocations. • Oppose legislation to alter the manner by which transient occupancy taxes are calculated and collected.
Transportation, Communications and Public Works
• Support and pursue funding that specifically benefits Cypress’ transportation and public works projects.
• Support protection of dedicated transportation-related tax revenues and enhance the ability of local agencies to finance local transportation programs and facilities. • Support efforts to maintain cities ability to retain existing fees on telecommunications services for public, educational and governmental channels. • Oppose efforts to restrict cities’ authority to zone and plan for the deployment of telecommunications infrastructure.
• Support cities’ ability to maintain and manage the public right-of-way and receive compensation for its use.
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 11.
FROM: Christopher Wong, Business Development Manager
DATE: 01/26/2026
SUBJECT: Approve Conditional Use Permit No. 2025-02 for an Adult Day Health Care Facility at 6269 Ball Road
RECOMMENDATION
Adopt a Resolution approving Conditional Use Permit No. 2025-02, subject to the attached conditions, and confirm the project is exempt from the California Environmental Quality Act (CEQA).
SUMMARY
Two Wings Health Services, Inc. requests approval of Conditional Use Permit No. 2025-02 to establish an adult day health care facility within an existing church building located at 6269 Ball Road. As conditioned, the proposed use meets all development standards and required findings and is recommended for approval.
DISCUSSION
Background
In 1995, the City Council approved Conditional Use Permit No. 95-20 to establish a church at 6269 Ball Road; the site has continuously operated as a church since then. New Praise Church purchased the property in 2012 and operates the facility, which includes a 2,200-square-foot sanctuary with 144 seats, seven classrooms, office space, a conference room, a kitchen, a playroom, and a banquet room. Conditional Use Permit No. 95-20 limits church operations to 15 hours per week, and the church currently operates only on weekends.
Project Description
The applicant proposes operating an adult day health care facility within the existing church building, occupying approximately 9,916 square feet of interior space. No new construction is proposed.
If approved, the proposed use of the facility will provide daytime health, therapeutic, recreational, and supportive services to seniors and adults with chronic conditions or disabilities and will operate Monday through Friday from 8:00 am to 1:30 pm, with no evening or weekend hours. The program will serve up to 150 participants and employ up to nine staff members, including licensed medical and therapy professionals, program aides, drivers, and a director.
Participants will arrive via program-operated vans or caregiver drop-off and pick-up using existing on-site parking and designated loading areas. Arrivals and departures will occur on staggered schedules, with most arrivals occurring between 8:00 a.m. and 9:00 a.m. and departures occurring by 1:30 p.m. Attendance varies based on individual care plans, and not all enrolled participants attend the facility every day.
The adult day care program would operate independent of church activities, will not overlap in hours of operation, and will remain primarily indoors. The operator will maintain required State licensure and certification through the California Department of Public Health and will comply with all applicable operational regulations.
Subject Property and Surrounding Uses
The property is located at the northeast corner of Ball Road and Juanita Street. Surrounding land uses and zoning are identified below, and a vicinity map is attached for reference.
Direction Land Use Zoning
North Multiple-Family Residential RM-20 (Multiple Family) South Single-Family Residential City of Buena Park
East Commercial CG (Commercial General)
West Single-Family Residential PC (Planned Community)
Regulatory Control
The property is zoned CG (Commercial General), and the General Plan designation is Commercial Neighborhood. The CG zone allows community care facilities, including adult day health care facilities, subject to approval of a conditional use permit.
ANALYSIS
The proposed adult day health care facility was evaluated for compatibility with the church and surrounding neighborhood, with a focus on design, operating hours, parking, and circulation. The church building is designed and improved for assembly and group activities. While the proposed hours do not overlap with typical church services, unregulated future changes could create conflicts. Accordingly, the conditions of approval prohibit concurrent operation of the adult day health care facility and the church, require the operator to maintain an approved operating schedule, and mandate operational adjustments as needed to prevent overlap.
