Hemet City Council
September 22, 2026

16.B.

Business-type Governmental
Activities Activities
Water Enterprise Internal Service
Fund Funds
ASSETS
Current Assets:

Cash and Investments 42,293,173 $ 11,861,329 $
Receivables:

Accounts 1,991,677 14,677
Due from Other Governmental Agencies 78,646 - Prepaid Assets - 261,320
Inventories - 253,224
Total Current Assets 44,363,496 12,390,550
Noncurrent Assets:

Land 32,975 -
Construction in Progress 644,630 -
Capital Assets 33,206,663 4,559,646
Less: Accumulated Depreciation (31,191,043) (3,675,633) Total Noncurrent Assets 2,693,225 884,013
Total Assets 47,056,721 13,274,563

DEFERRED OUTFLOWS
Deferred Outflows Related to OPEB 54,473 - Deferred Outflows Related to Pensions 1,292,237 - Total Deferred Outflows of Resources 1,346,710 -

LIABILITIES
Current Liabilities:

Accounts Payable 1,133,602 701,473
Accrued Salaries and Benefits 28,267 35,088 Accrued Liabilities - -
Deposits 1,517,051 -
Unearned Revenue - -
Due to Other Funds - 23,361
Compensated Absences Payable - Current Portion 106,719 - Claims and Judgments Payable - Current Portion - 1,956,544 268,600 Settlement Liability - Current Portion - Total Current Liabilities 3,054,239 2,716,466 Noncurrent Liabilities:

Compensated Absences Payable 320,158 -
Claims Payable - 4,541,506
Settlement Liability 2,551,700 -
Net OPEB Liability 2,331,929 -
Net Pension Liability 5,672,487 -
Total Noncurrent Liabilities 10,876,274
4,541,506
Total Liabilities 13,930,513 7,257,972

DEFERRED INFLOWS
Deferred Inflows Related to OPEB 109,925 - Deferred Inflows Related to Pensions 21,251 - Total Deferred Inflows of Resources 131,176 -

NET POSITION
2,693,225 Net Investment in Capital Assets 884,013 Unrestricted 31,648,517 5,132,578
34,341,742 Total Net Position $ 6,016,591 $
City of Hemet
Statement of Net Position
Proprietary Funds
June 30, 2025
The accompanying notes are an integral part of this statement. 37

16.B.

Business-type Governmental
Activities Activities
Water Enterprise Internal Service
Fund Funds

OPERATING REVENUES
Charges for Sales and Services 14,749,220$ 23,231,334$ Miscellaneous 37,195 248,424
Total Operating Revenues 14,786,415 23,479,758

OPERATING EXPENSES
Personnel Services 3,568,323 3,675,778
Parts and Supplies 280,744 119,105
Maintenance 4,124,154 2,631,076
Utilities 552,799 995,726
Water Purchases 541,199 -
Contracts, Rents and Leases 235,633 728,037 Insurance 381,800 11,366,991
Claims and Judgments - 1,124,798 Enterprise Assessments 3,739,800 -
Depreciation 216,330 154,842
Total Operating Expenses 13,640,782 20,796,353
Operating Income (Loss) 1,145,633 2,683,405

NONOPERATING REVENUES (EXPENSES)
Loss on Disposal - -
Investment Income 1,724,041 -
Intergovernmental Revenues - -
Total Nonoperating Revenues (Expenses) 1,724,041 - Income (Loss) Before Transfers and
Capital Contributions 2,869,674 2,683,405
Transfers In - 1,000,000
Transfers Out - -
Change in Net Position 2,869,674 3,683,405
Total Net Position, Beginning 31,472,068 2,333,186 Total Net Position, Ending 34,341,742$ 6,016,591$
City of Hemet
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Year Ended June 30, 2025
The accompanying notes are an integral part of this statement. 38

16.B.

Business-type Governmental
Activities Activities -
Internal Water
Enterprise Fund Service

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 14,784,461$ -$
Cash Received from User Departments - 23,607,782 Cash Paid to Suppliers for Goods and Services (9,443,872) (15,769,725) Cash Paid to Employees for Services (3,418,829) (3,680,218) Cash Payments for Insurance and Claims - (4,143,889) Net Cash Provided (Used) by Operating Activities 1,921,760 13,950

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Principal Paid Towards Settlement Liability (268,600) - Cash Received From Other Funds - 1,023,361 Cash Paid to Other Funds - -
Net Cash Provided (Used) by Noncapital
Financing Activities (268,600) 1,023,361

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (644,630) (147,538) Net Cash Provided (Used) by Capital and
Related Financing Activities (644,630) (147,538)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income Received 1,724,041 -
Net Cash Provided (Used) by Investing Activities 1,724,041 - Net Increase (Decrease) in Cash and Cash Equivalents 2,732,571 889,773 Cash and Cash Equivalents - Beginning of the Year 39,560,602 10,971,556 Cash and Cash Equivalents - End of the Year 42,293,173$ 11,861,329$ Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:

Operating Income (Loss) 1,145,633$ 2,683,405$
Adjustments to Reconcile Operating Income to
Net Cash Provided by Operating Activities:

Depreciation 216,330 154,842
(Increase) Decrease in Accounts Receivable 216,125 (71,411) (Increase) Decrease in Inventories - (114,374) (Increase) Decrease in Prepaids 5,399 130,660 (Increase) Decrease in Due from Other Governments 53,332 - (Increase) Decrease in Deferred Outflows - Pensions 91,590 - (Increase) Decrease in Deferred Outflows - OPEB 84,319 - Increase (Decrease) in Accounts Payable 54,924 412,257
Increase (Decrease) in Accrued Salaries and Benefits (21,776) (4,440) Increase (Decrease) in Accrued Liabilities (5,399) -
Increase (Decrease) in Unearned Revenues - (88,101) Increase (Decrease) in Claims Payable - (3,019,091) Increase (Decrease) in Deposits Payable 16,125 -
Increase (Decrease) in Compensated Absences Payable 159,429 - Increase (Decrease) in Deferred Inflows - Pensions (137,099) - Increase (Decrease) in Deferred Inflows - OPEB (62,001) - Increase (Decrease) in Net Pension Liability 184,699 -

Increase (Decrease) in Net OPEB Liability (149,667) -
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,921,760$ 13,950$ City of Hemet
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2025
The accompanying notes are an integral part of this statement. 39

16.B.

Successor Agency
OPEB Trust Custodial Private-purpose
Fund Funds Trust Fund
ASSETS
Cash and Investments -$ 108,748$ 558,540$ Investments:

Balanced HighMark PLUS 3,650,439 - - Receivables:

Accounts - - - Notes - - 168,309 Land Held for Resale - - 2,208,773 Restricted Assets:

Cash and Investments with Fiscal Agents - 822,763 - Total Assets 3,650,439 931,511 2,935,622

LIABILITIES
Accounts Payable - 267,645 - Accrued Liabilities - - 7,497 Deposits Payable - - - Interest Payable - - 121,515 Due to City of Hemet - 1,141,579 - Bonds Payable - - 5,792,546 Total Liabilities - 1,409,224 5,921,558

NET POSITION
Restricted for:

Successor Agency - - (2,985,936) OPEB 3,650,439 - -
Other Organizations,
Individuals, and Governments - (477,713) - Total Net Position 3,650,439$ (477,713)$ (2,985,936)$ City of Hemet
Statement of Net Position
Fiduciary Funds
June 30, 2025
The accompanying notes are an integral part of this statement. 40

16.B.

Successor
Agency
OPEB Trust Custodial Private-purpose
Fund Funds Trust Fund

ADDITIONS
Contributions:

Taxes and Assessments Collected for Others -$ 3,066,810$ 968,639$ Developer Contributions - - - Employer Contributions 225,200 - - Investment Earnings:

Investment Income 342,460 31,237 1,017 Total Additions 567,660 3,098,047 969,656

DEDUCTIONS
Administrative Costs 19,251 - 153,330 Interest on Bonds - - 162,145 Payments on behalf of Others - 688,800 - Payments to Other Agencies for Charges Collected - 3,136,566 - Total Deductions 19,251 3,825,366 315,475 Change in Net Position 548,409 (727,319) 654,181 Net Position - Beginning of Year 3,102,030 249,606 (3,640,117) Net Position - End of Year 3,650,439$ (477,713)$ (2,985,936)$ City of Hemet
Statement of Changes in Net Position
Fiduciary Funds
Year Ended June 30, 2025
The accompanying notes are an integral part of this statement. 41

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Hemet, California was incorporated in 1910 as a general law City. The City operates under a Council- Manager form of government and provides the following services: public safety (police and fire), highways and streets, refuse and recycling collection, water, sewer maintenance, public library, parks, public improvements, planning and zoning, and general administrative services.

The financial statements of the City of Hemet have been prepar ed in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies are described below.

A) Description of Reporting Entity

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

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

Hemet Housing Authority

The Hemet City Council is also the governing board of the Hemet Housing Authority; therefore the Authority is included within the reporting entity of the City. The authority was formed under the California Health and Safety sup for financing to seq, et 34200, Section Code provide sanitary and safe plying dwelling accommodations to persons of low income at affordable rents. Separate financial statements are not issued for the Housing Authority.

42

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

B) Measurement Focus, Basis of Accounting, and Financial State ment Presentation

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance or net position, revenues and expenditures or expe nses, as appropriate. Fund accounting segregates funds according to their intended purpose and is use d to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide and Fund Financial Statements

The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental and business- type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of sources, liabilities, and deferred inflows of sources, including capi tal assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not included among program revenues are reported instead as general revenues.

Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liability in the government- wide financial statements. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expense.

As a general rule, the effect of interfund activity has been el iminated from the government-wide financial statements. Exceptions to this general rule are payments in-lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the government’s water and sewer function and various other functions of the government. Elimination of these charges would distort the direct cost and program revenues reported for the various functions concerned.

When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed.

43

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Governmental Fund Financial Statements

The governmental fund financial statements are reported using the resources financial current measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collect ed within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources.

Sales taxes, property taxes, franchise taxes, intergovernmental revenue and rental income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally co llected within the availability period. Other revenue items are considered to be measurable and available when cash is received by the government.

Non-current portions of long-term receivables due from governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special re porting treatments are used to indicate, however, that they should not be considered “available spendable resources,” since they do not represent net current assets.

Proprietary and Fiduciary Funds

The City’s enterprise and internal service funds are considered proprietary funds. Proprietary funds and fiduciary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods o r services are delivered. Proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets.

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

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange tr ansactions are those in which each party receives and gives up essentially equal values. Non-operating r evenues, such as subsidies, taxes, and investment earnings result from nonexchange transactions or anc illary activities. Amounts paid to acquire capital assets are capitalized as assets in the enterprise fund financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liabil ity in the enterprise fund financial statements, rather than as anothe r financing source. Amounts pa id to reduce long-term indebtedness of the enterprise fund are reported as a reduction of the related liability, rather than as an expense.

The custodial funds account for monies held for the benefit of other organizations and governments to which the City provides accounting and investing services and are reported using economic resources measurement focus and the accrual basis of accounting. The private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. 44

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

C) Fund Classifications

The City reports the following major governmental funds:

General Fund - This is the primary operating fund of the City. It accounts for all activities of the general government, except those required to be accounted for in another fund.

Sewer and Storm Drain Sp ecial Revenue Fund - This fund accounts for the financial transactions of a City- wide program to maintain storm drains and sewer transmission lines. Revenues are intended to cover the maintenance costs for these lines, not all of the costs associated with the replacement, and depreciation of these lines.

Public Safety Grants Special Revenue Fund – This fund accounts for various public safety grant revenues restricted for public safety.

Miscellaneous Grants Special Revenue Fund - This fund accounts for various grants restricted for specific purposes.

Bridges, Streets and Traffic Facilities Capital Projects Fund - This fund accounts for the financial transactions for bridges, streets and traffic facilities in the development impact fee report and is funded through developer contributions.

The City reports the following major enterprise funds:

Water - This fund accounts for the financial transactions of t he City’s water utility s ervice, including water production, transmission, and distribution system.

The City also reports th e following fund types:

Internal Service Funds - These funds account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, on a cost reimbursement basis. These departments consist of administrative, facility maintenance, vehicle maintenance, workers’ compensation, dental, vision, retiree medical and liability insurance.

OPEB Trust Fund - These funds account for the prefunding of post-employment benefits other than pensions.

Custodial Funds - These funds account for resources held by th e City in a trustee capacity as an agent for individuals, private organizations, and/or other governments. Custodial Funds are custodial in nature and are held for the benefit of other individuals, organizations and/or governments. These funds consist of the Police Activities League, pass thru fees collected for the County, and a developer CFD.

Private-purpose Trust Fund - This fund is used to account for the balances and transactions of the Successor Agency to the former Hemet Redevelopment Agency.

D) Cash and Investments

Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates.

Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gai ns or losses realized upon the liquidation, maturity, or sale of investments. 45

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial stateme nts as cash and investments. Investment income earned from pooled investments is allocated to those various funds based on each fund’s average cash and investment balance.

For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or were purchased so near their maturity that they present insignificant risk of change in value because of changes in interest rates. Cash and cash equivalents in the accompanying statements include the pro prietary funds’ share of the cash and investment pool of the City of Hemet.

E) Receivables

Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes all amounts are considered to be collectible in the normal course of business.

F) Inventory and Prepaid Items

All inventories are valued on the average cost method. Inventory in the General Fund consists of City promotional items. Inventory in the Internal Service fund consists of hardware supplies, auto shop supplies, fuel and oil. Inventory in the Enterprise fund consists of expendable supplies held for use by the water utility.

All costs are recorded as an expenditure at the time the individual inventory items are consumed.

Prepaid items are payments made to vendors for services that wi ll benefit periods beyond the fiscal year ended using purchase method.

G) Interfund Transactions

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion o f interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government- wide financial statements as "internal balances."

Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

H) Forgivable Notes

Certain loans have been made by the City to third parties in order to enhance the redevelopment, community development, economic development, and housing objectives of the City. Certain loans contain conditions for non-collection (after being held for a certain period of time, etc.). The City has recorded as an allowance for forgivable notes the estimate of the amounts that will not be collected on these loans.

46

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

I) Land Held for Resale

Land held for resale represents land, structures and their rel ated improvements that were acquired for resale in accordance with the objectives of the Redevelopment Projects and grants. These costs will be charged to current year project expenditures when the related land and structures are sold. Land held for resale is valued at the lower of cost or expected net realizable value.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

J) Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of two years except in the case of infrastructure-related capital projects, which would only be capitalized when total project costs are expected to exceed $50,000. Such assets are recorded at histor ical cost or estimated historical cost if purchased or constructed. Contributed capital assets are valued at their acquisition value at the date of the contribution.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. No interest were costs capitalized during the current fiscal year.

Capital assets of the primary government, as well as the component units, are depreciated using the straight- line method over the following estimated useful lives.

Buildin
gs and Improvements 25 - 50 years
Infrastructure
Roadwa y 20 - 75 years
100 Storm Drain years
Water S ystem 30 years
Sewer S ystem 30 years
Machinery and Equipment
Vehicles 7 years
O f f i c e Equipment 5 years
Other E quipment 5 years
Software Subscri ption Assets 3 - 10 years

K) Compensated Absences

It is the government’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial statements.

47

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

City employees receive from twelve to thirty-three (12-33) vacation days each year depending upon length of service and bargaining group. Vacation can be accumulated up to a maximum of two years for most City bargaining units; two years plus the current year's accumulation for other units. Unused vacation may be cashed in yearly per each bargaining unit's M.O.U. limitations or upon retirement. City and police employees receive eight (8) hours of sick leave for each month of employment. Management employees accrue six (6) days of sick leave per year. City fire fighters accrue twelve ( 12) hours per calendar month. City general employees' right to accrue sick leave is unlimited. Used sick leave may be cashed in upon retirement at a payment percentage of 25%, 50% or 75% determined by length of c ontinuous service and bargaining unit M.O.U.

City and police employees are allowed to accumulate compensatory leave time for unpaid overtime at 150% rate up to a forty (40) hour or eighty (80) hour maximum depending on M.O.U. limitations.

L) Claims and Judgments

The expenditures for claims are recognized when it is probable that the liability has been incurred at year-end and the amount of the loss can be reasonably estimated. Such claims are reported as liabilities in the Internal Service Funds and government-wide financial statements.

M) Pension

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

N) Other Postemployment Benefits (OPEB)

For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, generally accepted accounting principles require that the reported results must pertain to liability and asset informatio n within certain defined timeframes. For this report, the following timeframes are used: June 30, 2023 Valua tion Date; June 30, 2025 Measurement Date; and July 1, 2024 through June 30, 2025 Measurement Period.

O) Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents 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. The City has certain items that qualify for reporting in this category: deferred outflows relating to the City’s net pension and OPEB liabilities.

48

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets 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 only one type of item, which arises only under the modified accrual basis of accounting, which qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, special assessments, grant receivables, long-term loans receivable, and other miscellaneous receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The City also reports deferred inflows relating to the net pension and OPEB liabilities.

P) Net Position

In the government-wide and proprietary fund financial statements, net position is classified in the following categories:

Investment in Capital Assets – this category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the ou tstanding balances of debt that are attributable to the acquisition, construction or improvement of those assets reduce this category.

Restricted Net Position – this category describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, go vernmental regulation, laws, or other restrictions which the City cannot unilaterally alter.

Unrestricted – this category describes the portion of net position which is not restricted to use.

Q) Net Position Flow Assumption

Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the statement of net position, a flow assumption must be made about the order in which the resources are considered to be applied.

It is the City’s policy to consider restricted – net position t o have been depleted before unrestricted – net position.

R) Fund Balances

Fund balances in governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor con straints on the specific purposes for which amounts in those funds can be spent. Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance).

In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the sam e purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

49

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

Nonspendable Fund Balance - Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact.

Restricted Fund Balance - Amounts that are constrained to speci fic purposes by state or federal laws, or externally imposed conditions by grantors or creditors.

Committed Fund Balance - Amounts that may be specified by the C ity Council by ordinance to formally commit part of the City’s fund balances or future revenues for a specific purpose(s) or program. To change or repeal any such commitment will require an additional formal City Council action utilizing the same type of action that was originally used.

The City's committed fund balance includes:

 General Fund Emergency Operating Contingency:

Fund balance in the General Fund has been committed for emergency/fiscal emergency contingencies, as set by ordinance. Emergencies shall mean the actual or thre atened conditions of disaster or of extreme peril to the safety of persons and property within the City caused by such conditions as air pollution, fire, flood, storm, epidemic, riot or earthquake, or other conditions, including conditions resulting from a labor controversy, which conditions are likely to be beyond the control of the services, personnel, equipment and facilities of the City, requiring combined forces of other political subdivisions to combat. A fiscal emergency is defined by the City of Hemet Municipal Code Section 2-451. The amount of the commitment as set forth by the City of Hemet Municipal Code Section 2-452 is equal to at least 40% of General Fund budgeted expenditures.

a contracts purchase which under accounting, Encumbrance order, the for commitments other nd expenditures of monies are recorded in order to reserve that po rtion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General, Special Revenue, and Capital Project funds. Encumbrances outstanding at year-end are reported as committed fund balances in the fund financial statements since they do not constitute expenditures or liabilities.

Assigned Fund Balance – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of r esources, but are neither res tricted or committed. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has by resolution authorized the City Manager to assign fund balance.

Unassigned Fund Balance - This amount is for any portion of the fund balances that do not fall into one of the above categories. The general fund is the only fund that r eports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental fund other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

50

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

1) SUMMARY OF SIGNIFICANT ACC OUNTING POLICIES - Continued

S) Property Tax Calendar

Property taxes are assessed and collected each fiscal year according to the following property tax calendar:

Lien Date March 1
Levy Date July 1 to June 30
Due Date November 1, 1 st Installment February 1, 2nd Installment Collection Date December 1, 1 st Installment April 10, 2nd Installment

The City receives from the County of Riverside a percentage of the basic 1% maximum tax rate allowed on assessments collected and allocated by the County. Property tax assessments are recognized as revenue when they become both measurable and available to finance the e xpenditures of the reported fiscal year.

Material delinquent property taxes (net of estimated uncollecti bles) are also recorded as current year receivables. Substantially all of the property taxes associated with the reported fiscal year were considered to be both measurable and available to finance expenditures of that fiscal year. When material amounts of property taxes are considered to be measurable but not available to finance the expenditures of the reported fiscal year, they are recorded as a receivable and as deferred revenue (to be recognized as revenue in the year in which they become available).

A delinquency penalty of 6% is assessed by the County of Riverside. If taxes become delinquent, they are deeded to the State and may be sold by the County Tax Collector for taxes due plus 1% per month redemption fee. All property taxes are collected by the County of Riverside and collection fees are deducted by the County before tax revenue is remitted to the City. The assessed valuation is at “full cash value”.

T) Use of Estimates

The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make est imates and assumptions that affect the reported amounts of assets and liabilities and disclosure of co ntingent assets and liabilities at the date of the financial statements and t he reported amounts of revenues a nd expenditures during the reporting period. Actual results could differ from those estimates.

2) CASH AND INVESTMENTS

Cash and investments are classified in the accompanying financial statements as follows:

Governmental Business-Type Fiduciary
Activities Activities Funds Total
Cash and Investments 160,022,338$ 42,293,173 $ 4,317,727 $ 206,633,238 $ Restricted Cash and Investments 863,551 - 822,763 1,686,314 Total Cash and Investments 160,885,889$ 42,293,173$ 5,140,490$ 208,319,552$ Government-wide
Statement of Net Position
51

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

2) CASH AND INVESTMENTS - Continued

Cash and Investments consist of the following:

Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the in vestment types that are authorized by the City’s investment policy and the California Government Code. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

*Based on state law requirement s or investment policy requirements, whichever is more restrictive.

Investments Authorized by Debt Agreements

Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of credit risk.

