Daly City City Council
February 9, 2026

AVAILABILITY OF PUBLIC RECORDS:

All public record to an open session item on this agenda, which are not exempt from disclosure pursuant to the California Public Records Act, that are distributed to a majority of the legislative body will be available for public inspection at the City Clerk’s Office, City Hall located at 333 90 th Street, Daly City, CA during normal business hours, at the same time that the public records are distributed or made available to the legislative body.

CITY OF DALY CITY

Regular Meeting - CITY COUNCIL

AGENDA

Monday, February 9, 2026 - 7:00 PM

City Hall Council Chambers – 2nd Floor
City Hall 333 – 90th Street
Daly City, CA 94015

To watch the live telecast:
https://www.youtube.com/@DalyCityGov/streams, https://www.dalycity.org/agendas, or Comcast Ch. 27

PUBLIC PARTICIPATION
There are three ways to submit public comments: (1) submit written comments by meeting day, (2) submit written comments during the meeting, and (3) attend the meeting in person.

1. To submit written comments by meeting day, please email [email protected] and include “Public Comment” in the subject line. All written comments received by 4:00 pm on meeting day will be provided to the City Council prior to the meeting.

Please note: Any emailed comments received after 4:00 p.m. on the meeting date are not guaranteed to be received by the City Council prior to the meeting. Comments are not read aloud into the record.

2. During the meeting, you may visit www.dalycity.org/agendas to submit comments using the Public Comment form to address the City Council on a specific item, or during the public comment period, and such comments are delivered to the City Council and City Staff during the meeting, and may be read into the record at the time they are received.

3. To speak at the meeting in person, please complete a Speaker Card located at the entrance to the Council Chamber and submit it to a Staff Member as early in the meeting as possible.

Persons with disabilities who require auxiliary aids or services in attending or participating in this meeting should call the office of the City Clerk at (650) 991-8078 as soon as possible.

PLEDGE TO THE FLAG:

CALL TO ORDER
The City of Daly City acknowledges that we are on the ancestral lands of the Ramaytush (rah - my-toosh) Ohlone (O-lon-ee) peoples. We recognize their enduring connection to this region and honor their history, culture, and contributions. As the Indigenous protectors of this land, we affirm their sovereign rights as the original inhabitants of this land and pay respects to the Ancestors, Elders, and Relatives of the Ramaytush Ohlone peoples.

Agenda – City Council
Monday, February 9, 2026

ROLL CALL:

APPROVAL OF MINUTES:

1. Regular Meeting of January 26, 2026

APPROVAL OF AGENDA:

2. Regular Meeting of February 9, 2026

ORAL COMMENT:

NOTE: Speakers are limited to two minutes, unless modified by the Mayor.

The Council cannot take action on any matter raised under this item.

CONSENT AGENDA
All items listed on the Consent Agenda are considered to be routine and may be approved by one roll call vote of the City Council. There shall be no separate discussion of the matters on the Consent Agenda unless requested by a member of the City Council. If discussion is required, that item will be removed from the Consent Agenda and will be considered separately at the end of the Agenda.

Communications:

3. Accept QTR 4 Investment Report

4. Accept the Fiscal Year 2025 Annual Comprehensive Financial Report

Resolutions:

5. Amend Traffic Regulations to: (1) Extend the existing 4-ft red zone on the south side of the driveway at 7535 Mission Street to 6-ft; and (2) remove the existing 3.5-ft red zone between the two parking spaces in front of 7535 Mission Street and 7555 Mission Street (TSR 26/22)

6. Approve Resolution Adopting Salary Schedules and Benefits for Miscellaneous/Unrepresented Employees

7. Approve Resolution Adopting Salary Schedules and Benefits for Executive Management Employees

8. Accept and Appropriate Fiscal Year 2026 Mid-Year Operating and Capital Improvement Program Budget Adjustments

9. Authorize the City Manager to Approve a Purchase Agreement with Altec for an Altec Model AT41ME Articulating Telescopic Aerial Lift Service Truck

10. Authorize Agreement with the County of San Mateo for Participation in the Compost for Climate Solutions Program

Agenda – City Council
Monday, February 9, 2026

11. Set Time and Place for a Public Hearing to Consider Proposed Ordinance Amending Chapter

8.16 of the Daly City Municipal Code Re: Property Maintenance and Nuisance Abatement (Set Time: 2/23/26)

12. Accept 2025 Mandated Fire And Life Safety Inspection Report

13. Approve Early Lease Renewal and Authorization to Execute a Lease Amendment for the Child Care Center at 280 92nd Street

END OF CONSENT AGENDA

PUBLIC HEARINGS:

14. Public Hearing to Consider Adoption of an Entertainment Zone Ordinance Pursuant to State Law (SB 969)

STAFF: Maybelle Manio

RECOMMENDATION: Open/Close Hearing
Motion for City Attorney to Read by Title Only
Councilmember Introduce Ordinance

15. Public Hearing on Issuance of Tax-Exempt Bonds for 493 Eastmoor Apartments and Resolution Approving the Issuance of Bonds

STAFF: Michael Van Lonkhuysen

RECOMMENDATION: Open/Close Hearing
Adopt Resolution by Roll Call Vote

APPOINTMENTS: Board/Commission Membership Committee Appointments

REPORTS:

16. Council Committee

17. City Council

18. Staff

ADJOURNMENT:

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
--------------------------------
Note on Public Comments:

To provide public comments, members of the public have the option to- 1) attend in person, 2) email the City Clerk, or 3) submit comments through the public comment portal on the City’s website. Persons with disabilities who require auxiliary aids or services in attending or participating in this meeting are instructed to call the office of the City Clerk at 991-8078 prior to the meeting.

Visit https://www.youtube.com/@DalyCityGov/streams to view the City Council meeting

CALL TO ORDER:

Mayor Sylvester called t he special meeting to order at 7:17 P.M. and read the City’s Land Acknowledgement:

The City of Daly City acknowledges that we are on the ancestral lands of the Ramaytush (rah -my-toosh) Ohlone (O-lon-ee) peoples. We recognize their enduring connection to this region and honor their history, culture, and contributions. As the Indigenous protectors of this land, we affirm their sovereign rights as the original inhabitants of this land and pay respects to the Ancestors, Elders, and Relatives of the Ramaytush Ohlone peoples.

ROLL CALL: Councilmembers Present
Glenn R. Sylvester, Mayor
Teresa G. Proaño, Vice Mayor
Dr. Roderick Daus-Magbual
Pamela DiGiovanni
Juslyn C. Manalo

Staff Present
Thomas J. Piccolotti, City Manager
Kelly Schott, Assistant City Attorney
K. Annette Hipona, City Clerk

Staff Absent
Rose Zimmerman, City Attorney

Councilmember DiGiovanni informed the Council and those in attendance about her health condition, stating that she might need to leave the meeting early as per her doctor’s orders.

APPROVAL OF MINUTES:

Special Meeting of January 6, 2026

It was moved by Councilmember Manalo, seconded by Vice Mayor Proaño and carried to approve the minutes of January 6, 2026.

APPROVAL OF AGENDA:

It was moved by Councilmember Daus -Magbual, seconded by Councilmember DiGiovanni and carried to approve the agenda.

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
2 STAFF COMMUNICATION:

City Manager Piccolotti provided an update on the complaints received concerning an area north of Thornton Beach, where a fence was erected without the necessary permits. He informed Council that the Acting Director of Economic and Community Development, Michael Van Lonkhuysen, and the Office of Code Enforcement have been alerted to the situation.

Code Enforcement Officer Ana Santiago reported on efforts the City is undertaking to address the fence surrounding a property on Olympic Way, which has restricted historic access to Thornton Beach and coastal trails. Santiago is working with the Planning Division, the Coastal Commission, and a legal team to investigate the issue and find a resolution. A multi-agency City team will also conduct a site inspection. A notice of violation has been issued to the property owner for constructing without City and coastal permits and possibly encroaching on public land. The City is also requesting documents, including permits, plans and survey data. Furthermore, Santiago shared a public safety report from the Police Department, including the presence of intimidating and threatening signs placed behind the fence.

ORAL COMMENT:

Sherwin Lum and Ray Satorre from the Daly City Host Lions Club invited the Council, the City Manager, and department heads to celebrate the club’s 85th anniversary at Nick’s Restaurant in Pacifica.

Satorre expressed pride in the club’s services to the community, highlighting its strength through diversity.

They also acknowledged Vice Mayor Proaño, Councilmember Manalo, and Chief Christensen , who are current members of the Lions.

Tirzo Rico, a contractor with TSR Construction, requested reimbursement for the construction and demolition deposit associated with permit number 058063. Tirzo mentioned that the job was completed back in 2020 and that he had previously discussed the refund with former Director Mothershead.

Tony Kasaris and Zachary Leyden, owners of Ocean View Stables, clarified to the community that the fence in question is not connected to their business and is owned by a different party . Zachary briefly described their business, expressed pride in being an active member of the Daly City community, and thanked the City for its prompt attention to the matter.

Tori Jacobs discussed the effects of the fence on her property and shared details about the owners' intentions to evict Luke and take down the fence. Tori raised concerns regarding the ecosystem at Thornton State Park, which is deteriorating in part due to the lack of enforcement of leash laws. Additionally, Tori pointed out that the dog- walking industry is treating the park as an unregulated commercial dog park, ignoring the two-dog-per-person limit that is in place.

Stephanie Bernstein thanked everyone from the City who is working on the issue at Thornton Park, highlighting the park’s importance for its users. Stephanie echoed a comment about dog walkers who utilize the park for their business.

Emma Mapa raised concerns and requested the Council’s assistance regarding vehicles being involved in hit-and-run accidents on Dorchester Drive, attributed to the absence of traffic lights and cameras.

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
3 DOGG, F12, acknowledged the unseated indigenous Ohlone land and expressed concern with the obstruction caused by the fence at Thornton Park. DOGG was concerned for elder ly people who use park trails, raising issues about the dangerous secondary access trails. DOGG noted the intimidating sign placed by the fence and called for those responsible for this situation to be held accountable.

Tatum King thanked the Council, City Manager Piccolotti, former Director Mothershead, Acting Director Van Lonkhuysen, and Chief Christensen for their diligence and quick action regarding Thornton Beach. Tatum shared the website thorntonbeachbluffpreserve.com for information and updates on the park, noting that the state beach has been closed for some time.

The following speakers thanked the Council for their support on the last contract that was approved for labor group AFSCME Local 829. AFSCME President Donaire discussed the importance of taking care of Daly City workers, recognizing the important contributions made by their members to the City. Speakers, including Local 829 members, requested the Council’s support in maintaining decent wages, improving benefits, and a cost-of-living increase to address local inflation and the high cost of housing. Local 829 Representative Walters provided an update on a tentative agreement and asked the Council to support a retroactive wage increase, as well as due process rights for union members.

Charlie Chan, ECD Building Inspector Felipe Donaire, President AFSCME Local 829 Ryan Fernandez, AFSCME Joshua Rees, Librarian, AFSCME Anthony Walters, AFSCME Local 829 Representative

CONSENT AGENDA:

It was moved by Councilmember Manalo, seconded by Councilmember DiGiovanni and carried to approve the consent agenda, with the exception of item #14.

Resolutions:

Adopt Memorandum of Understanding and Salary Schedules between the City of Daly City and Teamsters Local 856 Clerical Technical Unit

Resolution 26-3, Adopting Composite Summary Memorandum Of Understanding With Teamsters Local 856 Clerical Technical Unit

Adopt Memorandum of Understanding and Salary Schedules between the City of Daly City and Teamsters Local 856 Police Assistants

Resolution 26-4, Adopting Composite Summary Memorandum Of Understanding With Teamsters Local 856 Police Assistants

Adopt Memorandum of Understanding and Salary Schedules between the City of Daly City and Teamsters Local 856 Safety Inspectors

Resolution 26-5, Adopting Composite Summary Memorandum Of Understanding With Teamsters Local 856 Safety Inspectors

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
4 Adoption of Memorandum of Understanding and Salary Schedule between the City of Daly City and International Union of Operating Engineers Stationary Engineers Local 39 Operating Engineers Unit

Resolution 26- 6, Adopting Composite Summary Memorandum Of Understanding With International Union Of Operating Engineers Stationary Engineers Local 39 Operating Engineers Unit

Adoption of Memorandum of Understanding and Salary Schedules between the City of Daly City and International Union of Operating Engineers Stationary Engineers Local 39 Plant Maintenance Unit

Resolution 26- 7, Adopting Composite Summary Memorandum Of Understanding With International Union Of Operating Engineers Stationary Engineers Local 39 Plant Maintenance Unit

Authorize the City Manager to Approve a Purchase Agreement for a TYMCO Model 600 Street Sweeper

Resolution 26-8, Approving A Purchase Agreement With TYMCO, Inc . For A TYMCO Model 600 Street Sweeper

Set Time and Place for Public Hearing Under the Tax and Equity Fiscal Responsibility Act (“TEFRA”) (Set Time: 2/9/2026)

Resolution 26-9, Setting Time And Place Of Public Hearing To Conduct A Tax Equity And Fiscal Responsibility Act Hearing Re: Issuance Of Bonds To Finance Development Of Multifamily Housing At 493 Eastmoor Apartments

Authorization to Perform Interior Concrete Restoration and Coating at Reservoir 6B

Resolution 26-10, Authorizing Execution Of An Agreement With D N Tanks To Perform Interior Concrete Joint Repairs And Coating At Reservoir 6B

Accept Annual Delegation of Investment Authority to the City Treasurer

Resolution 26-11, Renewing Delegation Of Investment Authority To The City Treasurer

Accept 2026 Statement of Investment Policy

Resolution 26-12, Adopting The Updated Statement Of Investment Policy For The City Of Daly City

Set Time and Place to Consider Adoption of an Entertainment Zone Ordinance Pursuant to SB 969 (Set Time: 2/9/2026)

Resolution 26- 13, Setting Time And Place Of Public Hearing To Consider Adoption Of An Entertainment Zone Ordinance Pursuant To SB 969

Commend Director of Economic & Community Development Tatum Mothershead on the Occasion of Her Retirement

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
5 City Manager Piccolotti announced the retirement of Tatum Mothershead, the Director of Economic & Community Development, and thanked her for 26 years of service to the City. Piccolotti read a resolution that commended Mothershead and highlighted her career in Daly City . The resolution noted her leadership within the Department of Economic and Community Development and detailed her professional development achievements throughout her tenure.

The Council expressed its appreciation for Director Mothershead’s many years of service and extended their congratulations on her retirement.

It was moved by Councilmember Manalo, seconded by Vice Mayor Proano and carried by voice vote to adopt the resolution.

Resolution 26-14, Commending Tatum Mothershead On The Occasion Of Her Retirement

Check Registers

Check Registers for the Month of December 2025

END OF CONSENT AGENDA

ORDINANCES:

Second Reading, Ordinance No. 1485, Amending Chapter 2.16 of the Municipal Code Re: Arts and Culture Commission

It was moved by Councilmember Manalo, seconded by Councilmember DiGiovanni and carried by unanimous roll call vote to adopt the ordinance.

Ordinance 1485, Amending Chapter 2.16 of the Municipal Code Re: Arts and Culture Commission

Second Reading, Ordinance No. 1486, Amending Chapter 2.20 of the Municipal Code Re: Recreation Commission

It was moved by Councilmember Manalo, seconded by DiGiovanni and carried by unanimous roll call vote to adopt the ordinance.

Ordinance 1486, Amending Chapter 2.20 of the Municipal Code Re: Recreation Commission

APPOINTMENTS:

Councilmember Manalo and Vice Mayor Proaño informed the Council of upcoming appointments.

REPORTS:

Council Committee

Peninsula Clean Energy (PCE) (Daus-Magbual)
Bay Area Water Supply & Conservation Agency (BAWSCA) (Manalo) San Mateo County Pre-Hospital Emergency Medical Services Group (SMCPHEMSG)(Sylvester)

CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
JANUARY 26, 2026
6 City Council

Vice Mayor Proaño reported attendance at the following events: the ribbon-cutting ceremony at Onigilly Japanese Kitchen located in Serramonte Center, along with Councilmembers Manalo and Daus- Magbual; a meeting regarding the José Rizal statue, along with Councilmembers Manalo and Daus- Magbual, and Director Anderson at the Gellert Park Library ; and the clergy appreciation dinner at H oly Angels Church. The Vice Mayor hoped to see everyone at the groundbreaking at Marchbank Park by Sacred Heart School at 7:30 A.M on January 27th.

Councilmember Manalo announced the upcoming Peninsula Division Legislator Spotlight event, which will feature members from Congress and the Assembly; the event is organized in collaboration with the Council of Cities for San Mateo and Santa Clara Counties and will take place at El Camino Hospital in Mountain View from 5:00 to 8:00 P.M. Manalo reported attendance at the following events: the Peninsula Division Board Meeting where they discussed their agenda for the upcoming year; the memorial service of Dado Banatao in Palo Alto, acknowledging Dado’s family; the opening of Onigilly Restaurant featuring affordable bites; the Martin Luther King Day march along with her children , which took place in San Francisco, and acknowledged organizations West Bay Pilipino Multiservice Center and United Playaz; the Connect Bay Area Conference with Senator Wiener, Assemblywoman Stefani and Mayors Lurie and Lee to advocate for resources for Bay Area public transit; a meeting with the Philippine Consulate, the Pilipino Bayanihan Resource Center, Kapwa Cultural Center, and the Dr. José Rizal Foundation at Gellert Park to discuss the best place for the José Rizal statue, acknowledging City Manager Piccolotti, Director Anderson, and Director Chiu for their support; and the Bay Area Seniors Association inaugural event in South San Francisco, which focused on self-empowerment. Manalo expressed excitement for the groundbreaking with Sacred Heart, calling the project innovative, the largest private-public partnership in Daly City, and a huge benefit for the community. Lastly, Manalo wished Mayor Sylvester an early happy birthday.

Councilmember Daus-Magbual acknowledged the upcoming Super Bowl in the B ay Area and promoted the Cow Palace’s Free Tailgate Event with Guy Fieri, featuring over ten restaurants, drinks, and live music . He noted that people interested in attending can sign up for free tickets at GuysFlavortownTailgate.com. The event is scheduled for Sunday, February 8th (11:30 A.M. to 3:30 P.M.).

ADJOURNMENT:

Mayor Sylvester adjourned the meeting at 9:0 3 P.M. in memory of Adilia Ramirez, Dorothy McLennan, Nelia Gallardo Pilare, Renée Nicole Macklin Good, Alex Jeffrey Pretti, and Digna F rancisco Carmona.

Approved as submitted, this 9th
City Clerk
day of February 2026.

Glenn R. Sylvester
Mayor

Investments
Par
Value
Market
Value
Book
Value
% of
Portfolio Term
Days to
Maturity
YTM
San Mateo County Pool 152,072,605.87 153,929,412.39 152,072,605.87 55.79 1 1 3.827 CAMP 72,571,803.13 72,571,803.13 72,571,803.13 26.62 1 1 3.989 Local Agency Investment Funds 9,403,238.00 9,423,751.00 9,403,238.00 3.45 1 1 4.025 Federal Agency Coupon Securities 22,115,000.00 21,939,797.17 20,999,909.00 7.70 1495 684 4.226 Federal Agency Disc. -Amortizing 2,225,000.00 2,001,587.75 1,926,687.58 0.71 1503 1049 3.530 CDs 15,346,000.00 15,412,290.77 15,346,000.00 5.63 1415 511 3.895 Mortgage Back Security 252,440.57 252,553.92 252,440.57 0.09 9998 4485 4.197 Investments 273,986,087.57 275,531,196.13 272,572,684.15 100.00% 216 94 3.910 Cash and Accrued Interest
Accrued Interest at Purchase 1,625.00 1,625.00
Subtotal 1,625.00 1,625.00
Total Cash and Investments 273,986,087.57 275,532,821.13 272,574,309.15 216 94 3.910 Total Earnings December 31 Period Ending Fiscal Year To Date Current Year 843,849.13 6,618,358.86
Average Daily Balance 262,203,611.32 254,496,157.33
Effective Rate of Return 3.79% 5.16%
Portfolio DALY
CP
PM (PRF_PM)
Report Ver.1.0.0
Reporting Period 12/01/2025 - 12/31/2025
City of Daly City
Portfolio Management
Portfolio Summary
December 31, 2025
City of Daly City
333 90th Street
Daly City, CA 94015
(650)991-8047

Cusip Investment # Issuer
Average
Balance
Purchase
Date Par Value Market Value Book Value
Stated
Rate
Days to
Maturity Term YTM
Maturity
Date
San Mateo County Pool
SMCP 10105 SAN MATEO COUNTY POOL 07/01/2025 152,072,605.87 153,929,412.39 152,072,605.87 3.827 1 1 3.827 Subtotal and Average 136,047,731.28 152,072,605.87 153,929,412.39 152,072,605.87 1 1 3.827 CAMP
CAMP 10135 CAMP POOL 07/01/2025 42,571,803.13 42,571,803.13 42,571,803.13 3.950 1 1 3.950 CAMP TERM 10150 CAMP POOL 07/01/2025 20,000,000.00 20,000,000.00 20,000,000.00 4.210 1 1 4.210 CAMPTERM 10158 CAMP TERM 10/15/2025 10,000,000.00 10,000,000.00 10,000,000.00 3.710 1 1 3.710 Subtotal and Average 72,434,198.47 72,571,803.13 72,571,803.13 72,571,803.13 1 1 3.989 Local Agency Investment Funds
LAIFCITY 10103 LAIF 07/01/2025 8,952,773.08 8,972,303.40 8,952,773.08 4.025 1 1 4.025 LAIFSANI 10104 LAIF 07/01/2025 450,464.92 451,447.60 450,464.92 4.025 1 1 4.025 Subtotal and Average 14,822,592.84 9,403,238.00 9,423,751.00 9,403,238.00 1 1 4.025 Federal Agency Coupon Securities
31422X5S7 10077 Federal Agricultural Mtg Corp 08/24/2023 1,015,000.00 1,021,810.65 1,012,485.85 4.650 218 1079 4.740 08/07/2026 31422XGQ9 10081 Federal Agricultural Mtg Corp 10/12/2022 1,000,000.00 978,550.00 880,726.00 0.940 298 1475 4.180 10/26/2026 31424WAF9 10120 Federal Agricultural Mtg Corp 10/05/2023 2,000,000.00 2,031,860.00 2,003,480.00 4.875 455 1274 4.820 04/01/2027 31422XR95 10133 Federal Agricultural Mtg Corp 10/25/2023 2,000,000.00 2,014,060.00 1,927,320.01 4.030 699 1498 4.580 12/01/2027 3133EPPE9 10124 Federal Farm Credit Bank 09/19/2023 2,000,000.00 2,007,220.00 1,978,900.00 4.375 186 1021 4.780 07/06/2026 3130AKVR4 10064 Federal Home Loan Bank 01/18/2023 2,000,000.00 1,993,040.00 1,800,000.00 0.550 42 1121 4.050 02/12/2026 3130A3DU5 10087 Federal Home Loan Bank 09/26/2022 1,380,000.00 1,371,195.60 1,329,578.94 3.000 435 1628 3.900 03/12/2027 3130AMGY2 10091 Federal Home Loan Bank 05/17/2023 1,400,000.00 1,357,678.00 1,273,959.40 1.250 508 1468 3.680 05/24/2027 3130AKT48 10100 Federal Home Loan Bank 08/24/2023 1,000,000.00 951,800.00 859,150.00 0.650 756 1617 4.550 01/27/2028 3130AMLL4 10068 Federal Home Loan Bank 06/01/2021 1,020,000.00 1,008,775.92 1,020,000.00 0.950 145 1820 0.950 05/26/2026 3134HBQY0 10152 Federal Home Loan Mtg Corp 05/29/2025 5,000,000.00 5,004,800.00 4,961,250.00 4.150 1609 1826 4.324 05/29/2030 3136G4X99 10095 Federal National Mtg Assn 03/13/2023 2,300,000.00 2,199,007.00 1,953,058.80 0.740 601 1626 4.520 08/25/2027 Subtotal and Average 20,999,909.00 22,115,000.00 21,939,797.17 20,999,909.00 684 1495 4.226 Federal Agency Disc. -Amortizing
3134A2G77 10147 Federal Home Loan Mtg Corp 10/04/2024 2,225,000.00 2,001,587.75 1,926,687.58 3.211 1049 1503 3.530 11/15/2028 Subtotal and Average 1,926,687.58 2,225,000.00 2,001,587.75 1,926,687.58 1049 1503 3.530 CP
Portfolio DALY
CM (PRF_CM)
Report Ver 1.0.0.0
City of Daly City
333 90th Street
Daly City, CA 94015
(650)991-8047
City of Daly City
Sanitation District
Portfolio Management
Portfolio Details - Investments
December 31, 2025