Participants will arrive via program-operated vans or caregiver drop-off and pick-up using existing on-site parking and designated loading areas. The conditions of approval require all arrivals and departures to occur entirely on site, prohibit queuing, double-parking, or spillover into the public right-of-way, and require additional operational measures including a parking management plan, if circulation impacts occur. The conditions of approval also limit the program to a maximum of 150 participants, establishing a clear cap on the scope and intensity of the land use. Collectively, these operational controls ensure compatibility and intensity of the land use. Collectively, these operational controls ensure compatibility with the church and the surrounding neighborhood and support the required findings for conditional use permits in Cypress Zoning Ordinance (CZO) Section 4.19.070(E).
Development Standards
The proposed adult day health care facility is subject to development standards specifically applicable to large community care facilities in CZO Section 3.17.060(D), including standards governing separation requirements, walls, landscaping, lighting, signage, fire safety, noise, and compliance with State health and safety regulations. The facility will operate in a zoning district that allows the use, meets the required 300-foot separation standard from another similar facility, and does not propose changes to site walls or lighting that currently meet applicable standards. Operations will occur primarily indoors, and any outdoor activity will remain limited and subject to applicable noise restrictions.
Parking for day care centers is required at a rate of one space per employee on the largest shift, plus one space for every 10 persons under care. Based on the proposed operation, 24 parking spaces are required; the site provides 43 on-site spaces, exceeding the minimum requirement.
The operator is required to comply with all applicable fire department standards and must obtain all required State and local licenses to ensure that operations remain consistent with applicable regulatory requirements. While the site generally complies with applicable development standards, on-site landscaping requires improvement to fully align with neighborhood conditions. As a condition of approval, the operator is required to upgrade and maintain on-site landscaping, including replacement of deteriorated plant materials and irrigation, to support consistency with applicable landscaping standards and the prevailing character of the surrounding area prior to operation.
Recommendation
The proposed conditional use permit is consistent with the requirements and intent of the CZO and applicable standards for a community care facility. It is recommended that the City Council approve Conditional Use Permit No. 2025-02, subject to the conditions set forth in Exhibit A to the attached resolution and determine that the project is exempt from CEQA.
Public Hearing
Notices of the public hearing were posted and mailed to all property owners within 500 feet of the project site. No comments have been received to date.
Alternative Action
If the City Council determines that additional concerns must be addressed before taking action, it may continue the item and direct staff to work with the applicant to resolve those concerns. Alternatively, the City Council may make the required findings and deny the project.
BUDGET IMPACT
None.
LEGAL REVIEW
The City Attorney has reviewed this report.
The City Attorney has reviewed this report.
APPROVED BY: Sean Joyce, Interim City
Manager
Attachments
Draft Resolution
Project Conditions of Approval
Vicinity Map
Plans
Notice of Exemption
RESOLUTION NO. ____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS, CALIFORNIA, APPROVING CONDITIONAL USE PERMIT NO. 2025-02
TO ALLOW AN ADULT DAY CARE FACILITY IN AN EXISTING CHURCH BUILDING AT 6269 BALL ROAD, LOCATED IN THE CG (COMMERCIAL
GENERAL) ZONE WITH A GENERAL PLAN LAND USE DESIGNATION
OF COMMERCIAL NEIGHBORHOOD, AND DETERMINING THAT THE
PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT
WHEREAS, the City Council of the City of Cypress considered an application for a conditional use permit in accordance with the provisions of Cypress Zoning Ordinance (CZO) Section 4.19.070 to allow the operation of an adult day care facility in an existing church building at 6269 Ball Road; and
WHEREAS, the subject property is zoned CG (Commercial General) and designated Commercial Neighborhood in the City’s General Plan, which allows community care facilities, including adult day care facilities, subject to approval of a conditional use permit; and
WHEREAS, the City Council, after proper notice thereof, on January 26, 2026, held a duly noticed public hearing on the application and took public testimony; and WHEREAS, the proposed project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 (Existing Facilities), which applies to the permitting of existing private or public structures involving negligible or no expansion of use, and there is no substantial evidence that the project may have a significant effect on the environment; and
WHEREAS, the City Council finds that the applicant agrees with the necessity of and accepts all elements, requirements, and conditions of this Resolution as being a reasonable manner of preserving, protecting, providing for, and fostering the health, safety, and welfare of the citizenry in general and the persons who work, visit or live in this community in particular.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS DOES
RESOLVE AS FOLLOWS BASED UPON SUBSTANTIAL EVIDENCE TAKEN FROM THE ADMINISTRATIVE RECORD AND PUBLIC HEARING:
SECTION 1. Findings. Pursuant to CZO Section 4.19.070(E), the City Council finds, after due study and deliberation that the following circumstances exist:
1. The proposed location of the conditional use is consistent with the requirements of the general plan and the zoning district in which the site is located; The CG (Commercial General) zoning district is applied to areas appropriate to serve the daily needs of the community. The CG zoning district is consistent with the general and neighborhood commercial land use designations of the General Plan and permits community care facilities, including adult day care facilities, subject to a conditional use permit. The community care facility will complement the existing church use and surrounding uses.