Cash on Hand 8,250$
Deposits with Financial Institutions 25,415,026
Investments 182,896,276
Total Cash and Investments 208,319,552$
Authorized Maximum Maximum
Investment Types by Investment Maximum Percentage Investment Authorized by State Law Policy Maturity* of Portfolio* in One Issue r* U.S. Treasury Obligations None None None Yes
U.S. Government Sponsored
Agency Securities Yes 5 years None None
Municipal Bonds 20% None 5 years Yes
Medium-Term Notes 20% 5% 5 years Yes
Collateralized Certificate of Deposit Yes 5 years None 25% Negotiable Certificates of Deposit Yes 5 years 30% None Banker's Acceptance Yes 180 days 40% None
Commercial Paper Yes 270 days 15% 10%
Money Market Mutual Funds Yes N/A 10% None
Repurchase Agreements 10% None 30 days Yes
Local Agency Investment Fund Yes N/A 90% $75,000,000
52

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

2) CASH AND INVESTMENTS - Continued

Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity In One Issuer Allowed

U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker’s Acceptances 30 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Municipal Obligations None None None
Repurchase Agreements 270 days None None
Investment Contracts None None None
Local Agency Investment Fund
(LAIF)
N/A None None

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment is, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s 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 investments by maturity:

12 Months 13 to 36 37 to 60
Inv estment Type Total Or Less Months Months
81,915,492 U.S. Treasury $ 10,434,764 $ 57,957,303$ 13,523,425$ U.S. Agency Securities 588,228 - 588,228 - LAIF 25,018,425 25,018,425 - - California CLASS 31,340,318 31,340,318 - - CalTRUST 31,245,261 31,245,261 - - Municipal Obligations 984,120 - 984,120 - Negotiable CD 247,667 247,667 - - Medium Term Notes 5,675,664 987,320 4,340,210 348,134 Money Market Mutual Funds 544,349 544,349 - - Held by Fiscal Agent:

Money Market Mutual Funds 5,336,752 5,336,752 - - Total 182,896,276$ 105,154,856$ 63,869,861$ 13,871,559$ Remaining Maturity (in Months)
53

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

2) CASH AND INVESTMENTS - Continued

Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investm ent will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the City’s investment policy, or debt agreements, and t he actual rating as of fiscal year end for each investment type.

Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There was no investments in any one issuer (other than U.S. Government Agencies, Supranationals, Money Market Funds, and external investment pools) that represent 5% or more of total City investments.

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty (e.g., broker dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment poli cy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2025, the City deposits (bank balances) were insured by the Federal Depository Insurance Corporation up to $250,000 and the remaining balances were collateralized under California law. Investments held by bond trustee are selected under the terms of the applicable trust agreement. For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.

Minimum
Investment Type Amount Legal Rating AAA AA A Unrated
U.S. Treasury 81,915,492 $ N/A - $ 81,915,492 $ - $ - $ U.S. Agency Securities 588,228 N/A - 588,228 - - LAIF 25,018,425 N/A - - - 25,018,425 California CLASS 31,340,318 N/A - - - 31,340,318 CalTRUST 31,245,261 N/A - - - 31,245,261 Municipal Obligations 984,120 A - 984,120 - - Negotiable CD 247,667 N/A - - - 247,667 Medium Term Notes 5,675,664 A - 683,949 4,991,715 - Money Market Mutual Funds 544,349 AAA 544,349 - - - Held by Bond Trustees:

Money Market Mutual Funds 5,336,752 AAA 5,336,752 - - - Total 182,896,276$ 5,881,101$ 84,171,789$ 4,991,715$ 87,851,671$ 54

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

2) CASH AND INVESTMENTS - Continued

Fair Value of Investments

Investments (except those that may be reported at amortized cos t) are measured at fair value on a recurring basis. Recurring fair value measurements, are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position a t the end of each reporting period. Fair value measurements are categorized bas ed on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets ; Level 2 inputs are signifi cant other observable inputs; Level 3 inputs are signifi cant unobservable inputs. Inv estment fair value measurements at June 30, 2024 are described below.

Investments categorized as Level 2 are valued based on matrix p ricing which use observable market inputs such as yield curves and market indices that are derived principally from or corroborated by observable market data by correlation to other means.

Investment in State Investment Pool

The City is a voluntary participant in the Local Agency Invest ment Fund (LAIF) that is regulated by the California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based on the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not rated.

Investment in CalTRUST

CalTRUST is a Joint Powers Authority created by local public agencies to provide a convenient method for local public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the invest ment manager and other agents. CalTRUST maintains and administers four pooled accounts within the program: Money Market, Short-term, Medium-term and Long-term. The Money Market account permits daily transactions, with same-day liquidity (provided redemption requests are received by 1:00 p.m. Pacific time), with no limit on the amount of funds that may be invested. The Not subject to
Level 2 Measurement Investment Type Total Level 1
81,915,492 U.S. Treasury $ 81,915,492 $ - $ -$ U.S. Agency Securities 588,228 - 588,228 - LAIF 25,018,425 - - 25,018,425 California CLASS 31,340,318 - - 31,340,318 CalTRUST 31,245,261 - - 31,245,261 Municipal Obligations 984,120 - 984,120 - Negotiable CD 247,667 - 247,667 - Medium Term Notes 5,675,664 - 5,675,664 - Money Market Mutual Funds 544,349 - - 544,349 Held by Bond Trustees: -
Money Market Mutual Funds 5,336,752 - - 5,336,752 Total 182,896,276$ 81,915,492$ 7,495,679$ 93,485,105$ Measurement Input
55

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

2) CASH AND INVESTMENTS - Continued

Short-term account permits an unlimited number of transactions per month (with prior day notice), with no limit on the amount of funds that may be invested. The Medium- and Long-term accounts permit investments, withdrawals and transfers once per month, with five days advance notice. All CalTRUST accounts comply with the limits and restrictions placed on local agen cy investments by the Californ ia Government Code. CalTRUST imposes a $250,000 minimum investment; however, there is no maximum limit.

The fair value of the City’s investment in this pool is reported at amounts based upon the City’s percentage interest of the fair value provided by CalTRUST (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by CalTRUST.

Investment in California CLASS

The California Cooperative Liquid Assets Securities System (California CLASS) is a joint exercise of powers entity authorized under Section 6509.7, California Government Code. California CLASS is a pooled investment option that was created via a joint exercise of powers agreement by and among California public agencies. California CLASS provides California public agencies with a convenient method for investing in high-quality, short- to medium-term securities carefully selected to optimize interest earnings while prioritizing safety and liquidity. The California CLASS Prime and Enhanced Cash funds offer public agencies the opportunity to strengthen and diversify their cash management programs in accordance with the safety, liquidity, and yield hierarchy that governs the investment of public funds.

The fair value of the City’s investment in this pool is reported at amounts based upon the City’s percentage interest of the fair value provided by California CLASS (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by California CLASS.

3) INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

The following represents the composition of interfund balances as of June 30, 2025:

Due To / From Other Funds

The Other Governmental Funds, Public Safety Grants Fund, and in ternal service funds borrowed $514,208, $1,390,727, and $23,361 respectively, from the General Fund as a result of routine, short-term interfund borrowings. These deficits will be eliminated when revenues are recognized.

Due to City of Hemet

The Fiduciary Funds borrowed $1,141,579 from the General Fund as a result of short-term borrowing to eliminate temporary deficit cash balances caused from fiduciary activitie s. These will be repaid when receivables are collected and restricted funds become available to repay.

Interfund Transfers

During the year, interfund transfers were made for purposes of financing administrative costs and capital improvements. Specifically, the following transfers were made:
56

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

3) INTERFUND RECEIVABLES, PAYABL ES AND TRANSFERS - Continued

The General Fund transferred $20,000 to the Other Governmental Funds for project costs and $1,000,000 to contribute additional funding for the General Liability Insurance fund.

4) NOTES RECEIVABLE

The City administers various r esidential rehabilitation and down payment assistance loan programs for low and moderate income families. In addition, the City has loaned monies to developers for affordable housing projects and entered into owner participation agreements. The loans have different stated interest rates, payback periods and may be forgivable assuming all conditions are met. These notes are long-term in nature and are recorded as notes receivable in the governmental funds balance sheet. At June 30, 2025 the outstanding balance of notes receivable totaled $7,564,945. The balance on the loans that w ill be forgiven by the City, assuming all requirements are met was $5,969,824, and is considered uncollec tible. The balance of loans receivable is recorded net of the uncollectible amount in the Statement of Net Position and the Governmental Funds Balance Sheet.

Other Internal
Governmental Service
TRANSFERS OUT Funds Funds Total
General Fund 20,000 $ 1,000,000 $ 1,020,000 $
20,000$ 1,000,000 $ 1,020,000$

TRANSFERS IN
57

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

5) CHANGES IN CAPITAL ASSETS

Capital assets activity for the year ended June 30, 2025 is as follows:

Beginning Ending
Governmental Activities: Balance Additions Deletions Transfers Balance Capital Assets, Not Being Depreciated:

Land and Improvements 15,035,131$ 355,349$ -$ -$ 15,390,480 $ Rights of Way 190,468,181 - - - 190,468,181 Construction in Progress 9,589,995 16,446,490 - (15,993,454) 10,043,031 Total Capital Assets, Not
Being Depreciated 215,093,307 16,801,839 - (15,993,454) 215,901,692 Capital Assets Being Depreciated:

Building and Improvements 29,419,965 3,032,485 - 137,004 32,589,454 Building and Improvements - ISF 75,899 110,216 - - 186,115 Machinery and Equipment 41,298,661 5,535,904 (1,266,295) 62,205 45,630,475 Machinery and Equipment - ISF 4,336,208 37,322 - - 4,373,530 Software Subscription Assets 880,173 7,277,460 (880,173) - 7,277,460 Infrastructure
Pavement 148,478,243 - (5,495,973) 13,792,119 156,774,389 Medians 163,384 - - - 163,384 Sidewalks 21,256,488 - - 1,007,016 22,263,504 Curb and Gutter 17,759,242 - - 995,110 18,754,352 Traffic Signal 8,370,627 - - - 8,370,627 Street Lights 5,059,579 - - - 5,059,579 Bridges 5,661,474 - - - 5,661,474 Storm
Drain/Retention Basins 11,588,613 - - - 11,588,613 Total Capital Assets Being
Depreciated 294,348,556 15,993,387 (7,642,441) 15,993,454 318,692,956 Less Accumulated Depreciation:

Building and Improvements (17,192,932) (753,571) - - (17,946,503) Building and Improvements - ISF (75,899) (857) - - (76,756) Machinery and Equipment (31,593,619) (1,987,002) 1,266,295 (32,314,326) Machinery and Equipment - ISF (3,444,891) (153,985) - (3,598,876) Software Subscription Assets (590,428) (931,489) 880,173 - (641,744) Infrastructure
Pavement (115,621,073) (2,818,767) 5,495,973 - (112,943,867) Medians (100,751) (5,449) - - (106,200) Sidewalks (6,269,358) (290,133) - - (6,559,491) Curb and Gutter (5,602,201) (243,423) - - (5,845,624) Traffic Signal (5,536,413) (209,268) - - (5,745,681) Street Lights (3,629,388) (173,556) - - (3,802,944) Bridges (1,555,236) (75,487) - - (1,630,723) Storm Drain/Retention Basins (3,592,979) (169,676) - - (3,762,655) Total Accumulated Depreciation (194,805,168) (7,812,663) 7,642,441 - (194,975,390) Total Capital Assets Being
Depreciated, Net 99,543,388 8,180,724 -
15,993,454 123,717,566
Total Capital Assets, Net 314,636,695$ 24,982,563$- $ -$ 339,619,258 $ 58

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

5) CHANGES IN CAPIT AL ASSETS - Continued

Depreciation expense was charged to functions/programs of the primary government as follows:

Depreciation expense was charged to functions/programs of the primary government as follows:

General Government 898,982$
Public Safety 2,342,530
Public Works 4,036,219
Libraries 380,090
Internal Service 154,842
Total Depreciation Expense 7,812,663$
Beginning Ending
Busine ss-type Activitie s: Balance Additions Deletions Transfers Balance Capital Assets, Not Being Depreciated:

Land 32,975$ -$ -$ -$ 32,975 $ Construction in Progress - 644,630 - - 644,630 Total Capital Assets, Not
Being Depreciated 32,975 644,630 - - 677,605 Capital Assets Being Depreciated:

Buildings and Improvements 29,624,091 - - - 29,624,091 Machinery and Equipment 3,620,225 - (37,653) - 3,582,572 Total Capital Assets Being
Depreciated 33,244,316 - (37,653) - 33,206,663 Less Accumulated Depreciation:

Buildings and Improvements (27,392,331) (216,330) - - (27,608,661) Machinery and Equipment (3,620,035) - 37,653 - (3,582,382) Total Accumulated Depreciation (31,012,366) (216,330) 37,653 - (31,191,043) Total Capital Assets Being
Depreciated, Net 2,231,950 (216,330) - - 2,015,620 Total Capital Assets, Net 2,264,925$ 428,300$ -$ -$ 2,693,225 $ Business-type Activities
Water 216,330 $
Total Depreciation Expense 216,330$
59

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

6) LONG-TERM LIABILITIES

Changes in long-term liabilities for governmental activities and business-type activities are as follows:

The net pension and OPEB liabilities in the governmental activities are generally liquidated by the General Fund, while the net pension and OPEB liabilities in the business-type activities are liquidated by the Water Enterprise Fund.

Fiduciary Fund

Changes in long-term liabilities for Fiduciary Funds for the year ended June 30, 2025 is as follows:

Settlement Liability

In February 2012, the City entered into a settlement agreement with the Soboba Band of Luiseño Indians (the “Tribe”) over a dispute about water rights. The settlement agreement includes the City of Hemet, City of San Jacinto, Eastern Municipal Water District and Lake Hemet Municipal Water District. The City of Hemet’s total settlement obligation per the agreement was $7,252,000. The agreement does not require interest payments.

Principal is due semi-annually on January 1 and July 1 of each year. Annual payments total $268,600. The balance on the settlement liability at June 30, 2025 was $2,820,300. The required payments on the settlement liability are as follows:

Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:

Compensated Absences, Net 3,529,187$ 974,928$ -$ 4,504,115 $ 1,126,029$ Claims Payable 9,517,141 510,007 (3,529,098) 6,498,050 1,956,544 Software Subscription Liability 150,797 7,277,460 (1,012,551) 6,415,706 1,238,077 Net OPEB Liability 35,696,810 - (2, 152,905) 33,543,905 - Net Pension Liability 114,320,169 787,234 - 115,107,403 - Total 163,214,104$ 9,549,629$ (6,694,554)$ 166,069,179$ 4,320,650$ Busine ss-type Activitie s:

Compensated Absences, Net 267,448$ 159,429$ -$ 426,877 $ 106,719$ Settlement Liability 3,088,900 - ( 268,600) 2,820,300 268,600 Net OPEB Liability 2,481,596 - ( 149,667) 2,331,929 - Net Pension Liability 5,487,788 184,699 - 5,672,487 - Total 11,325,732$ 344,128$ (418,267)$ 11,251,593$ 375,319$ Beginning Due Within Ending
Balance Additions Deletions Balance One Year
Tax Allocation Bonds:

Series 2014, Refunding 6,175,000$ -$ ( 670,000)$ 5,505,000$ 700,000$ Premium 333,745 - (46,199) 287,546 - Total 6,508,745$ -$ ( 716,199)$ 5,792,546$ 700,000$ 60

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

6) LONG-TERM LIABILITIES - Continued

Software Subscription Liability

The City of Hemet has entered into subscription-based information technology arrangement (SBITA) with vendors for various City software systems. The systems are discounted at a rate of 5%. For the year ended June 30, 2025, the City reported a SBITA liability of $6,415,706. For the year ended June 30, 2025, there was a principal reduction of $1,012,551. As of June 30, 2025, the net SBITA right-to-use intangible asset was reported in the amount of $6,635,716. The future payments of the SBITA liability are as follows:

Fiscal Year Ending
June 30, Principal Interest Total
2026 268,600$ -$ 268,600 $
2027 268,600 - 268,600
2028 268,600 - 268,600
2029 268,600 - 268,600
2030 268,600 - 268,600
2031 268,600 - 268,600
2032 268,600 - 268,600
2033 268,600 - 268,600
2034 268,600 - 268,600
2035 268,600 - 268,600
2036 134,300 - 134,300
Totals 2,820,300$ - 2,820,300 $ $
Fiscal Year Ending
June 30, Principal Interest Total
2026 1,238,077$ 86,594 $ 1,324,671 $
2027 1,255,946 121,697 1,377,643
2028 842,047 147,136 989,184
2029 569,312 130,521 699,832
2030 488,326 142,424 630,750
2031 465,072 165,678 630,750
2032 442,926 187,824 630,750
2033 421,834 238,231 660,065
2034 401,747 229,003 630,750
2035 290,419 182,643 473,062
Totals 6,415,706$ 1,631,751$ 8,047,457$
61

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

6) LONG-TERM LIABILITIES - Continued

2014 Tax Allocation Refunding Bonds

In December 2014, the Riverside County Public Financing Authori ty issued $11,110,000 Riverside County Public Financing Authority 2014 Tax Allocation Revenue Bonds (Hemet Refunding Project) to 1) refund the Successor Agency Subordinate Tax Allocation Bonds, 1999 Series A and Tax Allocation Bonds, 2002 Series A, 2) to satisfy the reserve requirement and 3) to pay cost of issuance. Interest ranges from 3.00% to 5.00% is payable semiannually on March 1 and September 1 of each year, commencing March 1, 2015. Principal is due in annual installments of $580,000 to $870,000 through September 1, 2031. The outstanding balance at June 30, 2024 was $6,175,000. The debt service to maturity is as follows:

Non-Commitment Debt

CFD No. 1999-1 Special Tax Refunding Bonds, Series 2006 (Heartland Project)

In July 2006, the City of Hemet authorized and provided for the issuance of special tax bonds for the Community Facilities District No. 1999-1. Proceeds of these bonds are held by a fiscal agent and are being used to defease and refund the 1999-1 Heartland CFD Series 2001A and Series 200 2B bonds. The original issues were used to finance off-site improvements of a 1,417 home community with an 18-hole golf course. This bond issue is not a legal obligation of the City as the City is only acting as an agent for the property owners in collecting the assessments. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. Therefore, these bonds are not reported as a liability i n the financial statements of the City. The outstanding balance on these bonds at June 30, 2025 is $4,340,000.

7) RISK MANAGEMENT AND SELF-INSURANCE PROGRAMS

The City is exposed to various t hird-party liability risks arising from various exposures including tort claims; police professional; errors and omissions; and injuries members of the public. The City’s Self-Insurance Internal Service Fund is used to account for and finance the City’s unin sured risks of loss. The City maintains a self- insured retention for liability claims of $2 million per occurr ence. Through Alliant, the City purchases excess general liability insurance from participating insurance carrie rs for limits above the applicable self-insured retention, providing total exc ess limits of up to $25 million, subject to the terms, conditions, exclusions, and aggregate limits of the applicable policies. Alliant is the City’s insurance broker and does not itself provide the insurance coverage.

Fiscal Year Ending
June 30, Principal Interest Total
2026 700,000$ 174,094 $ 874,094 $
2027 735,000 145,569 880,569
2028 765,000 122,591 887,591
2029 780,000 97,962 877,962
2030 815,000 72,044 887,044
2031 840,000 44,655 884,655
2032 870,000 15,255 885,255
Totals 5,505,000$ 672,170 $ 6,177,170 $
62

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

7) RISK MANAGEMENT AND SELF-INSURANCE PROGRAMS - Continued

The City is self-insured for workers’ compensation claims through its participation in PRISM’s Excess Workers’ Compensation Program. The City retains the first $250,000 of each workers’ compensation claim. PRISM provides excess coverage above t he City’s retention, providing Statutory limits for workers compensation injuries and a $5 million per occu rrence limit for employers li ability, subject to the terms and conditions of the applicable program documents and California workers’ compensation law.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2024-25.

The City operates a self-insurance program for dental, vision, and retiree supplemental medical insurance costs.

The retiree supplemental medical plan, for employees hired prior to July 24, 1990 and who subsequently retire from the City, is only intended to bridge decreases in health c overage benefits as measured between current coverage benefits and the highest level of such benefits as conferred during the employee’s tenure. A separate internal service fund has been established to accumulate reserves and pay expenses of the program.

Currently, the various operating funds provide the financial support of these programs. It is, however, hoped that once adequate reserve levels are achieved, the interest earnings will carry the administration costs. Estimated City costs of claims for liability, workers’ compensation, dental, vision, and the retiree supplemental medical have been accrued as Claims and Judgments Payable in the accompanying financials statements.

For the past three years, settled claims have not exceeded the amount of insurance coverage. Liabilities for claims payable including workers’ compensation are typically liquidated by the internal service funds.

8) CITY EMPLOYEES RETIREMENT PLAN

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 mu ltiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement Sys tem (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the plan are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website: www.calpers.ca.gov.

Claim Payments
Beginning Claims and Other Ending
Incurred Balance Adjustments Balance
2022-2023 Total 4,449,097 $ 19,377 $ (67,927) $ 4,400,547 $ 2023-2024 Total 4,400,547 $ 8,466,576 $ (3,349,982) $ 4,400,547 $ Dental - Vision 9,092 1,053 - 10,145 Workers' Comp 672,518 - (418,520) 253,998 Liability 8,835,531 508,954 (3,110,578) 6,233,907 2024-2025 Total 9,517,141$ 510,007$ (3,529,098)$ 6,498,050$ 63

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN - Continued

Benefits Provided

The Plans are agent multiple-employer defined benefit pension p lans administered by the California Public Employees’ Retirement System (CalPERS). A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the plan’s June 30, 2023 Annual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuati on report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website.

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

Employees Covered: At June 30, 2025, the following number of employees were covered by the benefit terms for each Plan:

Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52
Monthly benefits, as a % of eligible compensation (1) (1) Required employee contribution rates 8% 8%
Required employer contribution rates 14.79% + $2,730,967 8.49% Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 3% @ 50 2.7% @ 50
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52
Monthly benefits, as a % of eligible compensation (1) (1) Required employee contribution rates 9% 14.75%
Required employer contribution rates 22.27% + $6,619,683 15.21% (1) - Depending on years of service
Miscellaneous
Safety
64

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN - Continued

Contributions: Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is 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 liab ility. The employer is require d 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. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer-Paid Member Contributions or situations where members are paying a portion of the employer contribution.