Cusip Investment # Issuer
Average
Balance
Purchase
Date Par Value Market Value Book Value
Stated
Rate
Days to
Maturity Term YTM
Maturity
Date
CDs
32022RSG3 10094 1ST FINANCIAL BK 08/01/2022 249,000.00 247,655.40 249,000.00 3.300 578 1827 3.254 08/02/2027 32110YYH2 10093 1ST NATL BANK 07/29/2022 249,000.00 248,215.65 249,000.00 3.450 574 1826 3.452 07/29/2027 01882MAA0 10099 ALLIANT CU 12/30/2022 248,000.00 253,458.48 248,000.00 4.850 728 1826 4.853 12/30/2027 01882MAJ1 10132 ALLIANT CU 11/20/2023 248,000.00 252,345.70 248,000.00 5.600 323 1096 5.600 11/20/2026 02007GQH9 10066 ALLY BANK 04/28/2022 246,000.00 245,242.32 246,000.00 2.850 117 1461 2.852 04/28/2026 02357QCL9 10149 AMERANT BANK 03/28/2025 244,000.00 245,681.16 244,000.00 4.050 817 1096 4.054 03/28/2028 03065YAB7 10088 AMERICA FIRST NCU 08/31/2023 248,000.00 252,357.36 248,000.00 5.050 454 1308 5.050 03/31/2027 03065AAY9 10145 AMERICA'S CREDIT UNION 10/24/2024 249,000.00 249,542.82 249,000.00 3.850 295 729 3.848 10/23/2026 02589AGX4 10148 AMERICAN EXPRESS NATIONAL 03/26/2025 244,000.00 246,874.32 244,000.00 4.150 1545 1826 4.153 03/26/2030 05220JAE1 10070 AUSTIN CAPITAL BANK 05/31/2023 248,000.00 248,950.58 248,000.00 4.600 148 1094 4.605 05/29/2026 052392CC9 10083 AUSTIN TELCO FCU 11/28/2022 248,000.00 251,226.48 248,000.00 5.050 330 1460 5.054 11/27/2026 062119BU5 10089 BANK FIVE NINE 05/15/2023 248,000.00 250,533.57 248,000.00 4.400 496 1458 4.403 05/12/2027 06051XBK7 10131 BANK OF AMERICA 03/21/2024 244,000.00 244,533.63 244,000.00 4.800 81 732 4.801 03/23/2026 07181JAY0 10084 BAXTER CU 01/24/2023 249,000.00 251,379.20 249,000.00 4.500 389 1462 4.504 01/25/2027 05614FBX0 10155 BNY MELLON 11/05/2025 245,000.00 242,042.85 245,000.00 3.600 1769 1826 3.602 11/05/2030 130162BC3 10127 CALIFORNIA CREDIT UNION 10/25/2023 248,000.00 251,759.68 248,000.00 5.450 298 1097 4.733 10/26/2026 14042RQB0 10082 CAPITAL ONE NA 11/17/2021 248,000.00 242,715.12 248,000.00 1.100 320 1826 1.101 11/17/2026 14622LAP7 10123 CARTER FEDERAL CREDIT UNION 10/18/2023 248,000.00 255,072.96 248,000.00 5.100 655 1461 5.104 10/18/2027 15118R3B1 10156 CELTIC BANK 11/07/2025 249,000.00 245,424.36 249,000.00 3.550 1771 1826 3.540 11/07/2030 20416TAX0 10061 COMMUNITYWIDE CU 01/06/2023 248,000.00 248,004.96 248,000.00 4.700 5 1096 4.704 01/06/2026 227563CH4 10067 CROSS RIVER BANK 05/19/2023 244,000.00 244,829.60 244,000.00 4.650 138 1096 4.655 05/19/2026 23204HQJ0 10144 CUSTOMERS BANK 10/15/2024 245,000.00 243,632.90 245,000.00 3.550 1019 1462 3.184 10/16/2028 25844MAW8 10101 DORT FCU 05/24/2023 247,000.00 250,445.65 247,000.00 4.350 874 1827 4.591 05/24/2028 27002YFV3 10065 EAGLEBANK 04/21/2023 248,000.00 248,642.32 248,000.00 4.650 110 1096 4.655 04/21/2026 32065RAV7 10142 FIRST KEYSTONE 10/08/2024 249,000.00 249,219.12 249,000.00 3.700 280 730 3.700 10/08/2026 32116QBK1 10090 FNB OF MIDDLE TENNESSEE 05/19/2023 248,000.00 250,699.98 248,000.00 4.450 503 1461 4.454 05/19/2027 34520LAY9 10098 FORBRIGHT BANK 12/15/2022 248,000.00 249,401.20 248,000.00 4.000 713 1826 4.002 12/15/2027 356436AQ8 10119 FREEDOM NORTHWEST CREDIT UNION 09/19/2023 248,000.00 251,106.45 248,000.00 5.350 260 1095 5.355 09/18/2026 37892MAN4 10137 GLOBAL FCU 05/30/2024 249,000.00 254,815.89 249,000.00 4.750 880 1461 4.754 05/30/2028 37892MAV6 10153 GLOBAL FCU 05/22/2025 249,000.00 250,569.70 249,000.00 4.100 505 729 4.101 05/21/2027 38149MXJ7 10075 GOLDMAN SACHS BANK 07/28/2021 249,000.00 245,217.69 249,000.00 0.950 208 1826 0.951 07/28/2026 396916AA6 10139 GREENWAY BANK 10/09/2024 249,000.00 249,218.87 249,000.00 3.700 281 730 3.700 10/09/2026 CP
Portfolio DALY
CM (PRF_CM)
Report Ver 1.0.0.0
Page: 2
City of Daly City
Sanitation District
Portfolio Management
Portfolio Details - Investments
December 31, 2025

Cusip Investment # Issuer
Average
Balance
Purchase
Date Par Value Market Value Book Value
Stated
Rate
Days to
Maturity Term YTM
Maturity
Date
CDs
41138NAB4 10085 HAPO COMMUNITY CU 08/31/2023 248,000.00 251,850.70 248,000.00 5.000 421 1275 4.999 02/26/2027 41939HDJ8 10141 HAVEN SAVINGS 04/19/2024 244,000.00 244,674.90 244,000.00 4.700 109 731 4.700 04/20/2026 419700AG4 10130 HAWAII CENTRAL FCU 10/27/2023 248,000.00 251,841.02 248,000.00 5.500 299 1096 5.505 10/27/2026 457731AQ0 10073 INSPIRE FCU 06/30/2023 248,000.00 249,647.46 248,000.00 5.000 180 1096 5.005 06/30/2026 530520AM7 10096 LIBERTY FIRST CU 08/29/2023 248,000.00 253,354.82 248,000.00 5.000 606 1462 5.004 08/30/2027 538036NE0 10063 LIVE OAK BANK 02/10/2021 249,000.00 248,070.23 249,000.00 0.500 40 1826 0.500 02/10/2026 560507AR6 10102 MAINE SAVINGS CU 08/25/2023 248,000.00 254,830.91 248,000.00 4.850 967 1827 4.855 08/25/2028 58404DJN2 10062 MEDALLION BANK 01/29/2021 249,000.00 248,330.19 249,000.00 0.450 28 1826 0.443 01/29/2026 61778EHV6 10154 MORGAN STANLEY BANK 11/05/2025 245,000.00 243,650.54 245,000.00 3.750 1769 1826 3.752 11/05/2030 61776NEA7 10143 MORGAN STANLEY PVT BK 10/09/2024 245,000.00 242,647.02 245,000.00 3.550 1377 1826 3.552 10/09/2029 62847NEL6 10140 MVB BANK 03/27/2024 249,000.00 249,564.73 249,000.00 4.800 85 730 4.801 03/27/2026 64034KBE0 10086 NELNET BANK 03/09/2022 247,000.00 242,131.14 247,000.00 1.900 432 1826 1.901 03/09/2027 647608AK4 10129 NEW ORLEANS FIRE 10/25/2023 248,000.00 254,162.06 248,000.00 5.100 662 1461 5.104 10/25/2027 651023FQ1 10080 NEWBURYPORT BK 10/06/2022 244,000.00 244,719.80 244,000.00 4.000 278 1461 4.003 10/06/2026 75102EAV0 10121 RAIZ FEDERAL CREDIT UNION 10/06/2023 244,000.00 249,917.73 244,000.00 5.100 643 1461 5.104 10/06/2027 7954506X8 10072 SALLIE MAE BANK 06/30/2021 249,000.00 245,631.78 249,000.00 0.900 180 1826 0.900 06/30/2026 78413RAD9 10114 SCE FEDERAL CREDIT UNION 10/04/2023 248,000.00 251,190.77 248,000.00 5.300 277 1097 5.177 10/05/2026 82671DAC1 10071 SIGNATURE FCU 06/07/2023 248,000.00 249,217.68 248,000.00 4.800 158 1097 4.688 06/08/2026 84287PHR6 10069 SOUTHER FIRST BANK 05/26/2023 248,000.00 248,920.58 248,000.00 4.650 145 1096 4.655 05/26/2026 84614AAJ8 10078 SPACE COAST CU 08/29/2023 248,000.00 250,886.72 248,000.00 5.350 242 1098 5.351 08/31/2026 856285XK2 10108 STATE BANK OF INDIA, NY 09/28/2021 248,000.00 243,544.68 248,000.00 1.100 270 1826 1.101 09/28/2026 87165ET98 10079 SYNCHRONY BANK 09/03/2021 248,000.00 243,630.49 248,000.00 0.900 245 1826 0.899 09/03/2026 89235MLE9 10076 TOYOTA FINL BANK 07/29/2021 249,000.00 245,200.76 249,000.00 0.950 209 1826 0.951 07/29/2026 89846HFE8 10157 TRUXTON TRUST 11/07/2025 249,000.00 244,875.56 249,000.00 3.500 1771 1826 3.490 11/07/2030 90348JP61 10074 UBS BANK 07/08/2021 249,000.00 245,490.10 249,000.00 0.900 188 1826 0.901 07/08/2026 91527PCK1 10128 UNIVEST 03/20/2024 248,000.00 250,863.16 248,000.00 4.600 445 1097 4.600 03/22/2027 90352RCU7 10097 USALLIANCE FCU 09/30/2022 249,000.00 250,364.02 249,000.00 4.000 637 1826 4.002 09/30/2027 917352AG1 10092 UTAH COMMUNITY FCU 06/07/2023 248,000.00 251,322.46 248,000.00 4.600 522 1461 4.604 06/07/2027 913065AC2 10126 UTD TEL FIN CREDIT UNION 10/20/2023 248,000.00 254,123.37 248,000.00 5.100 657 1461 5.104 10/20/2027 919853KY6 10134 VALLEY NAT'L BANK 03/19/2024 244,000.00 246,819.42 244,000.00 4.600 442 1095 4.600 03/19/2027 Subtotal and Average 15,715,000.00 15,346,000.00 15,412,290.77 15,346,000.00 511 1415 3.895 CP
Portfolio DALY
CM (PRF_CM)
Report Ver 1.0.0.0
Page: 3
City of Daly City
Sanitation District
Portfolio Management
Portfolio Details - Investments
December 31, 2025

Cusip Investment # Issuer
Average
Balance
Purchase
Date Par Value Market Value Book Value
Stated
Rate
Days to
Maturity Term YTM
Maturity
Date
Mortgage Back Security
36202E6D6 10110 GNMA 07/22/2009 201,884.83 201,723.32 201,884.83 4.500 4918 10925 4.478 06/20/2039 36291HTQ7 10111 GNMA 10/18/2007 25,500.35 25,805.84 25,500.35 5.500 2995 9645 5.572 03/15/2034 36291YRM1 10113 GNMA 10/18/2007 554.81 555.79 551.81 5.500 3360 10010 5.572 03/15/2035 36200MQW6 10115 GNMA 06/01/2023 24,500.58 24,468.97 24,500.58 4.500 2752 3697 0.933 07/15/2033 Subtotal and Average 257,492.15 252,440.57 252,553.92 252,440.57 4485 9998 4.197 Total and Average 262,203,611.32 273,986,087.57 275,532,821.13 272,574,309.15 94 216 3.910 Run Date: 2/5/2026 5:53:18 PM
CP
Portfolio DALY
CM (PRF_CM)
Report Ver 1.0.0.0
Page: 4
City of Daly City
Sanitation District
Portfolio Management
Portfolio Details - Investments
December 31, 2025

Maturity Date Cusip Investment # Fund
Security
Type Issuer Dealer
Dealer's Phone
Number
Maturity
Par Value
Stated
Rate Comments
10/16/2025 95763PQF1 10125 GENER
AL
MC1 WESTERN ALLIANCE TVI 244,000.00 5.300
10/28/2025 319477AN5 10050 GENER
AL
MC1 FIRST CITIZENS BK TVI 244,000.00 4.700
10/28/2025 39573LDW5 10052 GENER
AL
MC1 GREENSTATE CU TVI 248,000.00 4.750
10/30/2025 48128UQJ1 10053 GENER
AL
MC1 JP MORGAN CHASE
BK
TVI 249,000.00 0.500
10/31/2025 819866BR4 10054 GENER
AL
MC1 SHARONVIEW FCU TVI 249,000.00 4.850 ~~*1stInt
*Intrcvnomrate
chng
October, 2025 Subtotal: 1,234,000.00
11/04/2025 91334AAE3 10055 GENER
AL
MC1 UNITED HERITAGE
CU
TVI 249,000.00 4.700 ~~*1stInt
*Intrcvnomrate
chng
11/18/2025 549104TK3 10056 GENER
AL
MC1 LUANA SAVINGS
BANK
TVI 249,000.00 0.400
November, 2025 Subtotal: 498,000.00
12/15/2025 06251A2Q2 10057 GENER
AL
MC1 BANK HAPAOLIM TVI 249,000.00 0.500
12/16/2025 16141BAD3 10058 GENER
AL
MC1 CHARTWAY FCU TVI 248,000.00 5.050
12/18/2025 05600XBQ2 10059 GENER
AL
MC1 BMO HARRIS BANK TVI 249,000.00 0.500
December, 2025 Subtotal: 746,000.00
Total 2,478,000.00
CP
Portfolio DALY
MI (PRF_MI)
Report Ver 1.0.0.0
City of Daly City
333 90th Street
Daly City, CA 94015
(650)991-8047
City of Daly City
Sanitation District
Maturing Investments
Sorted by Maturity Date
October 01, 2025 - December 31, 2025

Cusip Investment # Fund
Sec.

Type Issuer
Original
Par Value Purchase Date Payment Periods
Principal
Purchased
Accrued Interest
at Purchase
Rate at
Purchase
Maturity
Date YTM
Ending
Book Value
General Fund
61778EHV6 10154 GENE
RAL
MC1 MOR 245,000.00 11/05/2025 05/05 - 11/05 245,000.00 3.750 11/05/2030 3.752 245,000.00 05614FBX0 10155 GENE
RAL
MC1 BNY 245,000.00 11/05/2025 05/05 - 11/05 245,000.00 3.600 11/05/2030 3.602 245,000.00 15118R3B1 10156 GENE
RAL
MC1 CELTIC 249,000.00 11/07/2025 12/07 - 01/07 249,000.00 3.550 11/07/2030 3.540 249,000.00 89846HFE8 10157 GENE
RAL
MC1 TRUX 249,000.00 11/07/2025 12/07 - 01/07 249,000.00 3.500 11/07/2030 3.490 249,000.00 CAMPTERM 10158 GENE
RAL
LA2 CAMP-T 10,000,000.00 10/15/2025 10,000,000.00 3.710 3.710 10,000,000.00 Subtotal 10,988,000.00 10,988,000.00 0.00 10,988,000.00 Total Purchases and
Deposits
10,988,000.00 10,988,000.00 0.00 10,988,000.00
CP
Portfolio DALY
PU (PRF_PU)
Report Ver 1.0.0.0
City of Daly City
Sanitation District
Purchases Report
Sorted by Fund - Fund
October 01, 2025 - December 31, 2025
City of Daly City
333 90th Street
Daly City, CA 94015
(650)991-8047

City Council Meeting Agenda Report Item #

Meeting Date: February 9, 2026
Subject: Accept Fiscal Year 2025 Annual Comprehensive Financial Report Recommended Action
Acceptance by motion of the fiscal year 2025 Annual Comprehensive Financial Report.

Background
The financial records of the City of Daly City are subject to an annual independent audit, which is performed by Maze & Associates. The audit is performed in conformance with generally accepted auditing standards in the United States and includes a comprehensive review of the financial records and the internal control procedures in place which safeguard the City’s assets.

Discussion
The Independent Auditor’s Report contained in the Annual Comprehensive Financial Report (ACFR) indicates that the financial statements present fairly, in all material respects, the financial position of the City as of June 30, 2025. This opinion is considered “clean” or “unmodified”, which means that the financial records reflect appropriately the financial activity of fiscal year 2025.

The ACFR contains the financial activity of all of the City’s funds and account groups. It is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of various funds. All disclosures necessary to enable the reader to gain maximum understanding of the City's financial activities are included.

Each year the ACFR is submitted to the Government Finance Officers Association award program for the Certificate of Achievement for Excellence in Financial Reporting. Daly City received the award for the prior fiscal year 2024 and staff anticipates that the City will be successful in attaining the award for fiscal year 2025.

Summary/Conclusion

Staff recommends acceptance of the fiscal year 2025 Annual Comprehensive Financial Report. Staff is available to provide any additional information desired by the Mayor or Councilmembers.

Respectfully submitted,

Timothy J. Nevin
Interim Director of Finance and
Administrative Services

Attachments: Fiscal Year 2025 Annual Comprehensive Financial Report

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

CITY OF DALY CITY,

CALIFORNIA

FOR THE FISCAL YEAR
ENDED JUNE 30, 2025

CITY OF DALY CITY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED

JUNE 30, 2025

Prepared by

DEPARTMENT OF FINANCE
AND

ADMINISTRATIVE SERVICES

Timothy J. Nevin
Interim Director of Finance
and Administrative Services

CITY OF DALY CITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS

I INTRODUCTORY SECTION
Page
Letter of Transmittal
................................................................................................................................. v Organization Structure .............................................................................................................................. xvi City Council and Administration and Department Heads ....................................................................... xvii Certificate of Achievement for Excellence in Financial Reporting ........................................................ xviii

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

Government-wide Financial Statements:

Statement of Net Position ........................................................................................................ 18 Statement of Activities ..................................................................................................... ........ 19 Fund Financial Statements:

Governmental Funds:

Balance Sheet ........................................................................................................................ 22 Reconciliation of the Governmental Funds Balance Sheet with the Statement of Net Position ................................................................................................ 23 Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 24 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities ........................................................................... 25 i

CITY OF DALY CITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
Page
Statement of Revenues, Expenditures, an d Changes in Fund Balance – Budget and Actual:

General Fund ............................................................................................................................ 26 Gas Tax Special Revenue Fund ......................................................................................... 28 Grants Special Revenue Fund
............................................................................................ 29 Measures A and W Special Revenue Fund ....................................................................... 30 Proprietary Funds:

Statement of Net Position ................................................................................................. 31 Statement of Revenues, Expenses and Changes in Fund Net Position ............................ 32 Statement of Cash Flows .................................................................................................. 33 Fiduciary Funds:

Statement of Fiduciary Net Position ..................................................................................36 Statement of Changes in Fiduciary Net Position ...............................................................37 Notes to Basic Financial Statements .......................................................................................... 39 Required Supplementary Information:

Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Plan .. 84 Schedule of Changes in the Net Pension Liability and Related Ratios – Safety Plan ............... 86 Schedule of Contributions - Pension Plans ................................................................................ 88 Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................ 90 Schedule of Contributions – Other Post-Employment Benefits Plan ........................................ 92 ii

CITY OF DALY CITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
Page
Supplemental Information:

General Fund:

Combining Fund Balance Sheet .......................................................................................... 96 Combining Fund Schedule of Revenues, Expenditures and Changes in Fund Balance ..... 97 Major Governmental Funds Other than General Fund and Special Revenue Funds:

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

Capital Projects Fund ..................................................................................................... 100 Nonmajor Governmental Funds:

Combining Balance Sheet ................................................................................................. 102 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................... 103 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual ......................................................................... 104 Internal Service Funds:

Combining Statement of Net Position ............................................................................... 108 Combining Statement of Revenues, Expenses and Changes in Fund Net Position .......... 110 Combining Statement of Cash Flows ................................................................................ 112 Custodial Funds:

Combining Statement of Net Position .............................................................................. 116 Combining Statement of Changes in Net Position ........................................................... 117 iii

CITY OF DALY CITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

TABLE OF CONTENTS
Page

III STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years
.......................................................................... 121 Changes in Net Position - Last Ten Fiscal Years ................................................................................ 122 Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................ 126 Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ..................................... 128 Assessed Value of Taxable Real Property - Last Ten Fiscal Years .................................................... 130 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ................................................. 131 Principal Property Tax Payers – Ten Year History ............................................................................. 132 Property Tax Levies and Collections – Last Ten Fiscal Years ........................................................... 133 Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................. 134 Ratio of General Bonded Debt by Type – Last Ten Fiscal Years ....................................................... 135 Computation of Direct and Overlapping Debt .................................................................................... 136 Computation of Legal Bonded Debt Margin ....................................................................................... 137 Water Utility Fund - Number of Connections by Users as of June 30, 2025 ..................................... 138 Water Utility Fund - Certificates of Participation Historical Revenues, Expenditures and Bond Coverage – Last Ten Fiscal Years .................................................................................................... 138 Demographic and Economic Statistics - Last Ten Fiscal Years ......................................................... 140 Principal Employers – Ten Year History ............................................................................................ 141 Full-Time City Government Employees by Function – Last Ten Fiscal Years ................................. 142 Operating Indicators by Function/Program – Last Ten Fiscal Years .................................................. 144 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .............................................. 146 iv

City of Daly City
333 – 90TH STREET
DALY CITY, CALIFORNIA 94015-1895
December 16, 2025
Honorable Mayor
Members of the City Council
Citizens of Daly City
We are pleased to present the Annual Comprehensiv
e Financial Report (ACFR) of the City of Daly
City for the Fiscal Year (FY) ended June 30, 2025. The goal of the independent audit is to provide reasonable assurance that the financial statements are free of material misstatements and presented in conformity with generally accepted accounting principles (GAAP).

The City has contracted with Maze and Associates, independent Certified Public Accountants (CPAs), to perform the audit of these financial statements. The auditors have issued an “unmodified” opinion on the City of Daly City’s financial statements. This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion. The auditor’s report is located at the front of the financial section of this report.

This letter of transmittal is designed to comple ment the Management’s Discussion and Analysis (MD&A) and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors.

Management assumes full responsibility for the co mpleteness and reliability of the information contained in this report, based on a comprehensive framework of internal controls that are established for this purpose. Since the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

The independent audit is part of a broader federally mandated Single Audit, designed to meet the requirements of federal grantor agencies. The standards governing Single Audits require the independent auditor to report on the fair presentation of the financial statements as in the normal audit, but also require the independent auditor to report on the City’s internal controls and compliance with legal requirements specific to the federal grants. These reports are part of the separately issued Single Audit Report that is provided to the appropriate federal agencies. v

PROFILE OF THE CITY
The City of Daly City is one of the largest cities in San Mateo County with an estimated population of 102,155. Daly City is an urbanized, coastal community located at the northern edge of San Mateo County, comprising approximately 7.66 square miles of substantially developed area. The City is known as the "Gateway to the Peninsula", and its area extends to the Pacific Ocean on the west, and nearly to San Francisco Bay on the East. Daly City abuts San Bruno Mountain, a State and County Park, which features the highest peak in the area’s hilly terrain. It is strategically located and is central to major growth areas of San Francisco and San Mateo counties.

Daly City was incorporated on March 22, 1911, as a General Law City. It is governed by a Council- Manager form of government. There are five council members who serve overlapping terms of four years, and the City Council, in turn, selects one of the council members to serve as Mayor each year.

The City Council appoints the City Manager and the City Attorney. The City Manager is the chief executive officer. It is the City Manager's responsibility to hire department heads for each of the City functions, to propose the annual budget, to coordinate and oversee all activities of the organization, and to implement the laws, policies, and budgets adopted by the City Council.

The City of Daly City is a full-service city providing a complete range of municipal services. These services include police, fire, library, recreation, street construction and maintenance, traffic signalization and control, engineering, code enforcement, parks operations and maintenance, general administration, planning, and community development. The City also operates a water utility and a sanitary sewer district. Operating and capital costs for these services are maintained in enterprise funds and are funded by user rates or debt proceeds.

The ACFR includes all funds and accounts of the City of Daly City and its blended component units.

The financial statements include the financial activities of the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation, the Daly City Housing Development Finance Agency, and the Daly City Joint Powers Financing Authority. The financial operations of the City and the other entities included in this financial report are closely related. City Council members serve as the governing board of the District, Corporation, Agency, and Authority.

The City Manager also serves as the General Manager of the Sanitation District, which is included in the proprietary fund types as an enterprise fund.

The budget serves as the foundation for the City’s financial planning and control. Using the Guiding Principles and Priorities established by the City Council, departments submit budget proposals to the City Manager for review. The City Manager’s Proposed Budget is presented to the City Council during public budget meetings. Changes as directed by the City Council are made and the budget is submitted for final adoption before July 1, the beginning of the next budget cycle. Departments are responsible for managing within the City Council appropriated budget. Budget amendments are often necessary due to changes in economic conditions and other circumstances occurring during the fiscal year.
vi

FACTORS AFFECTING FINANCIAL CONDITION
Economic Indicators
According to the Federal Open Market Committee, United States GDP in 2025 is expected to grow

1.6% while the GDP increased in 2024 by 2.8%, compared to 6.3% in 2023 and 9.2% in 2022.

Although the increased growth rate is an improvement over the negative growth rates resulting from the COVID-19 pandemic, the lower growth rates still reflect a possible future recession. Also due to the pandemic, California unemployment hit a record high of 16.4% in May 2020 and then reached a new low of 3.4% in May of 2022 as the State recovered. However, the return to low unemployment may not last as the Federal Reserve increases interest rates in response to rising inflation. As of August 2025, the unemployment rate has risen to 5.5%. The greatest risks to the forecast of the U.S. economy stem from concerns over inflation, rising interest rates, and supply concerns for both labor and housing. The current tightening of monetary policies affecting financial and credit conditions will also weigh on economic activity, hiring, and inflation.

In California, especially in the San Francisco Ba y Area, housing prices continue to be expensive and unaffordable, particularly for first time homebuyers, given the limited availability even with a downshift in the market. The U.S. Home Price Growth, on a year-over–year basis as measured by the Case-Shiller 20-City Composite Home Price Index, experienced a 1.8% increase in July 2025, compared with a 5.9% increase in July 2024. The housing market continues to be equally challenging for California renters, many of whom need to spend more than half of their income on rent. Housing market research suggests that continued limited supply compared to demand is one of the major causes of high housing costs in the coastal California region.

Local Economy and Fiscal Challenges
General Fund revenues for FY 2025 increas ed by $5.4 million to $130.1 million. The revenue increase is made up of some revenue increases and some decreases among the various General Fund sources. The City experienced revenue incr eases in property tax and sales tax revenues of about $2 million dollars; an increase in charges and fees, and, through the recognition of $2.7 million in one-time American Rescue Plan Act (ARPA) funds. General Fund expenditures increased by $3.6 million to $121.1 million in FY 2025, the majority of which was due to salary and benefit increases resulting from cost-of-livi ng raises. Although the City budgeted at a deficit for FY 2025, the General Fund saw a minor surplus because of savings from a large number of vacant staff positions and the one time APRA funding.
vii

Enterprise Funds
Two of the City’s major enterprise funds, the Water Utility Fund and Sanitation District Fund, derive revenue from water usage.

Revenues for the Water Utility Fund increased by $2 million to $31.8 million in FY 2025 mainly due to an annual water rate increase of 9.5% and investment returns. Expenses increased $1.3 million to $22.2 million in FY 2025 reflecting an increase in the cost-of-living salary increases for employees in the Water Utility Fund and an increase in capital project spending.

The Sanitation District Fund revenues increased minimally by $0.9 million to $26.7 million in FY 2025. Expenses increased by $0.9 million to $34.8 million in FY 2025 also reflecting an increase in cost-of-living salary increases for employees in the Sewer Enterprise Fund and an increase in capital project spending.

LONG RANGE FINANCIAL PLANNING
The City employs a ten-year financial forecasting model to ensure accountability of service levels and to plan for future challenges. Long-range financial planning enables the City to foresee potential budget issues, giving the City sufficient time to respond to and analyze the long-term financial impact, as well as to take appropriate action before a problem develops. In addition, the long-range financial planning serves as a key planning tool for future budgets and decision- making.

Many of the fiscal drivers within the ten-year forecast are outside the City’s control. This includes changes in the national and local economy; federal and state legislation; and CalPERS actuarial assumptions, investment returns, and the resulting impact on employer contribution rates. Due to the passage of Propositions 13, 218, and 26 in California, the City has no ability to institute taxes and assessments without voter approval. For a ballot measure to be successful, there must be broad community support.

Given the current and forecasted budget challenges, the City has implemented a multi-pronged approach to address long-term fiscal challenges and to ensure the sustainability of the City’s finances into the future.