2. The proposed location of the conditional use and the conditions under which it would be operated or maintained would not be detrimental to the public health, safety, or general welfare, nor would be materially injurious to properties or improvements in the vicinity; and
The location of the adult day care facility and the conditions under which it will operate will not be detrimental to the public health, safety or welfare, nor materially injurious to properties or improvements in the vicinity. The use will occupy an existing church building that is already designed and improved for assembly and group activities. No expansion of the building footprint or intensification of site development is proposed. Conditions of approval limit the program to a maximum of 150 participants, establishing a clear cap on the scope and intensity of the land use. Conditions of approval also prohibit concurrent operation with church activities, require all drop-off and pick-up to occur on site, restrict parking lot use to vehicular parking only, and provide for City review and implementation of parking management measures if parking or circulation impacts arise. The project is further conditioned to require active management of arrivals and departures to prevent congestion, queuing, or spillover into the public right-of-way, and to maintain all required state and local licenses to ensure ongoing compliance with health and safety regulations. As conditioned, the use will operate in an orderly manner that protects public health and safety and will not be materially injurious to surrounding properties or improvements.
3. The proposed conditional use would comply with all applicable provisions of this zoning ordinance.
The proposed adult day care facility complies with all applicable provisions of the CZO for large community care facilities. It will operate within an existing church building and meets the required 300-foot separation from another similar facility.
The project also complies with applicable standards for lighting, noise, fire and life safety, and state health and safety regulations. As a condition of approval, the operator shall upgrade and maintain on-site landscaping and irrigation in accordance with CZO standards specifically applicable to community care facilities, to ensure compatibility with the surrounding neighborhood. As conditioned, the project meets all applicable development, operational, and licensing requirements of the CZO.
SECTION 2. CEQA. The City Council finds the project is categorically exempt from the California Environmental Quality Act pursuant to CEQA Guidelines Section 15301 (Existing Facilities), as the project involves the use of an existing building with no expansion of the structure and no significant change in intensity of use.
SECTION 3. Approval. The City Council of the City of Cypress hereby approves Conditional Use Permit No. 2025-02 to allow an adult day care facility at 6269 Ball Road, subject to the conditions of approval attached hereto as Exhibit “A” and incorporated herein by reference. Any challenge to this Resolution, and the findings set forth therein, must be filed within the 90-day statute of limitations set forth in Code of Civil Procedure 1094.6.
PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 26th day of January, 2026.
_______________________________
MAYOR OF THE CITY OF CYPRESS
ATTEST:
___________________________________
CITY CLERK OF THE CITY OF CYPRESS
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
I, LISA BERGLUND, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of said City Council held on the 26th day of January, 2026, by the following roll call vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
___________________________________
CITY CLERK OF THE CITY OF CYPRESS
Community Development Department Planning Division
EXHIBIT A
CONDITIONAL USE PERMIT NO. 2025-02
ADULT DAY CARE FACILITY
6269 BALL ROAD
CONDITIONS OF APPROVAL
Conditions in bold text represent those specific to this project.