Net Pension Liability: The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plans are 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.

Actuarial Assumptions: The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Safety
Inactive employees or beneficiaries
currently receiv ing benefits 321 206
Inactiv e employees entitled to but not yet
receiv ing benefits 264 114
Activ e employees 165 125
All Plans
June 30, 2023 Valuation date
Measurement date June 30, 2024
Actuarial cost method entry-age normal
Actuarial assumptions:

Discount rate 6.90%
Inflation 2.30%
Payroll growth (1)
Projected salary increase (1)
Inv estment rate of return 6.90%
Mortality (2)
Post Retirement (3)
(1) Depending on age, service and type of employment
(2) Derived using CalPERS’ Membership Data for all Funds. (3) The lesser contract COLA or 2.3% until Purchasing Power Protection Allowance floor on purchasing power applies,

2.3% thereafter
65

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN - Continued

The mortality table used was developed based on CalPERS-specifi c data. The probabilitie s of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post- retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

Long-term Expected Rate of Return - The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, C alPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent exp ected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as follows:

Discount Rate - The discount rate used to measure the total pension liability f or PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member co ntribution rates and that contr ibutions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was a pplied to all periods of projected benefit payments to determine the total pension liability.

New Strategic
Asset Class Allocation Real Return (1,2)
Global Equity - Cap Weighted 30% 4.54%
Global Equity - Non-Cap Weighted 12% 3.84%
Private Equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-backed Securities 5% 0.50%
Investment Grade Corporates 10% 1.56%
High Yield 5% 2.27%
Emerging Market Debt 5% 2.48%
Private Debt 5% 3.57%
Real Assets 15% 3.21%
Leverage -5% -0.59%
(1) An expected inflation of 2.3% used for this period. (2) Figures are based on the 2021 Asset Liability Management st udy. 66

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN - Continued

Changes in Net Pension Liability

The changes in the Net Pension Liability for the Miscellaneous Plan are as follows:

The changes in the Net Pension Liability for the Safety Plan are as follows:

Pension Plan Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2023 141,152,945$ 104,567,698$ 36,585,247$ Changes in the year:

Serv ice cost 2,121,823 - 2,121,823 Interest on the total pension liability 9,836,909 - 9,836,909 Changes of benefit terms - - - Differences between expected and actual experience 4,191,433 - 4,191,433 Contributions from the employer - 4,081,403 (4,081,403) Contributions from employees - 938,964 (938,964) Net inv estment income - 9,983,557 (9,983,557) Benefit payments, including refunds (7,682,790) (7,682,790) - Administrativ e/other expense - (85,087) 85,087 Net changes 8,467,375 7,236,047 1,231,328 Balance at June 30, 2024 149,620,320$ 111,803,745$ 37,816,575$ Increase (Decrease)
Pension Plan Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2023 233,176,485$ 149,953,775$ 83,222,710$ Changes in the year:

Serv ice cost 4,849,739 - 4,849,739 Interest on the total pension liability 16,151,376 - 16,151,376 Changes of benefit terms - - - Differences between expected and actual experience 4,419,464 - 4,419,464 Contributions from the employer - 9,113,747 (9,113,747) Contributions from employees - 2,106,839 (2,106,839) Net inv estment income - 14,581,293 (14,581,293) Benefit payments, including refunds (11,885,797) (11,885,797) - Administrativ e/other expense - (121,905) 121,905 Net changes 13,534,782 13,794,177 (259,395) Balance at June 30, 2024 246,711,267$ 163,747,952$ 82,963,315$ Increase (Decrease)
67

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN – Continued

Sensitivity of the Net Pension Liability to Changes in the Disc ount Rate: The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calc ulated using a discount rate that is 1 percentage- point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:

Pension Plan Fiduciary Net Position: Detailed information about each pension plan’s fiduciary net p osition is available in the separately issued CalPERS financial reports.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2025, the City recognized pension e xpense of $5,534,533 for the Miscellaneous Plan and $12,781,003 for the Safety Plan. The total pension ex pense for both plans was $18,315,536 for the year ended June 30, 2025. At June 30, 2025, the City reported deferred outflows and deferred inflows for the Miscellaneous Plan from the following sources:

$4,607,157 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 and deferred inflows related to pensions will be recognized as pension expense as follows:

Miscellaneous Safety

5.90% 1% Decrease 5.90%
Net Pension Liability 57,860,657$ 118,320,912$
Current Discount Rate 6.90% 6.90%
Net Pension Liability 37,816,575$ 82,963,315$
1% Increase 7.90% 7.90%
Net Pension Liability 21,388,677$ 54,285,201$
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 4,607,157$ -$ Differences between actual and expected experience 2,369,071 141,674 Changes in assumptions - -
Net differences between projected and actual
earnings on plan investments 1,638,684 -
Total 8,614,912$ 141,674$
Miscellaneous
68

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

8) CITY EMPLOYEES RETIREMENT PLAN - Continued

At June 30, 2025, the City reported deferred outflows and deferred inflows for the Safety Plan from the following sources:

reported as $10,473,759 deferred outflows of related resources to subsequent to the contributions 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 and deferred inflow s related to pensions will be recognized as pension expense as follows:

Year Ending
June 30,
2026 1,554,421$
2027 3,321,844
2028 (436,411)
2029 (573,773)
2030 -
Thereafter -
Miscellaneous
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 10,473,759$ -$ Differences between actual and expected experience 3,818,412 6,106 Changes in assumptions 1,782,783 -
Net differences between projected and actual
earnings on plan investments 2,103,073 -
Total 18,178,027$ 6,106$
Safety
Year Ending
June 30,
2026 3,165,928$
2027 5,048,073
2028 337,180
2029 (853,019)
2030 -
Thereafter -
Safety
69

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

9) OTHER POSTEMPLOYMENT BENEFITS (OPEB)

Plan Description

The City of Hemet Retiree Healthcare Plan administers a single-employer defined benefit plan which provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements.

Retiree medical health benefits are offered to eligible retiree s through Aetna and Kaiser. Dental and vision benefits are provided by the City and administered by Group Management Services. Eligibility is based on the contract. The City's plan does not issue a publicly available financial report.

Benefits Provided

The substantive plan provisions for the City of Hemet's OPEB Pl an include lifetime retiree health benefits for employees retiring within 120 days of separation and receiving CalPERS benefits. Eligibility varies by hire date, with full City subsidies for employees hired before July 24,1990, partial subsidies for those hired between July 24, 1990, and December 31, 1997, and no subsidies for employees hired after January 1, 1998. Spousal and dependent coverage is allowed under certain conditions, and retirees must contribute the portion of the premium not covered by the City. Medicare integration and supplemental benefits are available, with no City-subsidized Medicare Part B reimbursement o r life insurance except for one retiree. Dental and vision benefits are self- insured, with rates adjusted annually.

Employees Covered by Benefit Terms

At June 30, 2023 (census date), the benefit terms covered the following employees:

Contributions

The obligation of the City to contribute to the plan is established and may be amended by the City Council. For the fiscal year ended June 30, 2025, the City’s average contribution rate was not applicable. The initial contribution of $750,000 was made November 2016. An annual $200,000 contribution began in fiscal year 2018 to the OPEB Trust Account, admin istered by the Public Agency Re tirement Systems (PARS). The City pays benefit payments outside of the trust. Employees are not required to contribute to the plan.

Net OPEB Liability

The City's net OPEB liability was measured as of June 30, 2025, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2023.

Actuarial Methods and Assumptions

The total OPEB liability in the June 30, 2023 actuarial valuati on was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified.

Retirees or spouses of retirees currently receiving benefits 221 Activ e employees 9
Total 230
70

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

9) OTHER POSTEMPLOYMENT BENEFITS (OPEB) - Continued

Discount Rate

The discount rate used to measure the total OPEB liability was 6.70 percent. The projection of cash flows used to determine the discount rate as sumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments f or current active and inactive employees.

Therefore, the long-term expecte d rate of return on OPEB plan i nvestments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Change in the Net OPEB Liability

Valuation Date June 30, 2023
Actuarial Cost Method Entry Age Normal, Lev el % of Pay Mortality CalPERS Experience Study dated November 2021
Mortality Improvement Fully generational with Scale MP-2020 Health Care Trend Rate 6.2 initial, 4.14% ultimate
Inflation Rate 2.30%
Discount Rate 6.70% at June 2025

6.58% at June 2024
Salary Increases 2.80% annually
Dental/Vision Trend 4.00% annually
Target Allocation
Asset Class PARS-Balance
Domestic Equity 36.0%
International Developed Equity 13.5%
Emerging Markets Equity 4.5%
REIT's 3.0%
Listed Infrastructure 3.0%
Core Fixed Income 35.0%
High Yield 3.0%
Cash 2.0%
Total 100.00%
Total OPEB Plan Fiduciary Net OPEB
Liability (TOL) Net Position Liability/(Asset)
41,280,436 Balance at June 30, 2024 $ 3,102,030 $ 38,178,406 $ Changes in the year:

Service cost 65,627 - 65,627 Interest on the total OPEB liab ility 2,582,114 - 2,582,114 Employer contributions - 4,433,622 (4,433,622) Changes of assumptions (382,423) - (382,423) Actual investment income - 342,460 (342,460) Differences between expected and actual experience 188,941 - 188,941 Administrative Expense - (19,251) 19,251 Benefit payments, including refunds (4,208,422) (4,208,422) - Net changes (1,754,163) 548,409 (2,302,572) Balance at June 30, 2025 39,526,273 3,650,439 $ $ 35,875,834 $ Increase (Decrease)
71

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

9) OTHER POSTEMPLOYMENT BENEFITS (OPEB) - Continued

Sensitivity of the Net OPEB Li ability to changes in the Discoun t Rate - The following presents the net OPEB liability of the City if it were calculated using a discou nt rate that is 1-perc entage-point lower or 1- percentage-point higher than the current discount rate:

Sensitivity of the Net OPEB Liability to changes in the Healthc are Cost Trend Rates - The following presents the net OPEB liability of the City, as well as what th e City’s Net OPEB would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rate:

OPEB Expense and Recognition of Deferred Outflows/Inflows of Resources Related to OPEB

Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

For the year ended June 30, 2025, the City recognized OPEB expense/(credit) of $2,474,401. The City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Amounts reported as deferred outflows and deferred inflows of r esources related to OPEB will be recognized as an OPEB expense as follows:

Discount Rate Valuation Discount Rate
1% Lower Discount Rate 1% Higher
Net OPEB liability (asset) 39,266,038$ 35,875,834 $ 32,958,455 $ Current
Healthcare Cost
1% Decrease Trend Rate 1% Increase
Net OPEB liability (asset) 32,290,710$ 35,875,834 $ 40,004,523 $ Deferred Deferred
Outflows Inflows
Changes of Assumptions 811,685$ -$
Differences between expected
and actual experience 26,370 1,517,165
Net differences between projected and actual
earnings on plan investments - 173,994 Total 838,055$ 1,691,159$
72

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

9) OTHER POSTEMPLOYMENT BENEFITS (OPEB) - Continued

10) FUND BALANCES

The details of the fund balances as of June 30, 2025 are presented below:

11) ENDOWMENTS

The City received an endowment in 2002 for $1,000,000. The prin cipal amount of $1,000,000 is to be held in perpetuity while interest earnings are to be used for the City's library as stated in the resolution accepting the endowment. The endowment activity is accounted for in the permanent fund of the City with the principal amount Year Ending
June 30,
2026 (180,816)$
2027 (578,690)
2028 (67,413)
2029 (26,185)
2030 -
Thereafter -
Other
General Sewer and Public Safety Miscellaneous Bridges/Streets Governmental Fund Storm Drain Grants Grants Traffic Facilities Funds Total Nonspendable:

Prepaid Items 14,532$ -$ -$ -$ -$ -$ 14,532$ Prepaid Items - Measure U 1,921,221 - - - - - 1,921,221 Library Endowment - - - - - 1,000,000 1,000,000 Restricted for:

Public Access Channel 2,003,596 - - - - - 2,003,596 Ambulance Penalty Fees 369,797 - - - - - 369,797 Opioid Settlement Funds 416,866 - - - - - 416,866 Public Safety - - - - - 2,225,250 2,225,250 Street Work - - - - 9,398,094 12,435,067 21,833,161 Lighting and Landscaping - - - - - 10,063,069 10,063,069 Housing and Community Development Grants 229,780 - - - - 7,770,273 8,000,053 Sewer Maintenance - 18,663,233 - - - - 18,663,233 Indian Gaming Capital Projects - - - - - 6,411 6,411 Dev elop
ment Impact Fees - - - - - 21,368,820 21,368,820 Library Equipment - - - - - 98,529 98,529 General Plan - - - - - 640,734 640,734 Committed:

Projects - - - - - - - Economic Stabilization Reserve 28,902,009 - - - - - 28,902,009 Measure U - Public Safety Personnel
Police 12,957,310 - - - - - 12,957,310 Fire 2,702,693 - - - - - 2,702,693 Measure U - Economic Stabilization Reserve
Police 1,971,299 - - - - - 1,971,299 Fire 1,008,001 - - - - - 1,008,001 Assigned:

Equipment Replacement - - - - - 5,735,773 5,735,773 Capital Replacement - - - - - 8,564 8,564 Capital Projects 7,280,876 - - - - - 7,280,876 Unassigned 7,508,980 - ( 680,922) (821,149) - (97,256) 5,909,653 Total Fund Balances 67,286,960$ 18,663,233$ (680,922)$ (821,149)$ 9,398,094$ 61,255,234$ 155,101,450$ 73

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

11) ENDOWMENTS - Continued

reflected in nonspendable fund balance. In the government-wide financial statements, the principal amount is included in restricted net position as non-expendable. At June 30, 2025, net appreciation on investment of the principal balance amounted to $98,529, and is reported as restr icted net position as expendable. California Senate Bill No. 1329 enacted Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) that governs the ability to spend on the net appreciation of the endowment fund. The City also passed resolution No. 3715 to establish policy on the spending of investment income in that available funds may only be used to supplement normal budgeted City funds appropriated by the City for the operation and maintenance of the library and not to substitute for such funds. Ava ilable funds may be used for a v ariety of library purposes that enhances the functioning of the library after specifically approved on a case by case basis by the City Council in advance of the expenditure.

12) DEFICIT NET POSITIONS AND FUND BALANCES

In the government-wide financial statements, the governmental activities had a deficit unrestricted net position of $37,66,931, caused to some extent by the net pension liability of $115,107,403 and the net OPEB liability of $33,543,905.

Funds with deficit net positions and fund balances at June 30, 2025 are as follows:

The deficit net position for the Successor Agency Private Purpose Trust Fund will be eliminated through continued repayment of debt through property tax revenue received. Local Law Enforcement Block Grant Special Revenue Fund will eliminate the deficit through a transfer from the General Fund Public Safety program. The deficits in the Active Transportation Grant fund will be eliminated when future unavailable revenues are recognized. Internal service funds deficits will be eliminated through cost recovery from the respective funds.

13) COMMITMENTS AND CONTINGENCIES

The City has been named as a defendant in certain other claims and litigation matters. In the opinion of City management, the outcome of such litigation is not expected to result in a material adverse effect to the financial condition of the City beyond that accrued in the City’s Self-funded Insurance Fund.

Major Governental Funds:

Public Safety Grants Special Revenue Fund 680,922 $
Miscellaneous Grants Special Revenue Fund 821,149
Other Governmental Funds:

Local Law Enforcement Block Grant 90,848 $
Active Transportation Grant 6,408
Fiduciary Funds
Successor Agency Priv ate Purpose Trust Fund 2,985,936$ Internal Service Fund
Liability Insurance 6,195,717$
74

16.B.

City of Hemet
Notes to Financial Statements
Year Ended June 30, 2025

13) COMMITMENTS AND CONTINGENCIES - Continued

The City has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grants, it is believed that any required reimbursements will not be material.

The estimated amount of remaining construction contract obligations at year-end is $15,205,857.

14) CHANGES WITHIN THE FINANCIAL REPORTING ENTITY AND ERROR CORRECTION

During the year, the following changes within the financial reporting entity and error corrections occurred. The changes within the financial reporting entity are a result of a previously reported nonmajor fund now reported as a major fund and a previously reported major fund now reported as a nonmajor fund due to the quantitative factors.

In addition, the beginning net position and fund balance of Gov ernmental Activities and the General Fund, respectively, was reduced by $940,752 due to amounts recorded as revenue in the prior period that should have been unearned revenue.

Newly major Formerly Major
Statement Governmental Governmental
of Activities Fund Fund Other
Governmental General Miscellaneous ARPA Governmental
Fund Grants Grant Activities Funds
Net position or fund balances, beginning
of year, as previously reported 355,142,230$ 71,990,261$ -$ 6,547,779 $ 60,353,754$ Change within the reporting entity - - (302,764) (6,547,779) 6,850,543 Error correction - revenue recognition (940,752) (940,752) - - - Net position or fund balances, beginning
of year, as restated 354,201,478$ 71,049,509$ (302,764)$ -$ 67,204,297 $ Reporting Units Affected by Adjustments to
and Restatements of Beginning Balances
75

16.B.

REQUIRED SUPPLEMENTARY INFORMATION
76

16.B.

Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Taxes 52,002,000$ 52,002,000$ 50,578,369$ (1,423,631)$ Licenses and Permits 5,159,000 5,159,000 4,530,165 (628,835) Intergovernmental Revenue 12,071,000 12,098,640 13,708,659 1,610,019 Charges for Services 4,462,100 4,562,100 4,188,790 (373,310) Fines and Forfeitures 23,574 167,600 167,600 191,174
Investment Income 748,000 748,000 5,108,493 4,360,493
Miscellaneous 66,600 107,914 435,211 327,297 Total Revenues 74,676,300 74,845,254 78,740,861 3,895,607

EXPENDITURES
Current:

General Government 1,794,300 2,554,676 632,873 1,921,803 Public Safety 69,859,300 73,494,536 66,697,120 6,797,416 Community Development 8,396,000 9,446,341 7,233,430 2,212,911 Public Works - - - - Parks 1,547,000 1,952,868 1,575,146 377,722 Libraries 2,075,000 2,224,843 2,016,546 208,297 Capital Outlay 3,060,000 10,744,514 10,605,755 138,759 Total Expenditures 86,731,600 100,417,778 88,760,870 11,656,908 Excess (Deficiency) of Revenues
over Expenditures (12,055,300) (25,572,524) (10,020,009) 15,552,515

OTHER FINANCING SOURCES (USES)
Software Subscriptions - - 7,277,460 7,277,460 Transfers In 300,000 - - - Transfers Out (20,000) (1,165,000) (1,020,000) 145,000 Total Other Financing Sources (Uses) 280,000 (1,165,000) 6,257,460 7,422,460 Net Change in Fund Balances (11,775,300) (26,737,524) (3,762,549) 22,974,975 Fund Balance, Beginning of Year, As Adjusted 71,049,509 71,049,509 71,049,509 Fund Balance, End of Year 59,274,209$ 44,311,985 $ 67,286,960 $ 22,974,975 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund
Year Ended June 30, 2025
Budgeted Amounts
77

16.B.

Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Charges for Services 4,177,500 $ 4,462,500 $ 4,573,851 $ 111,351$ Investment Income 35,000 35,000 746,230 711,230 Miscellaneous - - 10,698 10,698 Total Revenues 4,212,500 4,497,500 5,330,779 833,279

EXPENDITURES
Current:

Sanitation 3,382,400 3,654,422 3,168,406 486,016
Capital Outlay - 6,889,125 966,460 5,922,665
Total Expenditures 3,382,400 10,543,547 4,134,866 6,408,681 Excess (Deficiency) of Revenues
over Expenditures 830,100 (6,046,047) 1,195,913 7,241,960

OTHER FINANCING SOURCES (USES)
Transfers In - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances 830,100 (6,046,047) 1,195,913 7,241,960 Fund Balance, Beginning of Year 17,467,320 17,467,320 17,467,320 - Fund Balance, End of Year 18,297,420$ 11,421,273$ 18,663,233$ 7,241,960$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Sewer and Storm Drain Special Revenue Fund Year Ended June 30, 2025
Budgeted Amounts
78

16.B.

Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Taxes -$ -$ -$ -$ Intergovernmental Revenues - 6,763,568 3,116,299 (3,647,269) Investment Income - - - - Total Revenues - 6,763,568 3,116,299 (3,647,269)

EXPENDITURES
Current:

Public Safety - 7,043,615 3,005,116 4,038,499 Capital Outlay - - - - Total Expenditures - 7,043,615 3,005,116 4,038,499 Excess (Deficiency) of Revenues
over Expenditures - (280,047) 111,183 391,230

OTHER FINANCING SOURCES (USES)
Transfers In - - - - Transfers Out - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances - (280,047) 111,183 391,230 Fund Balance, Beginning of Year (792,105) (792,105) (792,105) - Fund Balance, End of Year (792,105)$ (1,072,152) $ (680,922) $ 391,230 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety Grants Special Revenue Fund Year Ended June 30, 2025
Budgeted Amounts
79

16.B.

Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental Revenues -$ 4,887,697$ 2,251,882$ (2,635,815)$ Total Revenues - 4,887,697 2,251,882 (2,635,815)

EXPENDITURES
Current:

General Government - 605,491 352,869 252,622 Capital Outlay - 5,298,703 2,417,398 2,881,305 Total Expenditures - 5,904,194 2,770,267 3,133,927 Excess (Deficiency) of Revenues
over Expenditures - (1,016,497) (518,385) 498,112

OTHER FINANCING SOURCES (USES)
Transfers In - - - - Transfers Out - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances - (1,016,497) (518,385) 498,112 Fund Balance, Beginning of Year (302,764) (302,764) (302,764) - Fund Balance, End of Year (302,764)$ (1,319,261) $ (821,149) $ 498,112 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Miscellaneous Grants Special Revenue Fund Year Ended June 30, 2025
Budgeted Amounts
80

16.B.

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81

16.B.