1. Evaluate General Fund and other reserves . The City’s Financial Policy is to maintain a Minimum General Fund unassigned fund balance equal to 17% or two months of annual budgeted expenditures. It is recommended that the City maintain a Preferred General Fund unassigned fund balance equal to 25% or 3 months of annual budgeted expenditures. Accomplishing the reserve target of 25% requires closely monitoring the balance between revenues and expenses on an ongoing basis. The General Fund reserve provides a buffer to the City in the event of unexpected reductions in revenues or increases in costs. If the City draws down the General Fund reserve, year-end budget surpluses will be used to replenish the reserve. viii

2. Identify other potential sources of revenues. Over the next ten years, General Fund expenses will continue to increase beyond the City’s ability to fund with current revenue sources. The City was successful with ballot measures on a cannabis business license tax and increases for transient occupancy tax and business license tax in the November 2018 General Election. In addition, the Daly City voters approved Measure Q – the Daly City Local Recovery and Relief Measure – in November 2020, which added a transaction and use tax of one-half cent to the total sales tax rate as of April 2021. The City will continue to identify other potential sources of new revenue and evaluate City fees to ensure cost recovery for services provided.

3. Promote economic development and business expansion. The City has identified several economic development opportunities which will improve economic activity in the City. These include economic development opportunities related to the disposition of former Redevelopment sites, implementation of commercial cannabis bus iness licensing, and the provision of financial assistance to local small and minority-owned businesses. The City has expanded efforts to engage with the small business community by creating the Small Business Commission to celebrate and honor local businesses through the Legacy Business Award program. A contract with the Daly City Colma Chamber of Commerce was also re-est ablished this past year. The City has also established the Economic Development division under the Office of the City Manager with two dedicated positions beginning in FY 2026. The City will continue to identify new opportunities for expanding and diversifying its economic base to ensure long-term fiscal sustainability.

4. Pre-fund Pension and Other Post-Employment Benefits (OPEB). In April 2017, the City Council authorized participation in the Section 115 Trust Program which allowed the City to set aside funds towards OPEB costs and help reduce the unfunded liability. The City continued to contribute to this Program in FY 2025.

In May 2017, the City Council also authorized participation in a Section 115 Trust to pre-fund pension costs and prepare for pension increases due to changes in CalPERS actuarial assumptions and discount rates. The Section 115 Trust Program will provide the City with an alternative to sending funds to CalPERS that will allow for greater control of the assets held in the trust and risk tolerance level for the investment. Another poten tial benefit includes pension rate stabilization.

Assets in the Trust Program can be transferred to CalPERS at the City’s discretion, which could reduce large fluctuations in employer contributions to CalPERS.

5. Complete comprehensive asset condition assessment and capital improvement plan. Within the last ten years, the Public Works Department completed several long-term planning documents.

The City completed the Facilities Condition Assessment, the ADA Self Evaluation and Transition Plan, the Parks and Open Space Master Plan, the Vision Zero Action Plan, the update to the City’s Pavement Management System Report, and the Pedestrian and Bicycle Master Plan. The Storm Drain Master Plan is currently underway and anticipated to be completed in 2026. The Seismic Evaluation of Critical Facilities and Public Works Corporation Yard Master Plan and Use Study still needs to be budgeted for.
ix

The needs identified by the above master planning documents significantly exceed resources currently available. Public Works has and will continue to pursue grant funding to support essential improvements. Public Works will colla borate with other departments to develop and identify long term budget plans to improve and maintain the City’s infrastructure.

MAJOR INITIATIVES
During FY 2025, under the leadership of the City Council, several outstanding key programs and projects were successfully undertaken by the City.

Economic and Community Development
The Economic and Community Development Department has continued to provide its regular services while implementing a variety of new programs and policies. The Building Division has been working with the assistance of consulting company Plante Moran to improve the overall permitting and inspection process by making more se rvices available online and exploring other opportunities to streamline the review process.

The Planning Division continued its work on the preparation of the Housing Element, which is a plan to build over 4,800 housing units to meet the region’s housing needs with the Housing Element being adopted in November 2024. Included in the adoption were several zoning changes to increase residential density and streamline development.

The Housing Division continued to administer the federal funding that was provided to help households that were affected by COVID-19 through rental assistance, food distribution, and mental health services as well as implement the CDBG program. The Housing Division has also confirmed funding, secured a site, and initiated project design of a low-income daycare facility on City property. The Housing Division also continued to refine its contract with Habitat for Humanity to administer the Residential Rehabilitation Program.

Code Enforcement was able to complete the enforcement cycle on high profile cases with assistance of the City Attorney’s office, improving neighborhood quality.

The Daly City Public Library
In fiscal year 2025, Daly City’s four libraries welcomed 213,198 visits and checked out 418,875 items, including 83,136 eBooks and other electronic items. Early literacy story times, activities, workshops, and events continue to draw people to the libraries. The Daly City Public Library provided 433 programs during the year with a total attendance of 15,305, a decrease from the prior year attributable to construction at our Serramonte Main Library which necessitated the temporary closure of the Community Room. ADA and energy efficiency facility upgrades began at the main library in January. Built in 1975, the main library will soon feature an elevator for accessing the Community Room and lower-level staff areas and new, more efficient HVAC and lighting. x

North County Fire Authority
The North County Fire Authority (NCFA) achieved an average response time of 5 minutes and 27 seconds for on scene arrival of a first due fire company at all emergency incidents. NCFA achieved an overall “Customer Satisfaction” rating of 98% in the delivery of emergency and non-emergency services. NCFA mitigated all fire incidents effectively and efficiently minimizing loss of life and property damage. NCFA provided high quality Basic Life Support and Advanced Life Support assessment and treatment interventions to emergency medical incidents utilizing our paramedic fire engines and truck companies, in which over half of total EMS calls benefited and served senior citizens. NCFA conducted monthly online virtual interactive meetings allowing the public the view presented fire safety, emergency planning and preparedness information as well to ask questions and get answers.

Fire Prevention Services completed timely and professional pre-fire engineering and plan check reviews and inspections for new construction projects, tenant improvements, alarm installations, and suppression systems. The division also completed a fire “cause and origin” analysis and investigation for all fire incidents. Further, NCFA completed annual mandated and required fire and life safety code compliance inspections covering all business, multi-family and permitted occupancies. NCFA presented throughout the y ear Emergency Preparedness, Individual and Family Preparedness seminars, as well as Co mmunity Emergency Response Team (CERT) classes. Additionally, “Hands Only CPR”, “Stop the Bleed and Choking” was presented to the public through numerous events and venues. NCFA provided fire engine companies and chief officers to multiple major wildfire incidents throughout the State of California.

Police Department
The Daly City Police Department remains co mmitted to service-based policing, emphasizing community engagement, technology integration, and adaptive policing strategies. The Department participates in local and regional task forces addressing quality-of-life issues and emerging crime trends. The Department also continues to strengthen partnerships with local and regional law enforcement agencies, community organizations, as well as other entities designed to provide invaluable services to our community.

As part of the Department’s ongoing commitment to combat organized retail theft (ORT), the Dal y
City Police Department continues to implement strategies supported by the California State ORT grant. This funding established a joint task force with two partner agencies, enabling shared resources and improving collaborative enforcement efforts. Looking ahead, the Department plans to further expand its use of technology through the expansion of a Real Time Information Center (RTIC). The RTIC serves as a hub for real-time data analysis, intelligence sharing, and coordinated response efforts.
xi

The Department was awarded a California Department of Justice Tobacco Grant, which supports local enforcement and prevention efforts aimed at reducing illegal retail sale of tobacco products to minors. This funding enables the Department to conduct retail enforcement operations to ensure adherence to state tobacco laws and protect our youth. This effort further aims to build community trust through collaboration. We value transparency, equipping officers with body and vehicle cameras, and ensure applicable policy adaptation. The Police Department strives to remain compliant with all reporting and legislative requirements.

The Department prioritizes community engagement through our Community Division, allowing us to enhance our social media presence, and further expand our participation in local events. This year, the Department hired five Community Service Officers (CSOs) to strengthen our civilian non-emergency response and outreach efforts. Alongside our Mental Health Clinician and Police Assistants, these positions support a compassionate and well-rounded approach to public safety and service delivery.

Technology continues to enhance operational e fficiency. The Department utilizes automated license plate readers (ALPRs), pursuit intervention solutions, and data integration software to streamline investigations. Deployment of unmanned aerial systems (UAS) has improved officer and community safety, and the Department is actively enhancing our Drone as First Responder (DFR) program to further enhance efficiency and emergency response capabilities. Through these combined initiatives, expanding strategic partnerships, strengthening community trust, and investing in technology, the Daly City Police Department continues to demonstrate its commitment to public safety, innovation, and exceptional services to the community.

Public Works Department
The Public Works Department completed several capital improvement projects and continued to provide routine services to the public such as street sweeping, traffic signal and street light maintenance, equipment and vehicle maintenance, facility maintenance, park maintenance and litter and debris removal. The Department continues to focus on preventative measures to maintain and maximize the useful lifespan of City owned assets such as City vehicles, equipment, facilities, and infrastructure.

Some completed projects by the Public Works Department include Southgate Avenue and School Street Safety Improvements Project, Mussel Ro ck Landfill Upper Disposal Area Pull-Back Project, City Hall Elevator Modernization and ADA Barrier Removal Project, Lawson Hall Roof Project and Parks/Fleet Maintenance Facility Roof Project. xii

Construction also began on the Northern Cities Smart Corridor Expansion Project, Skyline Slurry Seal & Westmoor Avenue and Westridge Avenue Intersections Quick Build Project, San Diego, Santa Cruz and Guadalupe Water Main Replacement Project & St. Francis Water Main Replacement Project, Daly City Doelger Art Center Roofing and HVAC Replacement Project, Serramonte Library – Elevator, Energy Efficiency, ADA Upgrades, HVAC Replacement Project, RO 572 Streetlight Conversion Project, Santa Barbara Avenue & Vista Grande Avenue Green Stormwater Infrastructure and Pedestrian Improvement Project, Fire Station 95 Diesel Fuel Tank Replacement Project and Mussel Rock Stability Project.

The Public Works Department also continues to seek grant funds for the City and was successful in securing additional funds for the Hillside Boulevard Complete Street Corridor Project, John Daly Boulevard Pedestrian and Bicycle Facility Improvements Project, Daly City Micromobility Pilot Project and Daly City Bayshore Shuttle.

Department of Water and Wastewater Resources
The Department of Water and Wastewater Resources (DWWR) continued to meet all public health and regulatory requirements associated with the production, treatment, and distribution of high- quality drinking water, along with the collection, treatment, re-use, and disposal of wastewater on behalf of the citizens of Daly City and the North San Mateo County Sanitation District. The Department continued to manage the critically important regional drinking water, wastewater, and stormwater project, the Vista Grande Drainage Basin Improvement Project (Project). DWWR is working diligently with project partners, the San Francisco Public Utilities Commission, the County of San Mateo, Caltrans, the Olympic Club, and many others. The Project went out to bid at the end of 2025, and construction will commence in 2026.

Drinking water projects continued to be of the highest priority along with groundwater pumping projects and water main improvements at St. Francis, San Diego, Santa Cruz, and Guadalupe Streets. At Reservoir 6B a new seismic roof was installed, and the interior of Reservoir 8 was restored to protect the drinking water of our residents. Additionally, significant capital improvements were made at the North San Mateo County Sanitation District Wastewater Treatment Plant and Collection Facilities such as sewer lift station rehabilitation, improvements to the treatment plant air scrubbers, upgrades to the treatment plant aeration mixer, SCADA system upgrades, and roof replacement of the Operations building. Staff is in the process of updating the Collection System and Wastewater Treatment Plant Master Plans which will produce a long-term Capital Program for both systems. With the continuation of the Utility Rate Assistance Program, 184 resident households now utilize it to receive financial assistance in managing their utility bills. xiii

Recreation Services
The Department of Recreation Services housed 490 rental opportunities for the Daly City community and beyond to host personal gatherings and events. The Youth Recreation Program and Youth Athletics Program, including Afterschool and Summer activities, served 5,296 participants across six school locations and two recreation facilities. Athletic leagues and programs, such as Youth Basketball, Mini Hoops, Youth Baseball, and Clinics, engaged over 1,632 participants in safe, meaningful activities. Through the Senior Lunch Program, over 55,239 congregate meals were served across four locati ons, and 271 senior participants were able to partake in the Senior Food Pantry.

The Department also hosted a variety of city-wide cultural and family-oriented events, including the Black History Celebration, Crab Feed, Recreation Resource Day, Spring Fun Day, Health and Wellness Fair, Children’s Day, Hip Hop Day, Latino Heritage Month – Pachanga!, Kasayahan sa Daly City, Trunk or Treat, Autumn Fest, and Frosty Snow Fest, collectively reaching over 12,530 youth and families.

Additionally, recreation programs, activities, and cla sses in exercise, education, and cultural arts served more than 15,191 participants. Community engagement was bolstered by 354 volunteers and volunteens, who collectively contributed over 42,157 service hours to support these efforts.

Finance and Administrative Services
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 Daly City for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024. This was the 38
th consecutive year that the City of Daly City has received this prestigious award.

To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

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

In addition, the City also received the GFOA’s Award for Distinguished Budget Presentation for its Comprehensive Operating and Capital Budget for FY 2025. To qualify for the Distinguished Budget Presentation Award, the City’s budget document was judged to be proficient in several categories including policy documentation, financial planning and organization. xiv

ACKNOWLEGEMENTS
The preparation of the Annual Comprehensive Financial Report on a timely basis was made possible by the dedicated efforts of the Accounting Division of the Department of Finance and Administrative Services. Each individual has our sincere appreci ation for the professionalism, dedication and contributions made in the preparation of this report.

Credit must also be given to the Mayor, City Council members and City Department Directors for their support in maintaining the highest standards of professionalism in the management of the City of Daly City’s finances.

Respectfully submitted,
Thomas J. Piccolotti Timothy J. Nevin
City Manager Interim Director of Finance and Administrative Services
xv

CITIZENS OF

DALY CITY

CITY OF DALY CITY

ORGANIZATONAL STRUCTURE
FISCAL YEAR 2025

MAYOR &

COUNCILCITY CLERK CITY

TREASURER

CITY ATTORNEY

PLANNING

COMMISSION

BICYCLE & PEDESTRIAN

ADVISORY COMMITTEE
YOUTH

ADVISORY

COMMITTEE

RECREATION

COMMISSION

LIBRARY BOARD OF

TRUSTEES
SMALL

BUSINESS

COMMISSION

PERSONNEL
BOARD
ARTS &

CULTURE

COMMISSION

MOBILE HOME

RENT REVIEW

COMMISSION

CITY MANAGER

ECONOMIC &

COMMUNITY

DEVELOPMENT

FINANCE &

ADMINISTRATIVE

SERVICES

FIRE HUMAN

RESOURCES

DALY CITY PUBLIC

LIBRARY POLICE PUBLIC WORKS

WATER &

WASTEWATER

RESOURCES

RECREATION

SERVICES
WOMEN’S

COMMISSION
xvi

CITY OF DALY CITY

CITY COUNCIL
JUNE 30, 2025
Glenn R. Sylvester, Mayor
Teresa G. Proano, Vice Mayor
Pamela DiGiovanni
Juslyn C. Manalo
Dr. Rod Daus-Magbual
K. Annette Hipona
City Clerk
Daneca Halvorson
City Treasurer

ADMINISTRATION AND DEPARTMENT HEADS
Thomas J. Piccolotti
Timothy J. Nevin
Rose Zimmerman
Richard Chiu Jr.

Cameron Christensen
Tatum Mothershead
Ron Myers
Joshua A. Cosgrove
Natalie Sakkal
City Manager
Assistant City Manager/Interim Director of Finance and
Administrative Services
City Attorney
Director of Public Works
Chief of Police
Director of Economic & Community Development
Fire Chief
Director of Water & Wastewater Resources
Director of Human Resources
xvii

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Daly City
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
xviii

INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members of the
City Council of the City of Daly City, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the g overnmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the City of Daly City (City), California, 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 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 informatio n of the City as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons lis ted in the Table of Contents as part of the basic financial statements 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 auditi ng standards generally accepted in the United States of America and the standards appli cable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in th e Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We ar e required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinions.

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

In preparing the financial statements, manageme nt 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. 1

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

Reasonable assurance is a high level of assurance but
is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulti ng 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 generally accepted auditing standards and Government Auditing Standards
, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material 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 manage ment, 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. 2

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis and other Required Supplementary Information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial 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 th e financial statements that collectively comprise the City’s basic financia l statements.

The accompanying Supplementary
Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial stat ements. Such information is the responsibility of management and was derived from and relates di rectly 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 Am erica. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inco nsistency 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. 3

Other Reporting Required by Government Auditing Standards In accordance with
Government Auditing Standards, we have also issued our report dated December 16, 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.

Pleasant Hill, California
December 16, 2025
4

MANAGEMENT’S DISCUSSION AND ANALYSIS
This narrative overview and analysis of the City of Daly City’s financial results provides an overview of the City’s financial activities for the year ended June 30, 2025.

FISCAL YEAR 2025 FINANCIAL HIGHLIGHTS

• As of June 30, 2025, net position totaled $233.9 million, an increase of $15.8 million from the prior year total of $218.1 million for both Governmental and Business-Type activities. • Net Position of governmental activities in Fiscal Year (FY) 2025 was $99.4 million compared to $88.4 million in FY 2024, an increase of $11 million. • Net Pension and OPEB Liabilities of governmental activities increased by $3.7 million to $246.2 million in FY 2025 from $242.5 million in FY 2024. • Net Position of business-type activities in FY 2025 was $134.5 million compared to $129.7 million in FY 2024, an increase of $4.8 million.
• Net Pension and OPEB Liabilities of business-type activities increased by $0.4 million to $18.6 million in FY 2025 from $18.2 million in FY 2024.
• In FY 2025, total City revenues, including program and general revenues, were $224.4million, while total expenses were $208.6 million.
• Governmental activities program revenues were $43.6 million in FY 2025 compared with $40.1 million in FY 2024. Business-type activities program revenues were $59.1 million in FY 2025 compared with $57.2 million in FY 2024.
• Governmental activities general revenues were $114.7 million in FY 2025 compared with $110.1 million in FY 2024, an increase of $4.6 million over the prior year. Part of this is $2 million in additional revenues from property taxes and sales taxes, showing a return to more normal growth rates for these revenues. In addition, there was an increase in the utility users tax due to increasing energy costs in FY 2025, and increase investment income of $1 million.

Business-type activities general revenues were $7 million in FY 2025, a decrease of $1.5 million over the prior year primarily due to lower investment income received based on the interest distribution percentages.
• Unrestricted net position of governmental funds changed from negative ($58.6) million in FY 2024 to negative ($58.9) million in FY 2025, primarily due to an increase in total assets of $22.7 million, made up of increases in cash and investments and capital assets. 5

OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This Annual Comprehensive Financial Report (ACFR) is in three sections:
1) Introductory Section containing the Transmittal Letter and miscellaneous other information
2) Financial Section containing the Independent Auditor’s Report, this Management’s Discussion and Analysis, the Basic Financial Statements, which include the Government- wide and the Fund Financial Statements, along with the Notes to these financial statements, Required Supplementary Information, and Combining Statements for Non-major Governmental Funds and Fiduciary Funds
3) Statistical Section containing financial trend data and general statistical information about the City

The Basic Financial Statements
The Basic Financial Statements are comprised of the City-wide Financial Statements and the Fund Financial Statements, including the Notes thereto. These two sets of financial statements provide two different views of the City’s financial activities and financial position.

The Government-wide Financial Statements provide a longer-term view of the City’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, like that used by private corporations. The Statement of Activities provides information about all the City’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each of the City’s programs. The Statement of Activities explains in detail the change in net position for the year.

All the City’s activities are grouped into governmental activities and business-type activities, as explained below. All the amounts in the Statement of Net Position and the Statement of Activities are separated into governmental activities and business-type activities to provide a summary of these two types of activities of the City as a whole.

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

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

The fiduciary statements provide financial information about the assets for which the City acts solely as custodian in its capacity as a fiscal agent.
6

The Government-Wide Financial Statements
The Statement of Net Position and the Statement of Activities present information about the following:
• Governmental activities - All the City’s basic services are governmental activities, including general government, public safety, public works, streets and infrastructure, culture and recreation, and economic and community development. These services are supported by general City revenues such as taxes, and by specific program revenues. • Business-type activities - All the City’s enterprise activities are reported here, including water, sewer, and solid waste transport. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.

Government-wide financial statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole.

Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major funds. Each major fund is presented individually, with all non- major funds summarized and presented only in a single column. Subordinate schedules present the detail of these non-major funds. Major funds present the major activities of the City for the year and may change from year to year because of changes in the pattern of the City’s activities.

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

Enterprise fund financial statements are prepared on the full accrual basis, and include all their assets and liabilities, both current and long-term.

Since the City’s internal service funds provide goods and services only to the City’s governmental and business-type activities, their activities are repor ted only in total at the fund level. Internal service funds cannot be major funds because their revenues are derived from other City funds.

These revenues are eliminated in the City-wide financial statements and any related profits or losses are returned to the activities which created them, along with any residual net position of the internal service funds.

Comparisons of budget and actual financial information are presented only for the General Fund and other major funds that are special revenue funds.

Fiduciary Statements – The City is the fiscal agent for a few small local agencies. Fiduciary activities are reported in the separate Statement of Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its own operations.

7

FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
This analysis focuses on the net position and changes in net position of the City’s governmental activities and business-type activities (Tables 1, 2, and 3) presented in the City-wide Statement of Net Position and Statement of Activities that follow.

Table 1
Net Position at June 30
(in thousands)

Governmental Activities
The City’s net position from governmental activities increased from $88.4 million in FY 2024 to $99.4 million in FY 2025. The increase in the Net Position reflected in the Statement of Activities, is also shown in Table 1. Increases and decreases of individual assets and liabilities include:

• Governmental cash and investments increased $14.9 million from $195.9 million in FY 2024 to $210.8 million in FY 2025. The City’s net position in cash and investments increased partly because of a steady increas e in governmental revenues including property taxes ($1.7 million), sales taxes ($343 thousand), and charges for fees ($2.1 million) which increased due an increase use of City services. The other portion of that increase is due to the change in investment earnings, which went from $9.5 million in FY 2024 to $10.4 million in FY 2025, as the financial markets rebounded to positive returns.

8

• Also on the asset side, capital assets increased in FY 2025 to $113.3 million from $107.5 million in FY 2024. This is mostly due to the implementation of GASB 96 in FY 2023.

Within the City’s governmental activities, the City estimates the value of the subscription- based information technology arrangement assets to be $5 million.

• In FY 2025, liabilities also increased by $3.7 million. This is due to an increase in the City’s net pension and OPEB liabilities, which went from $242.5 million in FY 2024, to $246.2 million in FY 2025.

• The restricted net position increased $5.5 million, and the unrestricted net position decreased slightly from negative ($58.6) million in FY 2024 to negative ($58.9) million in FY 2025. The City’s unrestricted net position was negatively impacted in fiscal year 2015 with the implementation of GASB 68, which continues to require the disclosure of the City’s unfunded pension liability. The unrestricted net position improved in FY 2025 because of the increase in cash and investments ($14.9 million) and the increase in capital assets ($5.8 million).

Business-type Activities
The net position of business-type activities in creased $4.8 million to a total of $134.5 million in FY 2025 from $129.7 million in FY 2024. Increases and decreases of individual assets and liabilities are as follows:

• Cash and investments increased by $2.1 million in FY 2025 due to the Water Utility revenues 9.5% water rate increase and the Sanitation District revenues increased due to a 9% increase is sanitary sewer rates.

• Liabilities increased in FY 2025 by $0.7 million from $24.2 million in FY 2024 to $24.9 million in FY 2025. Similar to governmental activities, the increase is mainly due to a $0.7 million increase in net pension and OPEB liabilities.

• Overall, the unrestricted net position improved $0.7 million ending at $62.2 million in FY 2025. The unrestricted net position increased in FY 2025 because of the increases in cash and investments resulting mostly from the rate increases approved for the year by both the Water Utility and the Sanitation District.

9

Changes in Net Position
Total governmental activities revenue in FY 2025 amounted to $158.3 million compared to $150.2 million in FY 2024, an increase of $8.1 million in FY 2025 due to a variety of factors. This includes increases in both property taxes and sales taxes as the City’s main revenue sources returned to more normal growth rates. The increase also includes an increase in the utility users tax, based on the increase in energy costs in FY 2025, and $2.7 million in American Rescue Plan Act funding that the City recognized during the fiscal year. Governmental expenses increased by $7.3 million in FY 2025 mostly due to newly negotiated cost of living raises for employees.

Total business-type activities revenues increased $1.9 million in FY 2025 due to an increase in water utility rate revenues and sanitary sewer ra te revenues. The expenses increased $3.1 million due to an increase in the net pension and OPEB liability for FY 2025 and negotiated cost of living raises for employees.

Table 2
Changes in Net Position
For Years Ended June 30
(in thousands)

10

Governmental Activities
Table 3 splits the revenues of the City’s governmental programs into five main areas. Table 4 splits the expenses of the governmental programs into six main areas. The distributions correspond to the programs in the Statement of Activities in whic h the total Change in Net Position, defined as total program cost less the revenues generated by those specific activities, is negative $(106) million.

Table 3
Governmental Activities - Revenues
For the Year Ended June 30, 2025
(in thousands)

Table 4
Governmental Activities - Expenses
For the Year Ended June 30, 2025
(in thousands)

11

THE CITY’S FUND FINANCIAL STATEMENTS
Governmental Funds
At June 30, 2025, the City’s major governmental funds consisted of the General Fund, Gas Tax Fund, Grants Fund, Measures A and W Fund, and Capital Projects Fund. The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial status.

The General Fund’s total fund balance increased $11 million to $99.4 million in FY 2025 compared to $88.4 million in FY 2024.

General Fund revenues for FY 2025 increased by $5.4 million to $130.1 million from $124.7 million in FY 2024 due to several factors. To begin, the City recognized $2.7 million in one-time American Rescue Plan Act funds during FY 2025 and saw an increase in its net investment income.

Additionally, property tax revenues increased by about 3%, with property taxes going from $52.1 million in FY 2024 to $53.8 million in FY 2025. Sales tax revenues increased slightly from $26.5 million in FY 2024 to $26.8 million in FY 2025. Meanwhile, charges for services increased almost 17% going from $7.7 million in FY 2024 to $9 million in FY 2025 due to return of fire inspections and recreation programs after the pandemic along with an increase in the fees. At the same time, decreases in some General Fund revenues offset the bigger increases. General Fund expenditures increased by $3.6 million to $121.1 million in FY 2025 reflecting additional increases in salaries and benefits in accordance with adopted memoranda of understanding. Although the General Fund showed an increase in expenditures, the expenditures were $2 million lower than the budget of $123.1 million. This is primarily due to salary savings within the Police Department and other General Fund departments where the City has seen a high number of vacant positions.