1. General Conditions
1.1. Prior to issuance of building permits or commencement of the use, the project applicant shall sign and return a City-approved affidavit accepting these conditions of approval. (Planning)
1.2. The applicant shall defend, indemnify, and hold harmless, the City and any agency thereof, or any of its agents, officers, and employees from any and all claims, actions, or proceedings against the City or any agency thereof, or any of its agents, officers or employees, to attack, set aside, void or annul, an approval of the City, or any agency thereof, advisory agency, appeal board, or legislative body, including actions approved by the voters of the City, concerning the project, which action is brought within the time period provided in Government Code Section 66499.37 and Public Resources Code, Division 13, CH. 4 (§ 21000 et seq. - including but not by way of limitation § 21152 and 21167). City shall promptly notify the applicant of any claim, action, or proceeding brought within this time period. (City Attorney)
1.3. This permit is granted for the plans dated December 22, 2025 on file with the Planning Division. The project shall conform to the plans, except as otherwise specified in these conditions, or unless a minor modification to the plans is approved by the Planning Director. A minor modification may be granted for minimal changes or increases in the extent of use or size of structures. (Planning)
1.4. The applicant shall comply with all provisions of The Code of the City of Cypress. (Planning)
1.5. The applicant shall obtain a Cypress business license prior to commencement of the business operation. (Finance)
1.6. The applicant may request minor modifications of conditions of approval consistent with the intent of the project approval. The Planning Director, City Engineer, Orange County Fire Authority, and/or the Police Chief, depending on the requested modification, shall approve the modification in writing. For numerical standards, the Planning Director may approve deviations up to 10% provided that city code requirements are met.
Exhibit “A”
Adult Day Care Facility CUP
Conditions of Approval Page 2
Community Development Department Planning Division
2. Planning
2.1. This conditional use permit may be modified or revoked by the City Council should the Council determine that the proposed use or conditions under which it is being operated or maintained is detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity. (Planning)
3. Signage
3.1 The property owner/tenant shall not erect or display on the subject property any signs which do not comply with the Cypress Zoning Ordinance and have not been approved in writing by the Community Development Department. (Planning)
4. Landscaping
4.1. Prior to operation of the adult day health care facility, the operator shall upgrade on-site landscaping to be consistent with the prevailing landscaping in the surrounding neighborhood, including replacement of missing or deteriorated plant materials and restoration of irrigation. The operator shall submit a landscape and irrigation plan to the Planning Division for review and approval demonstrating compliance with applicable City landscaping and water efficiency requirements. All irrigation shall utilize drip or microspray irrigation. The operator shall maintain all landscaping in a healthy, well-kept condition at all times. (Planning)
4.2. Unless otherwise specified, all required trees shall be a minimum 15-gallon in size and of a variety approved by the Director of Community Development. (Planning)
4.3. Landscape irrigation pipes and sprinkler heads shall be maintained in good working order so as to cover all landscaped areas. (Planning)
5. Operational
5.1. The facility shall operate in substantial conformance with the approved plans, the project description, and applicable State and federal ADHC regulations, unless modified by these conditions or as approved by the Director of Community Development. (Planning)
5.2. All product and material storage shall occur within the building. Exterior storage is specifically prohibited. (Planning)
5.3. The City Council shall maintain the right to review the business hours of operation and may, subject to a public hearing, limit the hours should substantiated complaints be received that the business hours are creating an adverse impact upon neighboring properties. (Planning)
Exhibit “A”
Adult Day Care Facility CUP
Conditions of Approval Page 3
Community Development Department Planning Division
5.4. The facility shall not exceed 150 enrolled participants. (Planning)
5.5. The adult day care facility and the church shall not operate concurrently, and any simultaneous use of the site by both is prohibited. The operator shall not conduct program activities, client drop-off or pick-up, or related operations during church services, events, or other church activities. The operator shall maintain an operating schedule approved by the Community Development Department and shall adjust operations as necessary and with approval of the City to prevent overlap or conflicts. (Planning)