City of Hemet
Required Supplementary Information
Year Ended June 30, 2025
Schedule of Changes in the Net Pension
Liability and Related Ratios
Agent Multiple-employer Plan - Miscellaneous
Total Pension Liability 2024 2023 2022 2021
2,121,823 Service cost $ 1,776,915 $ 1,739,825$ 1,620,902$ Interest on total pension liability 9,836,909 9,290,688 9,137,300 9,086,211 Changes in assumptions - - 4,277,964 - Changes of benefit terms - 188,706 - - Differences between expected and actual experience 4,191,433 (1,558,408) (2,261,897) (391,754) Benefit payments, including refunds (7,682,790) (7,347,665) (7,258,269) (7,617,503) Net change in total pension liability 8,467,375 2,350,236 5,634,923 2,697,856 Total pension liability - beginning 141,152,945 138,802,709 133,167,786 130,469,930 Total pension liability - ending (a) 149,620,320$ 141,152,945$ 138,802,709$ 133,167,786$ Plan Fiduciary Net Position
Contributions - employer 4,081,403$ 4,204,411$ 3,974,114$ 3,885,574$ Contributions - employee 938,964 840,732 703,332 680,978 Net investment income 9,983,557 6,177,834 (8,438,624) 21,096,786 Benefit payments (7,682,790) (7,347,665) (7,258,269) (7,617,503) Plan to Plan Resource Movement - - - - Administrative/Other Expense (85,087) (74,099) (69,679) (93,804) Net change in plan fiduciary net position 7,236,047 3,801,213 (11,089,126) 17,952,031 Plan fiduciary net position - beginning 104,567,698 100,766,485 111,855,611 93,903,580 Plan fiduciary net position - ending (b) 111,803,745$ 104,567,698$ 100,766,485$ 111,855,611$ Net pension liability - ending (a) - (b) 37,816,575$ 36,585,247$ 38,036,224$ 21,312,175$ Plan fiduciary net position as a percentage
of the total pension liability 74.72% 74.08% 72.60% 84.00% Covered payroll 10,765,212$ 9,029,038$ 8,647,240$ 8,751,743$ Net pension liability as percentage of
covered payroll 351.29%
405.20% 439.87% 243.52%
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:

Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2019 valuation date. This applies to voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in Assumptions: In 2021, the accounting discount rate changed from 7.15 percent to 6.90 percent.

In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflected an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

Measurement Period
82

16.B.

2020 2019 2018 2017 2016 2015
1,707,524$ 1,890,624$ 1,857,379$ 1,931,287$ 1,729,490$ 1,871,677$ 8,871,075 8,592,385 8,241,843 8,110,383 7,937,191 7,613,775 - - (585,850) 6,866,966 - (1,903,393) - - - - - - (58,526) 827,595 (1,731,724) (1,473,269) (192,030) 353,826 (6,651,779) (6,218,552) (5,862,944) (5,834,147) (5,132,797) (4,856,565) 3,868,294 5,092,052 1,918,704 9,601,220 4,341,854 3,079,320 126,601,636 121,509,584 119,590,880 109,989,660 105,647,806 102,568,486 130,469,930$ 126,601,636$ 121,509,584$ 119,590,880$ 109,989,660$ 105,647,806$ 3,788,951$ 3,789,256$ 3,136,888$ 2,990,210$ 2,647,176$ 2,503,520$ 724,261 772,222 745,420 743,649 743,644 780,189 4,584,933 5,749,884 6,966,209 8,615,176 396,714 1,739,990 (6,651,779) (6,218,552) (5,862,944) (5,834,147) (5,132,797) (4,856,565) - - (204) (38,502) (382) (887) (129,114) (62,278) (374,702) (113,068) (47,522) (87,854) 2,317,252 4,030,532 4,610,667 6,363,318 (1,393,167) 78,393 91,586,328 87,555,796 82,945,129 76,581,811 77,974,978 77,896,585 93,903,580$ 91,586,328$ 87,555,796$ 82,945,129$ 76,581,811$ 77,974,978$ 36,566,350$ 35,015,308$ 33,953,788$ 36,645,751$ 33,407,849$ 27,672,828$

71.97% 72.34% 72.06% 69.36% 69.63% 73.81%
9,960,091$ 9,693,519$ 9,531,865$ 9,581,222$ 9,353,143$ 9,860,790$ 367.13% 361.22% 356.21% 382.47% 357.18% 280.63%
M
easurement Period
83

16.B.

City of Hemet
Required Supplementary Information
Year Ended June 30, 2025
Schedule of Changes in the Net Pension
Liability and Related Ratios
Agent Multiple-employer Plan - Safety
Total Pension Liability 2024 2023 2022 2021
4,849,739 Service cost $ 4,161,065 $ 4,303,472$ 3,968,710$ Interest on total pension liability 16,151,376 15,278,425 14,633,003 13,947,881 Changes in assumptions - - 8,468,220 - Changes of benefit terms - 103,544 - - Differences between expected and actual experience 4,419,464 1,116,438 438,599 (250,382) Benefit payments, including refunds (11,885,797) (11,217,845) (10,244,764) (9,742,340) Net change in total pension liability 13,534,782 9,441,627 17,598,530 7,923,869 Total pension liability - beginning 233,176,485 223,734,858 206,136,328 198,212,459 Total pension liability - ending (a) 246,711,267$ 233,176,485$ 223,734,858$ 206,136,328$ Plan Fiduciary Net Position
Contributions - employer 9,113,747$ 8,388,840$ 7,912,960$ 7,489,405$ Contributions - employee 2,106,839 1,832,292 1,712,748 1,689,371 Net investment income 14,581,293 8,912,405 (11,839,228) 28,944,164 Benefit payments (11,885,797) (11,217,845) (10,244,764) (9,742,340) Plan to Plan Resource Movement - - - - Administrative/Other Expense (122,018) (104,525) (96,367) (126,309) Net change in plan fiduciary net position 13,794,064 7,811,167 (12,554,651) 28,254,291 Plan fiduciary net position - beginning 149,953,888 142,142,721 154,697,372 126,443,081 Plan fiduciary net position - ending (b) 163,747,952$ 149,953,888$ 142,142,721$ 154,697,372$ Net pension liability - ending (a) - (b) 82,963,315$ 83,222,597$ 81,592,137$ 51,438,956$ Plan fiduciary net position as a percentage
of the total pension liability 66.37% 64.31% 63.53% 75.05% Covered payroll 15,010,025$ 12,525,783$ 13,164,492$ 13,119,703$ Net pension liability as percentage of
covered payroll 552.72%
664.41% 619.79% 392.07%
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:

Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2018 valuation date. This applies to voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in Assumptions: In 2021, the accounting discount rate changed from 7.15 percent to 6.90 percent. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflected an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

Measurement Period
84

16.B.

2020 2019 2018 2017 2016 2015
3,877,702$ 3,746,584$ 3,255,817$ 2,874,210$ 2,471,569$ 2,394,505$ 13,404,657 12,696,170 11,907,636 11,326,420 10,976,376 10,402,942 - - (582,760) 10,043,106 - (2,726,343) - - - - - - 2,343,095 4,092,051 2,318,140 (1,131,468) 1,932,999 1,323,162 (9,217,556) (8,667,438) (8,277,450) (7,718,359) (7,544,599) (7,001,597) 10,407,898 11,867,367 8,621,383 15,393,909 7,836,345 4,392,669 187,804,561 175,937,194 167,315,811 151,921,902 144,085,557 139,692,888 198,212,459$ 187,804,561$ 175,937,194$ 167,315,811$ 151,921,902$ 144,085,557$ 6,947,064$ 6,605,381$ 5,494,582$ 4,880,193$ 4,516,245$ 4,085,934$ 1,607,715 1,569,835 1,429,167 1,142,393 1,032,806 885,734 6,111,153 7,562,691 9,055,192 11,060,588 516,112 2,205,144 (9,217,556) (8,667,438) (8,277,450) (7,718,359) (7,544,599) (7,001,597) - - (265) 38,502 382 887 (170,814) (81,214) (483,180) (144,246) (60,481) (111,835) 5,277,562 6,989,255 7,218,046 9,259,071 (1,539,535) 64,267 121,165,519 114,176,264 106,958,218 97,699,147 99,238,682 99,174,415 126,443,081$ 121,165,519$ 114,176,264$ 106,958,218$ 97,699,147$ 99,238,682$ 71,769,378$ 66,639,042$ 61,760,930$ 60,357,593$ 54,222,755$ 44,846,875$

63.79% 64.52% 64.90% 63.93% 64.31% 68.87%
12,672,228$ 11,986,001$ 10,732,874$ 9,450,596$ 9,039,459$ 8,826,041$ 566.35% 555.97% 575.44% 638.66% 599.85% 508.12%
M
easurement Period
85

16.B.

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86

16.B.

City of Hemet
Required Supplementary Information
Year Ended June 30, 2025

Schedule of Contributions – Last 10 Years
Agent Multiple-employer Plan – Miscellaneous Plan

Schedule of Contributions – Last 10 Years
Agent Multiple-employer Plan – Safety Plan

Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2025 4,607,157$ (4,607,157)$ -$ 11,311,679 $ 40.73% 2024 4,081,965 (4,081,965) - 10,765,212 37.92% 2023 4,205,154 (4,205,154) - 9,029,038 46.57% 2022 3,969,112 (3,969,112) - 8,647,240 45.90% 2021 3,887,516 (3,887,516) - 8,747,448 44.44% 2020 3,789,402 (3,789,402) - 8,953,980 42.32% 2019 3,789,256 (3,789,256) - 9,693,519 39.09% 2018 3,136,888 (3,136,888) - 9,531,865 32.91% 2017 2,990,210 (2,990,210) - 9,581,222 31.21% 2016 2,647,176 (2,647,176) - 9,353,153 28.30% Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2025 10,473,759$ (10,473,759) $ - $ 19,956,801 $ 52.48% 2024 9,113,184 (9,113,184) - 17,228,795 52.90% 2023 8,388,097 (8,388,097) - 15,152,188 55.36% 2022 7,912,960 (7,912,960) - 13,164,492 60.11% 2021 7,487,463 (7,487,463) - 13,119,703 57.07% 2020 6,947,140 (6,947,140) - 12,672,228 54.82% 2019 6,605,381 (6,605,381) - 11,986,001 55.11% 2018 5,494,582 (5,494,582) - 10,732,874 51.19% 2017 4,880,193 (4,880,193) - 9,450,596 51.64% 2016 4,516,245 (4,516,245) - 9,039,459 49.96% 87

16.B.

City of Hemet
Required Supplementary Information
Year Ended June 30, 2025
2025 2024 2023
Total OPEB Liability
Service cost 65,627$ 91,721$ 101,332$ Interest on total OPEB liability 2,582,114 2,689,277 2,879,946 Changes in assumptions (382,423) (6,355,940) - Differences between expected and actual experience 188,941 54,572 (2,466,271) Benefit payments, including refunds (4,208,422) (3,755,010) (3,834,166) Net change in total OPEB liability (1,754,163) (7,275,380) (3,319,159) Total OPEB liability - beginning 41,280,436 48,555,816 51,874,975 Total OPEB liability - ending (a) 39,526,273$ 41,280,436$ 48,555,816$ Plan Fiduciary Net Position
Contributions - employer 4,433,622$ 3,995,310$ 4,087,951$ Net Investment Income 342,460 357,500 216,126 Benefit payments (4,208,422) (3,755,010) (3,834,166) Administrative Expense (19,251) (15,800) (32,435) Net change in plan fiduciary net position 548,409 582,000 437,476 Plan fiduciary net position - beginning 3,102,030 2,520,030 2,082,554 Plan fiduciary net position - ending (b) 3,650,439$ 3,102,030$ 2,520,030$ Net OPEB liability - ending (a) - (b) 35,875,834$ 38,178,406$ 46,035,786$ Plan fiduciary net position as a percentage
of the total OPEB liabilit
y 9.2% 7.5% 5.2%
Covered - employee payroll 31,268,480 27,994,007 28,788,925 Net OPEB liability as a percentage of
covered-employee payroll 114.73% 136.38% 159.91%
* OPEB schedules are intended to show information for ten years, additional years' information will be displayed as it becomes available.

Measurement Period
Schedule of Changes in the Net OPEB Liability and Related Ratios for the Measurement Periods Ended June 30
Last 10 Years*
88

16.B.

2022 2021 2020 2019 2018
237,000$ 184,471$ 208,241$ 359,700$ 349,223$ 2,903,335 2,987,576 3,035,365 2,919,091 2,936,563 3,206,347 3,010,639 - 2,845,604 - (2,653,284) 465,835 - (191,273) - (4,091,232) (3,984,911) (3,984,013) (3,858,552) (3,293,090) (397,834) 2,663,610 (740,407) 2,074,570 (7,304) 52,272,809 49,609,199 50,349,606 48,275,036 48,282,340 51,874,975$ 52,272,809$ 49,609,199$ 50,349,606$ 48,275,036$ 4,386,817$ 4,253,811$ 4,260,842$ 4,112,794$ 3,540,596$ (319,692) 432,284 66,550 64,025 61,075 (4,091,232) (3,984,911) (3,984,013) (3,858,552) (3,293,090) (108,759) (73,501) (84,114) (56,932) (49,749) (132,866) 627,683 259,265 261,335 258,832 2,215,420 1,587,737 1,328,472 1,067,137 808,305 2,082,554$ 2,215,420$ 1,587,737$ 1,328,472$ 1,067,137$ 49,792,421$ 50,057,389$ 48,021,462$ 49,021,134$ 47,207,899$

4.0% 4.2% 3.2% 2.6% 2.2%
20,422,785 25,724,365 23,502,304 23,892,668 23,441,109 243.81% 194.59% 204.33% 205.17% 201.39%
Measurement Period
89

16.B.

City of Hemet
Required Supplementary Information
Year Ended June 30, 2025

* OPEB schedules are intended to show information for ten years, additional years’ information will be displayed as it becomes available.

Contributions in
Relation to the Contributions
Actuarially Actuarially Contribution Covered as a % of
Determined Determined Deficiency/ Employee Covered
Fiscal Year Contributions Contributions (Excess) Payroll Employee Pa yroll 2025 3,723,901$ (4,433,622)$ (709,721)$ 31,268,480$ 14.18% 2024 4,122,191 (3,995,310) 126,881 27,994,007 14.27% 2023 4,217,306 (4,087,951) 129,355 28,788,925 14.20% 2022 3,946,000 (4,386,817) (440,817) 20,422,785 21.48% 2021 3,797,000 (4,260,842) (463,842) 25,724,365 16.56% 2020 3,797,000 (4,260,842) (463,842) 23,502,304 18.13% 2019 3,744,000 (4,112,794) (368,794) 23,892,668 17.21% 2018 - (3,540,596) (3,540,596) 23,441,109 15.10% Schedule of Plan Contributions
La st 10 Ye a rs*
for the City's OPEB Plan
90

16.B.

City of Hemet
Notes to Required Supplementary Information
Year Ended June 30, 2025

BUDGETS AND BUDGETARY ACCOUNTING

The City uses the following procedures in establishing the bud getary data reflected in the financial statements:

After January 1, department heads prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. The City Manager submits to the City Council a proposed operating budget for the upcoming fiscal year. The operating budget includes a summary of the proposed expenditures and financial resources of the City, as well as historical data for the preceding two fiscal periods. Public hearings are conducted to obtain taxpayer comments. The City Council is normally expected to adopt the budget prior to the beginning of the next fiscal period through passage of an adopting resolution. This appropriated budget covers substantially all City expenditures. There were no significant non-budgeted financial activities. All appropriated amounts are as originally adopted or as amended by the City Council and not subject to continuing appropriation lapse at year end.

The City Manager is authorized to transfer budgeted amounts between functions, departments and expenditure accounts within funds. Transfers of appropriations between fun ds may be made only by authority of the City Council. Formal budgetary integration is employed as a management control device during the fiscal year for the General, Special Revenue, Capital Projects, and Debt Service funds. Formal budgetary control is not employed for Debt Service funds because effective budgetary control is a lternatively achieved through debt indenture provisions. It is the policy of the City of Hemet to only budget capital expenditure projects from existing capital projects funds fund balances. No annual revenues are budgeted due to their annual volatility. Budgets for the various funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Annual appropriated budgets are legally adopted for the General, Special Revenue, Capital Projects, and Debt Service fund types.

The following nonmajor funds did not have adopted budgets in the fiscal year ended June 30, 2025:

Local Law Enforcement Blo ck Grant Special Revenue Fund Neighborhood Stabilization Program Grant Special Revenue Fund Indian Gaming Grant Special Revenue Fund
General Capital Capi tal Projects Fund

91

16.B.

SUPPLEMENTARY INFORMATION
92

16.B.

City of Hemet
Measure U Operating Funds

In November 2016, the citizens of Hemet voted to approve Measure U, a general 1% sales tax measure. While this Measure is considered a General Tax, the City’s Council passed a Resolution restricting the use of Measure U revenues to the addition and retention of Public Safety Personnel. Although the funds are housed within the General Fund, by Resolution, they are required to be tracked in separat e accounts from General Fund revenues and expenditures. Any Measure U funds not spent at the end of the fiscal year are required to be reserved for future use of the Measure U program. Over the last two fiscal years, Measure U revenues have outpaced original projections.

The details of the City’s Measure U program for the year ended June 30, 2025 are as follows:

Police Fire Total
Revenues
Police 2/3, Fire 1/3 ov erall allocation 11,051,233$ 5,525,616$ 16,576,849$ Expenditures
Salary and Fringe Benefits 8,299,670 4,366,417 12,666,087 Operating Supplies and Services 554,822 86,476 641,298 Internal Service Charges 799,600 543,600 1,343,200 Capital Outlay 202,403 43,510 245,913 Total 9,856,495$ 5,040,003$ 14,896,498
Measure U in Support of General Fund Public Safety -$ -$ -$ Change in Measure U Operating Funds 1,194,738 485,613 1,680,351 Beginning Measure U Operating Funds 13,939,789 4,940,384 18,880,173 Prepaid Measure U Operating Funds 205,918 1,715,303 1,921,221 Committed Measure U Operating Funds 14,928,609 3,710,694 18,639,303 Ending Measure U Operating Funds 15,134,527$ 5,425,997$ 20,560,524$ 93

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Charges for Services 793,600 $ 859,431 $ 65,831 $ Investment Income 65,000 416,488 351,488
Intergovernmental - - - Total Revenues 858,600 1,275,919 417,319

EXPENDITURES
Current:

Public Works 1,167,923 499,355 668,568
Capital Outlay 6,167,507 - 6,167,507 Total Expenditures 7,335,430 499,355 6,836,075
Excess (Deficiency) of Revenues
over Expenditures (6,476,830) 776,564 7,253,394

OTHER FINANCING SOURCES (USES)
Transfers In - - - Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (6,476,830) 776,564 7,253,394 Fund Balance, Beginning of Year 8,621,530 8,621,530 -
Fund Balance, End of Year 2,144,700$ 9,398,094$ 7,253,394$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Bridges/Streets Traffic Facilities Capital Projects Fund Year Ended June 30, 2025
94

16.B.

City of Hemet
Non-major Governmental Funds

SPECIAL REVENUE FUNDS

Special revenue funds are used to account for revenue derived from specific taxes or other dedicated revenue sources (other than for major capital projects) that are restricted by law or administrative action for expenditures for specified purposes.

Public Safety/Towing - This fund accounts for the financial transactions involving the use of monies collected for towing service as related to public safety.

Gas Tax Fund - Accounts for transactions as prescribed by the State of California statute on California Streets and Highways; including receipts under Streets and Highways Code Section 2105, 2106, 2107, 2107.5 and SB300.

Measure A - Accounts for the use of Measure A tax monies for transit purposes.

Article 3 - Accounts for the use of Article 3 of the Transportation Develo pment Act (TDA) in California focuses on funding for bicycle and pedestrian projects, allocating 2% of L ocal Transportation Funds (LTF) for projects that enhance facilities for pedestrians and bicyclists.

Air Pollution Reduction - Accounts for the financial transactions per Regulation 15 of the South Coast Air Quality Management District.

Lighting/Landscape Maintenance District - Accounts for the financial transactions of City-wide lighting a nd landscaping assessment district established by City Council.

Post Proposition 218 Lighting District - Accounts for the financial transactions of lighting districts voted by the citizens of those specified areas.

Post Proposition 218 Landscape District - Accounts for financial transactions of landscape districts voted in by the citizens of those specified areas.

Public Works CFD - Accounts for financial transactions of lighting, landscape and maintenance of specific areas established by the City Council.

Asset Seizure - Accounts for the financial transactions associated with assets seized in narcotics investigations to be used for law enforcement purposes.

ARPA – Accounts for the financial transactions as prescribed under the Federal American Rescue Plan Act (ARPA) of 2021.

Public Safety CFD - Accounts for the proceeds from the Public Safety Community Facilities District voted in by the citizens of those specific areas to be used specifically for public safety.

Citizen Option for Public Safety Programs (COPS) - Accounts for the financial transactions as prescribed by the State of California Grant under AB 3229.

Local Law Enforcement Block Grant (LLEBG) - Accounts for the financial transactions as prescribed by the U.S.

Department of Justice Grant for the Local Law Enforcement Block Grant Program.

Community Development Block Grant - Accounts for the financial transactions as prescribed by the Federal Department of Housing and Urban Development for Community Development Block Grant Programs. 95

16.B.

City of Hemet
Non-Major Governmental Funds - Continued

SPECIAL REVENUE FUNDS - Continued

General Plan - Accounts for the financial transactions related to updating and maintaining the City’s general plan.

HOME Program - Home Investment Partnership Program - Accounts for the financial transactions of the federally funded HOME program as administered by the State of California’s Department of Housing and Community Development.

CAL HOME Program - Accounts for the financial transactions of the State funded program to replace and rehabilitate mobile homes.

2001 - 2008 HOME Program - Accounts for the financial transactions of the Federally funded HOME program as administered by the State of California Department of Housing and Community Development.

Neighborhood Stabilization Program Grant - Accounts for the financial transactions as prescribed by the Federal Department of Housing and Urban Development for Neighborhood Stabilization Program Grants.

Housing Authority - This fund accounts for the revenue received from the City’s affordable housing programs which facilitate housing development and affordable housing opportunities.

Indian Gaming Grants - This fund accounts for the financial transactions of Indian Gaming Grants received by the City to be spent on specific programs or departments.