In FY 2025, the Gas Tax Special Revenue Fund to tal fund balance increased slightly to $8.9 million as revenues closely matched expenses. The ba lance in this fund represents funds that are legally required to be spent on local roadway pr ojects. All such amounts are budgeted for future expenditures as laid out in the multi-year capital improvement plan. The fund balance in the Measures A and W Fund did increase from $12.7 million in FY 2024 to $16.9 million in FY 2025 as both funds revenues also closely matched expenses.

The Capital Projects Fund total fund balance increased $9.5 million in FY 2025 to $46.3 million compared to $36.8 million in FY 2024. This fund is designated for specific capital projects that will benefit the community. Capital Projects Fund revenues increased $0.9 million in FY 2025 to $5.8 million due to an increase in net investment income. A transfer of $10.7 million to the Capital Projects Fund was done from the General Fund utilizing one-time surpluses to help fund future capital projects. Capital Projects Fund expenditures also increased in FY 2025 to $7 million due to an increase in project spending.

12

Enterprise Funds
The City has three major enterprise funds: the Water Utility Fund, the Sanitation District Fund and the Civic Center Fund.

Water Utility operating revenues in FY 2025 increased $2 million to $31.8 million compared to $29.8 million in FY 2024 due to an increase in revenues related to the 9.5% water rate increase.

Operating expenses increased $1.3 million in FY 2025 to $22.2 million because of increases in salaries and benefits in accordance with adopted memoranda of understanding.

Sanitation District operating revenues increased $0.9 million to $26.7 million in FY 2025 because sanitary sewer rates increased by 9% although the increase was offset by reduced water usage.

Operating expenses increased by $1 million to $34.8 million in FY 2025 because of increases in salaries and benefits in accordance with adopted memoranda of understanding.

The Civic Center Fund became a major fund in FY 2022 due to the implementation of GASB 87 and the addition of leases receivables for building leases within the Fund. The Civic Center Fund remained a major fund in FY 2025 with an endi ng net position of $5.6 million, a small increase from its $5.5 million net position in FY 2024.

General Fund Budgetary Highlights
The City typically uses a biennial budgeting process. Two individual budget years are proposed to the City Council at the same time, with mid-budget adjustments at the end of the first of the two years. This process provides more opportunity for long-term planning but does require adjustments based on changing economic conditions. However, due to continuing economic uncertainties, the City again completed a one-year budget process for FY 2025. Revenues were better than the budget in FY 2025 as some, like property tax, rents and interest, and utility user fees tax, came in higher than expected. Expenditures were below final budgeted amounts by $2 million, mostly because of staffing vacancies in the Police Department and other General Fund funded departments.

13

Table 5
General Fund
Statements of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual
For the Year Ended June 30, 2025

14

CAPITAL ASSETS
At the end of FY 2025 the City had $184.8 million, net of accumulated depreciation, invested in a broad range of capital assets, as shown in Table 6 below (further detail may be found in Note 4 to the financial statements):

Table 6
Capital Assets Net of Depreciation at June 30
(in thousands)

DEBT ADMINISTRATION
Each of the City’s debt issues is discussed in detail in Note 5 to the financial statements. At June 30, the City’s debt was comprised of:

Table 7
Outstanding Debt
(in thousands)

15

ECONOMIC FACTORS
During FY 2025, the City continued to see growth in its main revenue sources, property taxes and sales taxes. Although some had predicted a recession might come in FY 2025 given the rising inflation and the increases in interest rates by the Federal Open Market Committee, the City did not experience any recessionary impacts. In fact, revenues seemed to return to more traditional growth rates as experienced by the City before the pandemic.

At the same time, though, expenditures continued to rise for the City as inflation and other supply and demand factors affected the cost of labor as well as services and supplies. The City had budgeted at a deficit for FY 2025, but ended the year almost breaking even since revenues were better than budgeted and expenses were significantly down due to staff vacancies. The City also continued to use its final portion of the American Rescue Plan Act funds to help partially offset the budgeted deficit in FY 2025.

ADDITIONAL INFORMATION
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the City’s finances. Questions about this Report should be directed to the Department of Finance and Administrative Services, 333 90 th Street, Daly City
California, 94015. Additional information about the City of Daly City, including our budget documents, can be found at www.dalycity.org.

16

STATEMENT OF NET POSITION AND

STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position.

They are prepared on the same basis as is used by most
businesses, which means they include all the City’s assets and deferred outflows of resources and all its liabilities and deferred inflows of resources, as well as all its revenues and expenses. This is known as the full accrual basis—the effect of all the City’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated.

The Statement of Net Position reports the difference between the City’s total assets and deferred outflows of resources and the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of the City’s Net Position, by subtracting total liabilities from total assets.

The Statement of Net Position summarizes the financial position of all of the City’s Governmental Activities in a single column. The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds.

The Statement of Activities reports increases and decr eases in the City’s Net Position. It is also prepared on the full accrual basis, which mean s it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures.

The Statement of Activities presents the City’s expenses first, listed by program. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expenses to arrive at the net expense of each governmental program. The City’s general revenues are then listed in the Governmental Activities and the Change in Net Position is computed and reconciled with the Statement of Net Position. 17

CITY OF DALY CITY

STATEMENT OF NET POSITION
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments (Note 2G) $210,838,236 $72,066,953 $282,905,189 Restricted cash (Note 2G) 5,196,496 5,196,496
Accounts receivable, net 16,813,766 8,033,502 24,847,268 Inventories (Note 2H) 285,167 2,013,075 2,298,242
Prepaids (Note 2H) 1,874,358 350 1,874,708
Internal balances (Note 6) (657,105) 657,105
Notes receivable (Note 13) 1,222,844 1,222,844
Loan receivable from Successor Agency (Note 15C) 8,284,899 8,284,899 Leases receivable (Note 7) 8,236,049 7,772,682 16,008,731 Property held for development (Note 2C) 3,366,888 3,366,888 Capital assets (Note 4):

Nondepreciable capital assets 41,877,739 22,970,020 64,847,759 Depreciable capital assets, ne
t 71,408,411 48,566,582 119,974,993
Total Assets 368,747,748 162,080,269 530,828,017

DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 8D) 50,575,030 3,891,259 54,466,289 Related to OPEB (Note 9E) 3,993,399 620,784 4,614,183
Total Deferred Outflows of Resources 54,568,429 4,512,043 59,080,472

LIABILITIES
Accounts payable 7,415,230 3,284,638 10,699,868
Accrued payroll 1,793,793 246,624 2,040,417
Deposits payable 14,525,791 35,800 14,561,591
Unearned revenue 5,468,473 5,468,473
Interest payable 33,371 33,371
Compensated absences (Note 2K):

Due within one yea
r 6,789,900 1,048,376 7,838,276
Due in more than one year 11,411,953 1,713,731 13,125,684 Accrued claims payable (Note 11):

Due within one year 2,753,216 2,753,216
Due in more than one year 8,252,784 8,252,784
Net OPEB liability, due in more than one year (Note 9C) 26,383,361 4,101,357 30,484,718 Net pension liability, due in more than one year (Note 8C) 219,832,686 14,499,428 234,332,114 Subscription liabilities (Note 14B):

Due within one year 2,168,940 2,168,940
Due in more than one year 2,900,057 2,900,057
Long-term debt (Note 5):

Due within one year 471,155 471,155
Due in more than one year 1,568,197 1,568,197
Total Liabilities 311,768,907 24,929,954 336,698,861

DEFERRED INFLOWS OF RESOURCES
Related to OPEB (Note 9E) 4,342,454 675,044 5,017,498
Related to leases (Note 7) 7,829,496 6,481,443 14,310,939 Total Deferred Inflows of Resources 12,171,950 7,156,487 19,328,437 NET POSITION (Note 12)
Net investment in capital assets 106,177,801 71,536,602 177,714,403 Restricted for:

Streets and roads 25,838,632 25,838,632
Infrastructure 12,945,510 12,945,510
Qualified capital outlay 716,070 716,070
Affordable housing 10,472,052 10,472,052
Other 2,804,483 2,804,483
Total Restricted Net Position 52,060,677 716,070 52,776,747 Unrestricted (58,863,158) 62,253,199 3,390,041
Total Net Position $99,375,320 $134,505,871 $233,881,191 See accompanying notes to financial statements
JUNE 30, 2025
18

CITY OF DALY CITY
FOR THE YEAR ENDED JUNE 30, 2025
Net (Expense) Revenue and
Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities:

General government $15,367,926 $909,257 $91,953 $137,340 ($14,229,376) ($14,229,376) Public safety 85,718,688 6,443,524 4,919,517 (74,355,647) (74,355,647) Public works 19,660,133 4,531,739 9,874,334 5,473,553 219,493 219,493 Culture and recreation 20,800,718 3,470,549 1,196,576 (16,133,593) (16,133,593) Economic and community development 7,753,983 4,210,876 2,323,177 (1,219,930) (1,219,930) Interest on long-term debt 97,634 (97,634) (97,634)
Total Governmental Activities 149,399,082 19,565,945 18,405,557 5,610,893 (105,816,687) (105,816,687) Business-type Activities:

Water Utility 22,463,226 31,164,910 39,640 $8,741,324 8,741,324 Civic Cente
r 1,136,157 1,267,238 131,081 131,081
Transfer Station
Sanitation District 35,579,506 26,603,929 29,319 (8,946,258) (8,946,258) Total Business-type Activities 59,178,889 59,036,077 68,959 (73,853) (73,853) Total $208,577,971 $78,602,022 $18,474,516 $5,610,893 (105,816,687) (73,853) (105,890,540) General revenues:

Taxes:

Property tax 53,818,304 2,895,151 56,713,455
Sales tax 26,826,185 26,826,185
Utility users tax 7,636,007 7,636,007
Franchise fees 5,294,325 5,294,325
Other taxes 8,901,887 8,901,887
Investment earnings 10,426,441 3,176,677 13,603,118
Gain from sale/disposal of capital assets 413,241 413,241 (Loss) on disposal of inventory (684) (684)
Miscellaneous 1,369,461 938,555 2,308,016
Transfers (Note 6) 2,154,372 (2,154,372)
Total general revenues and transfers 116,840,223 4,855,327 121,695,550 Change in Net Position 11,023,536 4,781,474 15,805,010
Net Position-Beginning 88,351,784 129,724,397 218,076,181 Net Position-Ending $99,375,320 $134,505,871 $233,881,191 See accompanying notes to financial statements

STATEMENT OF ACTIVITIES
Program Revenues
19

FUND FINANCIAL S

TATEMENTS
Major funds are defined generally as having significant activities or balances in the current year. 21

CITY OF DALY CITY

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2025
Other Total
Measures Capital Governmental Governmental
General Gas Tax Grants A and W Projects Funds Funds
ASSETS
Cash and investments (Note 2G) $70,259,235 $11,357,519 $206,031 $16,735,104 $47,932,688 $8,064,843 $154,555,420 Restricted cash and investments (Note 2G) 5,196,496 5,196,496 Accounts receivable, net 12,415,775 2,234,368 824,839 192,800 782,490 141,956 16,592,228 Due from other funds (Note 6) 71,355 71,355
Prepaids (Note 2H) 42,365 40,533 82,898
Inventories (Note 2H) 20,257 39,602 59,859
Notes receivable (Note 13) 435,432 787,412 1,222,844
Loan receivable from Successor Agency (Note 15C) 8,284,899 8,284,899 Leases receivable (Note 7B) 8,236,049 8,236,049
Property held for development (Note 2C) 3,366,888 3,366,888 Total Assets $104,526,431 $13,631,489 $1,506,835 $16,927,904 $48,715,178 $12,361,099 $197,668,936

LIABILITIES
Accounts payable $3,938,913 $1,481,261 $323,443 $846,671 $84,299 $6,674,587 Accrued payroll 1,626,265 42,507 7,120 7,181 1,683,073
Due to other funds (Note 6) 71,355 71,355
Deposits payable 14,427,790 98,001 14,525,791
Unearned revenue 726,518 3,196,993 1,544,962 5,468,473
Total Liabilities 20,719,486 4,720,761 330,563 2,391,633 260,836 28,423,279

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - loans 435,432 787,412 1,222,844
Related to leases (Note 7B) 7,829,496 7,829,496
Total Deferred Inflows of Resources 7,829,496 435,432 787,412 9,052,340

FUND BALANCES
Fund Balance (Note 12)
Nonspendable 8,762,431 39,602 40,533 8,842,566
Restricted 6,196,496 8,871,126 700,307 $16,927,904 12,945,510 11,312,852 56,954,195 Assigned 481,384 33,378,035 33,859,419
Unassigned 60,537,138 (1) 60,537,137
Total Fund Balances 75,977,449 8,910,728 740,840 16,927,904 46,323,545 11,312,851 160,193,317 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $104,526,431 $13,631,489 $1,506,835 $16,927,904 $48,715,178 $12,361,099 $197,668,936 See accompanying notes to financial statements
22

CITY OF DALY CITY
Reconciliation of the

GOVERNMENTAL FUNDS - BALANCE SHEET
with the

STATEMENT OF NET POSITION
JUNE 30, 2025
Total fund balances reported on the Governmental Funds Balance Sheet $160,193,317 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:

CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 100,448,005

ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance, central services and maintenance to individual governmental funds. The net current assets of the internal service funds are therefore included in Governmental Activities in the following line items in the Statement of Net Position.

Cash and investments 56,282,816
Accounts receivable 221,538
Prepaids 1,791,460
Deferred outflows 328,933
Inventories 225,308
Internal balances (657,105)
Capital assets 12,838,145
Accounts payable (740,643)
Accrued payroll (110,720)
Interest payable (33,371)
Accrued claims payable (11,006,000)
Compensated absences (1,486,522)
Net OPEB liability (2,173,106)
Deferred inflows (357,672)
Subscription liabilities - due within one yea
r (296,871)
Subscription liabilities - due in more than one year (598,257) Long-term debt - due within one year (471,155)
Long-term debt - due in more than one year (1,568,197)

ACCRUAL OF NONCURRENT REVENUES AND EXPENSES
Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities. 1,222,844

DEFERRED INFLOWS AND OUTFLOWS
The deferred outflows below are not current assets or financial resources; and the deferred inflows are not due and payable in the current period and therefore are not reported in the Governmental Funds.

Deferred outflows 54,239,496
Deferred inflows (3,984,782)

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

Subscription liabilities (4,173,869)
Net OPEB liability (24,210,255)
Net pension liability (219,832,686)
Compensated absences (16,715,331)

NET POSITION OF GOVERNMENTAL ACTIVITIES
$99,375,320
See accompanying notes to financial statements
23

CITY OF DALY CITY

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2025
Other Total
Measures Capital Governmental Governmental
General Gas Tax Grants A and W Projects Funds Funds

REVENUES
Property tax $53,818,304 $53,818,304
Gas tax $5,798,766 5,798,766
Sales tax 26,826,185 $3,738,593 30,564,778
Utility users tax 7,636,007 7,636,007
Franchise fees 5,294,325 5,294,325
Other taxes 8,901,887 2,313,811 11,215,698
Licenses and permits 2,716,256 2,716,256
Fines and forfeitures 2,544,524 2,544,524
Rents and interest 6,311,067 546, 617 $32,329 696,492 $1,876,015 $248,166 9,710,686 Federal programs and grants 2, 742,849 85,528 55,613 91,039 2,261,565 5,236,594 Receipts from other agencies 1, 220,869 62,566 2,567,915 1,363,176 5,214,526 Charges and fees 9,031,373 1,116,556 2,333,999 155,365 12,637,293 Miscellaneous 3,052,607 47,596 44,069 137,340 269,978 3,551,590 Total Revenues 130,096,253 9,971,440 2, 699,926 4,435,085 5,801,569 2,935,074 155,939,347

EXPENDITURES
Current:

General government 14,835,091 150,250 5,070 14,990,411
Public safety 76,841,194 3,570,848 16,152 80,428,194
Public works 6,730,384 5,995,658 25,547 12,751,589
Culture and recreation 17,016,041 17,016,041
Economic and community development 5,065,362 155,953 2,221,627 7,442,942 Capital projects 6,231,320 304,051 6,984,356 13,519,727 Debt service:

Principal 557,725 71,167 628,892
Interest 12,088 2,333 14,421
Total Expenditures 121,057,885 12,226,978 4,254,602 5,070 6,984,356 2,263,326 146,792,217

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 9,038,368 (2,255,538) (1 ,554,676) 4,430,015 (1, 182,787) 671,748 9,147,130

OTHER FINANCING SOURCES (USES)
Issuance of long-term debt (Note 14) 1,720,074 1,720,074 Transfers in (Note 6) 3,351,125 3,073,229 26,125 10,697,293 267,392 17,415,164 Transfers (out) (Note 6) (13,337,517) (464,200) (218,627) (2, 035) (115,436) (14,137,815) Total Other Financing Sources (Uses) (9,986,392) 2,609,029 1,720,074 (192,502) 10,695,258 151,956 4,997,423 NET CHANGES IN FUND BALANCES (948,024) 353,491 165,398 4,237,513 9,512,471 823,704 14,144,553 BEGINNING FUND BALANCES 76,925,473 8,557, 237 575,442 12,690,391 36,811,074 10,489,147 146,048,764 ENDING FUND BALANCES $75,977,449 $8,910, 728 $740,840 $16,927,904 $46,323, 545 $11,312,851 $160,193,317 See accompanying notes to financial statements
24

CITY OF DALY CITY
Reconciliation of the

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the

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

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $14,144,553 Amounts reported for governmental activities in the Statement of Activities are different because of the following:

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

The capital outlay expenditures (less prepaid asset of $40,533) are therefore added back to fund balance. 10,922,020
Depreciation expense is deducted from fund balance
(Depreciation expense is net of internal service fund depreciation of $1,928,963 which has already been allocated to serviced funds). (5,548,224) Retirements of capital assets are deducted from fund balance (186,493)

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

Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.

Repayment of lease principal is added back to fund balance 34,463 Repayment of subscription liability principal is added back to fund balance 594,429 Proceeds from new subscription liabilities are deducted from fund balance (1,720,074)

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

Unavailable revenue (117,646)
Compensated absences 118,905
OPEB expense 2,111,990
Pension expense (14,319,786)

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

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

Change in net position of all internal service funds 4,989,399 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $11,023,536 See accompanying notes to financial statements
FOR THE YEAR ENDED JUNE 30, 2025
25

CITY OF DALY CITY

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)

REVENUES
Property tax $48,629,851 $51,629,851 $53,818,304 $2,188,453 Sales tax 27,887,700 25,687,700 26,826,185 1,138,485
Utility users tax 6,063,335 6,063,335 7,636,007 1,572,672 Franchise fees 5,430,734 5,430,734 5,294,325 (136,409)
Other taxes 8,637,244 8,637,244 8,901,887 264,643
Licenses and permits 2,575,635 2,575,635 2,716,256 140,621 Fines and forfeitures 2,076,867 2,076,867 2,544,524 467,657 Rents and interest 2,657,651 2,657,651 6,311,067 3,653,416 Federal programs and grants 2,715,000 2,719,510 2,742,849 23,339 Receipts from other agencies 832,500 1,321,607 1,220,869 (100,738) Charges and fees 7,290,134 7,850,809 9,031,373 1,180,564 Miscellaneous 600,518 692,595 3,052,607 2,360,012
Total Revenues 115,397,169 117,343,538 130,096,253 12,752,715

EXPENDITURES
Current Operations:

General Government
Legislative:

Salaries and benefits 318,476 318,476 308,823 9,653
Services and supplies 78,367 78,367 56,681 21,686
Other charges 45,888 45,888 36,540 9,348
Total Legislative 442,731 442,731 402,044 40,687
Legal:

Salaries and benefits 1,230,887 1,230,887 1,233,442 (2,555) Services and supplies 816,621 840,757 238,742 602,015
Other charges 11,323 11,323 9,387 1,936
Total Legal 2,058,831 2,082,967 1,481,571 601,396
Administrative:

Salaries and benefits 1,544,469 1,646,565 8,968,777 (7,322,212) Services and supplies 3,429,110 3,647,749 3,114,116 533,633 Other charges 1,016,907 791,295 868,583 (77,288)
Total Administrative 5,990,486 6,085,609 12,951,476 (6,865,867) Total General Government 8,492,048 8,611,307 14,835,091 (6,223,784) Public Safety
Police:

Salaries and benefits 40,515,131 40,973,749 34,982,784 5,990,965 Services and su
pplies 8,354,203 8,318,877 7,850,597 468,280
Capital outlay 187,320 386,996 274,656 112,340
Other charges 1,000,296 1,002,596 974,597 27,999
Total Police 50,056,950 50,682,218 44,082,634 6,599,584 Fire:

Salaries and benefits 26,105,192 26,105,192 28,193,643 (2,088,451) Services and supplies 4,043,060 4,064,060 3,973,069 90,991 Capital outlay 363,135 339,135 279,231 59,904
Other charges 110,085 113,085 312,617 (199,532)
Total Fire 30,621,472 30,621,472 32,758,560 (2,137,088) Total Public Safety 80,678,422 81,303,690 76,841,194 4,462,496 (Continued)
26

CITY OF DALY CITY

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
Public Works
Salaries and benefits 5,574,972 5,574,972 4,307,669 1,267,303 Services and supplies 2,371,980 2,505,694 2,255,064 250,630 Capital outlay 2,000 2,000 1,554 446
Other charges 92,165 97,165 166,097 (68,932)
Total Public Works 8,041,117 8,179,831 6,730,384 1,449,447 Culture and Recreation
Salaries and benefits 11,049,341 11,167,738 9,863,475 1,304,263 Services and supplies 6,701,658 7,593,889 6,959,748 634,141 Capital outlay 22,825 27,272 4,566 22,706
Other charges 56,299 56,299 188,252 (131,953)
Total Culture and Recreation 17,830,123 18,845,198 17,016,041 1,829,157 Economic and Community Development
Salaries and benefits 4,170,513 4,248,064 3,831,243 416,821 Services and supplies 1,299,083 1,733,136 1,018,739 714,397 Other charges 95,614 218,954 215,380 3,574
5,565,210 6,200,154 5,065,362 1,134,792
Debt service:

Principal 557,725 (557,725)
Interest 12,088 (12,088)
569,813 (569,813)
Total Expenditures 120,606,920 123,140,180 121,057,885 2,082,295

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (5,209,751) (5,796,642) 9,038,368 14,835,010

OTHER FINANCING SOURCES (USES)
Transfers in 4,420,694 4,420,694 3,351,125 (1,069,569)
Transfers out (6,069,179) (13,363,419) (13,337,517) 25,902 Total Other Financing Sources (Uses) (1,648,485) (8,942,725) (9,986,392) (1,043,667) NET CHANGE IN FUND BALANCE ($6,858,236) ($14,739,367) (948,024) $13,791,343 BEGINNING FUND BALANCE 76,925,473
ENDING FUND BALANCE $75,977,449
See accompanying notes to financial statements
Total Economic and Community Development
27

CITY OF DALY CITY

GAS TAX SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)

REVENUES
Gas tax $5,579,659 $5,579,659 $5,798,766 $219,107
Rents and interest 70,000 70,000 546,617 476,617
Federal programs and grants 2,790,940 85,528 (2,705,412) Receipts from other agencies 1,300,000 12,553,147 2,376,377 (10,176,770) Charges and services 1,083,904 1,083,904 1,116,556 32,652 Miscellaneous 11,000 11,000 47,596 36,596
Total Revenues 8,044,563 22,088,650 9,971,440 (12,117,210)

EXPENDITURES
Public works 5,921,946 6,120,498 5,995,658 124,840
Capital projects 9,713,934 42,273,668 6,231,320 36,042,348 Total Expenditures 15,635,880 48,394,166 12,226,978 36,167,188

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (7,591,317) (26,305,516) (2,255,538) 24,049,978

OTHER FINANCING SOURCES (USES)
Transfers in 7,782,760 20,758,614 3,073,229 (17,685,385) Transfers out (317,156) (317,156) (464,200) (147,044)
Total Other Financing Sources (Uses) 7,465,604 20,441,458 2,609,029 (17,832,429) NET CHANGE IN FUND BALANCE ($125,713) ($5,864,058) 353,491 $6,217,549 BEGINNING FUND BALANCE 8,557,237
ENDING FUND BALANCE $8,910,728
See accompanying notes to financial statements
28

CITY OF DALY CITY

GRANTS SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance
Positive
Original Final Actual (Ne gative)

REVENUES
Rents and interest $4,500 $4,500 $32,329 $27,829
Federal programs and grants 1,835,003 55,613 (1,779,390) Receipts from other agencies 258,889 8,527,342 2,567,915 (5,959,427) Miscellaneous revenue 10,000 46,944 44,069 (2,875)
Total Revenues 273,389 10,413,789 2,699,926 (7,713,863)

EXPENDITURES
General Government
Administrative:

Services and supplies 333,877 150,250 183,627
Total General Government 333,877 150,250 183,627
Public Safety
Salaries and benefits 176,151 1,321,042 330,582 990,460 Services and supplies 84,737 1,252,700 179,713 1,072,987 Capital outlay 905,348 2,175,820 (1,270,472)
Other charges 3,414,629 884,733 2,529,896
Total Public Safety 260,888 6,893,719 3,570,848 3,322,871 Public Works
Capital Outlay 810,128 304,051 506,077
Total Public Works 810,128 304,051 506,077
Culture and Recreation
Services and supplies
Total Culture and Recreation
Economic and Community Development
Salaries and benefits 39,678 37,702 1,976
Services and supplies 278,485 118,251 160,234
Other char
ges 3,287,289 3,287,289
Total Economic and Community Development 3,605,452 155,953 3,449,499 Debt service:

Principal 71,167 (71,167)
Interest 2,333 (2,333)
73,500 (73,500)
Total Expenditures 260,888 11,643,176 4,254,602 7,388,574

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 12,501 (1,229,387) (1,554,676) (325,289)

OTHER FINANCING SOURCES (USES)
Issuance of long-term debt 1,720,074 1,720,074
Transfers in 24,800 (24,800)
NET CHANGE IN FUND BALANCE $12,501 ($1,204,587) 165,398 $1,369,985 BEGINNING FUND BALANCE 575,442
ENDING FUND BALANCE $740,840
Budgeted Amounts
See accompanying notes to financial statements
29

CITY OF DALY CITY

MEASURES A AND W SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance
Positive
Original Final Actual (Negative)

REVENUES
Sales taxes $3,835,000 $3,835,000 $3,738,593 ($96,407)
Rents and interest 40,000 40,000 696,492 656,492
Total Revenues 3,875,000 3,875,000 4,435,085 560,085

EXPENDITURES
General Government
Administrative:

Services and supplies 5,500 5,500 5,070 430
Total Expenditures 5,500 5,500 5,070 430

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,869,500 3,869,500 4,430,015 560,515

OTHER FINANCING SOURCES (USES)
Transfers in 26,125 26,125
Transfers out (4,428,000) (15,925,754) (218,627) 15,707,127 NET CHANGE IN FUND BALANCE ($558,500) ($12,056,254) 4,237,513 $16,293,767 BEGINNING FUND BALANCE 12,690,391
ENDING FUND BALANCE $16,927,904
Budgeted Amounts
See accompanying notes to financial statements
30