Active Transportation Grants - This fund accounts for the financial transactions of Active Transportation Grant received by the City to be spent on specific programs or departments.

CAPITAL PROJECTS FUNDS

Public Meeting Facilities - Accounts for the financial transactions for the public meeti ng facilities identified in the development impact fee report and funded through developer contributions.

General Facilities - Accounts for the financial transactions for general facilities identified in the development impact fee report and funded through developer contributions.

Flood Control - Accounts for the financial transactions for flood control improvements identified in the development impact fee report and funded through developer contributions.

Law Enforcement Facilities - Accounts for the financial transactions for the purchase of equipment identified in the development impact fee report and funded through developer contributions.

Fire Facilities - Accounts for the financial transactions for the purchase of equipment identified in the development impact fee report and funded through developer contributions.

Park Development - Accounts for the financial transactions for park acquisitions and development identified in the development impact fee report and funded through park dedication fees and state grants.

Valley Wide DVL Park - Accounts for the financial transactions for development iden tified in the development impact fee report and funded through developer contributions.

96

16.B.

City of Hemet
Non-Major Governmental Funds - Continued

CAPITAL PROJECTS FUNDS - Continued

Library Facilities - Accounts for the financial transactions for expansion of lib rary facilities identified in the development impact fee report and funded through developer contributions.

Equipment Replacement - Accounts for accumulation of reserves for future replacement of rolling stock vehicles from other funds.

General Capital - Accounts for the financial transactions for the addition of new (non-replacement) equipment.

PERMANENT FUNDS

LaSalle Library Endowment - Accounts for an endowment given to the City of Hemet for the benefit of the Library.

Only interest earned on the principal amount of $1,000,000 can be used for non-operating costs of the Library.

97

16.B.

Public Air Pollution
Safety/Towing Gas Tax Measure A Article 3 Reduction
ASSETS
Cash and Investments 273,000$ 3,390,641$ 7,179,769$ -$ 707,817$ Receivables:

Accounts - - - - 31,210 Interest - - - - - Due from Other Governments - 646,275 664,275 - - Notes - - - - - Allowance for Forgivable Notes - - - - - Due from Other Funds - - - - - Due from Fiduciary Funds - - - - - Land Held for Resale - - - - - Total Assets 273,000$ 4,036,916$ 7,844,044$ -$ 739,027$

LIABILITIES
Accounts Payable 1,876$ 158,440$ 857,796$ -$ 311,477$ Accrued Salaries and Benefits 106 6,758 - - - Deposits - - - - - Unearned Revenue - - - - - Due to Other Funds - - - - - Total Liabilities 1,982 165,198 857,796 - 311,477

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - - Total Deferred Inflows of Resources -
- - - -

FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted 271,018 3,871,718 6,986,248 - 427,550 Assigned - - - - - Unassigned - - - - - Total Fund Balances 271,018 3,871,718 6,986,248 - 427,550 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 273,000$ 4,036,916$ 7,844,044$ -$ 739,027$ City of Hemet
Combining Balance Sheet
Non-major Governmental Funds
June 30, 2025
Special Revenue
98

16.B.

Special Revenue
Lighting and Post Post
Landscaping Prop 218 Prop 218 Public Works Asset Public Maintenance Lighting Landscaping CFD Seizure ARPA Safety CFD 3,021,112$ 1,997,399$ 4,366,447$ 1,165,049$ 361,471$ 1,742,150$ 1,227,014$ - 8,188 - - - - - - - - - - - - - 185 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3,021,112$ 2,005,772$ 4,366,447$ 1,165,049$ 361,471$ 1,742,150$ 1,227,014$ 79,536$ 15,101$ 51,862$ 20,250$ -$ 324,753$ 6,953$ 3,129 294 6,834 294 - 4,185 7,312 - - 204,639 113,372 249,827 - 9,654 - - - - - 263,661 - - - - - - - - 82,665 15,395 263,335 133,916 249,827 592,599 23,919 - - - - - - - - - - - - - - - - - - - - - 2,938,447 1,990,377 4,103,112 1,031,133 111,644 1,149,551 1,203,095 - - - - - - - - - - - - - - 2,938,447 1,990,377 4,103,112 1,031,133 111,644 1,149,551 1,203,095 3,021,112$ 2,005,772$ 4,366,447$ 1,165,049$ 361,471$ 1,742,150$ 1,227,014$ Continued
99

16.B.

Local Law Community
COPS Enforcement Development General HOME
AB 3229 Block Grant Block Grant Plan Program
ASSETS
Cash and Investments 701,471 $ - $ - $ 640,734 $ 770,871$ Receivables:

Accounts - - - - 249 Interest - - - - - Due from Other Governments - - 477,107 - - Notes - - - - 250,808 Allowance for Forgivable Notes - - - - - Due from Other Funds - - - - - Due from Fiduciary Funds - - - - - Land Held for Resale - - - - - Total Assets 701,471$ - $ 477,107 $ 640,734 $ 1,021,928$

LIABILITIES
Accounts Payable 61,978$ - $ 60,155 $ - $ -$ Accrued Salaries and Benefits - - - - - Deposits - - - - - Unearned Revenue - - - - - Due to Other Funds - 90,848 416,952 - - Total Liabilities 61,978 90,848 477,107 - -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - -
Total Deferred Inflows of Resources - - - - -

FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted 639,493 - - 640,734 1,021,928 Assigned - - - - - Unassigned - (90,848) - - - Total Fund Balances 639,493 (90,848) - 640,734 1,021,928 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 701,471$ - $ 477,107 $ 640,734 $ 1,021,928$ Special Revenue
City of Hemet
Combining Balance Sheet
Non-major Governmental Funds - Continued
June 30, 2025
100

16.B.

Capital
Projects
Public Indian Active
CalHome 2001 - 2008 Housing Gaming Transportation Meeting Grant Home Grant NSP Program Authority Grants Grant Facilities 245,138$ 1,052,348 $ 75,865 $ 262,342 $ 6,411 $ - $ 241,884$ - - - 3,500 - - - - 672,113 - 1,022,040 - - - - - - - - 6,408 - 317,006 3,961,151 118,874 2,917,106 - - - - (4,272,113) - (1,697,711) - - - - - - - - - - - - - - - - - - - 593,919 1,482,500 - - - 562,144$ 1,413,499 $ 788,658 $ 3,989,777 $ 6,411 $ 6,408 $ 241,884 $ -$ - $ - - $ $ - $ - $ - $ - - - - - - - - - - 5,733 - - - - - - - - - - - - - - - 6,408 - - - - 5,733 - 6,408 - - - - - - 6,408 - - - - - - 6,408 - - - - - - - - 562,144 1,413,499 788,658 3,984,044 6,411 - 241,884 - - - - - - - - - - - - (6,408) - 562,144 1,413,499 788,658 3,984,044 6,411 (6,408) 241,884 562,144$ 1,413,499$ 788,658$ 3,989,777$ 6,411$ 6,408$ 241,884$ Continued
Special Revenue
101

16.B.

Law
Flood Enforcement Fire Park General
Facilities Control Facilities Facilities Development
ASSETS
Cash and Investments 1,904,600 $ 7,818,186 $ 980,440 $ 4,917,786 $ 3,649,496 $ Receivables:

Accounts - - - - - - Interest - - - - - Due from Other Governments - - - - - Notes - - - - Allowance for Forgivable Notes - - - - - Due from Other Funds - - - - - Due from Fiduciary Funds - - - - - Land Held for Resale - - - - - Total Assets 1,904,600 $ 7,818,186 $ 980,440 $ 4,917,786 $ 3,649,496 $

LIABILITIES
Accounts Payable 21,760 $ 81,734 $ - $ - $ - $ Accrued Salaries and Benefits - - - - - Deposits - - - - - Unearned Revenue - - - - - Due to Other Funds - - - - - 21,760 Total Liabilities 81,734 - - -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - - Total Deferred Inflows of Resources -
- - - -

FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted 1,882,840 7,736,452 980,440 4,917,786 3,649,496 Assigned - - - - - Unassigned - - - - - Total Fund Balances 1,882,840 7,736,452 980,440 4,917,786 3,649,496 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 1,904,600$ 7,818,186$ 980,440$ 4,917,786$ 3,649,496$ City of Hemet
Combining Balance Sheet
Non-major Governmental Funds - Continued
June 30, 2025
Capital Projects
102

16.B.

Permanent
Fund
LaSalle Valley
Wide Library Equipment General Library
DVL Park Facilities Replacement Capital Endowment Totals 607,066$ 1,358,859 $ 5,738,286 $ 8,564 $ 1,086,176$ 57,498,392 $ - - - - - 43,147 - - - - 12,353 1,706,506 - - - - - 1,794,250 - - - - - 7,564,945 - - - - - (5,969,824) - - - - - - - - - - - - - - - - - 2,076,419 607,066$ 1,358,859 $ 5,738,286 $ 8,564 $ 1,098,529$ 64,713,835 $ -$ 6,003$ 2,513 $ - - $ 2,062,187 $ $ - - - - - 28,912 - - - - - 583,225 - - - - - 263,661 - - - - - 514,208 - 6,003 2,513 - - 3,452,193
- - - - - 6,408 - - - - - 6,408 - - - - 1,000,000 1,000,000 607,066 1,352,856 - - 98,529 54,608,153 - - 5,735,773 8,564 - 5,744,337 - - - - - (97,256) 607,066 1,352,856 5,735,773 8,564 1,098,529 61,255,234
607,066$ 1,358,859$ 5,738,286$ 8,564$ 1,098,529$ 64,713,835$ Capital Projects
103

16.B.

Public Air Pollution
Safety/Towing Gas Tax Measure A Article 3 Reduction

REVENUES
Taxes -$ -$ 2,935,555$ -$ -$ Intergovernmental Revenue - 4,968,560 - - 119,514 Charges for Services 82,642 - - - - Investment Income 9,164 207,716 311,913 - 26,194 Miscellaneous - 613 - - - Total Revenues 91,806 5,176,889 3,247,468 - 145,708

EXPENDITURES
Current:

General Government - - - - - Public Safety 45,305 - - - - Community Development - - - - - Public Works - 1,907,714 43,252 - - Libraries - - - - - Capital Outlay - 6,204,626 3,625,959 - 322,477 Total Expenditures 45,305 8,112,340 3,669,211 - 322,477 Excess (Deficiency) of Revenues
Over Expenditures 46,501 (2,935,451) (421,743) - (176,769)

OTHER FINANCING SOURCES (USES)
Transfers In - 20,000 - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - 20,000 - - - Net Change in Fund Balances 46,501 (2,915,451) (421,743) - (176,769) Fund Balances, Beginning, as previously reported 224,517 6,787,169 7,407,991 - 604,319 Change within financial reporting entity - - - - - Fund Balances, Beginning, as adjusted 224,517 6,787,169 7,407,991 - 604,319
Fund Balances, End of Year 271,018$ 3,871,718$ 6,986,248$ -$ 427,550$ City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
Special Revenue
Year Ended June 30, 2025
104

16.B.

Lighting and Post Post
Landscaping Prop 218 Prop 218 Public Works Asset Public Maintenance Lighting Landscaping CFD Seizure ARPA Safety CFD -$ -$ -$ -$ -$ -$ -$ - - - - 3,977 2,461,416 - 1,661,007 368,933 2,110,690 534,616 - - 1,397,448 109,791 73,891 151,509 34,019 12,352 - 27,320 75,724 1,120 60 - - - - 1,846,522 443,944 2,262,259 568,635 16,329 2,461,416 1,424,768 - - - - - 1,550,332 - - - - - - - 1,081,399 - - - - - - - 1,830,905 190,558 1,806,039 93,554 - - - - - - - - - - - - - - - 6,309,312 - 1,830,905 190,558 1,806,039 93,554 - 7,859,644 1,081,399 15,617 253,386 456,220 475,081 16,329 (5,398,228) 343,369 - - - - - - - - - - - - - - - - - - - - - 15,617 253,386 456,220 475,081 16,329 (5,398,228) 343,369 2,922,830 1,736,991 3,646,892 556,052 95,315 - 859,726 - - - - - 6,547,779 - 2,922,830 1,736,991 3,646,892 556,052 95,315 6,547,779 859,726 2,938,447$ 1,990,377$ 4,103,112$ 1,031,133$ 111,644$ 1,149,551$ 1,203,095$ Continued
Special Revenue
105

16.B.

Local Law Community
COPS Enforcement Development General HOME
AB 3229 Block Grant Block Grant Plan Program

REVENUES
Taxes -$ -$ - $ - $ -$ Intergovernmental Revenue 270,809 - 487,108 - - Charges for Services - - - 36,384 - Investment Income - - - 25,449 - Miscellaneous - - - - 167 Total Revenues 270,809 - 487,108 61,833 167

EXPENDITURES
Current:

General Government - - - - - Public Safety 333,408 - - - - Community Development - - 321,337 - - Public Works - - - - - Libraries - - - - - Capital Outlay - - 165,771 - - Total Expenditures 333,408 - 487,108 - - Excess (Deficiency) of Revenues
Over Expenditures (62,599) - - 61,833 167

OTHER FINANCING SOURCES (USES)
Transfers In - - - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - - - - - Net Change in Fund Balances (62,599) - - 61,833 167
Fund Balances, Beginning, as previously reported 702,092 (90,848) - 578,901 1,021,761 (major to non-major) - - - - - Fund Balances, Beginning, as adjusted 702,092 (90,848) - 578,901 1,021,761 Fund Balances, End of Year 639,493$ (90,848)$ - $ 640,734 $ 1,021,928$ City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds - Continued
Year Ended June 30, 2025
Special Revenue
106

16.B.

Capital
Projects
(Formerly
Indian Active Non-Major) Public
CalHome 2001 - 2008 Housing Gaming Transportation Miscellaneous Meeting Grant Home Grant NSP Program Authority Grants Grant Grants Facilities -$ -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - 10,607 - - - 9,780 24,000 1,300 - - - - - - 24,000 1,300 - 10,607 - - - 9,780 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - 6,267 - - - - - - - 6,267 - - 24,000 1,300 - 10,607 - (6,267) - 9,780 - - - - - - - - - - - - - - - - - - - - - - - - 24,000 1,300 - 10,607 - (6,267) - 9,780 538,144 1,412,199 788,658 3,973,437 6,411 (141) (302,764) 232,104 - - - - - - 302,764 - 538,144 1,412,199 788,658 3,973,437 6,411 (141) - 232,104 562,144$ 1,413,499$ 788,658$ 3,984,044$ 6,411$ (6,408)$ -$ 241,884$ Continued
Special Revenue
107

16.B.

Law
Enforcement Fire Flood General Park
Facilities Control Facilities Facilities Development

REVENUES
Taxes -$ -$ -$ -$ -$ Intergovernmental Revenue - - - - - Charges for Services 203,635 898,256 76,690 126,929 210,546 Investment Income 78,285 300,065 38,834 212,080 145,307 Miscellaneous - - - - - Total Revenues 281,920 1,198,321 115,524 339,009 355,853

EXPENDITURES
Current:

General Government - - - - - Public Safety - - - - - Community Development - - - - - Public Works 160,509 - - - - Libraries - - - - - Capital Outlay - 326,216 - - 17,209 Total Expenditures 160,509 326,216 - - 17,209 Excess (Deficiency) of Revenues
Over Expenditures 121,411 872,105 115,524 339,009 338,644

OTHER FINANCING SOURCES (USES)
Transfers In - - - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - - - - - Net Change in Fund Balances 121,411 872,105 115,524 339,009 338,644 Fund Balances, Beginning, as previously reported 1,761,429 6,864,347 864,916 4,578,777 3,310,852
(major to non-major) - - - - - Fund Balances, Beginning, as adjusted 1,761,429 6,864,347 864,916 4,578,777 3,310,852 Fund Balances, End of Year 1,882,840$ 7,736,452$ 980,440$ 4,917,786$ 3,649,496$ City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds - Continued
Year Ended June 30, 2025
Capital Projects
108

16.B.

Permanent
Fund
Valley LaSalle
Wide Library Equipment General Library
DVL Park Facilities Replacement Capital Endowment Totals -$ -$ -$ -$ -$ 2,935,555$ - - - - - 8,311,384 34,323 88,407 1,093,300 - - 8,923,806 24,113 56,207 250,670 - 63,565 2,178,831 - - 54,375 - - 157,359 58,436 144,614 1,398,345 - 63,565 22,506,935 - - - - - 1,550,332 - - - - - 1,460,112 - - - - - 321,337 - - - - - 6,032,531 - 137,710 - - 16,434 154,144 - - 1,979,705 - - 18,957,542 - 137,710 1,979,705 - 16,434 28,475,998 58,436 (581,360) 6,904 - 47,131 (5,969,063)
- - - - - 20,000 - - - - - - - - - - - 20,000 58,436 6,904 (581,360) - 47,131
(5,949,063)
548,630 1,345,952 6,317,133 8,564 1,051,398 60,353,754
- - - - - 6,850,543 548,630 1,345,952 6,317,133 8,564 1,051,398 67,204,297 607,066$ 1,352,856$ 5,735,773$ 8,564$ 1,098,529$ 61,255,234$ Capital Projects
109

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Charges for Services 70,000 $ 82,642 $ 12,642 $ Investment Income - 9,164 9,164
Miscellaneous - - - Total Revenues 70,000 91,806 21,806

EXPENDITURES
Current:

Public Safety 24,695 70,000 45,305
Capital Outlay - - - 24,695 70,000 45,305 Total Expenditures
Excess (Deficiency) of Revenues
- over Expenditures 46,501 46,501

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - 46,501 46,501
Fund Balance, Beginning of Year 224,517 224,517 -
Fund Balance, End of Year 224,517$ 271,018$ 46,501$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety Towing Special Revenue Fund Year Ended June 30, 2025
110

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Licenses and Permits - $ - $ - $ Intergovernmental Revenue 4,843,500 4,968,560 125,060
Investment Income 25,000 207,716 182,716
Miscellaneous - 613 613 Total Revenues 4,868,500 5,176,889 308,389

EXPENDITURES
Current:

Public Works 2,034,087 1,907,714 126,373
Capital Outlay 8,813,482 6,204,626 2,608,856
10,847,569 8,112,340 2,735,229 Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures (5,979,069) (2,935,451) 3,043,618

OTHER FINANCING SOURCES (USES)
Transfers In 20,000 20,000 -
Transfers Out - - - Total Other Financing Sources (Uses) 20,000 20,000 -
Net Change in Fund Balances (5,959,069) (2,915,451) 3,043,618 Fund Balances, Beginning of Year 6,787,169 6,787,169 -
Fund Balance, End of Year 828,100 $ 3,871,71
8$ 3,043,618$
City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Gas Tax Special Revenue Fund
Year Ended June 30, 2025
111

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
2,778,000 Taxes $ 2,935,555 $ 157,555 $
30,000 311,913 281,913 Investment Income
- Charges for Services - - 2,808,000 3,247,468 439,468 Total Revenues

EXPENDITURES
Current:

Public Works 47,252 43,252 4,000
Capital Outlay 10,550,433 3,625,959 6,924,474
Total Expenditures 10,597,685 3,669,211 6,928,474 Excess (Deficiency) of Revenues
Over Expenditures (7,789,685) (421,743) 7,367,942 Fund Balance, Beginning of Year 7,407,991 7,407,991 -
Fund Balance, End of Year (381,694) $ 6,986,248 $ 7,367,942 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Measure A Special Revenue Fund
Year Ended June 30, 2025
112

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
- Intergovernmental Revenue $ - $ - $ - Miscellaneous - - - Total Revenues - -

EXPENDITURES
Current:
- Public Works - - 536,786 Capital Outlay - 536,786 536,786 Total Expenditures - 536,786 Excess (Deficiency) of Revenues
Over Expenditures (536,786) - 536,786 Fund Balance, Beginning of Year - - - Fund Balance, End of Year (536,786) $ - $ 536,786$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Article 3 Special Revenue Fund
Year Ended June 30, 2025
113

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
100,000 Intergovernmental Revenue $ 119,514 $ 19,514 $ 5,000 Investment Income 26,194 21,194
- Charges for Services - - Total Revenues 105,000 145,708 40,708

EXPENDITURES
Current:

Public Works - - - Capital Outlay 326,000 322,477 3,523
326,000 Total Expenditures 322,477 3,523 Excess (Deficiency) of Revenues
Over Expenditures (221,000) (176,769) 44,231

OTHER FINANCING SOURCES (USES)
Transfers In - - - Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (221,000) (176,769) 44,231
Fund Balance, Beginning of Year 604,319 604,319 -
Fund Balance, End of Year 383,319 $ 427,550 $ 44,231 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Air Pollution Reduction Special Revenue Fund Year Ended June 30, 2025
114

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Taxes - $ - $ - $
Charges for Services 1,678,723 1,661,007 (17,716)
Investment Income - 109,791 109,791 Miscellaneous - 75,724 75,724
Total Revenues 1,678,723 1,846,522 167,799

EXPENDITURES
Current:

Public Works 1,803,366 1,830,905 (27,539)
Capital Outlay - - - Total Expenditures 1,803,366 1,830,905 (27,539)
Excess (Deficiency) of Revenues
over Expenditures (124,643) 15,617 140,260

OTHER FINANCING SOURCES (USES)
Transfers In 145,000 - (145,000) Transfers Out - - - Total Other Financing Sources (Uses) 145,000 - (145,000) 20,357 15,617 (4,740) Net Change in Fund Balances
Fund Balance, Beginning of Year 2,922,830 2,922,830 -
Fund Balance, End of Year 2,943,187 $ 2,938,447 $ (4,740) $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Lighting/Landscaping Maintenance Special Revenue Fund Year Ended June 30, 2025
115

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ - - $ $
Charges for Services 381,382 368,933 (12,449) Investment Income - 73,891 73,891 Miscellaneous - 1,120 1,120
381,382 Total Revenues 443,944 62,562

EXPENDITURES
Current:

Public Works 472,227 190,558 281,669
Capital Outlay - - - Total Expenditures 472,227 190,558 281,669 Excess (Deficiency) of Revenues
over Expenditures (90,845) 253,386 344,231

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (90,845) 253,386 344,231 Fund Balance, Beginning of Year 1,736,991 1,736,991 -
Fund Balance, End of Year 1,646,146 $ 1,990,377 $ 344,231 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Post Prop 218 Lighting Special Revenue Fund Year Ended June 30, 2025
116

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ - - $ $
Charges for Services 2,171,987 2,110,690 (61,297) Investment Income - 151,509 151,509 Miscellaneous - 60 60
Total Revenues 2,171,987 2,262,259 90,272

EXPENDITURES
Current:

Public Works 2,077,930 1,806,039 271,891
Capital Outlay 200,000 - (200,000) Total Expenditures 2,277,930 1,806,039 471,891
Excess (Deficiency) of Revenues
over Expenditures (105,943) 456,220 562,163

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (105,943) 456,220 562,163 Fund Balance, Beginning of Year 3,646,892 3,646,892 -
Fund Balance, End of Year 3,540,94 9$ 4,103,112$ 562,163$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Post Prop 218 Landscape Special Revenue Fund Year Ended June 30, 2025
117

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Charges for Services - $ 534,616$ 534,616 $ Investment Income - 34,019 34,019 - Total Revenues 568,635 568,635

EXPENDITURES
Current:

Public Works 39,900 93,554 (53,654)
Capital Outlay - - - 39,900 Total Expenditures 93,554 (53,654) Excess (Deficiency) of Revenues
Over Expenditures (39,900) 475,081 514,981 Fund Balance, Beginning of Year 556,052 556,052 - Fund Balance, End of Year 516,152 $ 1,031,133 $ 514,981 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Works CFD Special Revenue Fund Year Ended June 30, 2025
118

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues - 3,977 3,977
Investment Income 1,000 12,352 11,352
Miscellaneous - - -
Total Revenues 1,000 16,329 15,329

EXPENDITURES
Current:

Public Safety 7,822 - 7,822
Capital Outlay - - -
Total Expenditures 7,822 - 7,822 Excess (Deficiency) of Revenues
over Expenditures (6,822) 16,329 23,151

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (6,822) 16,329 23,151 Fund Balance, Beginning of Year 95,315 95,315 -
Fund Balance, End of Year 88,493 $ 111,644$ 23,151 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Asset Seizure Special Revenue Fund
Year Ended June 30, 2025
119

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
2,727,077 Intergovernmental $ 2,461,416 $ (265,661) $ 2,727,077 2,461,416 (265,661) Total Revenues

EXPENDITURES
Current:
1,875,977 1,550,332 325,645 General Government
7,396,878 6,309,312 1,087,566 Capital Outlay
9,272,855 7,859,644 1,413,211 Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures (6,545,778) (5,398,228) 1,147,550

OTHER FINANCING SOURCES (USES)
Transfers In - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (6,545,778) (5,398,228) 1,147,550 Fund Balance, Beginning of Year 6,547,779 6,547,779 - Fund Balance, End of Year 2,001$ 1,149,551$ 1,147,550$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - ARPA Special Revenue Fund
Year Ended June 30, 2025
120

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
- $ Intergovernmental Revenue -$ -$ Charges for Services 988,000 1,397,448 409,448
Investment Income - 27,320 27,320
Total Revenues 988,000 1,424,768 436,768

EXPENDITURES
Current:

Public Safety 1,081,500 1,081,399 (101)
Capital Outlay - - -
Total Expenditures 1,081,500 1,081,399 101
Excess (Deficiency) of Revenues
over Expenditures (93,500) 343,369 436,869

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (93,500) 343,369 436,869 Fund Balance, Beginning of Year 859,726 859,726 -
Fund Balance, End of Year 766,226$ 1,203,095$ 436,869$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety CFD Special Revenue Fund Year Ended June 30, 2025
121

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues 779,901 270,809 (509,092) Investment Income - - - Total Revenues 779,901 270,809 (509,092)

EXPENDITURES
Current:

Public Safety 556,606 333,408 223,198
Capital Outlay - - -
Total Expenditures 556,606 333,408 223,198
Excess (Deficiency) of Revenues
over Expenditures 223,295 (62,599) (285,894)

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 223,295 (62,599) (285,894) Fund Balance, Beginning of Year 702,092 702,092 -
Fund Balance, End of Year 925,387 $ 639,493$ (285,894)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - COPS/AB 3229 Special Revenue Fund
Year Ended June 30, 2025
122

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Taxes - $ - $ - $
Intergovernmental Revenues 1,619,600 487,108 (1,132,492) Investment Income - - - Total Revenues 1,619,600 487,108 (1,132,492)

EXPENDITURES
Current:

General Governmental - - - Community Development 567,047 321,337 245,710 Capital Outlay 1,080,651 165,771 914,880 Total Expenditures 1,647,698 487,108 1,160,590 Excess (Deficiency) of Revenues
over Expenditures (28,098) - 28,098

OTHER FINANCING SOURCES (USES)
Transfers In - - - Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (28,098) - 28,098 Fund Balance, Beginning of Year - - - Fund Balance, End of Year (28,098) $ - $ 28,098$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Community Development Block Grant Special Revenue Fund Year Ended June 30, 2025
123

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ -$ - $
Charges for Services 97,300 36,384 (60,916) Investment Income 1,200 25,449 24,249
Total Revenues 98,500 61,833 (36,667)

EXPENDITURES
Current:

General Government 47,043 - 47,043 Capital Outlay - - -
Total Expenditures 47,043 - 47,043 Excess (Deficiency) of Revenues
over Expenditures 51,457 61,833 10,376

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 51,457 61,833 10,376 Fund Balance, Beginning of Year 578,901 578,901 -
Fund Balance, End of Year 630,358 $ 640,734$ 10,376 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Plan Special Revenue Fund
Year Ended June 30, 2025
124

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Investment Income 1,000 $ - $ (1,000)$ Miscellaneous - 167 167
1,000 Total Revenues 167 (833)

EXPENDITURES
Current:

Community Development - - - - Capital Outlay - - - Total Expenditures - - Excess (Deficiency) of Revenues
over Expenditures 1,000 167 (833)

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 1,000 167 (833) Fund Balance, Beginning of Year 1,021,761 1,021,761 -
Fund Balance, End of Year 1,022,761 $ 1,021,92 8$ (833)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - HOME Program Special Revenue Fund
Year Ended June 30, 2025
125

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Investment Income 1,600 $ -$ (1,600)$ Miscellaneous - 24,000 24,000
Total Revenues 1,600 24,000 22,400

EXPENDITURES
Current:

Community Development - - - Public Works - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 1,600 24,000 22,400

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 1,600 24,000 22,400 Fund Balance, Beginning of Year 538,144 538,144 -
Fund Balance, End of Year 539,744 $ 562,144$ 22,400 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - CalHome Grant Special Revenue Fund
Year Ended June 30, 2025
126

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
- Taxes - $ $ - $
- Intergovernmental Revenues - - Investment Income 11,000 - (11,000) Miscellaneous - 1,300 1,300
11,000 Total Revenues 1,300 (9,700)

EXPENDITURES
Current:
- Community Development - - - Public Works - -
- Capital Outlay - - - Total Expenditures - - Excess (Deficiency) of Revenues
11,000 over Expenditures 1,300 (9,700)

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - 11,000 Net Change in Fund Balances 1,300 (9,700) Fund Balance, Beginning of Year 1,412,199 1,412,199 -
Fund Balance, End of Year 1,423,19 9$ 1,413,499$ (9,700)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - 2001- 2008 Home Grant Special Revenue Fund Year Ended June 30, 2025
127

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Taxes - $ - - $ $
Intergovernmental Revenues - - - Investment Income 1,500 10,607 9,107 Total Revenues 1,500 10,607 9,107

EXPENDITURES
Current:

Public Works - - -
Capital Outlay - - - - Total Expenditures - - Excess (Deficiency) of Revenues
over Expenditures 1,500 10,607 9,107

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 1,500 10,607 9,107 Fund Balance, Beginning of Year 3,973,437 3,973,437 -
Fund Balance, End of Year 3,974,937 $ 3,984,044 $ 9,107 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Housing Authority Special Revenue Fund Year Ended June 30, 2025
128

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - $ - $ - Total Revenues - -

EXPENDITURES
Current:

Public Works - - -
Capital Outlay 305,118 6,267 (298,851)
Total Expenditures 305,118 6,267 298,851 Excess (Deficiency) of Revenues
over Expenditures (305,118) (6,267) 298,851

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - (305,118) Net Change in Fund Balances (6,267) 298,851 Fund Balance, Beginning of Year (141) (141) - Fund Balance, End of Year (305,259 )$ (6,408)$ 298,851$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Active Transportation Grant Special Revenue Fund Year Ended June 30, 2025
129

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services - - - Investment Income 3,000 9,780 6,780
Total Revenues 3,000 9,780 6,780

EXPENDITURES
Current:

Public Works - - -
Libraries - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 3,000 9,780 6,780

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 3,000 9,780 6,780 Fund Balance, Beginning of Year 232,104 232,104 -
Fund Balance, End of Year 235,104 $ 241,884$ 6,780 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Meeting Facilities Capital Projects Fund Year Ended June 30, 2025
130

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - - $ $ Charges for Services 226,200 203,635 (22,565) Investment Income 8,000 78,285 70,285 Miscellaneous - - - 234,200 Total Revenues 281,920 47,720

EXPENDITURES
Current:

Public Works 540,626 160,509 380,117
Capital Outlay - - - Total Expenditures 540,626 160,509 380,117 Excess (Deficiency) of Revenues
over Expenditures (306,426) 121,411 427,837

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (306,426) 121,411 427,837 Fund Balance, Beginning of Year 1,761,429 1,761,429 -
Fund Balance, End of Year 1,455,003 $ 1,882,840 $ 427,837 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Facilities Capital Projects Fund Year Ended June 30, 2025
131

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
- Intergovernmental Revenues $ - - $ $ Charges for Services 5,231,100 898,256 (4,332,844) Investment Income 45,000 300,065 255,065 Miscellaneous - - - Total Revenues 5,276,100 1,198,321 (4,077,779)

EXPENDITURES
Current:

Public Works - - - Capital Outlay 7,098,078 326,216 6,771,862
Total Expenditures 7,098,078 326,216 6,771,862 Excess (Deficiency) of Revenues
over Expenditures (1,821,978) 872,105 2,694,083

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (1,821,978) 872,105 2,694,083 Fund Balance, Beginning of Year 6,864,347 6,864,347 -
Fund Balance, End of Year 5,042,369$ 7,736,452$ 2,694,083$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Flood Control Capital Projects Fund Year Ended June 30, 2025
132

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 139,800 76,690 (63,110) Investment Income 1,100 38,834 37,734 Total Revenues 140,900 115,524 (25,376)

EXPENDITURES
Current:

Public Works - - - Capital Outlay - - - - Total Expenditures - - Excess (Deficiency) of Revenues
over Expenditures 140,900 115,524 (25,376)

OTHER FINANCING SOURCES (USES)
Transfers In - - - Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 140,900 115,524 (25,376) Fund Balance, Beginning of Year 864,916 864,916 -
Fund Balance, End of Year 1,005,816 $ 980,440 $ (25,376) $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Law Enforcement Facilities Capital Projects Fund Year Ended June 30, 2025
133

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 166,000 126,929 (39,071) Investment Income 50,000 212,080 162,080 Total Revenues 216,000 339,009 123,009

EXPENDITURES
Current:

Public Works - - -
Capital Outlay 1,174,210 - 1,174,210 Total Expenditures 1,174,210 - 1,174,210 Excess (Deficiency) of Revenues
over Expenditures (958,210) 339,009 1,297,219

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (958,210) 339,009 1,297,219 Fund Balance, Beginning of Year 4,578,777 4,578,777 -
Fund Balance, End of Year 3,620,567 $ 4,917,786 $ 1,297,21 9$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Fire Facilities Capital Projects Fund Year Ended June 30, 2025
134

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - - $ $ Charges for Services 460,000 210,546 (249,454) Investment Income 23,000 145,307 122,307 Total Revenues 483,000 355,853 (127,147)

EXPENDITURES
Current:

Public Works - - -
Capital Outlay 177,856 17,209 160,647
Total Expenditures 177,856 17,209 160,647 Excess (Deficiency) of Revenues
over Expenditures 305,144 338,644 33,500

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 305,144 338,644 33,500 Fund Balance, Beginning of Year 3,310,852 3,310,852 -
Fund Balance, End of Year 3,615,996 $ 3,649,496 $ 33,500 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Park Development Capital Projects Fund Year Ended June 30, 2025
135

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services 78,000 34,323 (43,677) Investment Income 1,500 24,113 22,613
Total Revenues 79,500 58,436 (21,064)

EXPENDITURES
Current:

General Government - - - Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 79,500 58,436 (21,064)

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 79,500 58,436 (21,064) Fund Balance, Beginning of Year 548,630 548,630 -
Fund Balance, End of Year 628,130 $ 607,066$ (21,064)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Valley Wide DVL Park Capital Projects Fund Year Ended June 30, 2025
136

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services - 88,407 88,407 Investment Income 8,500 56,207 47,707 Miscellaneous - - - 8,500 Total Revenues 144,614 136,114

EXPENDITURES
Current:

Libraries 193,200 137,710 55,490
Capital Outlay 505,025 - 505,025 Total Expenditures 698,225 137,710 560,515 Excess (Deficiency) of Revenues
over Expenditures (689,725) 6,904 696,629

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (689,725) 6,904 696,629 Fund Balance, Beginning of Year 1,345,952 1,345,952 -
Fund Balance, End of Year 656,227 $ 1,352,856 $ 696,629 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Library Facilities Capital Projects Fund Year Ended June 30, 2025
137

16.B.

Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 1,093,300 1,093,300 -
Investment Income 10,000 250,670 240,670 Miscellaneous 96,700 54,375 (42,325)
Total Revenues 1,200,000 1,398,345 198,345

EXPENDITURES
Current:

Public Works - - -
Capital Outlay 4,019,580 1,979,705 2,039,875
Total Expenditures 4,019,580 1,979,705 2,039,875 Excess (Deficiency) of Revenues
over Expenditures (2,819,580) (581,360) 2,238,220

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - (2,819,580) Net Change in Fund Balances (581,360) 2,238,220 Fund Balance, Beginning of Year 6,317,133 6,317,133 -
Fund Balance, End of Year 3,497,553 $ 5,735,773 $ 2,238,220 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Equipment Replacement Capital Projects Fund Year Ended June 30, 2025
138

16.B.

Variance with
Final Budget
Actual Positive Final
Budget Amounts (Negative)

REVENUES
Intergovernmental Revenues - $ - - $ $ Charges for Services - - - Investment Income - 63,565 63,565 - Total Revenues 63,565 63,565

EXPENDITURES
Current:
- General Governmental - - Libraries 14,000 16,434 (2,434)
- Capital Outlay - - 14,000 Total Expenditures 16,434 (2,434) Excess (Deficiency) of Revenues
(14,000) over Expenditures 47,131 61,131

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (14,000) 47,131 61,131 Fund Balance, Beginning of Year 1,051,398 1,051,398 -
Fund Balance, End of Year 1,037,39 8$ 1,098,529$ 61,131$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - LaSalle Library Endowment Permanent Fund Year Ended June 30, 2025
139

16.B.

THIS PAGE INTENTIONALLY LEFT BLANK
140

16.B.

City of Hemet
Internal Service Funds

INTERNAL SERVICE FUNDS

Administrative Services - Accounts for the central administrative services funded by interdepartmental allocation.

Workers' Compensation - Accounts for the financial transactions of a self-insured workers' compensation program

Medical Insurance - Accounts for the financial transactions of a self-insured em ployer active employee medical, dental and vision insurance program.

Liability Insurance - Accounts for the financial transactions of an external liability program.

OPEB - Accounts for financial transactions of a self-insured employer retiree medical, dental and vision insurance program.

141

16.B.

Workers' Medical
Admin. Compensation Insurance
Services Admin Admin
ASSETS
Current:

Cash and Investments 6,554,288$ 2,157,239$ -$
Accounts Receivable 12,846 - - Due from Other Funds - - - Due from Other Governments - - - Prepaid Assets 261,320 - -
Inventory 253,224 - -
Total Current Assets 7,081,678 2,157,239 -
Noncurrent Assets:

Construction in Progress - - - Capital Assets 4,559,646 - -
Less Accumulated Depreciation (3,675,633) - - Total Noncurrent Assets 884,013 - - Total Assets 7,965,691 2,157,239 -

LIABILITIES
Current Liabilities:

Accounts Payable 475,268 45,020 12,324 Accrued Salaries and Benefits 35,088 - - Due to Other Funds - - 23,361 Unearned Revenue - - - Current Portion of Long-term Liabilities:

Claims Payable - 76,199 6,671 Total Current Liabilities 510,356 121,219 42,356
Noncurrent Liabilities:

Claims Payable - 177,799 -
Total Noncurrent Liabilities - 177,799 - Total Liabilities 510,356 299,018 42,356

NET POSITION
Net Investment in Capital Assets 884,013 - - Unrestricted 6,571,322 1,858,221 (42,356)
Total Net Position 7,455,335$ 1,858,221$ (42,356)$
City of Hemet
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
142

16.B.

Liability
Insurance OPEB Total
190,380$ 2,959,422$ 11,861,329$
- 1,831 14,677
- - -
- - -
- - 261,320
- - 253,224
190,380 2,961,253 12,390,550
- - -
- - 4,559,646 - - (3,675,633) - - 884,013
190,380 2,961,253 13,274,563
152,190 16,671 701,473
- - 35,088
- - 23,361
- - -
1,870,200 3,474 1,956,544
2,022,390 2,716,466 20,145
4,363,707 - 4,541,506
4,363,707 - 4,541,506
6,386,097 20,145 7,257,972
- - 884,013
(6,195,717) 2,941,108 5,132,578
(6,195,717)$ 2,941,108$ 6,016,591$
143

16.B.

Workers' Medical
Admin. Compensation Insurance
Services Admin Admin

OPERATING REVENUE
Charges for Services 9,454,450$ 1,464,000$ 361,967$ Miscellaneous 176,161 - -
Total Operating Revenue 9,630,611 1,464,000 361,967

OPERATING EXPENSES
Personnel Services 3,565,031 51,141 -
Parts and Supplies 119,105 - -
Maintenance 2,631,076 - -
Utilities 995,726 - -
Contracts, Rents and Leases 530,111 82,818 15,108 Insurance 343,200 1,497,620 -
Claims and Judgments 695,934 - 389,663 General Office - - - Depreciation 154,842 - -
Total Operating Expenses 9,035,025 1,631,579 404,771 Operating Income (Loss) 595,586 (167,579) (42,804)

NONOPERATING REVENUE (EXPENSES)
Disposal of Capital Assets - - - Total Nonoperating Revenue (Expenses) - - - Income (Loss) Before Transfers
and Capital Contributions 595,586 (167,579) (42,804)
Capital Contributions - - - Transfers In - - - Transfers Out - - - Change in Net Position (42,804) 595,586 (167,579)
Net Position, Beginning 6,859,749 2,025,800 448
Net Position, Ending 7,455,335$ 1,858,221$ (42,356)$ City of Hemet
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
Year Ended June 30, 2025
144

16.B.

Liability
Insurance OPEB Total
7,221,400$ 4,729,517$ 23,231,334$
72,063 200 248,424
7,293,463 4,729,717 23,479,758
59,606 - 3,675,778
- - 119,105
- - 2,631,076 - - 995,726
100,000 - 728,037
5,312,512 4,213,659 11,366,991
39,201 - 1,124,798
- - -
- - 154,842
5,511,319 4,213,659 20,796,353
1,782,144 516,058 2,683,405
- - -
- - -
1,782,144 516,058 2,683,405
- - -
1,000,000 - 1,000,000
- - -
2,782,144 3,683,405 516,058
(8,977,861) 2,425,050 2,333,186
(6,195,717)$ 2,941,108$ 6,016,591$
145

16.B.

Workers' Medical
Admin. Compensation Insurance
Services Admin Admin

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from User Departments 9,530,702$ 1,693,865$ 361,967$ Cash Paid to Suppliers for Goods and Services (4,471,545) (1,556,616) (4,920) Cash Paid to Employees for Services (3,568,143) (52,144) - Cash Payments for Insurance and Claims (695,934) (418,520) (388,662) Net Cash From Operating Activities 795,080 (333,415) (31,615)

CASH FLOWS FROM NONCAPITAL AND

RELATED FINANCING ACTIVITIES
Cash Paid From Other Funds - - 23,361 Cash Paid (to) Other Funds - - - Net Cash From Noncapital and Related
Financing Activities - - 23,361

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (147,538) - - Net Cash From Capital and Related
Financing Activities (147,538) - -
Net Increase (Decrease) in Cash and Cash Equivalents 647,542 (333,415) (8,254) Cash and Cash Equivalents, Beginning of the Year 5,906,746 2,490,654 8,254 Cash and Cash Equivalents, End of the Year 6,554,288$ 2,157,239$ -$ Reconciliation of Operating Income (Loss) to
Net Cash from Operating Activities:

Operating Income (Loss) 595,586$ (167,579)$ (42,804)$ Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:

Depreciation 154,842 - -
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (11,909) 229,865 - (Increase) Decrease in Prepaid Assets 130,660 - - (Increase) Decrease in Inventory (114,374) - - Increase (Decrease) in Accounts Payable 131,387 23,822 10,188 Increase (Decrease) in Accrued Salaries and Benefits (3,112) (1,003) - Increase (Decrease) in Unearned Revenue (88,000) - - Increase (Decrease) in Claims Payable - (418,520) 1,001 Net Cash from Operating Activities 795,080$ (333,415) $ (31,615) $ City of Hemet
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2025
146

16.B.

Liability
Insurance OPEB Total
7,293,463$ 4,727,785$ 23,607,782$
(5,527,327) (4,209,317) (15,769,725)
(59,931) - (3,680,218)
(2,640,825) 52 (4,143,889)
(934,620) 518,520 13,950
1,000,000 - 1,023,361
- - -
1,000,000 - 1,023,361
- - (147,538) - - (147,538) 65,380 518,520 889,773
125,000 2,440,902 10,971,556
190,380$ 2,959,422$ 11,861,329$
1,782,144$ 516,058$ 2,683,405$
- - 154,842
- (1,831) 216,125
- - 130,660
- - (114,374) (114,815) 4,342 54,924
(325) - (4,440)
- (101) (88,101)
(2,601,624) (3,019,091) 52
(934,620)$ 518,520$ 13,950$
147

16.B.