CITY OF DALY CITY

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2025
Business-type Activities-Enterprise Funds Governmental
Nonmajor - Activities-
Water Sanitation Civic Transfer Internal Service
Utility District Cente r Station Totals Funds
ASSETS
Current Assets:

Cash and investments (Note 2G) $38,926,557 $29, 638,149 $1,970,331 $1,531,916 $72,066,953 $56,282,816 Accounts receivable, net (Note 2I) 6,6 17,141 1,391,030 25,331 8,033,502 221,538 Inventories (Note 2H) 391,993 1,621,082 2,013,075 225,308 Prepaids 350 350 1,831,993
Total Current Assets 45,935,691 32,650,611 1,995,662 1,531,916 82, 113,880 58,561,655 Noncurrent Assets:

Leases receivable (Note 7) 7,772,682 7,772,682
Capital Assets (Note 4):

Land 839,856 233,547
1,695,762 93,384 2,862,549 378,343
Buildings 272,379 893,519 5,568,728 1,184,278 7,918,904 35,817 Sewage facilities 63,162,264 63,162,264
Wells and pump stations 9,074,783 9,074,783
Water reservoirs 12,715,925 12,715,925
Mains and subsurface lines 21,623,453 26,871,004 48,494,457 Equipment 7,527,606 10,523,811 936,705 20,912 19,009,034 27,303,124 Furniture and fixtures 37,154 114,174 151,328 63,104
Subscription assets 1,795,663
Construction in progress 5,129,791 14,977,680 20,107,471 Total Capital Assets 57,220,947 116,775,999 8,201,195 1,298,574 183,496,715 29,576,051 Less accumulated depreciation (32,582,538) (72,315,736) (5,856,649) (1,205,190) (111,960,113) (16,737,906) Net Capital Assets 24,638,409 44,460,263 2,344,546 93,384 71,536,602 12,838,145 Total Noncurrent Assets 24,638,409 44,460, 263 10,117,228 93,384 79,309,284 12,838,145 Total Assets 70,574,100 77,110,874 12,1 12,890 1,625,300 161,423,164 71,399,800

DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 8D) 1,106,543 2,784,716 3,891,259 Related to OPEB (Note 9) 194,574 426,210 620,784 328,933 Total Deferred Outflows 1,301,117 3,210,926 4,512,043 328,933

LIABILITIES
Current Liabilities:

Accounts payable 1,340,311 1, 938,487 5,840 3,284,638 740,643 Accrued payroll 64,579 182,045 246,624 110,720
Deposits payable 35,800 35,800
Interest payable 33,371
Accrued claims payable (Note 11) 2,753,216
Compensated absences (Note 2K) 303,487 744,889 1,048,376 Long-term debt (Note 5) 768,026
Total Current Liabilities 1,744,177 2,865,421 5,840 4,615,438 4,405,976 Noncurrent Liabilities:

Compensated absences (Note 2K) 330,252 1,383,479 1,713,731 1,486,522 Accrued claims payable (Note 11) 8,252,784
Net OPEB liability (Note 9) 1,285,500 2,815,857 4,101,357 2,173,106 Net Pension Liability (Note 8C) 4,123,149 10,376,279 14,499,428 Long-term debt (Note 5) 2,166,454
Total Noncurrent Liabilities 5,738,901 14,575,615 20,314,516 14,078,866 Total Liabilities 7,483,078 17,441,036 5,840 24,929,954 18,484,842

DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 8D)
Related to OPEB (Note 9) 211,581 463,463 675,044 357,672 Related to leases (Note 7) 6,481,443 6,481,443
Total Deferred Inflows 211,581 463,463 6,481,443 7,156,487 357,672 NET POSITION (Note 12)
Net investment in capital assets 24,638,409 44,460,263 2,344,546 93,384 71,536,602 9,903,665 Restricted for:

Qualified capital outlay 716,070 716,070
Unrestricted 39,542,149 17,240,968 3,28 1,061 1,531,916 61,596,094 42,982,554 Total Net Position $64,180,558 $62,417,301 $5,625,607 $1,625,300 133,848,766 $52,886,219 Some amounts reported for business-type activities in the statement of net position are different because certain internal service fund assets and liabilities are included in business-type activities 657,105 Net position of business-type activities $134,505,871
See accompanying notes to financial statements
31

CITY OF DALY CITY

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2025
Business-type Activities-Enterprise Funds Governmental
Nonmajor - Activities-
Water Sanitation Civic Transfer Internal Service
Utility Distric t Center Station Totals Funds

OPERATING REVENUES
Water sales $31,164,910 $267,651 $31,432,561
Sewer service charges 26,144,364 26,144,364
Connection charges 191,914 191,914
Rental income $1,267,238 1,267,238
Charges to City departments $27,818,669
Lease revenues 9,270
Other revenues 644,786 77,101 99,066 $117,602 938,555 1,183,432 Total Operating Revenues 31,809,696 26,681,030 1,366,304 117,602 59,974,632 29,011,371

OPERATING EXPENSES
Salaries and benefits 4,742,816 12,590,382 17,333,198 7,612,833 Services and supplies 2,396,691 13,710,110 653,708 16,760,509 6,808,882 Water purchases 10,156,017 10,156,017
Utilities 1,311,862 2,411,469 224,671 3,948,002 567,369 Insurance 646,177 1,641,563 46,672 2,334,412 5,671,319
Claims and settlements 3,211,264
Depreciation (Note 4) 1,345,961 2,216,500 186,042 3,748,503 1,928,963 Other charges 1,606,615 2,213,468 3,820,083 633,203
Total Operating Expenses 22,206,139 34,783,492 1,111,093 58,100,724 26,433,833 Operating Income (Loss) 9,603,557 (8,102,462) 255,211 117,602 1,873,908 2,577,538

NONOPERATING REVENUES (EXPENSES)
Property taxes 2,895,151 2,895,151
Intergovernmental 39,640 29,319 68,959
Loss on sale of inventory (684) (684) 487,315
Loss on sale of capital assets (74,074)
Interest income 1,714,447 1,367,506 94,724 3,176,677 2,052,557 Interest expense (83,213)
Grant reimbursement 74,088
Total Nonoperating Revenues (Expenses) 1,754,087 4,291,292 94,724 6,140,103 2,456,673 Income (Loss) Before Transfers 11,357,644 (3,811,170) 349,935 117,602 8,014,011 5,034,211 Transfers in (Note 6) 125,274 3,258,776 60,000 3,444,050 124,336 Transfers (out) (Note 6) (3,821,050) (1,375,565) (216,533) (185,274) (5,598,422) (1,247,313) Net transfers (3,695,776) 1,883,211 (216,533) (125,274) (2,154,372) (1,122,977) CHANGE IN NET POSITION 7,661,868 (1,927,959) 133,402 (7,672) 5,859,639 3,911,234 BEGINNING NET POSITION 56,518,690 64,345,260 5,492,205 1,632,972 127,989,127 48,974,985 ENDING NET POSITION $64,180,558 $62,417,301 $5,625,607 $1,625,300 133,848,766 $52,886,219 Net change in net position 5,859,639
Some amounts reported for business-type activities in the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities. (1,078,165)
Change in net position of business-type activities $4,781,474 See accompanying notes to financial statements
32

CITY OF DALY CITY

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2025
Governmental
Nonmajor - Activities-
Sanitation Civic Transfe r Internal Service
Water Utility Distric t Center Station Totals Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $31,280,352 $26,481,815 $1,130,013 $117,602 $59,009,782 $29,255,296 Payments to suppliers (15,929,842) (19,899,126) (940,188) (36,769,156) (13,699,300) Payments to employees (4,408,337) (11,961,547) (16,369,884) (7,943,296) Claims paid (2,989,264)
Cash Flows from Operating Activities 10,942,173 (5,378,858) 189,825 117,602 5,870,742 4,623,436

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Property tax 2,895,151 2,895,151
Intergovernmental 39,640 29,319 68,959 74,088
Transfers in 125,274 3,258,776 60,000 3,444,050 124,336 Transfers out (3,821,050) (1,375,565) (216,533) (185,274) (5,598,422) (1,247,313) Cash Flows from (used for) Noncapital Financing Activities (3,656,136) 4,807,681 (216,533) (125,274) 809,738 (1,048,889)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Proceeds from sale of assets 487,314
Acquisition of capital assets (2,458,340) (5,304,220) (7,762,560) (3,021,626) Principal paid on subscription liabilities (295,514)
Interest paid on subscription liabilities (14,930)
Principal paid on capital debt (456,191)
Interest paid on capital debt (85,013)
Cash Flows from (used for) Capital and
Related Financing Activities (2,458,340) (5,304,220) (7,762,560) (3,385,960) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income (expense) 1,714,447 1,367,506 94,724 3,176,677 2,052,557 Net Cash Flows 6,542,144 (4,507,891) 68,016 (7,672) 2,094,597 2,241,144 Cash and investments at beginning of period 32,384,413 34,146,040 1,902,315 1,539,588 69,972,356 54,041,672 Cash and investments at end of period $38,926,557 $29,638,149 $1,970,331 $1,531,916 $72,066,953 $56,282,816 Reconciliation of Operating Income (Loss) to Cash Flows from Operating Activities:

Operating income (loss) $9,603,557 ($8,102,462) $255,211 $117,602 $1,873,908 $2,577,538 Adjustments to reconcile operating income (loss) to cash flows from operating activities:

Depreciation 1,345,961 2,216,500 186,042 3,748,503 1,928,963 Change in assets and liabilities:

Accounts receivable, net (536,544) (199,215) (1,266) (737,025) 243,925 Inventories 13,832 34,848 48,680 2,720
Prepaids 601 40,921 41,522 429
Accounts payable 173,087 1,715 (15,137) 159,665 (21,676) Accrued payroll 7,925 31,448 39,373 29,560
Deposits payable 7,200 7,200
Accrued claims payable 222,000
Compensated absences 106,092 74,848 180,940 (170,450)
Leases-related activity (235,025) (235,025)
Due to OPEB system (112,142) (245,643) (357,785) (189,573) Due to retirement system 332,604 768,182 1,100,786
Cash Flows from Operating Activities $10,942,173 ($5,378,858) $189,825 $117,602 $5,870,742 $4,623,436

NONCASH TRANSACTIONS
Retirement of capital assets ($429,491)
Retirement of subscription liability $364,884
See accompanying notes to financial statements
Business-type Activities-Enterprise Funds
33

FIDUCIARY FUNDS

FIDUCIARY FUNDS
These funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements.

SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE PURPOSE TRUST
The fund is used to account for the activities of the Successor Agency to the former Redevelopment Agency of the City.

CUSTODIAL FUNDS
These funds report resources, not in a trust, that are held by the City for other parties outside of the City’s reporting entity.
35

CITY OF DALY CITY

FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2025
Successor Agency Custodial Funds
to the External
Redevelopment Agency Custodial Investment
Private-Purpose Trust Funds Pool Fund
ASSETS
Cash and investments (Note 2G) $249,929 $2,648,052 $950,146 Receivables 10,692 2,470,351
Total Assets 260,621 5,118,403 950,146

LIABILITIES
Accounts payable 4,434,888
Deposits payable 4,050
Loans payable to City (Note 15C) 8,284,899
Total Liabilities 8
,288,949 4,434,888

NET POSITION
Restricted for:

Other agencies and organizations (8,028,328) 683,515
Pool participan
t 950,146
Total Net Position ($8,028,328) $683,515 $950,146
See accompanying notes to financial statements
36

CITY OF DALY CITY

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2025
Successor Agency Custodial Funds
to the External
Redevelopment Agency Custodial Investment
Private-Purpose Trust Funds Pool Fund

ADDITIONS
Taxes $1,336,960
Receipts from other agencies $25,050
Rents and interest 85,034 $48,562
Other receipts 200 5,768,914
Total additions 1,422,194 25,050 5,817,476

DEDUCTIONS
Services and supplies 56,875
Culture and recreation 1,435
Other payments 6,233,859
Total deductions 56,875 1,435 6,233,859
CHANGE IN NET POSITION 1,365,319 23,615 (416,383)

NET POSITION
Net Position (Deficit) - Beginning (9,393,647) 659,900 1,366,529 Net Position (Deficit) - Ending ($8,028,328) $683,515 $950,146 See accompanying notes to financial statements
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CITY OF DALY CITY

ANNUAL COMPREHENSIVE FINANCIAL REPORT

NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1.

REPORTING ENTITY
The City of Daly City (City) was incorporated on March 22, 1911 and operates under a council-manager form of government. Daly City is a general law city, and provides the following services: public safety (police and fire), highways and streets, water, sanitary sewer, social services, library, recreation, public improvements, planning and zoning, and general administrative services.

The City's Basic Financial Statements include th e financial activities of the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation and the Daly City Housing Development Finance Agenc y. These entities are controlled by governing boards consisting of the City Council and are reported as blended component units. Council members are financially accountable for these entities’ operations and approve fees, debt issues and adopt budgets. Blended component units, although legally separate entities are, in substance, part of the government’s operations, thus, data from these units are combined with that of the primary government.

The North San Mateo County Sanitation District became a subsidiary district of the City on July 1, 1985. The activities of the District are reported in the Sanitation District Enterprise Fund. The District does not issue separate financial statements.

The activities of the Daly City Public Faci lities Financing Corporation (Corporation) are included in the basic financial statements of the Water Utility Enterprise Fund in proportion to the activities carried out on its behalf because the City Council sits as the Board of this entity.

The City established the Corporation to facilitate the issuance of long-term debt. The Corporation is facilitating the issuance of Stat e Water Resources Control Board loans for the purpose of financing the Vista Grande Drainage Basin Improvement Project. The Corporation acts as a conduit for the leasing of the associated facilities of the utility in order to allow the issuance of its long-term debt (See Note 5). Th e Corporation does not issue separate financial statements.
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The activities of the Daly City Housing Development Finance Agency (Finance Agency) are included in the Affordable Housing and the Low and Moderate Income Housing Assets Special Revenue Funds. The City established the Finance Agency in 1985 pursuant to California Health and Safety Code (HSC) Division 24, Part 2, Chapte r 1, to address the housing needs of the City and the Finance Agency serves as the Housing Successor to the former Daly City Redevelopment Agency. The primary activity of the Finance Agency is to develop nonsubsidized multifamily rental housing development financing pursuant to Section 34312.3 of the HSC that is owned, operated and managed by
private and other agencies, not the Finance
Agency. The Finance Agency is administered by a Governing Board whose members are the City Council of the City of Daly City, and the City also performs all accounting and administrative functions for the Finance Agency. The Finance Agency does not issue separate financial statements.

The City and the Sanitation District established the Daly City Joint Powers Financing Authority (Financing Authority) in March 2022 pursuant to the Joint Exercise of Powers Act (commencing at Government Code Section 6500) to provide assistance with public financings, including, among others, General Fund lease financings and enterprise fund financings. The Financing Authority is administered by a Governing Board whose members are the City Council of the City of Daly City, and the City also performs all accounting and administrative functions for the Financing Authority. The Financing Authority does not issue separate financial statements. The Financing Authority did not have any activity during the year ended June 30, 2025.

NOTE 2.

DESCRIPTION OF FUNDS AND SUMMARY OF ACCOUNTING POLICIES The Basic Financial Statements include financial information for entities which are directly or indirectly governed by the City Council. The entities included are the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation and the Daly City Joint Powers Financing Authority (see Note 1).

The accounting policies of the City conform with generally accepted accounting principles as they apply to governments. The following is a summary of the more significant policies.

A. BASIS

OF PRESENTATION
The City’s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the U.S.A. These standards require that the financial statements described below be presented.
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Government-wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the City and its blended component units).

These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Interfund services provided and used are not eliminated in the process of consolidation. These statements distinguish between the governmental and business-type
activities of the City. Governmental activities are generally financed through taxes, intergovernmental revenues, and other nonexcha nge transactions. Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City’s governmental activities and for each segment of the business-type activities of the City. Direct expens es are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function.

Program revenues include charges paid by the recipients of goods or services offered by the programs, grants and contributions that are re stricted to meeting the operational needs of a particular program and fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

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

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.

B. MAJOR FUNDS
Major funds are defined as funds which have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of thei r fund-type total and five percent of the grand total of governmental and enterprise funds. Major governmental and business-type funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund type. The General Fund is always a major fund, and the City may select other funds it believes should be presented as major funds. The City selected the Grants Fund and Measures A and W Fund for presentation as major funds because of their importance and because they often qualify as major funds.
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The City reported the following major governmental funds in the accompanying financial statements:

GENERAL FUND is the general operating fund of the City. It is used to account for all financial resources traditionally associated with governments which are not required to be accounted for in a separate fund.

GAS TAX SPECIAL REVENUE FUND is used to account for gas tax monies allocated by the State to the City for the streets and roads program.

GRANTS SPECIAL REVENUE FUND is used to account for miscellaneous grant monies, such as HOME, law enforcement special grants, and after school safety grants.

MEASURES A AND W SPECIAL REVENUE FUND is used to account for the City’s portion of the Measure A special half cent sales tax receipts restricted for maintaining local streets and roads improvements and the City’s portion of the Measure W special half cent sales tax receipts restricted for congestion relief and transit improvements.

CAPITAL PROJECTS FUND is used to account for financial resources to be used for the acquisition or construction of major capital facilities or infrastructure other than those financed by proprietary funds.

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

WATER UTILITY FUND is used to account for activity related to providing water service to the community.

SANITATION DISTRICT FUND is used to account for activity related to providing residents with sanitary sewer services.

CIVIC CENTER FUND is used to account for rental activity of real property owned by the City in the Civic Center area.

The City also reports the following fund types:

Internal Service Funds – These funds account for motor vehicles, central services, telephone, building maintenance, information services, se lf-insurance and pension bond payments. All of these services are provided to other departments on a cost-reimbursement basis.

Fiduciary Funds – The Successor Agency to the Redevelopment Agency Private-Purpose Trust Fund accounts for the accumulation of resources to be used for payments at appropriate amounts and times in the future. Custodial Funds are used to account for assets held by the City for Billing Services and Supporters of Senior Center and monies held for an external investment pool for the San Mateo Pre-Hospital Emergency Medical Services Group, none of which are held in trust. In addition, The financial activities of these funds are excluded from the government- wide financial statements because they are not directly or indirectly governed by the City Council.

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C. PROPERTY HELD FOR DEVELOPMENT
Property held for development is stated at the lower of historical cost or net realizable value (equal to agreed upon sales price if a disposition and development agreement has been reached with a developer).

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

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, including lease liabilities, as well as claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions are reported as expenditu res in governmental funds, including entering into contracts giving the City the right to use leased assets and right to use subscription assets.

Proceeds of governmental long-term debt and financing through leases are reported as other financing sources.

In addition to assets, the statement of net position or balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of net position or balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

The City has one item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from loans and deferred amounts related to leases. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

Property taxes and sales taxes are considered m easurable and available when in the hands of intermediary collecting governments and are recognized as revenue at that time. The primary revenue sources which are susceptible to accrual include taxes, rents, licenses, interest, grants and contributions. Fines and penalties and other revenues are recorded as revenues when received in cash because they are generally not measurable until actually received.

The City may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
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Certain indirect costs are included in program expenses reported for individual functions and activities. Nonexchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations.

On an accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

E. BUDGETS, BUDGETARY ACCOUNTING AND ENCUMBRANCES
The City uses a biennial budget process whereby two individual annual budgets are adopted by City Council for all funds and component units other than the Custodial Funds. Due to the COVID-19 pandemic and ongoing economic uncertainties, the City moved to a one-year budget cycle starting in FY2021. The City is monitoring and evaluating the economic climate in hopes of switching back to a biennial budget process. Budgets are subject to public hearing before they are adopted by the City Council. Budgets are prepared on the basis of generally accepted accounting principles (GAAP basis).

The City is not legally required to prepare budgets for any of its funds, but does so as a matter of managerial policy. Budgets submitted to the City Council include both proposed appropriations and the means of financing them. The City Counc il approves total appropriations on a departmental basis.

The City Manager is authorized and directed to make any changes or transfers of appropriations within any Department of the City and from one
Department to another as deemed necessary or
feasible, as long as the total appropriations of the funds are not exceeded. Additional appropriations not included in the original budget resolutions require approval by the City Council. Budgeted amounts shown are as adopted and amended by the City Council. Individual amendments were not material in relation to the original appropriations. Budgets for the City's proprietary funds are considered as memorandum budgets used for the purpose of management control. These nonappropriated budgets are not included in the Basic Financial Statements.

The City uses an encumbrance system as an extension of normal budgetary accounting. Under this system purchase orders, contracts and other commitments for the expenditure of monies are recorded to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as an assignment of fund balance since they do not constitute expenditures or liabilities. Outstanding encumbrances at year end are automatically reappropriated the following year. Unencumbered and unexpended appropriations for other than capital outlay lapse at year-end. However, the Capital Projects Fund is not budgeted on a project-length basis.

Only the budget estimated to be spent in the cu rrent fiscal year is appropriated, even if the project will continue into future fiscal years. The City prepares a ten year capital plan, and each project year budget (GAAP Basis) is appropriated separately on an on-going basis. 44

Expenditures in Excess of Appropriations – The General Fund and Gas Tax Special Revenue Fund incurred expenditures in excess as follows during the fiscal year ending June 30, 2025:

Expenditures
Exceeded Budget
General Fund
General Government $6,223,784
Public Safety - Fire 2,137,088
Debt service 569,813
Gas Tax Special Revenue Fund
Transfers out 147,044

Sufficient resources were available within the funds to finance these expenditures.

F. FAIR VALUE MEASUREMENTS
Fair value is defined as 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. The City categorizes its fair value measurements within th e fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for an asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for an asset or liability.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.

G. CASH AND INVESTMENTS
The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.

The City pools cash from all sources and all funds, except restricted cash and cash and investments with fiscal agents, so the pool of f unds can be invested consistent with goals for safety and liquidity, while maximizing yield. Cash is pooled so individual funds can make expenditures at any time.

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Investment income is allocated among funds on the basis of average daily cash and investment balances in each fund, unless there are specific legal or contractual requirements to do otherwise.

Cash and investments are classified in the fi nancial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or Agency agreements:

Cash and investments $282,905,189
Restricted cash and investments 5,196,496
Cash and investments of the City 288,101,685
Cash and investments in Fiduciary Funds (separate statement):

Private-purpose Trust Fund 249,929
Custodial Funds 2,648,052
Custodial Funds - External investment pool 950,146
Total cash and investments $291,949,812

Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s Investment Policy and the California Government Code allow the City to invest in the following, provided the credit ratings of the is suers are acceptable to the City and approved percentages and maturities are not exceeded. The following table also identifies certain provisions of the California Government Code, or the City’s Investment Policy where the City’s Investment Policy is more restrictive, that addresses interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy. 46

Minim um Max im um Max im um
Max im um Credit in Investm ent
Authorized Investm ent Type Maturity Quality Portfolio In One Municipal Securities/Registered Treasury Noted or Bonds 5 years A 30% 5% U.S. Treasuries 5 years N/A No Limit No Limit
Federal Agencies 5 years N/A 20% 30%
Banker’s Acceptances 180 days A-1/A 40% 5%
Commercial Paper 270 days A-1/A 25% 5%
Negotiable Certificates of Deposit 5 years A-1/A 30% 5% Non-Negotiable Certificates of Deposit 5 years N/A 20% No Lim it Placement Service Deposits 5 years N/A 30% No Limit
Collateralized Bank Deposits Upon
Demand
N/A No Limit No Limit
Repurchase Agreements 1 year N/A No Limit No Limit
State of California Local Agency Investm ent Fund (LAIF) Upon Demand
N/A $75,000,000
per account
$75,000,000
per account
Local G overnm ent Investm ent Pools (LG IP) Upon
Demand
N/A No Limit No Limit
Corporate Medium Term Notes 5 years A 30% 5%
Asset-Backed, Mortgage Backed, Mortgage Pass-Through
Securities, & Collateralized Mortgage Obligations
5 years* AA 20% 5%
Mutual Funds Upon
Demand
Highest
Ranking by
two
NRSROs
10% No Limit
Money-Market Mutual Funds Upon
Demand
Highest
Ranking by
two
NRSROs
20% No Limit
Supranationals 5 Years AA 30% 10%
*However, the Cit
y Council specifically grants the authorit y to the City Treasurer to invest a maximum of $14,000,000 of the City's G overnm ent National Mortgage Association securities which, at the time of investment, have terms remainin g to maturity in exces

Public Agencies Post-Employment Trust
On May 22, 2017, the City Council adopted resolution 17-58 approving the adoption of the Public Agencies Post-Employment Trust administered by Public Agency Retirement Services (PARS).

The Trust is an irrevocable trust and qualifies as an Internal Revenue Section 115 Trust. This Trust will assist the City in mitigating the CalPERS co ntribution rate volatility. Investments of funds held in Trust are governed by the Investment Guideline Document for the investment account and by the agreement for administrative services with PARS, rather than the general provisions of the California Government Code of the City’s invest ment policy. The City elected a discretionary investment approach which allows the City to ma intain oversight of the investment management, control on target yield and the portfolio’ risk of tolerance, under the Moderately Conservative Index PLUS investment option. The assets in the Trust will eventually be used to fund pension plan obligations.

Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinance, bond indentures or State statute.

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The following table identifies the investment type s that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements:

Minim um Max im um Max im um
Max im um Credit In Investm ent
Authorized Investment Type Maturity Quality Portfolio In One Issuer U. S. Treas ury Bonds , Notes and Bills N/A N/A No Limit No Limit U.S. G overnment Agency Securities and
U.S. G overnm ent Sponsored Enterprise N/A AAA No Lim it No Lim it State Obligations
N/A
Highest Rating
Category No Limit No Limit
Co mmercial Pap er 270 Day s A No Limit No Limit
Negotiable Certificates of Deposit 365 days A-1+ No Limit No Limit Money Market Mutual Funds N/A AAAm No Lim it No Lim it
Bankers Acceptances 360 days A-1+ No Limit No Limit
Local Obligations
N/A
Highest Rating
Category No Limit No Limit
State of California Local Agency
Investm ent Fund (LAIF Pool) Upon Dem and N/A No Lim it No Lim it Municipal Obligations N/A AAA No Lim it No Lim it
Repurchase Agreements N/A A No Limit No Limit

Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates.

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

Less than One to More than
Investment Type One Y ear Five Y ears Five Y ears Total U.S. Government Agency Securities $4,942,676 $21,741,042 $268,556 $26,952,274 California Local Agency Investment Fund 47,838,510 47,838,510 California Asset Management Program 70,719,434 70,719,434 San Mateo County Investment Pool 114,811,488 114,811,488 Negotiable Certificates of Deposit 7,655,745 11,173,293 18,829,038 PARS Moderately Conservative Index PLUS Fun
d 5,196,496 5,196,496
Total Investments $251,164,349 $32,914,335 $268,556 284,347,240 Cash in Bank and On Hand 7,602,572
Total Cash and Investments $291,949,812

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The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Each regular LAIF accoun
t is permitted to have up to 15 transactions per
month, with a minimum transaction amount of $5,000, a maximum transaction amount of $75 million and at least 24 hours advance notice for withdrawals of $10 million or more. Bond proceeds accounts are subject to a one ‐time deposit with no cap and are set up with a monthly draw down schedule. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, United States Treasury Notes and Bills, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2025, these investments have an average maturity of 248 days.

The City is a participant in the San Mateo County Investment Pool (SMCIP) that is regulated by California Government Code Section 53600 under the oversight of the Treasurer of the County of San Mateo. The City reports its investment in SMCIP at the fair value amount provided by SMCIP. The balance available for withdrawal is based on the accounting records maintained by SMCIP, which are recorded on an amortized co st basis. Included in SMCIP’s investment portfolio are U.S. Treasury Notes, obligations issued by agencies of the U.S. Government, LAIF, corporate notes, commercial paper, collatera lized mortgage obligations, mortgage-backed securities, other asset-backed securities, and fl oating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2025, these investments matured in an average of 2.28 years.

Money Market Mutual Fund investments are available for withdrawal on demand.

Fair Value Investments
Generally accepted accounting principles require governments to present investments at fair value. The City adjusts the carrying value of its investment to reflect the fair value at each fiscal year-end, and it includes the effect of this adjustment in income for that fiscal year. 49

Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The actual ratings as of June 30, 2025 are provided by Standard and Poor’s except as noted.

Total
Investm ent Type AA+/AA/A-1 Investm ents
U.S. Government Agency Securities $19,668,841 $19,668,841 San Mateo County Investm ent Pool 114,811,488 114,811,488 Total $134,480,329 134,480,329
Not rated:

U.S. Government Agency Securities 7,283,433
California Local Agency Investment Fund 47,838,510
California Asset Management Program 70,719,434
Negotiable Certificates of Deposit 18,829,038
PARS Moderately Conservative Index PLUS Fund 5,196,496
Total Investments $284,347,240

Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (for example, broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

The City’s investment policy requires that securities transactions be executed on a delivery vs. payment basis. Funds are not wire-transferred until securities are delivered into safekeeping with the City's third party custodian. The custodial rela tionship is subject to an agreement for services which may be separate from the agreement for other banking services. The safekeeping requirement does not apply to securities which are physically delivered to the City.

Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value. The following provides a summary of the hierarchy used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets that the City has the ability to access at the measurement date. Level 1 assets may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over-the-counter markets.

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Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable, such as interest rates and curves observable at commonly quoted intervals, implied volatilities, and credit spreads. For financial reporting purposes, if an asset ha s a specified term, a Level 2 input is required to be observable for substantially the full term of the asset.

Level 3 – Unobservable inputs should be developed using the best information available under the circumstances, which might include the City’s own data. The City should adjust that data if reasonable available information indicates that other market participants would use different data or certain circumstances specific to the City are not available to other market participants.

The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2025:

Investm ent Type Level 2 Total
Inv estments b y Fair Value Lev el:

U.S. Government Agency Securities $26,952,274 $26,952,274 Negotiable Certificates of Deposit 18,829,038 18,829,038 Subtotal $45,781,312 45,781,312
Investments Measured at Amortized Cost:

PARS Moderately Conservative Index PLUS Fund 5,196,496
Inv estments Not Subject to the Fair Value Hierarchy:

California Local Agency Investment Fund 47,838,510
California Asset Management Program 70,719,434
San Mateo County Investm ent Pool 114,811,488
Total Investments $284,347,240

All investments classified in Level 2 were valued using prices provided by the City’s custodian bank.

H. INVENTORY AND PREPAIDS
Inventory is valued at cost, using the first-in, first-out method. For the General Fund, inventories consist of consumable supplies, and do not constitute available spendable resources, even though they are a component of net current assets. For proprietary funds, inventories represent materials and supplies for operations. The consumption method of accounting is applied to inventories.

Prepaids represent services that are paid for in advance. For governmental funds, prepaids do not constitute available spendable resources even though they are a component of net current assets.

The consumption method of accounting is applied to prepaids.

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I. WATER UTILITY ACCOUNTS RECEIVABLE
The City bills usage to water utility customers on a bimonthly basis in arrears. At any given time, an average of one month's usage is unread and unbilled. These unbilled estimated usages have been recognized as revenue and receivables in the financial statements of the Water Utility enterprise fund.

J. ADVANCES TO OTHER FUNDS AND AGENCIES
Current portions of interfund loans receivable (reported in "due from" asset accounts) are considered available spendable resources.

K. ACCUMULATED UNPAID VACATION, COMPENSATORY AND SICK LEAVE Accumulated unpaid employee benefits are accrued at year-end. If vacation or compensatory leave is not taken by employees during their employment, the City is obligated to make cash payments to them on termination or retirement at the salary rates then in effect. City employees receive from thirteen to twenty-eight days of vacation each year.

Full-time City employees receive one working day of sick leave for each month of employment.

Employees who terminate for reasons other than death, retirement or abolishment of position lose all accumulated sick leave. Upon death, retirement after the age of 50 and 5 years of service or abolishment of position the City is obligated to pay 50% of unused sick leave, up to from 750 to 1,392 hours, depending on the bargaining unit, at the salary rate then in effect. The value of vested sick leave liability for all employees qualified for retirement on June 30 of each year is accrued.

The City’s liability for compensated absences is recorded in various governmental funds or proprietary funds as appropriate. The liability for compensated absences is determined annually.

For all governmental funds, compensated absences are reported only if they are still outstanding following an employee’s resignation or retirement.

The changes in the liability for compensated absences were as follows:

Governmental
Activities
Business Type
Activities Total
Balance July 1, 2024 $18,491,208 $2,581,167 $21,072,375 Net Change (289,355) 180,940 (108,415) Balance June 30, 2025 $18,201,853 $2,762,107 $20,963,960 Due within one year $6,789,900 $1,048,376 $7,838,276

L. CLAIMS AND JUDGMENTS
The City has recognized a liability for workers' compensation and general liability claims in the Self-Insurance Internal Service Fund. This liability reflects the costs of claims determined to be probable of assertion and measurable in amount.

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M. PROPERTY TAX LEVY, COLLECTION, MAXIMUM RATES
Article 13 of the California State Constitution provides for a maximum general property tax rate statewide of $1.00 per $100 of assessed value, and may be adjusted by no more than two percent per year unless the property is sold or transferred, in which case it is then assessed at sales price.

Assessed value is calculated at 100% of sales price as defined by the above referenced Article 13.

The State Legislature has determined the method of distribution of receipts from the $1.00 tax levy among the county, cities, school districts and other districts. Counties, cities and school districts may levy such additional tax rate as is necessar y to provide for voter-approved debt service. San Mateo County assesses properties, bills for, and collects property taxes on the following schedule:

SECURED

UNSECURED
Valuation dates March 1 March 1
Lien/levy dates January 1 January 1
Due Dates 50% on November 1 July 1
50% on February 1
Delinquent as of December 10 August 31
April 10

The term "unsecured" refers to taxes on property not secured by liens on real property. Property taxes levied are recorded as revenue and receivab les, net of estimated uncollectible amounts, in the fiscal year of levy. Property taxes which cannot be recorded as current year revenues, in accordance with the modified accrual basis of accounting, have been recorded as unearned revenues.

N. USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 3.

COMMITMENTS AND CONTINGENCIES

A. CONSTRUCTION CONTRACTS
At June 30, 2025, the City had made commitments of approximately $30 million for construction work, legal and consulting fees, and purchases of supplies and equipment, which includes the encumbrances in Note 3C below.

B. LITIGATION
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney, there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.

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C. ENCUMBRANCES
The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities.

Outstanding encumbrances
at year-end are automatically reappropriated for the following year. Unencumbered and unexpended appropriations lapse at year-end. Encu mbrances outstanding as of June 30, 2025 were $481,384 in the General Fund, $6,712,689 in the Gas Tax Special Revenue Fund, $492,139 in the Grants Special Revenue Fund, $8,223,454 in the Capital Projects Fund, and $358,142 in nonmajor governmental funds.

D. FEDERAL AND STATE GRANT PROGRAMS
The City participates in Federal and State grant programs. These programs have been audited by the City’s independent accountants in accordance with the provisions of the Federal Single Audit Act as amended and applicable State requirements. No cost disallowances were proposed as a result of these audits. However, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

NOTE 4.

CAPITAL ASSETS
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available, except for intangible right to ‐use lease assets, the measurement of which is discussed in Note 7 below and intangible right to use subscription assets the measurement of which is discussed in Note 14 below. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. The City’s policy is to capitalize all assets with costs exceeding $25,000 for all classes of capital assets with useful lives exceeding two years. Prior to July 2020, the City’s policy was to capitalize costs exceeding $25,000 for infrastructure and $5,000 for all other classes of capital assets.

The City depreciates capital assets over their estimated useful lives. T he purpose of depreciation
is to spread the cost of capital assets equitabl y among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets.
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Depreciation is calculated using the straight-lin e method, which means the cost of the asset is divided by its expected useful life in years and the
result is charged to expense each year until the
asset is fully depreciated. The City has assigned the useful lives listed below to capital assets:

Buildings and Improvements 20-50 years Sewage Collection Facilities 10-50 years Streets and Infrastructure
20-60 years
Sewage Disposal and Treatment
Facilities
15-50 years
Park Structures and Improvements
10-30 years Sanitation Subsurface Lines and
Water Mains
25 years
Vehicles, Equipment, Furniture
and Fixtures
5-20 years
Wells and Pump Stations 40-50 years
Right to Use Leased Building
2 years
Water Reservoirs 40-99 years
Right-to-use Subscription Assets
3 years
The City capitalizes major asset purchases and improvements which increase the useful life of the related assets. Minor purchases and routine repair and maintenance costs are charged directly to expense. Major outlays for capi tal assets and improvements are capitalized as projects are constructed.

A. CAPITAL ASSET ADDITIONS AND RETIREMENTS
Capital assets at June 30 comprise:

Balance Retirements/ Balance
June 30, 2024 Additions Adjustm ents Transfers June 30, 2025 Governmental activities:

Capital assets not being depreciated:

Land $27,856,486 ($186,492) $27,669,994
Construction in progress 14,649,653 $6,824,719 ($7,266,627) 14,207,745 Total capital assets not being depreciated 42,506,139 6,824,7 19 (186,492) (7,266,627) 41,877,739 Capital assets being depreciated:

Buildings & improvements 60,244,828 540,791 271,180 61,056,799 Right-to-use building 244,821 244,821
Streets & infrastructure 95,375,755 6,676,870 102,052,625 Park structures & improvements 10,791,276 10,791,276
Vehicles & equipment 31,459,455 3,581,105 (1,660,742) 318,577 33,698,395 Furniture & fixtures 458,590 458,590
Subscription assets 6,530,271 2,956,498 (5 33,130) 8,953,639 Total capital assets being depreciated 205,104,996 7,078,394 (2,193,872) 7,266,627 2 17,256,145 Less accumulated depreciation for:

Buildings & improvements 41,960,225 1,597 ,052 43,557,277 Right-to-use building 214,965 29,856 244,821
Streets & infrastructure 70,247,370 2,107 ,255 72,354,625 Park structures & improvements 5,611,358 538,694 6,150,052 Vehicles & equipment 19,663,065 2,052,200 (1,5 86,668) 20,128,597 Furniture & fixtures 446,641 2,829 449,470
Subscription assets 1,991,303 1,149,301 (1 77,712) 2,962,892 Total accumulated depreciation 140,134,927 7,477 ,187 (1,764,380) 145,847,734 Net depreciable assets 64,970,069 ( 398,793) (429,492) 7, 266,627 71,408,411 Governmental activity capital assets, net $107,476,208 $6,425,926 ($615,984) $113,286,150 55

Balance Balance
June 30, 2024 Additions Re tirements June 30, 2025
Business-type activities:

Capital assets not being depreciated:

Land $2,862,549 $2,862,549
Construction in progress 16,390,689 $7,466,005 ($3,749,223) 20,107,471 Total capital assets not being depreciated 19,253,238 7,466,005 (3,749,223) 22,970,020 Capital assets being depreciated:

Buildings & improvements 7,918,904 7,918,904
Sewage facilities 59,413,041 3,749,223 63,162,264
Mains & subsurface lines 48,439,825 54,632 48,494,457
Water reservoirs 12,715,925 12,715,925
Wells & pump stations 9,074,783 9,074,783
Equipment 18,767,111 241,923 19,009,034
Furniture & fixtures 151,328 151,328
Total capital assets being depreciated 156,480,917 296,555 3,749,223 160,526,695 Less accumulated depreciation for:

Buildings & improvements 6,779,208 166,401 6,945,609
Sewage facilities 44,388,871 1,132,098 45,520,969
Mains & subsurface lines 30,801,697 1,592,729 32,394,426 Water reservoirs 6,343,023 159,293 6,502,316
Wells & pump stations 5,264,556 185,664 5,450,220
Equipment 14,513,708 508,829 15,022,537
Furniture & fixtures 120,547 3,489 124,036
Total accumulated depreciation 108,211,610 3,748,503 111,960,113 Net depreciable assets 48,269,307 (3,451,948) 3,749,223 48,566,582 Business-type activity capital assets, net $67,522,545 $4,014,057 $71,536,602 B. CAPITAL ASSET CONTRIBUTIONS
Some capital assets may be acquired using federal and state grant fu nds, or they may be contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed.
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C. DEPRECIATION ALLOCATION
Depreciation expense is charged to functions and programs based on the usage of the related assets. The amounts allocated to each function or program are as follows:

Gov ernmental Activ ities
G eneral governm ent $118,010
Public safety 1,438,053
Public works 2,482,377
Culture and recreation 1,509,784
Capital assets held by the City's internal service
funds charged to the various functions based
on their usage of the assets 1,928,963
Total Governmental Activities $7,477,187
Business-T yp e Activ ities
Water Utility $1,345,961
Sanitation District 2,216,500
Civic Center 186,042
Total Business-Type Activities $3,748,503

NOTE 5.

LONG-TERM DEBT

Changes in Long-Term Debt for the fiscal year ended June 30, 2025, are as follows:

Original Issue Balance Balance Current
Amount June 30, 2024 Additions Retirements June 30, 2025 Portion Governmental Activities Debt
Community First National Bank Lease-Fire Pumpers

2.670%, due FY 2028 $1,483,056 $ 880,786 $211,571 $669,215 $217,220 Community First National Bank Lease-Fire Engines

3.81%, due FY 2030 1,830,457 1,614,757 244,620 1,370,137 253,935 Total Governmental Activities 2,495,543 456,191 2,039,352 471,155 Total City Long-Term Debt $2,495,543 $456,191 $2,039,352 $471,155

On December 18, 2020, the City entered into a lease financing agreement in the amount of $1,483,056 with Community First National Bank, to acquire two fire pumpers. Events of default on the lease include non-payment of principal and interest when due. A penalty of 10% per year of the amount due will be added on all amount due , and, after five days written notice, the lessor has the right to take possession of the equipment. There have been no events of default since the lease was issued. Principal and interest ar e due annually starting on December 18, 2021, with annual payments of $235,088 through 2028. The lease bears an interest rate of 2.670%. For fiscal year 2025, principal and interest paid were $235,088.

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On October 11, 2022, the City entered into a lease financing agreement in the amount of $1,830,457 with Community First National Bank, to acquire two fire engines.

Events of default
on the lease include non-payment of principal and interest when due. A penalty of 10% per year of the amount due will be added on all amount due , and, after five days written notice, the lessor has the right to take possession of the equipment. There have been no events of default since the lease was issued. Principal and interest are due annually starting on January 15, 2024, with annual payments of $306,115 through 2030. The lease bears an interest rate of 3.81%.

On April 23, 2025, the City entered into a lease financing agreement in the amount of $5,057,558 with Community First National Bank, to acquire two fire engines, one pierce enforcer, and one rescue vehicle. The City has not recorded a liability for the lease as the City has not received the vehicles as of June 30, 2025. The City will record a liability for the lease financing arrangement upon receipt of the right-to-use asset. Events of default on the lease include non-payment of principal and interest when due. A penalty of 10% per year of the amount due will be added on all amount due, and, after five days written notice, the lessor has the right to take possession of the equipment. There have been no events of default since the lease was issued. Principal and interest are due annually starting on August 1, 2026, with annual payments of $1,184,177 through 2030. The lease bears an interest rate of 4.99%.

Annual debt service requirements are shown below for all long-term debt with specified repayment terms:

Fire Apparatus Pumpers Leas e Fire Engines Leas e
Y ear ending June 30 Principal Interest Principal Interest Principal Interest 2026 $217,220 $17,868 $253,935 $52,180 $471,155 $70,048 2027 223,020 12,068 263,606 42,509 486,626 54,577
2028 228,975 6,114 273,645 32,470 502,620 38,584
2029 284,067 22,049 284,067 22,049
2030 294,884 11,230 294,884 11,230
$669,215 $36,050 $1,370,137 $160,438 $2,039,352 $196,488 G overnm ental Activities
Total
The City is subject to a debt limit that is 3.75% of the total assessed value of property, net of exempt real property. At June 30, 2025, that amount was $656,578,396. As of June 30, 2025, the City did not have any outstanding debt applicable to the limit. 58

STATE WATER RESOURCES CONTROL BOARD LOANS
In April 2025, the City entered into a loan agreement with the State of California’s State Water Resources Control Board for the purpose of financing the Vista Grande Drainage Basin Improvement Project. Under the terms of the contract, the City agreed to repay $62,889,860 plus interest to the State in exchange for receiving $67,889,860 in proceeds used to fund the project. The difference between the repayment obligation and proceeds represents the principal forgiveness component. As of June 30, 2025, the City has not drawn down on the debt and therefore, there is no liability. The loan bears interest at 1.8% and payments are due annually on December 31 of each year commencing in 2028 until 2057.

CONDUIT DEBT
The Finance Agency has assisted private-sector entities by sponsoring their issuance of debt for purposes the City deems to be in the public interest. These debt issues are secured solely by the property financed by the debt. The City and Finance Agency are not legally or morally obligated to pay these debts or be the purchaser of last resort of any foreclosed properties secured by these debts, nor is it obligated to advance City or Fi nance Agency funds to repay these debts in the event of default by any of these issuers. At June 30, 2025, the balance of this issuers’ outstanding debt was as follows:

Franciscan Moblie Home Park Acquisition Project:

Senior Revenue Refunding Bonds, Series 2007A and
Subordinate Revenue Refunding Bonds, Series 2007B $40,215,000 Third Tier Revenue Refunding Bonds, Series 2007C 6,740,000 Fourth Tier Revenue Bonds, Series 2002D 377,000
NOTE 6.

CURRENT INTERFUND BALANCES
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. The purpose of these interfunds was to cover deficit cash in receiving funds. At June 30, 2025, Community Block Grant Special Revenue Fund owed the General Fund $
71,355.
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INTERFUND TRANSFERS

Transfers between funds during the fiscal year ended June 30, 2025 were as follows:

Fund Making Transfer Fund Receiving Transfer Transfer Amount General Fund Gas Tax Special Revenue Fund $2,764,651
Capital Projects Fund 10,200,725
Non Major Governmental Funds 267,392
Internal Service Fund - Central Services 26,564
Internal Service Fund - Motor Vehicles 76,642
Internal Service Fund - Information Services 1,543
Gas Tax Special Revenue Fund General Fund 317,156
Capital Projects Fund 120,919
Measures A and W Special Revenue Fund 26,125
Measures A and W Special Revenue Fund Gas Tax Special Revenue Fund 218,627 Capital Projects Fund Internal Service Fund - Information Services 2,035 Non Major Governmental Fund Capital Projects Fund 115,436 Water Utility Enterprise Fund General Fund 562,274
Sanitation District Enterprise Fund 3,258,776
Sanitation District Enterprise Fund General Fund 1,225,614 Gas Tax Special Revenue Fund 89,951
Non Major Enterprise Fund 60,000
Civic Center Enterprise Fund General Fund 16,320
Capital Projects Fund 200,213
Non Major Enterprise Fund Capital Projects Fund 60,000
Water Utility Enterprise Fund 125,274
Internal Service Fund - Motor Vehicles General Fund 493,381 Internal Service Fund - Central Services General Fund 15,624 Internal Service Fund - PBX General Fund 7,259
Internal Service Fund - Building Maintenance General Fund 391,112 Internal Service Fund - Information Services General Fund 208,520 Internal Service Fund - Self-Insurance General Fund 113,865 Internal Service Fund - Information Services 17,552
$20,983,550

The purpose of the majority of transfers is to provide general support to another fund. General Fund transfers out typically represent a subsidy or in the case of grants, a match of another fund’s expenditures.

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INTERNAL BALANCES

Internal balances are presented in the gover nmental-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities.

NOTE 7.

LEASES

A. POLICIES
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivables or liabilities with an initial, individual value of $25,000 or more.

Lessee – The City is a lessee for a noncancellable lease of office space, as well as the financed purchase discussed in Note 5. The City recognizes a lease liability and an intangible right ‐to‐use lease asset (lease asset) in the government‐wide financial statements.

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

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:

• The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. • Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

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

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

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Lessor – The
City is a lessor for noncancellable leases of buildings and facilities. The City recognizes a lease receivable and a deferred inflow of resources in the government ‐wide and fund financial statements.

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

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

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

B. LEASES RECEIVABLE
The balances related to leases receivable and de ferred inflows of resources as of June 30, 2025 were:

Deferred
Lease Inflows of
Receivable Resources
General Fund
Communication sites $8,236,049 $7,829,496
Civic Center Enterprise Fund
Facilities leases 7,772,682 6,481,443
Total $16,008,731 $14,310,939
Communication Site Leases
– The City leases various locations to third parties for the provisions of mobile/wireless communications services. During the year ended June 30, 2025, the City had nine leases, with original lease terms ranging from five to fifty-five years, including the optional extension periods, and as of June 30, 2025, the leases had 1 to 48 years remaining.

The City recognized $339,275 in lease revenue and $157,050 in interest revenue during the current fiscal year related to these leases. Also, the City has deferred inflows of resources associated with these leases that will be recognized as revenue over the lease term. 62

Facilities Leases – The City leases various facilities to third parties. During the year ended June 30, 2025, the City had four leases, with original lease terms ranging from three to twelve years and as of June 30, 2025, the leases had 1 to 13.5 years remaining. The City recognized $ 607,236 in lease revenue and $ 398,876 in interest revenue during the current fiscal year related to these leases. Also, the City has deferred inflows of reso urces associated with these leases that will be recognized as revenue over the lease term.

C. LEASE PAYABLE
A summary of governmental activities lease transactions for the fiscal year ended June 30, 2025, are as follows:

Balance Balance Current
June 30, 2024 Retirements June 30, 2025 Portion
Gov ernmental Activ ities
Lease Payable
MKD Cedar Hill $34,463 ($34,463) - -

Building Lease – The City entered into a five year lease agreement with MKD Cedar Hill as lessee for the use of office space that commenced in November 2017. An initial lease liability was recorded in the amount of $ 98,554 during fiscal year 2024, but the lease term was extended two years during fiscal year 2024 and the lease liability increased by $ 146,267. As of June 30, 2025, the value of the lease liability was $ 0 as the City fully paid off the lease and the lease agreement ended. At June 30, 2025 the value of the right-to-use asset was $0, net of accumulated amortization.

NOTE 8.

RETIREMENT PLAN

A. GENERAL INFORMATION ABOUT THE PENSION PLANS
Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension pl ans 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 cr edited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 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 each plan are applied as specified by the Public Employees’ Retirement Law.

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The
Plans’ provisions and benefits in effect at June 30, 2025, are summarized as follows:

M iscellaneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit paym ents m onthly for life m onthly for life
Retirement age 50-60 52-67
Monthly benefits, as a % of eligible com pensation 2.0%-3.0% 1.0%-2.5% Required em ployee contribution rates 8.00% 8.00%
Required em ployer contribution rates 12.49% * 12.49% * Required Unfunded Accrued Liability Contribut ion $7,952,576 *Effective February 15, 2014, members in the Teamsters Local 856 Public Safety Dispatchers and P
olice Assistants were required to pay an additional 5.41% for their share of pension costs a
nd members in the Teamsters Local 856 Clerical/Technical unit pay an additional 5.51% for t
heir share of pension costs.

Safety
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit paym ents m onthly for life m onthly for life
Retirement age 50-55 50-57
Monthly benefits, as a % of eligible com pensation 2.4%-3.0% 2.0%-2.7% Required em ployee contribution rates 9.00% 11.50%
Required em ployer contribution rates 17.79% 17.79%
Required Unfunded Accrued Liability Contribut ion $10,743,071 *Effective July 11, 2020, members in the Daly City Police Officers Association and Daly City P
olice Managem ent Bargaining Unit were required to pay an additional 3.0% for their share of
pension costs.

Beginning in fiscal year 2016, CalPERS collect s employer contributions for each Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL).

The dollar amounts are billed on
a monthly basis, or the City can elect to make a lump-sum payment at the beginning of the fiscal year. The City’s required contributions for the unfunded liability in the Miscellaneous and Safety Plans for the year ended June 30, 2025 were $7,952,576 and $10,743,071, respectively, which were made under the lump-sum payment option.

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Employees Covered – The following employees were covered by the benefit terms for each Plan as of the most recent actuarial valuation date of June 30, 2023 and measurement date of June 30, 2024:

Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 567 361 Inactive employees entitled to but not yet receiving benefits 423 107 Active em ployees 288 155
Total 1,278 623
Contributions
– Section 20814(c) of the California Public Employees’ Retirement Law 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 fo llowing notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

The City’s Contributions to the Plans for the year ended June 30, 2025 were $11,851,001 for the Miscellaneous Plan and $15,440,585 for the Safety Plan.

B. NET PENSION LIABILITY
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each Plan is measured as of June 30, 2024, using an annual 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.
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Actuarial Assumptions – The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Norm al Cost Method
Actuarial As s umptions :

Discount Rate 6.90%
Inflation 2.30%
Payroll G rowth 2.80%
Projected Salary Increase V aries by Entry Age and Service Investm ent Rate of Return 6.90% (1)
Mortality Derived using CalPERS Mem bership Data for all Funds (2) Post Retirement Benefit Increase
The lesser of contract COLA or 2.30% until Purchasing
Protection Allowance floor on purchasing power applies,

2.30% thereafter
(1) Net of pension plan investm ent ex penses, including inflation (2) The m ortality table used was developed based on CalPERS-specific data. The probabilities of mortality 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 ex perience study report from Novem ber 2021 that can be found on the CalPERS website.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2023 valuation were based on the results of a November 2021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website at www.calpers.ca.gov.

Discount Rate – The discount rate used to measure the total pension liability for each Plan was

6.90%. The projection of cash flows used to dete rmine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

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

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

Asset C l ass (a)
Assum ed
Asset
Allocation
Real return
(a) (b)
G lobal Equity - Cap-weighted 30.00% 4.54%
G lobal 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)
(a) An ex pected inflation of 2.30% used for this period. (b) Figures are based on the 2021 Asset Liability
Managem ent study.