City of Hemet
Custodial Funds

CUSTODIAL FUNDS

McSweeny - Accounts for the McSweeny dev elopment projects administered by the City on behalf of the McSweeny developers.

Pass Thru Fees - Accounts for the developer fees collected by the City on behalf of the County of Riverside. Those fees are remitted periodically to the County.

Heartland 1999 - 1 CFD 2006 Refunding Series - Accounts for the financial transacting of a special tax bond issue which is financing the off-site improvements of a housing community and a golf course.

148

16.B.

Total
Pass Thru Heartland Custodial
McSweeny Fees CFD 2006 Funds
ASSETS
Cash and Investments -$ 108,748$ -$ 108,748$ Accounts Receivables - - - - Due from Other Funds - - - - Cash and Investments with Fiscal Agent - - 822,763 822,763 Total Assets - 108,748 822,763 931,511

LIABILITIES
Accounts Payable 261,291 174 6,180 267,645 Due to City of Hemet 1,056,121 - 85,458 1,141,579 Deposits - - - - Total Liabilities 1,317,412 174 91,638 1,409,224

NET POSITION
Held for the Benefit of Other Organiztions (1,317,412) 108,574 731,125 (477,713) Total Net Position (1,317,412)$ 108,574$ 731,125$ (477,713)$ City of Hemet
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
June 30, 2025
149

16.B.

Total
Pass Thru Heartland Custodial
McSweeny Fees CFD 2006 Funds

ADDITIONS
Contributions:

Taxes and assessments collected for others - $ 2,343,591$ 723,219 $ 3,066,810 $ Developer Contributions - - - - Investment Earnings:

Interest Income - - 31,237 31,237 Total Additions - 2,343,591 754,456 3,098,047

DEDUCTIONS
Payments on behalf of Others 688,800 - - 688,800 Payments to Other Agencies
for Service Charges Collected - 2,383,279 753,287 3,136,566 Total Deductions 688,800 2,383,279 753,287 3,825,366 Net Increase (decrease) in fiduciary net position (688,800) (39,688) 1,169 (727,319) Net Position, beginning of the year (628,612) 148,262 729,956 249,606 Net Position, end of the year (1,317,412)$ 108,574 $ 731,125 $ (477,713) $ City of Hemet
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
Year Ended June 30, 2025
150

16.B.

STATISTICAL SECTION
151

16.B.

City of Hemet (unaudited)
Description of Statistical Section Contents
June 30, 2025

This part of the City of Hemet's Annual Comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.

Contents: Pa ges

Financial Trends theses schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time

153

Revenue Capacity these schedules contain information to help the reader assess the City's most significant local revenue source, the property tax

163

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

168

Demographic and Economic Information these schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place

173

Operating Information these schedules contain service and infrastructure data to help the reader understand how the information in the City's fi nancial report relates to the services the City provides and the activities it performs

175

152

16.B.

City of Hemet
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Governmental activities
Net Investment in Capital Assets 321,098 $ 315,946 $ 312,748 $ 309,342 $ 308,639 $ Restricted 43,671 48,220 55,279 64,207 67,601 Unrestricted (45,551) (58,471) (95,864) (99,715) (105,649) Total governmental activities net position 319,218 $ 305,695 $ 272,163 $ 273,834 $ 270,591 $ Business-type activities
Net Investment in Capital Assets 3,522 $ 3,898 $ 4,174 $ 3,893 $ 4,532 $ Restricted - - - - - Unrestricted 6,550 7,068 (845) 1,868 14,760 Total business-type activities net positio
n 10,072 $ 10,966 $ 3,329 $ 5,761 $ 19,292 $
Primary government
Net Investment in Capital Assets 324,620 $ 319,844 $ 316,922 $ 313,235 $ 313,171 $ Restricted 43,671 48,220 55,279 64,207 67,601 Unrestricted (39,001) (51,403) (96,709) (97,847) (90,889) Total primary government net positio
n 329,290 $ 316,661 $ 275,492 $ 279,595 $ 289,883 $
Source: City of Hemet
Statistical Table 1
153

16.B.

City of Hemet
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Governmental activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total governmental activities net positio
n
Business-type activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total business-type activities net positio
n
Primary government
Net Investment in Capital Assets
Restricted
Unrestricted
Total primary government net positio
n
Source: City of Hemet
2021 2022 2023 2024 2025
303,775$ 302,783 $ 308,207 $ 314,486 $ 333,204$
53,804 $ 60,649 $ 62,663 $ 69,728 $ 70,970 $ (78,520)$ (54,833) $ (37,757) $ (29,072) $ (37,667)$ 279,059 $ 308,599 $ 333,113 $ 355,142 $ 366,507$
3,973 $ 3,146 $ 2,599 $ 2,265 $ 2,693 $ - $ - $ - $ - $ - $ 19,623 $ 20,282 $ 24,877 $ 29,207 $ 31,649 $ 23,596 $ 23,428 $ 27,476 $ 31,472 $ 34,342 $
307,748$ 305,929 $ 310,806 $ 316,751 $ 335,897$
53,804 60,649 62,663 69,728 70,970
(58,897) (34,551) (12,880) 135 (6,018) 302,655 $ 332,027 $ 360,589 $ 386,614 $ 400,849$
Statistical Table 1
154

16.B.

City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Expenses
Governmental activities:

General government 1,142 $ 2,777 $ 3,511 $ 6,181 $ 4,142 $ Public Safety 21,566 34,746 43,067 40,916 48,122 Community development 3,952 4,874 5,729 5,535 5,056 Public Works 11,652 11,696 13,766 11,962 12,526 Sanitation 2,070 2,048 2,248 2,167 1,838 Parks 1,015 1,176 1,407 1,205 1,433 Libraries 1,788 2,085 2,125 2,026 1,884 Total governmental activities expenses 43,186 59,402 71,853 69,992 75,001 Business-type activities:

Water 7,643 9,966 12,052 9,261 9,845 Total business-type activities expenses 7,643 9,966 12,052 9,261 9,845 Total primary government expenses 50,829 $ 69,368 $ 83,905 $ 79,253 $ 84,846 $ Program Revenues
Governmental activities:

Charges for services:

General government 586 $ 602 $ 759 $ 793 $ 510 $ Public safety 760 1,207 1,289 1,049 1,134 Community development 2,674 2,261 2,824 2,824 2,482 Public Works 2,724 3,542 3,912 3,944 4,531 Sanitation 3,412 3,918 4,003 3,969 4,372 Other activities 2,764 58 159 141 28 Operating grants and contributions 3,349 2,559
2,719 2,455 2,005
Capital grants and contributions 7,658 6,220 6,503 7,962 7,890 Total government activities program revenues 23,928 20,367 22,168 23,137 22,952 Business-type activities
Charges for services:

Water 10,306 11,460 10,602 11,445 11,993 Operating grants and contributions - - - - 10,416 Capital grants and contributions - - - - - Total business-type activities program revenues 10,306 11,460 10,602 11,445 22,409 Total primary government program revenues 34,234 $ 31,827 $ 32,770 $ 34,582 $ 45,361 $ Statistical Table 2
155

16.B.

City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Expenses
Governmental activities:

General government
Public Safety
Community development
Public Works
Sanitation
Parks
Libraries
Total governmental activities expenses
Business-type activities:

Water
Total business-type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:

Charges for services:

General government
Public safety
Community development
Public Works
Sanitation
Other activities
Operating grants and contributions
Capital grants and contributions
Total government activities program revenues
Business-type activities
Charges for services:

Water
Operating grants and contributions
Capital grants and contributions
Total business-type activities program revenues
Total primary government program revenues
2021
2022 2023 2024 2025
1,964 $ 2,343 $ 3,633 $ 5,369 $ 5,758 $ 46,711 42,656 55,036 62,053 70,131
5,420 6,065 6,708 5,812 7,409 10,728 9,011 13,442 10,712 10,741 2,437 2,846 2,925 2,712 3,107 1,052 1,513 1,020 1,244 1,544 1,892 1,487 1,993 2,075 2,509 70,204 65,921 84,756 89,977 101,199 10,222 9,687 10,395 11,858 13,641 10,222 9,687 10,395 11,858 13,641 80,426 $ 75,608 $ 95,151 $ 101,835 $ 114,840$
2,589 $ 2,539 $ 3,157 $ 3,111 $ 3,434 $ 1,892 4,876 17,039 5,430 6,582 251 244 288 267 252 6,926 10,159 10,047 11,444 9,819
4,339 4,131 5,069 5,660 5,915 2 12 16 18 18 4,039 3,136 2,821 4,119
6,003
7,758 12,105 11,567 16,140 14,789 27,796 37,202 50,004 46,189 46,812
12,114 14,073 14,017 14,380 14,786
- - - - - - - - - - 12,114 14,073 14,017 14,380 14,786
39,910 $ 51,275 $ 64,021 $ 60,569 $ 61,598 $
Statistical Table 2
156

16.B.

City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Net (expense)/revenue
Governmental activities (30,431) $ (39,034) $ (49,685) $ (46,855) $ (51,151) $ Business-type activities 2,410 1,495 (1,450) 2,185 12,563 Total primary government net expense (28,021) $ (37,539) $ (51,135) $ (44,670) $ (38,588) $ General Revenues and Other Changes in
Net Positon
Governmental activities:

Taxes
Property taxes 6,208 6,485 7,123 7,718 7,919 Transient occupancy taxes 854 963 1,026 975 770 Sales taxes* 12,275 14,175 23,446 24,986 25,352 Motor vehicle in lieu taxes 5,715 6,061 6,393 6,786 7,073 Franchise and other taxes 5,053 4,964 5,048 5,117 5,173 Investment income 1,415 194 403 2,425 957 Miscellaneous 765 439 649 357 223 Gain on Sale of Capital Assets - - - - - Transfers 205 350 138 163 243 Total governmental activities 32,490 33,631 44,226 48,527 47,710 Business-type activities
Investment income 166 (25) 21 350 226 Gain (loss) on sale/disposal of assets - - - - - Miscellaneous 84 45 81 60 16 Transfers (205) (350) (138) (163) (243) Total business-type activities 45 (330)
(36) 247 (1)
Total primary government 32,535 $ 33,301 $ 44,190 $ 48,774 $ 47,709 $ Change in Net Position
Governmental activities 2,059 $ (5,403) $ (5,459) $ 1,672 $ (3,441) $ Business-type activities 2,455 1,165 (1,487) 2,432 12,562 Total primary government 4,514 $ (4,238) $ (6,946) $ 4,104 $ 9,121 $ *Sales taxes are one of the highest revenue generating items for the City. This includes, Sales and Use Tax (including Measu r
Statistical Table 2
157

16.B.

City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Net (expense)/revenue
Governmental activities
Business-type activities
Total primary government net expense
General Revenues and Other Changes in
Net Positon
Governmental activities:

Taxes
Property taxes
Transient occupancy taxes
Sales taxes*
Motor vehicle in lieu taxes
Franchise and other taxes
Investment income
Miscellaneous
Gain on Sale of Capital Assets
Transfers
Total governmental activities
Business-type activities
Investment income
Gain (loss) on sale/disposal of assets
Miscellaneous
Transfers
Total business-type activities
Total primary government
Change in Net Position
Governmental activities
Business-type activities
Total primary government
*Sales taxes are one of the highest revenue generati
n
2021 2022 2023 2024 2025
(42,408) $ (28,719) $ (34,762) $ (43,789) $ (54,387) $ 1,892 4,386 3,622 2,522 1,146 (40,516) $ (24,333) $ (31,140) $ (41,267) $ (53,241) $ 8,028 8,676 9,389 10,276 10,445 891 1,039 942 953 1,005 32,268 35,066 34,056 33,143 33,555
7,394 7,758 8,547 9,427 10,164 5,491 5,848 5,599 6,323 5,574 303 (441) 271 4,970 5,460 42 254 279 437 490 - - 290 - -
248 27 151 - - 54,665 58,227 59,234 65,819 66,693
(2) (494) 578 1,474 1,724 - - - - - - - - - - (248) (27) (151) - - (250) (521) 427 1,474
1,724
54,415 $ 57,706 $ 59,661 $ 67,293 $ 68,417 $
12,259 $ 29,508 $ 24,473 $ 22,029 $ 12,306 $
1,641 3,864 4,048 3,996 2,870 13,900 $ 33,372 $ 28,521 $ 26,025 $ 15,176 $
re U) and Measure A.

Statistical Table 2
158

16.B.

City of Hemet
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
General Fund
Nonspendable 7 7 4 660 8
Restricted 1,253 2,469 1,253 12,805 1,316 Committed 7,727 8,295 9,303 8,214 20,921 Assigned 215 215 215 134 890 Unassigned 6,084 1,882 5,920 1,086 2,926 Total general fund 15,287 $ 12,868 $ 16,695 $ 22,247 $ 26,713 $ All other governmental funds
Nonspendable 1,000 1,000 1,000 1,000 1,000 Restricted 41,418 43,536 46,330 50,374 51,884 Committed - - - - - Assigned 6,586 6,350 4,081 4,056 3,776 Unassigned, reported in:

Special revenue funds (297) (81) (180) (191) (264) Capital projects funds - - - - - Total all other governmental funds 48,707 $ 50,805 $ 51,231 $ 55,239 $ 56,396 $ Source: City of Hemet
Statistical Table 3
159

16.B.

City of Hemet
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
General Fund
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total general fund
All other governmental funds
Nonspendable
Restricted
Committed
Assigned
Unassigned, reported in:

Special revenue funds
Capital projects funds
Total all other governmental funds
Source: City of Hemet
2021 2022 2023 2024 2025
665 2,114 2,137 2,000 1,936 1,499 1,926 1,524 2,194 3,021 23,776 26,387 26,632 38,784 47,540 1,945 1,749 3,106 8,328 7,281 11,710 21,884 30,214 20,684 7,509 39,595 $ 54,060 $ 63,613$ 71,990$ 67,287$
1,000 1,000 1,000 1,000 1,000 57,161 66,894 69,796 53,422 82,669 - - 5,861 - - 3,906 4,250 7,833 6,326 5,744 (102) (91) (716) (394) (1,599) - -
61,965 $ 72,053 $ 83,774$ 60,354$ 87,814$
Statistical Table 3
160

16.B.

City of Hemet
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Revenues
Taxes 30,105 $ 34,284 $ 44,799 $ 47,526 $ 48,194 $ Licenses and permits 1,974 1,679 1,784 1,968 5,371 Intergovernmental revenues 6,712 5,677 5,792 5,854 5,495 Charges for services 9,988 10,393 11,307 11,152 7,248 Fines and forfeitures 412 443 491 446 336 Investment income 1,430 197 402 2,425 1,815 Other contributions - - - - - Miscellaneous 3,823 679 1,261 2,204 1,960 Total revenues 54,444 53,352 65,836 71,575 70,419 Expenditures
General government 2,307 2,103 2,195 5,148 2,235 Public safety 30,339 32,497 38,450 35,908 40,448 Community development 4,793 4,844 4,856 5,057 4,593 Public works 5,738 5,488 8,804 6,076 5,795 Sanitation 2,035 1,999 2,193 2,104 1,879 Parks 1,120 1,205 1,248 1,153 1,295 Libraries 1,506 1,642 1,600 1,486 1,540 Capital outlay 3,772 2,457 2,193 4,002 7,508 Debt service
Principal - - -
- -
Interest - - - - - SERAF Obligation - - - - - Fiscal-administrative charges - - - - - Total expenditures 51,611 52,235 61,539 60,934 65,293 Excess (deficiency) of
revenues over expenditures 4,453 1,117 4,297 10,641 5,126 Other financing sources (uses)
Proceeds from Sale of Assets - - - - - Software Subscriptions - - - - - Transfers in 713 325 467 183 1,876 Transfers out (490) (1,086) (513) (1,264) (1,379) Issuance of debt 11 - - - - Total other financing sources 234 (761) (46) (1,081) 497 (uses)
Net change in fund balance
s 4,687$ 356 $ 4,251$ 9,560$ 5,623$ Debt service as a percentage of
noncapital expenditures 0.00% 0.00% 0.00% 0.00% 0.00%
Source: City of Hemet
Statistical Table 4
161

16.B.

City of Hemet
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Revenues
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines and forfeitures
Investment income
Other contributions
Miscellaneous
Total revenues
Expenditures
General government
Public safety
Community development
Public works
Sanitation
Parks
Libraries
Capital outlay
Debt service
Principal
Interest
SERAF Obligation
Fiscal-administrative charges
Total expenditures
Excess (deficiency) of
revenues over expenditures
Other financing sources (uses)
Proceeds from Sale of Assets
Software Subscriptions
Transfers in
Transfers out
Issuance of debt
Total other financing sources
(uses)
Net change in fund balance
s
Debt service as a percentage of
noncapital expenditures
Source: City of Hemet
2021 2022 2023 2024 2025
46,678$ 53,402$ 52,888$ 53,495$ 53,514$ 2,104 4,287 4,433 5,503 4,530 10,157 17,994 30,313 24,783 27,388 3,234 19,740 18,383 19,617 18,546 234 199 276 172 191 299 (1,335) 1,276 7,474 8,450 - - - - - 8 1,150 350 535 603
62,714 95,437 107,919 111,579 113,223 2,390 5,150 3,720 2,498 2,536 42,039 44,467 50,580 57,845 71,162 5,420 6,065 6,708 6,407 7,555 5,125 5,167 5,866 6,036 6,532 2,437 2,846 2,925 2,990 3,168 1,052 1,513 1,020 1,371 1,575 1,587 1,181 1,687 1,944 2,171 4,127 4,977 14,760 14,735 32,947 - - - - -
- - - - - - - - - - - - - - - 64,177 71,366 87,266 93,826 127,646 (1,463) 24,071 20,654 17,753 (14,423) - - 468 353 - - - 7,277
27 538 171 886 20 (2) (55) (20) (2,191) (1,020) 25 483 619 (952) 6,277 (1,438)$ 24,554$ 21,273$ 16,801$ (8,146)$

0.00% 0.00% 0.00% 0.00% 0.00%
Statistical Table 4
162

16.B.

City of Hemet
Own Source Revenue
Governmental Activities Property Tax Revenue
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Property
Year Tax
2016 5,916
2017 6,136
2018 6,804
2019 7,392
2020 7,592
2021 7,650
2022 7,943
2023 8,579
2024 9,833
2025 9,947
Statistical Table 5
163

16.B.

City of Hemet
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Taxable Taxable Highest
Assessed Less Assessed Direct Tax Fiscal Less
Year Secured Unsecured Exemptions Value Secured Unsecured Exemptions Value Rate 2016 4,989,091,509 157,483,240 (153,462,996) 4,993,111,753 1,472,420,756 64,336,968 N/A** N/A** 0.24552 2017 5,294,563,351 166,151,715 (159,158,493) 5,301,556,573 1,554,120,090 66,302,157 N/A** N/A** 0.24552 2018 5,738,442,456 173,750,554 (152,501,372) 5,759,691,638 1,632,333,531 67,103,391 N/A** N/A** 0.24552 2019 5,891,505,336 190,128,633 (164,926,297) 5,916,707,672 1,709,804,561 78,020,649 N/A** N/A** 0.24552 2020 6,150,877,556 190,147,395 (169,524,075) 6,171,500,876 1,794,064,122 76,990,710 N/A** N/A** 0.24552 2021 6,451,235,055 187,135,933 (178,728,139) 6,459,668,559 1,856,098,890 77,009,200 N/A** N/A** 0.24552 2022 6,748,837,124 185,630,583 (185,385,214) 6,748,412,303 1,924,292,110 78,939,139 N/A** N/A** 0.24552 2023 7,460,126,502 185,696,825 (196,544,968) 7,448,557,204 2,080,173,341 77,763,054 N/A** N/A** 0.24552 2024 8,191,982,684 208,152,931 (192,338,295) 8,207,459,940 2,349,320,193 81,991,732 N/A** N/A** 0.24552 2025 8,722,644,704 213,640,225 (74,725,436) 8,708,236,563 2,551,265,516 83,302,260 N/A** N/A** 0.24552 NOTE:

In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. **The State of California dissolved all Redevelopment Agencies effective 02/01/2012. All activity for the wind down of the Agencies was moved to a Successor Agency.

Source: Riverside County Auditor-Controller
City Redevelopment
Statistical Table 6
164

16.B.

City of Hemet
Property Tax Rates
Direct and Overlapping Governments
Per $100 of Assessed Value
Last Ten Fiscal Years
2024 2023 2022 2021 2025 2019 2018 2017 2016 2020
City Direct Rates:

City of Hemet Basic Area 0.24552 0.24552 0.24552 0.24552 0.24552 0.24552 0.24552 0.24547 0.37274 0.37274 Overlapping Rates:

Hemet Unified School 0.30653 0.30653 0.30653 0.30653 0.30653 0.30653 0.30653 0.30650 0.30650 0.30650 County General 0.25433 0.25433 0.25433 0.25433 0.25433 0.25433 0.25433 0.25437 0.12710 0.12710 Eastern Municipal Water District 0.04435 0.04435 0.04435 0.04435 0.04435 0.04435 0.04435 0.04440 0.04440 0.04440 Flood control Zone 4 0.03923 0.03923 0.03923 0.03923 0.03923 0.03923 0.03923 0.03920 0.03920 0.03920 Riv. Co. Office of Education 0.03641 0.03641 0.03641 0.03641 0.03641 0.03641 0.03641 0.03640 0.03640 0.03640 Mt. San Jacinto Junior College 0.03527 0.03527 0.03527 0.03527 0.03527 0.03527 0.03527 0.03530 0.03530 0.03530 Eastern Municipal Water Improvement Dist 17 0.01665 0.01665 0.01665 0.01665 0.01665 0.01665 0.01665 0.01665 0.01665 0.01665 Valley Wide Recreation & Park District 0.01455 0.01455 0.01455 0.01455 0.01455 0.01455 0.01455 0.01455 0.01455 0.01455 San Jacinto Valley Cemetery 0.00458 0.00458 0.00458 0.00458 0.00458 0.00458 0.00458 0.00458 0.00458 0.00458 Flood Control Administration 0.00238 0.00238 0.00238

0.00238 0.00238 0.00238 0.00238 0.00238 0.00238 0.00238 San Jacinto Basin Resource Conservation 0.00020 0.00020 0.00020 0.00020 0.00020 0.00020 0.00020 0.00020 0.00020 0.00020 Proposition 13 Rate 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Bond issues:

Hemet Unified School District Debt Sv 0.13729 0.12409 0.11019 0.10173 0.11571 0.11876 0.12323 0.12000 0.12000 0.12000 Metropolitan Water District Debt Sv 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.00350 0.00350 0.00700 Total Rate 1.14079 1.12759 1.11369 1.10523 1.11921 1.12226 1.12673 1.12350 1.12350 1.12700 NOTE:

In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount.