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C. CHANGES IN THE NET PENSION LIABILITY
The changes in the Net Pension Liability for each Plan follow:

Miscellaneous Plan:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2023 (M easurement Date) $389,679,629 $298,534,094 $91,145,535 Changes in the year:

Service cost 5,792,979 5,792,979
Interest on the total pension liability 27,332,401 27,332,401 Changes of Benefit Term s
Differences between actual and expected experience 14,446,815 14,446,815 Contributions - employer 10,044,439 (10,044,439)
Contributions - employees 2,721,155 (2,721,155)
Net investment income 28,316,818 (28,316,818)
Benefit paym ents, including refunds of em ployee
contributions (21,802,358) (21,802,358)
Adm inistrative Ex pense (242,918) 242,918
Net changes 25,769,837 19,037,136 6,732,701
Balance at June 30, 2024 (M easurement Date) $415,449,466 $317,571,230 $97,878,236 Safety Plan:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2023 (M easurement Date) $419,538,752 $282,590,009 $136,948,743 Changes in the year:

Service cost 7,092,905 7,092,905
Interest on the total pension liability 28,877,801 28,877,801 Changes of Benefit Term s
Differences between actual and expected experience 7,639,732 7,639,732 Contributions - employer 13,971,850 (13,971,850)
Contributions - employees 3,307,786 (3,307,786)
Net investment income 27,055,611 (27,055,611)
Benefit paym ents, including refunds of em ployee
contributions (24,412,179) (24,412,179)
Adm inistrative Ex pense (229,944) 229,944
Net changes 19,198,259 19,693,124 (494,865)
Balance at June 30, 2024 (M easurement Date) $438,737,011 $302,283,133 $136,453,878 TOTAL - BOTH PLANS $854,186,477 $619,854,363 $234,332,114

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Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Safety Total
1% Decrease 5.90% 5.90%
Net Pens ion Liability $150,648,404 $191,700,957 $342,349,361 Current Discount Rate 6.90% 6.90%
Net Pens ion Liability $97,878,236 $136,453,878 $234,332,114 1% Increase 7.90% 7.90%
Net Pens ion Liability $54,111,471 $90,677,193 $144,788,664 Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

D. PENSION EXPENSE AND DEFERRED OUTFLOWS/INFLOWS OF

RESOURCES R

ELATED TO PENSIONS
Pension expense is the change in net pension liab ility from the previous fiscal year to the current fiscal year less adjustments. Deferred outflows and deferred inflows of resources related to pensions are certain changes in total pension liabilities and fiduciary net position that are to be recognized in future pension expense. For th e year ended June 30, 2025, the City recognized pension expense of $20,772,079 for the Miscellaneous Plan and $21,940,079 for the Safety Plan, for total pension expense of $42,712,158. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $11,851,001 Differences between actual and expected experience 9,608,211 Changes in assumptions
Net differences between projected and actual earnings on plan investments 4,808,686
Total $26,267,898
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Safety Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $15,440,585 Differences between actual and expected experience 7,787,104 Changes in assumptions 598,393
Net differences between projected and actual earnings on plan investments 4,372,309
Total $28,198,391
Total Miscellaneous and Safety Plans $54,466,289

The amount of $27,291,586 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended 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:

Ye a r En d e d
June 30 Miscellaneous Plan Safety Plan Total
2026 $6,917,043 $4,304,336 $11,221,379
2027 10,351,647 10,529,649 20,881,296
2028 (1,240,640) (512,612) (1,753,252)
2029 (1,611,153) (1,563,567) (3,174,720)
Totals $14,416,897 $12,757,806 $27,174,703

Annual Am ortization
NOTE 9.

POST EMPLOYMENT BENEFITS OTHER THAN PENSION

The City provides certain health care benefits for employees who retire directly from the City with at least five years of service with the City and who are vested in the California Public Employees Retirement System (CalPERS). The City participates in the CalPERS health care plan which is governed under the California Public Employees Health and Medical Care Act (PEHMCA). Required retiree medical plan contributions are also governed by PEHMCA for member agencies. The City joined the California Employers' Retiree Benefit Trust (CERBT), an agent multiple-employer plan administered by CALPERS, consisting of an aggregation of single- employer plans. The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees' Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703.

For employees hired prior to February 1, 2024, the City contributes up to a fixed dollar amount for retiree medical benefits, which varies by em ployee bargaining group and coverage level as governed by PEHMCA. Benefits continue for surviving spouses in amounts as required by PEHMCA. Should an eligible retiree opt out of the CalPERS medical plan, they will receive $120 to $125 per month in lieu of contributions to the CalPERS plan.

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For employees hired on or after February 1, 2024, the City contributes the PEHMCA minimum, which was $158 in 2025.

As of the June 30, 2024 measurement date, approx imately 512 retirees were eligible and were receiving retiree health care benefits from the City and approximately 40 inactive employees entitled to but not yet receiving benefit payments. There were approximately 441 active full time employees that should they meet requirements will be eligible to receive health care benefits upon retirement.

For the year ended June 30, 2025, the City contributed $4,132,118 to the Plan, which was comprised of benefit premiums of $2,628,692, prefunding contributions of $750,000, administrative expenses of $26,426 and implied subsidy benefit payments of $727,000.

A. FUNDING POLICY AND ACTUARIAL ASSUMPTIONS
The total OPEB liability was determined as part of a June 30, 2024 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included 2.50% inflation rate, 6.25% investment rate of return, 2.75% projected annual salary increase, and a medical trend of 8.50% (Non-Medicare),

7.50% (Medicare-Non-Kaiser) and 6.25% (Medicare- Kaiser) in 2025 decreasing to an ultimate rate of 3.45% in 2076. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets.

Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The City’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year closed amortization period for an initial June 30, 2008 Unfunded Accrued Actuarial Liability (UAAL), a 20 year closed amortization period for method assumptions and plan changes and 15 years for gains and losses, with a maximum of a 30 year combined closed period.

B. NET OPEB LIABILITY
Actuarial Methods and Assumptions – The City’s net OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to calculat e the net OPEB liability was determined by an actuarial valuation dated June 30, 2023.

The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected fu ture real rates of return (expec ted returns, net of OPEB plan investment expense and inflation) are develope d for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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Long-Term
Target Ex pected Real
Asset Class Allocation Rate of Return
Global Equity 49% 4.56%
Fixed Income 23% 1.56%
TIPS 5% -0.08%
Commodities 3% 1.22%
REITs 20% 4.06%
Assum ed Long-Term Rate of Inflation 100% 2.50%
Ex pected Long-Term Net Rate of Return 6.25%
Discount Rate – The discount rate used to measure the total OPEB liability was 6.25%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. B ased on those assumptions,
the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

C. CHANGES IN NET OPEB LIABILITY
The changes in the net OPEB liability follows:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a) - (b)
B
alance at June 30, 2024 $52,821,020 $20,182,606 $32,638,414 Changes Recognized for the Measurement Period:

Service Cost 1,214,158 1,214,158
Interest on the total OPEB liability 3,270,217 3,270,217 Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contributions from the employer 4,451,839 (4,451,839)
Net investment income 2,221,244 (2,221,244)
Administrative expenses (35,012) 35,012
Benefit payments (3,423,415) (3,423,415)
Net changes 1,060,960 3,214,656 (2,153,696)
Balance at June 30, 2025 (June 30, 2024 Measurement Date) $53,881,980 $23,397,262 $30,484,718 Increase (Decrease)
Detailed information about the OPEB plan’s fiduci ary net position is available in the separately issued Plan financial report that may be obtaine d from the CERBT. The benefit payments above include implied subsidy benefit payments in the amount of $933,000. 72

D. SENSITIVITY OF THE NET OPEB LIABILITY TO CHANGES IN THE

DISCOUNT RATE AND HEALTHCARE COST TREND RATES
The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1- percentage-point higher than the current discount rate:

Net OPEB Liability/(A s s et)
Discount Rate -1%
Current
Discount Rate Discount Rate +1%
(5.25%) (6.25%) (7.25%)
$36,326,392 $30,484,718 $25,518,732

The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

Net OPEB Liability/(A s s et)
Current
Healthcare Cost
1% Decrease Trend Rates 1% Increase
$28,077,593 $30,484,718 $33,589,343

E. OPEB EXPENSE AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES

RELATED TO OPEB
For the year ended June 30, 2025, the City recognized OPEB expense of $1,472,770. At June 30, 2025, the City reported deferred outflows and in flows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
$4,132,118
Difference between expected and actual experience ($2,827,189) Changes in assumptions 158,497 (2,190,309) Net differences between projected and actual earnings on plan investments 323,568
Total $4,614,183 ($5,017,498)
Employer contributions made subsequent to the measurement

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$
4,132,118 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2026. Other amounts reported as deferred ou tflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:

Y ear Annual
Ended June 30 Am ortization
2026 ($1,348,826)
2027 (845,463)
2028 (1,403,790)
2029 (
937,354)
T
otals ($4,535,433)
NOTE 10.

DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Internal Revenue Service.

The Plan is part of the public agency agent mu ltiple-employer defined contribution plan that is administered by CalPERS. Benefit provisions unde
r the Plan are established by City Resolution.

The laws governing deferred compensation plan assets require plan assets to be held by a trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to City control, they have been excluded from these financial statements.

The City has no liability for any losses incurred by the Plan and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has a contract with Mission Square to manage and invest the assets of the Plan. The administrator pools the assets of the Plan with those of other participants and does not make separate investments for the City. The assets in the Plan are the sole pr operty of the participants or their beneficiaries.

Since the assets held under the Plan are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements. The Plan requires investments to be stated at fair market value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.

The City adopted a Resolution in November 2020 that required a monthly deferred compensation contribution of $1,000 for the City Manager. Effective January 2024, the City’s required monthly deferred compensation contribution was reduced to $500. In August 2022, the City Council approved a one-time payment of vacation accruals in the amount of $17,250 toward the City Manager’s deferred compensation account. In addition, the City adopted a Resolution in November 2024 that required a monthly deferred compensation contribution of $500 for the City Attorney. The City does not make any other contributions to the Plan. The City’s required contributions for the year ended June 30, 2025 totaled $12,000.
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NOTE 11.

SELF-INSURANCE

The Self-Insurance Internal Service Fund was established in 1979 to provide for payment of costs associated with the City’s risk management programs. Fund revenues consist of interest earnings, reimbursements of claims paid by the Fund and charges to other funds. The latter is intended to match the charges for insurance premiums for coverage in excess of self-insured amounts, estimated payments resulting from self-insurance programs, operating expenses and the provision of reserves for pending and possible future claims.

The City has a self-insured retention for the first $500,000 of general and automobile liability claims and maintains a $50,000 deductible for property losses. Losses in excess of the retention up to $250,000,000 on general and automobile liability are covered by purchased excess insurance. The City purchases combined property, boiler and machinery and automobile comprehensive insurance covering all but the deductible on the full value of City property. Settlements have never exceeded insurance coverage. The City expenses the incurred liabilities for claims in cases where such amounts are reasonably determinable and where the likelihood of liability exists. Included are estimates for incurred but not reported claims, which are calculated based on claims experience.

The City is a member of Public Risk Innovation, Solutions, and Management (PRISM), a joint powers authority (JPA) which provides excess workers’ compensation liability claims coverage above the City’s self-insured retention of $350,000 per occurrence. Losses above the self-insured retention are pooled with excess reinsurance purchased to provide coverage to statutory limits.

During the fiscal year ended June 30, 2025, the City contributed $ 962,558 to PRISM for current year coverage. Audited financial statements for PRISM are available from PRISM at 75 Iron Point Circle, Suite 200, Folsom, CA 95630.

The City’s present value liability for uninsured claims including a provision for claims incurred but not reported using a discount rate of 2% was computed as follows based on claims experience for the years ended June 30, 2025 and 2024:

2025 2024
Beginning balance of claims payable $10,784,000 $10,073,000 Increase in estimated claims liability 3,211,264 3,906,938 Claims paid (2,989,264) (3,195,938)
Ending balance of claims payable $11,006,000 $10,784,000 Current Portion $2,753,216 $2,928,869

The undiscounted claims totaled $12,176,000 at June 30, 2025.

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NOTE 12.

NET POSITION AND FUND BALANCE

A. NET POSITION
Net Position is the excess of all the City’s assets and deferred outflows over all its liabilities and deferred inflows, regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position and are described below:

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

Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements an d amounts required to be set aside for low and moderate income housing.

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

B. GOVERNMENTAL FUND BALANCES
The City’s fund balances are classified in accordance with generally accepted accounting principles, Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources.

For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint.

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

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources.

Committed fund balances have constraints imposed by formal action of the City Council by resolution which may be altered only by formal action in the same manner. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources.

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Assigned
fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council by resolution or its designee (City Manager) and may be changed at the discretion of the City Council by resolution. This category includes encumbrances; Nonspendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.

Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general f und balance and residual fund deficits, if any, of other governmental funds.

Detailed classifications of the City’s Fund Balances, as of June 30, 2025, are below:

Ot her
General Gas Measures Capital Governmental
F und Balance Classifications F und T ax Grants A and W Projects F unds T otal Nonspendables:

Items not in spendable form:

Inventories $20,257 $39,602 $59,859
Petty cash 8,357 8,357
Prepaids 42,365 $40,533 82,898
Leases receivable 406,553 406,553
Loan receivable from
Successor Agency 8,284,899 8,284,899
T otal Nonspendable 8,762,431 39,602 40,533 8,842,566
Restricted for:

Pension benefits 5,196,496 5,196,496
G as Tax Projects 8,871,126 8,871,126
Capital Projects 1,000,000 $16,927,904 $12,945,510 30,873,414 Affordable Housing $6,005,619 6,005,619
Low and Moderat e Income
Housing Assets 4,466,433 4,466,433
704,904 704,904
Traffic Safety 135,896 135,896
G rants 700,307 700,307
T otal Restricted 6,196,496 8,871,126 700,307 16,927,904 12,945,510 11,312,852 56,954,195 Assigned to:

Capital Projects 33,378,035 33,378,035
Other Contracts 481,384 481,384
T otal Assigned 481,384 33,378,035 33,859,419
Unassigned:

Contingency Fund 1,000,000 1,000,000
Operating Reserve 22,250,000 22,250,000
Unassigned 37,287,138 (1) 37,287,137
T otal Unassigned 60,537,138 (1) 60,537,137
T otal Fund Balances $75,977,449 $8,910,728 $740,840 $16,927, 904 $46,323,545 $11,312,851 $160,193,317 Linda Vista Benefit Assessment
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C. MINIMUM FUND BALANCE POLICY
The City Council adopted a General Fund Reserve Policy in July 2020 to establish target reserve levels and the methodology for calculating reserve levels. The Policy also establishes criteria for the use of reserves and a process to replenish reserves.

The Policy requires the City to strive to maintain the following fund balances:
1) Contingency Fund
The City shall maintain a minimum Contingency Fund reserve equal to $1,000,000 within its General Fund to provide a financial cushion to cover revenue shortfalls resulting from unexpected economic changes or recessionary periods or to provide funds in the event of major unplanned expenditures the City could face as a result of natural or man-made disasters such as earthquakes, windstorms, landslides, floods, wildfires, natural gas leaks, or terrorist attacks.

The balance of the Contingency Fund Reserve was $1,000,000 at June 30, 2025 and is reported as a component of General Fund unassigned fund balance. 2) General Fund Operating Reserve
The City shall maintain a minimum General Fund operating reserve equal to two months (17%), and a targeted reserve equal to three months (25%), of General Fund annual operating expenditures plus recurring (i.e., not one-time) transfers to other funds for that fiscal year. These reserves will be used to provide adequate cash flow and budget contingencies.

The balance of the Operating Reserve was $22.25 million at June 30, 2025 and is reported as a component of General Fund unassigned fund balance.

If reserves are projected to fall below, or unexpectedly fall below, the minimum levels as set by this policy, the City shall include within its annual budget a plan to restore reserves to the minimum levels within two years based on its long-range financial forecast. Such a plan may include, but not be limited to, revenue enhancements, service delivery changes, expenditure controls/cost shifts, and/or service level reductions . At no time shall reserves be planned to fall below zero for any operating or capital fund.

D. NET POSITION RESTRICTED FOR QUALIFIED CAPITAL OUTLAY The City established a Reserve for Qualified Capital Outlay in the Sanitation District Enterprise Fund and transferred into it amounts from fiscal years 2019 to 2025 necessary to ensure compliance with State Gann Limit provisions. These funds will be used solely to pay for Gann Limit excludable capital expenses. To qualify, they must be for assets with a value greater than $100,000 and a useful life of at least 10 years.
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NOTE 13.

LOANS AND NOTES RECEIVABLE

Housing Rehabilitation Program – The City administers a housing rehabilitation program using Housing and Community Development Block Gr ant (CDBG) and Cal Home funds that is accounted for in the Community Block Grant Special Revenue Fund and Grants Special Revenue Fund. Under this program, individuals with income s below a certain level are eligible to receive low interest loans, secured by deeds of trust or mobile home liens, for construction work on their homes. Although these loans and notes are expected to be repaid, their balance has been offset by unavailable revenue as they are not expected to be repaid during the next fiscal year.

During fiscal year 2025, the City made loans to three participants unde r this program and the CDBG and Cal HOME loan program activity is as follows:

Beginning Balance $1,263,087
New Loans 98,655
Loan repayments (133,585)
Loans forgiven (5,313)
Ending Balance $1,222,844

NOTE 14.

SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS

A. POLICIES
A subscription-based information technology arrangement (SBITA) is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underl ying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.

At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs.

Subsequently, the subscription asset is amortized on a straight ‐line basis over shorter of the subscription term or the useful life of the underlying IT assets. The City recognizes subscription assets with an initial, individual value of $25,000 or more.

Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments as follows:

• The City uses the interest rate charged by th e IT vendor as the discount rate. When the interest rate charged by the IT vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscription liabilities. 79

• The subscription term includes the noncancellable period of the subscription.

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

Subscription assets are reported with other capital assets and subscription liabilities are reported on the statement of net position.

B. SUBSCRIPTION LIABILITIES
A summary of the City’s SBITA transaction activities for the fiscal year ended June 30, 2025, are as follows:

Balance Balance Current
June 30, 2024 Additions Retirements June 30, 2025 Portion Governmental Activities
Subscription Liabilities
Axon Enterprises $2,240,563 $357,137 $1,883,426 $359,301 Tyler Technologies 300,754 74,569 226,185 74,911
Microsoft Enterprise Enrollment 889,888 220,945 668,943 221,960 Superion 364,884 364,884
Flock Safety 807,661 237,292 570,369 278,382
C3 AI Inc. $1,720,074 1,720,074 1,234,386
Total Subscription Liabilities $4,603,750 $1, 720,074 $1,254,827 $5,068,997 $2,168,940 In May 2021, the City entered into a five ‐year SBITA for the use of body-worn camera-related cloud services. The agreement automatically renews for an additional five years, but the vendor may increase the cost of services by up to 3% per year during the renewal period. An initial subscription liability was recorded in the amount of $2,613,259 as of July 1, 2022. During fiscal year 2024, the City entered into an additional 3 year agreement with 3 other services for car camera systems, camera drones and additional body-worn camera services for an additional SBITA liability of $321,020. As of June 30, 2025, the balance of the subscription liability was $1,883,426. The software has a useful life of three to nine years. The City is required to make annual principal and interest payments of $13,400 to $327,547 on the subscriptions. The value of the right ‐to
‐use assets as of the end of the current fiscal year was $2,934,278 and had accumulated amortization of $1,102,020.
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In August 2020, and amended in November 2021, the City entered into a five ‐year SBITA for the use of community development and cashiering software. Due to a delay in the implementation, the amendment revised the commencement date of the agreement to November 1, 2021. The agreement automatically renews for one year, at the vendor’s current service rate.

An initial subscription liability was recorded in the amount of $557,927 as of July 1, 2022.

During fiscal year 2024, the City modified the agreement for the software and therefore, retired the subscription asset and liability by $91,018, and the accumulated amortization on the right-to- use asset by $17,065. As of June 30, 2025, the balance of the subscription liability was $226,185.

The City is required to make annual principal and interest payments of $75,948. The software has a six‐year estimated useful life. The value of the right‐to‐use asset as of the end of the current fiscal year was $466,909 and accumulated amortization was $262,636.

In December 2022, the City entered into a three ‐year SBITA for the use of Microsoft Enterprise cloud services. The agreement can be renewed for an additional three year term. An initial subscription liability was recorded in the amount of $1,328,754 during fiscal year 2024. As of June 30, 2025, the balance of the subscription liability was $668,943. The City is required to make annual principal and interest payments of $225,032. The software has a six ‐year estimated useful life. The value of the right ‐to
‐use asset as of the end of the current fiscal year was $1,328,754 and had accumulated amortization of $664,377.

In May 2020, the City entered into a one ‐year SBITA for the use of finance enterprise software.

The agreement automatically renews for successive one year terms. An initial subscription liability was recorded in the amount of $533,130 as of July 1, 2022. As of June 30, 2025, the City cancelled the subscription, and the balance of the subscription liability was $0. The value of the right-to-use asset and related accumulated amortization amounted to $0 at June 30, 2025.

In December 2023, the City entered into a three-year SBITA for the use of cameras and software.

The agreement can be renewed for an additional two year term. An initial subscription liability was recorded in the amount of $1,145,600 during fiscal year 2024. As of June 30, 2025, the balance of the subscription liability was $570,369. The City is required to make annual principal and interest payments ranging from $109,950 to $233,250 on the subscription. The software has a five-year estimated useful life. The value of the right-to-use asset as of the end of the current fiscal year was $1,145,600 and had accumulated amortization of $559,588.

In December 2023, the City entered into a three-year SBITA for the use C3 AI software. The agreement can be renewed up to 8 years from the effective date. As of June 30, 2025, the balance of the subscription liability was $1,720,074. The City is required to make initial principal and interest payment of $1,250,000 and $62,000 thereafter on the subscription. The software has an eight-year estimated useful life. The value of the right-to-use asset as of the end of the current fiscal year was $2,956,499 and had accumulated amortization of $293,206.

In addition, at June 30, 2025, the City had an additional SBITA asset with StarChase for software that the City has an agreement to use through June 30, 2026. The City prepaid for the SBITA in the amount of $121,599 in fiscal year 2024 and therefore, there is no liability at June 30, 2025. The software has a 3 year estimated useful life. The value of the right-to-use asset as of the end of the current fiscal year was $121,599 and had accumulated amortization of $81,065. 81

The future principal and interest subscription liability payments as of June 30, 2025, were as follows:

For the Year
Ended June 30 Principal Interest Tota l
2026 $2,168,940 $31,239 $2,200,179
2027 787,688 13,481 801,169
2028 800,456 9,781 810,237
2029 364,723 6,021 370,744
2030 375,660 4,347 380,007
Thereafter 571,530 4,313 575,843
Totals $5,068,997 $69,182 $5,138,179

NOTE 15.

ACTIVITIES OF THE SUCCESSOR AGENC Y TO THE FORMER REDEVELOPMENT AGENCY

The activities of the Successor Agency are reported in the Successor Agency to the Redevelopment Agency Private-Purpose Trust Fund as the activities are under the control of the Oversight Board.

The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency.

Information presented in the following footnotes represents assets and liabilities of the Successor Agency.

A. CASH
Cash and investments of the Successor Agency as of June 30, 2025 are discussed in Note 1G above. Information presented in the following foot notes represents other assets and liabilities of the Successor Agency as of June 30, 2025.

B. LONG RANGE PROPERTY MANAGEMENT PLAN APPROVAL
On December 14, 2015 the Successor Agency received confirmation from the DOF that the DOF had reviewed and approved the Successor Agency’s Long Range Property Management Plan (LRPMP).

C. LOANS BETWEEN THE CITY AND THE SUCCESSOR AGENCY
Due to the dissolution of the Redevelopment Agency, loans payable, totaling $23,842,357, from the Redevelopment Agency to the General Fund were written off as of June 30, 2012. In May 2016 the State Department of Finance (DOF) co nfirmed and approved repayment of the loan payment from the former Redevelopment Agency to the City General Fund totaling $13,775,503, payable at the statutory interest rate of 3% of the outstanding amount. In October 2016, the City received confirmation and approval of an additional repayment of the loan from the former Redevelopment Agency to the City Genera l Fund totaling $4,579,613. These loans are recorded as a loan receivable in the City’s General Fund and is classified as nonspendable fund balance as it cannot be appropriated against until funds are received from the State. The balance of the loans as of June 30, 2025 is $8,284,899.
82

REQUIRED SUPPLEMENTARY INFORMATION

AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLANS AND OPEB PLANS:

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
This schedule reports the beginning and ending balances of the total pension liability, the plan assets available for pension benefits (called pl an net position), and the net pension liability, as well as the change in those amounts during the year presented by cause (similar to the note disclosure). It also reports the total pensi on liability, plan net position, net pension liability, a ratio of plan net position divided by the total pension liability, the payroll amount for current employees in the plan (covered payroll), and a ratio of the net pension liability divided by covered-employee payroll.

SCHEDULE OF CONTRIBUTIONS – PENSION PLANS
This schedule reports the agent multiple-employer’s contributions to the plan which are actuarially determined, the employer’s actual contributions, the difference between the actual and actuarially determined contributions, and a ratio of the actual contributions divided by covered payroll.

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS This schedule reports the beginning and ending balances of the total OPEB liability, the plan assets available for OPEB benefits (called plan net position), and the net OPEB liability, as well as the change in those amounts during the year presented by cause (similar to the note disclosure). It also reports the total OPEB lia bility, plan net position, net OPEB liability, a ratio of plan net position divided by the total OPEB liability, the payroll amount for current employees in the plan (covered-employee payroll), and a ratio of the net OPEB liability divided by covered- employee payroll.

SCHEDULE OF CONTRIBUTIONS – OPEB PLAN
This schedule reports the agent multiple-employer’s contributions to the plan which are actuarially determined, the employer’s actual contributions, the difference between the actual and actuarially determined contributions (ADC) or contractually required contributions if the ADC has not been calculated, and a ratio of the actual contributions divided by covered- employee payroll.
83

Measurement Period 2014-2015 2015-2016 2016-2017 2017-2018 Total Pension Liability
Service Cost $4,355,451 $4,356,641 $4,961,492 $4,820,144 Interest 20,028,375 20,453,457 21,126,222 21,405,533
Differences between expected and actual experience (5,096,599) (6,329,013) (1,376,656) 1,006,212 Changes in assumptions (4,888,600) 17,607,198 (9,036,830) Changes in benefits
Benefit payments, including refunds of employee
contributions (12,134,586) (12,862,999) (13,610,749) (14,549,197) Net change in total pension liability 2,264,041 5,618,086 28,707,507 3,645,862 Total pension liability - beginning 275,683,597 277,947,638 283,565,724 312,273,231 Total pension liability - ending (a) $277,947,638 $283,565,724 $312,273,231 $315,919,093 Plan fiduciary net position
Contributions - employer $3,732,343 $4,446,777 $5,539,675 $6,152,860 Contributions - employee 1,959,273 2,019,542 2,110,207 2,068,466 Net investment income 5,074,277 1,142,662 24, 378,978 19,945,939 Benefit payments, including refunds of employee
contributions (12,134,586) (12,862,999) (13,610,749) (14,549,197) Other miscellaneous income (expense) (708,784)
Administrative Expense (255,289) (138,235) (326,924) (373,237) Net Plan to Plan Resource Movement (493) (585)
Net change in plan fiduciary net position (1,624,475) (5,392,253) 18,091,187 12,535,462 Plan fiduciary net position - beginning 228,445,077 226,820,602 221,428,349 239,519,536 Plan fiduciary net position - ending (b) $226,820,602 $221,428,349 $239,519,536 $252,054,998 Net pension liability - ending (a)-(b) $51,127,036 $62,137,375 $72,753,695 $63,864,095 Plan fiduciary net position as a percentage of the total pension liability 81.61% 78.09% 76.70% 79.78%
Covered payroll $22,658,681 $22,823,982 $23,568,915 $22,688,822 Net pension liability as percentage of covered payroll 225.64% 272.25% 308.68% 281.48% Notes to Schedule:

Source: CalPERS Accounting Valuation

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2025
Last 10 Years

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Changes in assumptions. There were no assumption changes in 2023 or 2024 . Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016.