This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of Hemet Unified School District Debt Service and Metropolitan Water District Debt Service.

Ratios for tax rate area 006-001, excluding Redevelopment factors the average tax rate in City of Hemet Basic Area is approximately .17 prior to the ERAF shifts Source: HDL, Coren & Cone
Riverside County Auditor-Controller
Statistical Table 7
165

16.B.

City of Hemet
Principal Property Taxpayers
Current Fiscal Year and Nine Years Ago
Percent of Percent of
Total City Total City
Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Rank Value Value
TIG Devonshire LLC 56,895,108$ 1 0.006533482 - - Physicians for Healthy Hospitals Inc 52,050,769 2 0.005977188 - - Freedom Properties Hemet 49,569,030 3 0.005692201 - - Granite Village West LP 49,340,066 4 0.005665908 - - SRF Investment 46,185,000 5 0.0053036
Walmart Real Estate Business Trust 38,538,606 6 0.004425535 - - 551 N Santa Fe St LLC 32,166,057 7 0.003693751 - - Providence Hemet Apts 31,089,094 8 0.003570079 - - CBYW Hemet ILF PROPCO LP 29,549,375 9 0.003393267 - - KPC Towne Centre LLC 28,829,083 10 0.003310553 - - PHH Real Estate - - 44,205,045 1 0.89% Freedom Properties Hemet - - 41,338,485 2 0.83% Grainte Village West LP - - 34,977,968 3 0.70% MCS Hemet Valley Center - - 34,110,308 4 0.68% FFLP CC - - 30,238,257 5 0.61% Walmart Real Estate Business Trust - - 26,967,705 6 0.54% James J. Femino - - 29,430,237 7 0.59% Merrill Gardens - - 26,723,130 8 0.54% Time Warner Cable - - 6,311,599 9 0.13% Deutsch Engineeered Connect Devices Inc - - - 10 0.00% 414,212,188$ 4.8% 274,302,734$ 5.5%
Source: HDL, Coren & Cone
20162025
Statistical Table 8
166

16.B.

City of Hemet
Property Tax Levies and Collections
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal City Redevelopment Successor Agency City Redevelopment Percentage Collection of Percentage Year Tax Levy Tax Increment Tax Increment Amount Amount * of Levy Delinquent taxes Amount of Levy 2016 4,965 - 10,714 4,960 - 99.89% 280 5,240 105.53% 2017 5,240 - 10,652 5,285 - 100.86% 214 5,499 104.95% 2018 5,514 - 10,683 5,552 - 100.68% 255 5,806 105.30% 2019 5,809 - 10,667 5,896 - 101.50% 193 6,088 104.81% 2020 6,146 - 10,675 6,083 - 98.98% 164 6,247 101.65% 2021 6,373 - 10,671 6,430 - 100.89% 169 6,599 103.54% 2022 6,648 - 10,673 6,734 - 101.29% 224 6,957 104.65% 2023 7,339 - 10,672 7,228 - 98.49% 71 7,299 99.46% 2024 7,960 - 10,673 8,017 - 100.72% 170 8,188 102.86% 2025 8,324 - 10,672 8,234 - 98.91% 168 8,402 100.93% NOTE:

The amounts presented include City property taxes and Redevelopment Agency tax increments. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. * The Redevelopment amount is Gross Tax Increment received which includes pass through amounts to other agencies. approximately 43% of the Redevelopment amount collected is available for the Redevelopment Agency **The State of California dissolved all Redevelopment Agencies effective 02/01/2012. All activity for the wind down of the Agencies was moved to a Successor Agency.

Since Successor Agency increment is only enough to cover annual costs of the wind down process, these amounts are excluded from the collection data.

Source: Riverside County Auditor Controller
HDL, Coren & Cone
Including Deliquencies
Collected within the
Fiscal Year of the Levy
Total Collections to Date
Statistical Table 9
167

16.B.

City of Hemet
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount) Water Total Percentage
Certificates 1999 2002 Notes SBITA Revenue Capital Certificates Primary of Personal Per Fiscal of Participation TAB TAB Payable Payable Bonds Leases of Participation Government Income Capita Year 2016 - * * - - - - - - 0.00% - 2017 - * * - - - - - - 0.00% - 2018 - * * - - - - - - 0.00% - 2019 - * * - - - - - - 0.00% - 2020 - * * - - - - - - 0.00% - 2021 - * * - - - - - - 0.00% - 2022 - * * - - - - - - 0.00% - 2023 - * * - 439 - - - - 0.00% - 2024 - * * - 151 - - - - 0.00% - 2025 * * - 7,277 - - - - 0.00% - NOTE:
* 1999 and 2002 Tax Allocation Bonds are no longer reported as part of the primary government.

Sources: City of Hemet Financial Statements
State of California Franchise Tax Board
State Department of Finance
Governmental Activities Business-Type Activities
Statistical Table 10
168

16.B.

City of Hemet
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(amounts expressed in thousands, except per capita amount) General Tax
Fiscal Obligation Allocation Percentage of Per
Year Population Bonds Bonds Total Assessed Value * Capita 80,070 2016 - ** - 0.00% - 81,868 2017 - ** - 0.00% - 83,166 2018 - ** - 0.00% - 84,754 2019 - ** - 0.00% - 85,175 2020 - ** - 0.00% - 84,525 2021 - ** - 0.00% - 89,646 2022 - ** - 0.00% - 89,918 2023 - ** - 0.00% - 89,663 2024 - ** - 0.00% - 91,934 2025 - ** - 0.00% - General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). * Assessed value has been used because the actual value of taxable property is not readily available in the State of California.
** 1999 and 2002 Tax Allocation Bonds are no longer reported as part of the primary government.

Statistical Table 11
169

16.B.

City of Hemet
Direct and Overlapping Governmental Activities Debt
as of June 30, 2024
2024-2025 Assessed Valuation: 8,709,833,150 $
Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2025 % Applicable (1) Debt 6/30/25 Metropolitan Water District $17,155,000 0.214% 36,712$
Eastern Municipal Water District, I.D. No. U12 1.867% 165,000 3,081$ Eastern Municipal Water District, I.D. No. U21 12.897% 75,000 9,673$ Mt. San Jacinto Community College District 237,330,000 6.232% 14,790,406$ Hemet Unified School District 265,580,000 49.655% 131,873,749$ San Jacinto Unified School District 69,055,000 6.149% 4,246,192$ Hemet Unified School District Community Facilities District No. 2004-1 4,275,000 100.000% 4,275,000$ Hemet Unified School District Community Facilities District No. 2005-2, 3 & 4 22,740,000 100.000% 22,740,000$ Hemet Unified School District Community Facilities District No. 2020-3 3,065,000 100.000% 3,065,000$ Hemet Unified School District Community Facilities District No. 2020-4 3,350,000 100.000% 3,350,000$ Hemet Unified School District Community Facilities District No. 2021-1 11,195,000 100.000% 11,195,000$ Hemet Unified School District Community Facilities District No. 2021-7 11,790,000 100.000% 11,790,000$ San Jacinto Unified School District Community Facilities District No. 2005-4 6,675,000 29.185% 1,948,099$ Eastern Municipal Water District Community Facilities District No. 2001-02 2,250,000 100.000% 2,250,000$ Eastern Municipal Water District Community Facilities District No. 2004-27 4,694,000 100.000% 4,694,000$ Eastern Municipal Water District Community Facilities District No. 2005-38 1,700,000 100.000% 1,700,000$ Eastern Municipal Water District Community Facilities District No. 2006-56 3,205,000 100.000% 3,205,000$ Eastern Municipal Water District Community Facilities District No. 2003-20 557,881 100.000% 557,881$ City of Hemet Community Facilities District No. 1999-1 4,340,000 100.000% 4,340,000$ California Statewide Communities Development Authority -$ Community Facilities District No 2018-2 I.A. No. 1 16,415,000 100.000% 16,415,000$ TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 242,484,793$
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Riverside County General Fund Obligations $1,134,209,783 2.052% 23,273,985$ Riverside County Pension Obligations 603,055,000 2.052% 12,374,689 Hemet Unified School District Certificates of Participation 30,5 00,000 49.655% 15,144,775
San Jacinto Unified School District Certificates of Participation 36,090,000 6.149% 2,219,174 City of Hemet 0 100.000% 0
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 53,012,623$ OVERLAPPING TAX INCREMENT DEBT (Successor Agency):

Hemet Redevelopment Agency Tax Allocation Bonds 5,505,000 100.000% 5,505,000 Riverside County Project Areas Tax Allocation Bonds 242,310,000 0.385-4.659% 2,233,577 TOTAL OVERLAPPING TAX INCREMENT DEBT 7,738,577

TOTAL DIRECT DEBT -
TOTAL GROSS OVERLAPPING DEBT 303,235,993
TOTAL NET OVERLAPPING DEBT 303,235,993
GROSS COMBINED TOTAL DEBT 303,235,993$ (2)
NET COMBINED TOTAL DEBT 303,235,993$
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

Ratios to 2024-25 Assessed Valuations
:

Total Overlapping Tax and Assessment Debt 2.78%
Total Direct Debt 0.00%
Gross Combined Total Debt 3.48%
Net Combined Total Debt 3.48%
Ratios to Redevelopment Successor Agencies Incremental Valuation ($2,404,965,972):

Total Overlapping Tax Increment Debt 0.32%
Source: California Municipal Statistics, Inc.

Statistical Table 12
170

16.B.

City of Hemet
Legal Debt Margin Information
Last Ten Years
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
181,336,069 Debt Limit $ 192,577,682 $ 203,270,441$ 214,746,714$ 224,300,756$ 235,219,009$ 246,129,447$ 272,384,308$ 299,985,540$ 31,852,696$ Total net debt applicable to limit - - - - - - - - - - Legal debt margin 181,336,069$ 192,577,682 $ 203,270,441 $ 214,746,714$ 224,300,756$ 235,219,009$ 246,129,447$ 272,384,308$ 299,985,540$ 31,852,696$ Total net debt applicable to the limit
as a percentage of debt limit - - - - Legal Debt Margin Calculation for Fiscal Year 2025:

Assessed Value 849,405,238$
Debt limit (3.75% of assessed value) 31,852,696$
Debt applicable to limit:

General obligation bonds
Legal debt margin 31,852,696$
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.

However, this provision was enacted when assessed valuation was based upon 25% of market value.

Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). Although the statutory debt limit has not been amended by the State since this change, the percentage presented in the above computations have been proportionately modified to 3.75% (25% of 15%) for the purpose of this calculation in order to be consistent with the computational effect of the debt limit at the time of the state's establishment of the limit.

Source: Riverside County Assessor's Office
Statistical Table 13
171

16.B.

City of Hemet
Pledged-Revenue Coverage
Last Ten Fiscal Years
(in thousands)
Fiscal Year Less Net
Ended Net Tax Water Operating Available
June 30 Increment Principal Interest Coverage Revenue Expenses Revenue Principal Interest Coverage 2016 956 580 359 1.02 - - - - - - 1,693 2017 470 411 1.92 - - - - - - 2018 935 485 394 1.06 - - - - - - 2019 905 505 375 1.03 - - - - - - 2020 899 530 365 1.00 - - - - - - 2021 962 545 330 1.10 - - - - - - 2022 829 575 302 0.95 - - - - - - 2023 2 610 272 0.00 - - - - - - 2024 850 635 241 0.97 - - - - - - 2025 868 670 208 0.99 Water Revenue Bond paid off in Fiscal year ending 6/30/2009 * 1999 and 2002 Tax Allocation Bonds are no longer reported as part of the primary government.

Source: City of Hemet Financial Statements
Debt Service Debt Service
Tax Allocation Bonds* Water Revenue Bonds
Statistical Table 14
172

16.B.

City of Hemet
Demographic and Economic Statistics
Last Ten Years
Personal Per Capita
Income (2) Personal Unemployment
Income Rate Calendar Population (in thousands)
Year (1) Local Area Zip Codes Local Area Zip Codes (3)
80,070 2016 1,777,480 22,199 (4) 8.70% (3)
81,868 2017 1,855,529 22,665 (4) 7.80% (3)
83,166 2018 2,022,498 24,319 (4) 5.60% (3)
84,754 2019 2,125,464 25,078 (4) 5.10% (3)
85,175 2020 2,211,416 25,963 (4) 13.60% (3) 84,525 2021 2,479,382 29,333 (4) 10.40% (3) 89,646 2022 1,213,852 13,541 (4) 5.70% (3)
89,918 2023 1,925,614 21,415 (4) 6.70% (3)
89,663 2024 - - * 7.10% (3) *
91,934 2025 - - * 7.50% (3) *

* 2024 & 2025 Personal Income Data is not yet available as of November 20, 2025.

Sources: 1 State Department of Finance (data shown is for City of Hemet) 2 Franchise Tax Board Adjusted Gross Income for zip codes 92543, 92544, 92545 3 California Labor Market Info, State and Local Info (data shown is for City of Hemet) 4 Franchise Tax Board Information is based upon calendar year. This statistical information became available beginning in 2005.

Statistical Table 15
173

16.B.

City of Hemet
Principal Employers
2025
Number of Percent of
Employer Employees Total Employment
Hemet Unified School District 5,139 15.87% Physicians For Healthy Hospitals 1,200 3.71% County of Riverside (Various service centers) 676 2.09% Walmart Supercenter 400 * 1.24%
353 City of Hemet 1.09%
Stater Bros 325 1.00%
281 Manorcare Health Services 0.87%
Tim Moran Ford, Toyota, Hyundai & Inland Chevrolet 234 0.72% American Medical Response (AMR) 225 0.69% Village Healthcare Retirement 223 0.69% Home Depot 198 0.61%
Winco Foods 173 0.53%
Target 140 * 0.43%
Lowe's 131 0.40%
Vallarta Market 128 0.40%
McCrometer, Inc. 125 0.39%
In-n-Out 112 0.35%
Airtopia 46 0.14%
Forest River, Inc. 25 0.08%
* Number of Employees for Employers are estimates from prior years Current year data not available.

Source: City of Hemet Telephone Survey
California Labor Market Info, Data Library
Numbers are approximate per their Human Resources Department Statistical Table 16
174

16.B.

City of Hemet
Active Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Function 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 33 General Government 38 38 33 35 30 24 30 30 34
Community Development 27 28 30 22 20 21 19 16 10 26
(Building, Planning, Engineering)
9 11 10 10 9 13 12 12 12 Library 9
Police
68 89 78 71 77 70 90 75 70 63 Sworn
N o n - s w o r n 2 93 54 13 53 33 13 33 94 34 8
Fire
Firefighters and Officers 39 42 58 49 49 47 54 55 53 53 2333222422 C i v i l i a n s
Public Works
Water 21 20 19 14 15 15 16 18 18 25
Sewer/Storm Drain/Street Sweeping 7 1 7 8 1 4 1 6 1 4896 1 0 1 R e f u s e 0000000000
3 13 12 92 81 61 51 51 41 91 7 L L M D P a r k s , S t r e e t s , Facility & Equipment Maintenance 10 11 12 10 9 7 9 10 10 10 Clean City Youth 0000000000
A d m i n i s t r a t i o n 5466455588
344 302 305 277 273 279 339 276 TOTAL 267 300
Source: City of Hemet Payroll Process Report - Active Employees as of June 30th Statistical Table 17
175

16.B.

City of Hemet
Operating Indicators
by Function
Last Ten Fiscal Years
Function: 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Police
Calls for Service (1) 52,346 79,101 * * 81,566 82,298 82,027 78,286 75,202 71,602 72,841 74,372 Arrests (1) 3,433 * 2,593 * 3,339 4,357 2,637 3,077 2,944 2,733 2,864 3,419 Sworn Officer's per 1000 population**** 0.86 * 0.95 * 1.03 1.06 1.06 0.88 0.85 0.91 1.00 0.99 Fire
Calls for Service (1) 12,672 * 17,946 16,918 * 17,976 17,656 17,666 18,251 18,850 19,751 20,160 Fire/Explosion (included in total above) 255 * 761 * 333 557 596 517 516 528 601 615 Medical Aid (included in total above) 10,816 * 13,867 * 13,958 14,659 14,317 14,159 15,501 16,877 15,557 16,217 Community Development
Permits: New Single Family + Mobile set up 80 2 62 55 97 246 641 368 387 154 Conditional Use Permits applied/approved 13/6 * 6/6 * 6/5 13/11 8/4 14/7 11/12 8/1 5/2 7/9 Site Development Reviews applied/approved 7/4 * 3/3 * 7/10 6/3 11/6 23/11 22/4 12/9 7/3 7/2 Librar
y
Number of items checked out 430,614 * 680,326 * 447,775 532,834 481,709 99,018 84,020 99,320 117,622 117,215 Number of Cardholders 110,629 * 149,965 * 152,164 153,527 145,736 116,189 107,579 110,737 114,730 118,479 Total items in collection 98,114 * 101,451 * 90,082 105,498 519,774 790,591 678,238 701,856 105,633 98,246 Public Works
Trees trimmed 1,800 1,750 1,750 * 1,600 1,595 1,649 1,358 1,818 1,181 1,070 Poured Sidewalk (sq ft) 12,000 38,050 55,000 * 26,283 72,150 17,000 17,400 26,526 3,200 29,252 Asphalt remove and replace (sq ft) 158,000 N/A N/A 80,882 * 1,265,000 695,246 421,075 740,800 208,958 1,765,613 Striping painted (linear ft) 850,000 N/A N/A - - 558,876 202,000 550,000 338,000 456,951 Equipment CHP 90 day inspections/maint 124 124 128 112 124 281 242 254 213 170 Equipment light duty preventative maint 766 811 897 774 714 918 1,389 1,432 1,343 1,322 Buildings maintained (sq ft) 285,907 285,907 285,907 285,907 285,907 285,907 285,907 285,907 285,907 285,907 Miscellan
eous service requests 3,893 * 1,290 * 1,318 1,459 1,600 1,536 1,500 1,553 1,540 1,610 Water
Number of active accounts 9,304 9,317 9,226 9,171 9,171 9,815 9,760 9,362 9,528 9,373 Water introduced into the System (acre ft) 3,539 3,784 3,847 3,512 3,195 *** 3,374 *** 3,030 *** 2,744 *** 3,611 3,350 *** 1 acre foot=325.851 gallons
* These numbers are estimated from historical data. Data was not available. ** These numbers are estimated. The estimates for FY13/14 are due to a change in software used to track Service Orders in various Public Works departments.

In Fiscal Year 09/10, the City contracted with YMCA and most currently Valley Wide Recreation to run the Simpson Center and all services associated with it. ***Water introduced into the System for calendar year is through October.

N/A is data that was not available
Source: Various departments within City of Hemet
Statistical Table 18
176

16.B.

City of Hemet
Capital Asset Statistics
by Function
Last Ten Fiscal Years
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
1 Police Stations 1 1 1 1 1 1 1 1 1 Fire Stations 5 5 5 5 5 5 5 5 5 5 Recreation and Culture:

Number of parks 12 12 12 12 12 12 12 12 12 12 Number of libraries 1 1 1 1 1 1 1 1 1 1 Number of volumes 88,756 80,115 80,115 80,115 85,438 92,037 97,396 100,439 100,439 98,246 Public Works:

Area of City (square miles) 28 28 28 28 28 29 29 29 29 29 Miles of Streets 360 360 360 360 360 360 360 360 360 360 Number of Street lights 3,600 5,479 5,479 5,479 4,249 4,249 4,249 4,311 4,311 4,724 Number of water accounts 9,304 9,317 9,226 9,171 9,171 9,815 9,760 9,362 9,528 9,373 Miles of water
mains 120 130 130 130 132 132 132 132 132 132 Number of vehicles (city wide) 320 314 337 351 354 347 338 326 315 353 N/A = not available
Source: Various City Departments
Statistical Table 19
177

16.B.

City of Hemet
Water, Refuse and Sewer Rates
Last Ten Years
Effective 7/1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/2021 7/1/2022 7/1/2023 7/1/2024 7/1/2025 Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Water
Low Water Usage Rates
0-1000 CF N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Normal Water Usage Rates
Base Water Rates
5/8" Meter 24.95 26.25 27.55 30.15 30.15 30.15 30.15 30.15 30.15 30.15 3/4" Meter 27.26 28.87 30.49 33.81 33.81 33.81 33.81 33.81 33.81 33.81 1" Meter 32.83 34.86 36.93 41.16 41.16 41.16 41.16 41.16 41.16 41.16 2" Meter 81.02 85.25 89.47 97.91 97.91 97.91 97.91 97.91 97.91 97.91 Consumption Water Rates per 100 CF
0-600 CF 6.25 4.41 4.54 4.79 4.79 4.79 4.79 4.79 4.79 4.79 '601-1200 CF 6.25 4.41 4.54 4.79 4.79 4.79 4.79 4.79 4.79 4.79 '1201-over CF 6.25 4.41 4.54 4.79 4.79 4.79 4.79 4.79 4.79 4.79 Sewer
City sewer and storm drain 10.30 10.80 11.30 11.30 11.30 11.30 11.30 11.30 11.30 11.30 The City of Hemet has a Franchise Agreement in place with CR&R for Refuse services. The City stopped providing Refuse services on 11/30/2011.

Source: City of Hemet Water DepartmentStatistical Table 20 178