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

MISCELLANEOUS
84

2018-2019 2019-2020 2020-20 21 2021-2022 2022-2023 2023-2024 $4,846,377 $4,734,206 $4,750,071 $5,243,267 $5,746,715 $5,792,979 22,557,657 23,372,961 24,305,480 24,450,276 25,648,026 27,332,401 5,081,458 432,569
2,730,394 (265,160) 7,085,412 14,446,815 4,197,477
342,121
(15,864,061) (16,891,285) (18,715,236) (18,923,625) (21,104,564) (21,802,358) 16,621,431 11,648,451 13,070,709 14,702,235 17,717,710 25,769,837 315,919,093 332,540,524 344,188,975 357,259,684 371,961,919 389,679,629 $332,540,524 $344,188,975 $357,259,684 $371,961,919 $389,679,629 $415,449,466 $7,068,468 $8,214,918 $8,924,993 $9,832,902 $10,858,504 $10,044,439 2,144,408 2,252,506 2,129,297 2,255,948 2,436,595 2,721,155 16,443,055 12,936,801 59,983,132 (24,109,678) 17,779,219 28,316,818 (15,864,061) (16,891,285) (18,715,236) (18,923,625) (21,104,564) (21,802,358) 585
(179,872) (368,964) (267,582) (199,291) (212,353) (242,918) 54,276
9,666,859 6,143,976 52,054,604 (31,143,744) 9,757,401 19,037,136 252,054,998 261,721,857 267,865,833 319,920,437 288,776,693 298,534,094 $261,721,857 $267,865,833 $319,920,437 $288,776,693 $298,534,094 $317,571,230 $70,818,667 $76,323,142 $37,339,247 $83,185,226 $91,145,535 $97,878,236

78.70% 77.83% 89.55% 77.64% 76.61% 76.44%
$24,144,928 $24,817,517 $24,973,064 $27,629,117 $28,935,160 $30,675,866 293.31% 307.54% 149.52% 301.08% 315.00% 319.07%

MISCELLANEOUS
85

Measurement Period 2014-2015 2015-2016 2016-2017 2017-2018 Total Pension Liability
Service Cost $4,776,984 $4,859,775 $5,566,167 $5,314,299 Interest 20,368,130 21,118,384 21,794,377 22,455,535
Differences between expected and actual experience (455,068) (1,021,524) 293,934 (978,042) Changes in assumptions (4,770,631) 17,425,044 (632,875) Changes in benefits
Benefit payments, including refunds of
employee contributions (13,776,270) (14,939,167) (15,643,224) (17,110,200) Net change in total pension liability 6,143,145 10,017,468 29,436,298 9,048,717 Total pension liability - beginning 275,975,394 282,118,539 292,136,007 321,572,305 Total pension liability - ending (a) $282,118,539 $292,136,007 $321,572,305 $330,621,022 Plan fiduciary net position
Contributions - employer $4,630,110 $5,309,673 $6,087,507 $6,986,096 Contributions - employee 1,864,455 1,917,899 1,935,079 2,062,297 Net investment income 4,997,920 1,208,758 23,497,877 18,994,354 Benefit payments, including refunds of employee
contributions (13,776,270) (14,939,167) (15,643,224) (17,110,200) Administrative Expense (249,064) (134,719) (316,566) (358,363) Other Miscellaneous Expense (680,537)
Plan to Plan Resource Management 493 341 (556) Net change in plan fiduciary net position (2,532,356) (6,637,556) 15,561,014 9,893,091 Plan fiduciary net position - beginning 223,582,794 221,050,438 214,412,882 229,973,896 Plan fiduciary net position - ending (b) $221,050,438 $214,412,882 $229,973,896 $239,866,987 Net pension liability - ending (a)-(b) $61,068,101 $77,723,125 $91,598,409 $90,754,035 Plan fiduciary net position as a percentage of the total pension liability 78.35% 73.39% 71.52% 72.55%
Covered payroll $19,567,377 $19,784,134 $19,829,558 $20,477,192 Net pension liability as percentage of covered payroll 312.09% 392.86% 461.93% 443.20% Notes to Schedule:

Source: CalPERS Accounting Valuation
Changes in assumptions. There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows.

In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021,

7.65% for measurement dates June 30, 2015 through June 30, 2016.

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

SAFETY

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2025
Last 10 Years

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS 86

2018-2019 2019-2020 2020-20 21 2021-2022 2022-2023 2023-2024 $5,562,199 $5,837,397 $5,977,808 $6,709,103 $7,095,262 $7,092,905 23,732,977 24,739,728 25,785,538 26,435,472 27,591,409 28,877,801 7,441,738 3,245,246 3,789,911 1,705,342 5,496,999 7,639,732 9,574,276
189,498
(17,828,231) (19,366,927) (20,254,165) ( 21,591,268) (22,951,582) (24,412,179) 18,908,683 14,455,444 15,299,092 22,832,925 17,421,586 19,198,259 330,621,022 349,529,705 363,985,149 379,284,241 402,117,166 419,538,752 $349,529,705 $363,985,149 $379,284,241 $402 ,117,166 $419,538,752 $438,737,011 $8,259,177 $9,741,720 $10,622,105 $12 ,262,596 $13,581,977 $13,971,850 2,040,072 2,186,070 2,777,982 3,050,038 3,130,330 3,307,786 15,591,708 12,209,629 56,328,465 (22,624,777) 16,771,986 27,055,611 (17,828,231) (19,366,927) (20,254,165) ( 21,591,268) (22,951,582) (24,412,179) (171,174) (349,203) (251,859) (187,722) (200,205) (229,944) 556
(54,276)
7,837,832 4,421,289 49,222,528 (29,091,133) 10,332,506 19,693,124 239,866,987 247,704,819 252,126,108 301,348,636 272,257,503 282,590,009 $247,704,819 $252,126,108 $301,348,636 $272 ,257,503 $282,590,009 $302,283,133 $101,824,886 $111,859,041 $77,935,605 $129 ,859,663 $136,948,743 $136,453,878

70.87% 69.27% 79.45% 67.71% 67.36% 68.90%
$21,410,816 $22,001,988 $23,722,063 $26,760,075 $26,939,202 $28,111,477 475.58% 508.40% 328.54% 485.27% 508.36% 485.40%
SAFETY
87

Fiscal Year Ended June 30 2016 2017 2018 2019
Actuarially determined contribution $6,771,305 $5,540,220 $6,146,305 $7,064,967 Contributions in relation to the actuarially
determined contributions (6,771,305) (5,540,220) (6,146,305) (7,064,967) Contribution deficiency (excess)
Covered payroll $22,823,982 $23,568,915 $22,688,822 $24,144,928 Contributions as a percentage of covered payroll 29.67% 23.51% 27.09% 29.26% Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016

MISCELLANEOUS

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2025
Last 10 Years

SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30 2016 2017 2018 2019
Actuarially determined contribution $5,309,673 $6,090,350 $6,985,429 $8,263,084 Contributions in relation to the actuarially
determined contributions (5,309,673) (6,090,350) (6,985,429) (8,263,084) Contribution deficiency (excess)
Covered payroll $19,784,134 $19,829,558 $ 20,477,192 $21,410,816 `
Contributions as a percentage of covered payroll 26.84% 30.71% 34.11% 38.59% Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 SAFETY

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2025
Last 10 Years

SCHEDULE OF CONTRIBUTIONS
88

2020 2021 2022 2023 2024 2025
$8,236,678 $8,901,914 $9,382,915 $10,858,503 $9,984,439 $11,851,001 (8,236,678) (8,901,914) (9,382,915) (10,858,503) (9,984,439) (11,851,001) $24,817,517 $24,973,064 $27,629,117 $28,935,160 $30,675,866 $33,064,033

33.19% 35.65% 33.96% 37.53% 32.55% 35.84%
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022

MISCELLANEOUS
2020 2021 2022 2023 2024 2025
$9,742,714 $10,620,215 $ 12,263,576 $13,351,978 $13,971,850 $15,440,585 (9,742,714) (10,620,215) (12,263,576) (13,351,978) (13,971,850) (15,440,585) $22,001,988 $23,722,063 $26,760,075 $2 6,939,202 $28,111,477 $29,140,125

44.28% 44.77% 45.83% 49.56% 49.70% 52.99%
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 SAFETY
89

Measurement Date Ended June 30 2017 2018 2019
Total OPEB Liability
Service Cost $1,470,697 $1,514,818 $1,560,263
Interest 3,449,729 3,567,790 3,690,181
Changes in benefit terms
Differences between expected and actual experience (4,588,272) Changes of assumptions (281,571)
Benefit payments (2,980,461) (3,170,657) (3,168,930)
Net change in total OPEB liability 1,939,965 1,911,951 (2,788,329) Total OPEB liability - beginning 55,215,189 57,155,154 59,067,105 Total OPEB liability - ending (a) $57,155,154 $59,067,105 $56,278,776 Plan fiduciary net position
Contributions - employer $5,980,461 $4,170,657 $3,168,930 Contributions - employee
Net investment income 557,870 604,302 799,047
Administrative expense (4,247) (18,096) (2,447)
Benefit payments (2,980,461) (3,170,657) (3,168,930)
Net change in plan fiduciary net position 3,553,623 1,586,206 796,600 Plan fiduciary net position - beginning 6,230,721 9,784,344 11,370,550 Plan fiduciary net position - ending (b) $9,784,344 $11,370,550 $12,167,150 Net OPEB liability - ending (a)-(b) $47,370,810 $47,696,555 $44,111,626 Plan fiduciary net position as a percentage of the total OPEB liabi 17.12% 19.25% 21.62% Covered-employee payroll $50,082,473 $49,471,054 $50,975,693 Net OPEB liability as a percentage of covered-employee payroll 94.59% 96.41% 86.53% * Fi
scal year 2018 was the first year of implementation.

City of Daly City, Agent Multiple-Employer Defined Benefit OPEB Plan As of fiscal year ending June 30, 2025
Last 10 Years*

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS 90

2020 2021 2022 2023 2024
$1,455,663 $1,480,458 $1,443 ,352 $1,408,527 $1,214,158 3,500,744 3,541,517 3,174,237 3,294,815 3,270,217
(1,048,749) (3,914,772)
(865,013) 581,149 (1,564,568) (2,156,493) (3,445,074) (3,482,594) (3,453 ,620) (3,407,335) (3,423,415) 646,320 1,071,781 (400,599) (4,775,258) 1,060,960
56,278,776 56,925,096 57,996 ,877 57,596,278 52,821,020 $56,925,096 $57,996,877 $57,59 6,278 $52,821,020 $53,881,980 $5,445,074 $5,482,594 $4,453 ,620 $4,407,335 $4,451,839 653,960 2,914,658 (2,477,143) 945,683 2,221,244
(6,040) (5,425) (4,993) (5,244) (3,423,415)
(3,445,074) (3,482,594) (3,453,620) (3,407,335) (35,012) 2,647,920 4,909,233 (1,482,136) 1,940,439 3,214,656
12,167,150 14,815,070 19,724 ,303 18,242,167 20,182,606 $14,815,070 $19,724,303 $18,24 2,167 $20,182,606 $23,397,262 $42,110,026 $38,272,574 $39,35 4,111 $32,638,414 $30,484,718

26.03% 34.01% 31.67% 38.21% 43.42%
$51,740,099 $54,458,885 $63,51 9,016 $63,958,980 $67,354,959

81.39% 70.28% 61.96% 51.03% 45.26%
91

Fiscal Year Ended June 30, 2025 2024 2023
Actuarially determined contributions $4,310,000 $4,564,000 $4,441,000 Contractually required contributions (a)
Contributions in relation to the
contractually required or actuarially
determined contributions (4,132,118) (4,451,839) (4,407,335) Contribution deficiency (excess) $177,882 $112,161 $33,665 Covered-employee payroll $73,062,685 $67,354,959 $63,958,980 Contributions as a percentage of
covered-employee payroll 5.66% 6.61% 6.89%
* Fi
scal year 2018 was the first year of implementation.
(a) The
City did not obtain an actuarially determined contribution calcu
lation in fiscal year 2018, therefore the contractually required contributions were reported.

City of Daly City, Agent Multiple-Employer Defined Benefit OPEB Plan As of fiscal year ending June 30, 2025
Last 10 Years*

SCHEDULE OF CONTRIBUTIONS
92

2022 2021 2020 2019 2018
$5,021,000 $4,873,000 $5,264,000 $5,109,000 $4,185,306
(4,453,620) (5,482,594) (5,445,074) (3,168,930) (4,185,306) $567,380 ($609,594) ($181,074) $1,940,070 $0
$63,519,016 $54,458,885 $51,740,099 $50,975,693 $49,471,054

7.01% 10.07% 10.52% 6.22% 8.46%
93

GENERAL FUND
The General Fund is the general operating fund of the City. It is used to account for all financial resources traditionally associated with governments which are not required to be accounted for in a separate fund. It comprises of the following activities: General, Special Deposits, and Traffic Enforcement.
95

CITY OF DALY CITY

GENERAL FUND

COMBINING FUND BALANCE SHEET
JUNE 30, 2025
Special Traffic Total
General Deposits Enforcement General Fun d
ASSETS
Cash and investments $52,672,491 $16,880,924 $705,820 $70,259,235 Restricted cash and investments 5,196,496 5,196,496
Accounts receivable, net 12,336,078 75,075 4,622 12,415,775 Due from other funds 71,355 71,355
Prepaids 41,883 482 42,365
Inventories 20,257 20,257
Loan receivable from Successor Agency 8,284,899 8,284,899 Leases receivable 8,236,049 8,236,049
Total Assets $86,859,508 $16,956,481 $710,442 $104,526,431

LIABILITIES
Accounts payable $1,896,463 $2,042,450 $3,938,913
Accrued payroll 1,626,265 1,626,265
Deposits payable 14,427,790 14,427,790
Unearned revenue 726,518 726,518
Total Liabilities 4,249,246 16,470,240 20,719,486

DEFERRED INFLOWS OF RESOURCES
Related to leases 7,829,496 7,829,496

FUND BALANCES
Fund Balance
Nonspendable 8,762,431 8,762,431
Restricte
d 6,196,496 6,196,496
Assigned 481,384 481,384
Unassigned 59,340,455 486,241 710,442 60,537,138
Total Fund Balances 74,780,766 486,241 710,442 75,977,449 Total Liabilities, and Fund Balances $86,859,508 $16,956,481 $710,442 $104,526,431 96

CITY OF DALY CITY

GENERAL FUND

COMBINING FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2025
Total
Special Traffic General
General Deposits Enforcements Funds

REVENUES
Property tax $53,818,304 $53,818,304
Sales tax 26,826,185 26,826,185
Utility users tax 7,636,007 7,636,007
Franchise fees 5,294,325 5,294,325
Other taxes 8,901,887 8,901,887
Licenses and permits 2,716,256 2,716,256
Fines and forfeitures 2,523,178 $21,346 2,544,524
Rents and interest 6,311,067 6,311,067
Federal programs and grants 2,742,849 2,742,849
Receipts from other agencies 1,220,869 1,220,869
Charges and fees 9,014,506 $16,867 9,031,373
Miscellaneous 3,051,145 1,462 3,052,607
Total Revenues 130,056,578 18,329 21,346 130,096,253

EXPENDITURES
Current:

General government 14,834,656 435 14,835,091
Public safety 76,841,194 76,841,194
Public works 6,730,384 6,730,384
Culture and recreation 17,015,882 159 17,016,041
Economic and community development 5,065,362 5,065,362
Debt service:

Principal 557,725 557,725
Interest 12,088 12,088
Total Expenditures 121,057,291 594 121,057,885

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 8,999,287 17,735 21,346 9,038,368

OTHER FINANCING SOURCES (USES)
Transfers in 3,351,125 3,351,125
Transfers (out) (13,337,517) (13,337,517)
Total Other Financing Sources (Uses) (9,986,392) (9,986,392) NET CHANGES IN FUND BALANCES (987,105) 17,735 21,346 (948,024) BEGINNING FUND BALANCES 75,767,871 468,506 689,096 76,925,473 ENDING FUND BALANCES $74,780,766 $486,241 $710,442 $75,977,449 97

MAJOR GOVERNMENTAL FUNDS, OTHER THAN

GENERAL FUND AND SPECIAL REVENUE FUNDS
The Capital Projects Fund is used to account for financial resources to be used for the acquisition, construction or rehabilitation of major capital assets other than those financed by Proprietary Funds.
99

CITY OF DALY CITY

CAPITAL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025
Variance
Positive
Budget Actual (Negative)

REVENUES
Rents and interest $75,000 $1,876,015 $1,801,015
Federal programs and grants 2,222,493 91,039 (2,131,454) Receipts from other agencies 6,047,692 1,363,176 (4,684,516) Charges and fees 2,288,197 2,333,999 45,802
Miscellaneous 1,000,000 137,340 (862,660)
Total Revenues 11,633,382 5,801,569 (5,831,813)

EXPENDITURES
Capital projects 41,656,039 6,984,356 34,671,683
Total Expenditures 41,656,039 6,984,356 34,671,683

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (30,022,657) (1,182,787) 28,839,870

OTHER FINANCING SOURCES (USES)
Transfers in 21,284,798 10,697,293 (10,587,505)
Transfers (out) (16,057,066) (2,035) 16,055,031
Total Other Financing Sources (Uses) 5,227,732 10,695,258 5,467,526 NET CHANGE IN FUND BALANCES ($24,794,925) 9,512,471 $34,307,396 BEGINNING FUND BALANCE 36,811,074
ENDING FUND BALANCE $46,323,545
100

NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for th e proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are legally restricted to expenditures for specified purposes or for which separate accounting is required by administrative action.

The City's Special Revenue Funds are as follows:
• Affordable Housing – to account for the activities of the D aly City Housing Development
Finance Agency.
• Community Block Grant – to account for monies received by the City as a participant in the federal Community Development Block Grant (CDBG) program. • Linda Vista Benefit Assessment - to account for the charges and for the costs of maintenance of storm drains in the Linda Vista Subdivision.
• Traffic Safety – to account for grant funds and vehicle impound fees authorized by State law specifically to provide traffic safety programs.
• Low and Moderate Income Housing Assets – to account for the activities of the Housing Successor Agency to the Daly City Redevelopment Agency. 101

CITY OF DALY CITY

NONMAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2025

SPECIAL REVENUE FUNDS
Total
Community Linda Vist a Low and Moderate Nonmajor
Affordable Block Benefit Traffic Income Housing Governmental Housing Grant Assessment Safety Assets Funds
ASSETS
Cash and investments $6,103,620 $704,904 $137,374 $1,118,945 $8,064,843 Accounts receivable, net $141,356 600 141,956
Loans receivable 787,412 787,412
Property held for development 3,366,888 3,366,888
Total Assets $6,103,620 $928,768 $704,904 $137,974 $4,485,833 $12,361,099

LIABILITIES
Accounts payable $63,911 $2,078 $18,310 $84,299
Accrued payroll 6,091 1,090 7,181
Due to other funds 71,355 71,355
Deposits payable $98,001 98,001
Total Liabilities 98,001 141,357 2,078 19,400 260,836

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - loans 787,412 787,412

FUND BALANCES
Restricte
d 6,005,619 $704,904 135,896 4,466,433 11,312,852
Unassigned (1) (1)
Total Fund Balances 6,005,619 (1) 704,904 135,896 4,466,433 11,312,851 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $6,103,620 $928,768 $704,904 $137,974 $4,485,833 $12,361,099 102

CITY OF DALY CITY

NONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2025

SPECIAL REVENUE FUNDS
Total
Community Linda Vista Low and Moderate Nonma jor
Affordable Block B enefit Traffic Income Housing Governmental Housing Grant Assessment Safet y Assets Funds

REVENUES
Rents and interest $173,739 $31,567 $42,860 $248,166
Federal programs and grants 1,631,208 $630,357 2,261,565 Charges and fees 85,067 44,378 $25,920 155,365
Miscellaneous 77,707 192,271 269,978
Total Revenues 1,967,721 822,628 75,945 25,920 42,860 2,935,074

EXPENDITURES
Public safety 16,152 16,152
Public works 25,547 25,547
Economic and community development 1,357,877 707,193 156,557 2,221,627 Total Expenditures 1,357,877 707,193 25,547 16,152 156,557 2,263,326

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 609,844 115,435 50,398 9,768 (113,697) 671,748

OTHER FINANCING SOURCES (USES)
Transfers in 267,392 267,392
Transfers out (115,436) (115,436)
Total Other Financing Sources (Uses) (115,436) 267,392 151,956 NET CHANGE IN FUND BALANCES 609,844 (1) 50,398 9,768 153,695 823,704 BEGINNING FUND BALANCES 5,395,775 654,506 126,128 4,312,738 10,489,147 ENDING FUND BALANCES $6,005,619 ($1) $704,904 $135,896 $4,466,433 $11,312,851 103

CITY OF DALY CITY

BUDGETED NONMAJOR GOVERNMENTAL FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2025

COMMUNITY BLOCK GRANT
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)

REVENUES
Rents and interest $55,000 $173,739 $118,739
Federal programs and grants 1,631,208 1,631,208 $2,064,981 $630,357 ($1,434,624) Charges and fees 85,067 85,067
Miscellaneous 1,500 77,707 76,207 192,271 192,271
Total Revenues 1,687,708 1,967,721 280,013 2,064,981 822,628 (1,242,353)

EXPENDITURES
Public Safety
Services and supplies
Capital outlay
Other charges
Total Public Safety
Public Works
Services and supplies
Capital outlay
Other charges
Total Public Works
Economic and Community Development
Salaries and benefits 54,781 24,520 30,261 325,778 316,538 9,240 Services and supplies 145,411 33,357 112,054 380,866 182,628 198,238 Other charges 5,754,793 1,300,000 4,454,793 844,336 208,027 636,309 Capital outlay 3,000 3,000
Total Economic and Community Development 5,954,985 1,357,877 4,597,108 1,553,980 707,193 846,787 Total Expenditures 5,954,985 1,357,877 4,597,108 1,553,980 707,193 846,787

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (4,267,277) 609,844 4,877,121 511,001 115,435 (395,566)

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (511,002) (115,436) 395,566
Total Other Financing Sources (Uses) (511,002) (115,436) 395,566 NET CHANGE IN FUND BALANCES ($4,267,277) 609,844 $4,877,121 ($1) (1) BEGINNING FUND BALANCES 5,395,775
ENDING FUND BALANCES $6,005,619 ($1)

AFFORDABLE HOUSING
104

LINDA VISTA

BENEFIT ASSESSMENT TRAFFIC SAFETY
Variance Variance Variance
Positive Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $3,000 $31,567 $28,567 $5,000 $42,860 $37,860
44,380 44,378 (2) $16,632 $25,920 $9,288
47,380 75,945 28,565 16,632 25,920 9,288 5,000 42,860 37,860 25,742 8,049 17,693
1,146 2,690 (1,544)
6,655 5,413 1,242
33,543 16,152 17,391
25,330 25,046 284
4,000 4,000
500 501 (1)
29,830 25,547 4,283
181,203 108,591 72,612
600,332 47,966 552,366
781,535 156,557 624,978
29,830 25,547 4,283 33,543 16,152 17,391 781,535 156,557 624,978 17,550 50,398 32,848 (16,911) 9,768 26,679 (776,535) (113,697) 662,838 257,059 267,392 10,333
257,059 267,392 10,333
$17,550 50,398 $32,848 ($16,911) 9,768 $26,679 ($519,476) 153,695 $673,171 654,506 126,128 4,312,738
$704,904 $135,896 $4,466,433

INCOME HOUSING ASSETS

LOW AND MODERATE
105

INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the City on a cost reimbursement basis.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund are eliminated by netting them against the operations of the other City departments which generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the Fund financial statements.

The City's Internal Service Funds are:
• Motor Vehicles – to account for the purchase and maintenance of all motor vehicles provided as a service to City departments.
• Central Services – to account for and allocate costs related to providing mail messenger services for City departments.
• PBX – to account for services provided for the operation and maintenance of the City's telephone system.
• Building Maintenance – to account for services provided for the maintenance of City facilities. • Information Services – to account for the distribution of computer hardware, software and operating costs to various City departments.
• Self-Insurance – to account for the costs of workers compensation, automotive, and general liability claims against the City.
• PERS Contributions – to account for the long-term debt, prepaid PERS contributions and repayments from benefiting City funds and departments resulting from the City’s PERS Obligation Bond issue.
• Pension UAL – to account for funding set-aside towards the City’s pension unfunded actuarial liability.
107

CITY OF DALY CITY

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
JUNE 30, 2025
Motor Central
Vehicles Services PBX
ASSETS
Current Assets:

Cash and investments $6,173,069 $363,817 $623,944
Accounts receivable, net 196,777
Inventories 177,350
Prepaids 1,830,457
Total Current Assets 8,377,653 363,817 623,944
Capital Assets:

Lan
d
Buildings 35,817
Equipment 24,076,317 967,235
Furniture and fixtures
Subscription assets
Total Capital Assets 24,112,134 967,235
Less Accumulated Depreciatio
n (12,796,962) (967,235)
Net Capital Assets 11,315,172
Total Assets 19,692,825 363,817 623,944

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 74,124 23,164

LIABILITIES
Current Liabilities:

Accounts payable 169,061 6,944 453
Accrued payroll 20,435 919
Interest payable 33,371
Accrued claims payable
Leases payable 471,155
Subscription liabilit
y
Total Current Liabilities 694,022 7,863 453
Long-Term Liabilities:

Compensated absences 377,328
Accrued claims payable
Net OPEB Liabilit
y 489,714 153,035
Leases payable 1,568,197
Subscription liability
Total Long-Term Liabilities 2,435,239 153,035
Total Liabilities 3,129,261 160,898 453

DEFERRED INFLOWS OF RESOURCES
Related to OPEB 80,602 25,188

NET POSITION
Net investment in capital assets 9,275,820
Restricted for debt service
Unrestricte
d 7,281,266 200,895 623,491
Total Net Position (Deficit) $16,557,086 $200,895 $623,491 108