La Mesa City Council
June 23, 2026

ATTACHMENT A

CERTIFICATE OF CITY CLERK
I, MEGAN WIEGELMAN, City Clerk of the City of La Mesa, California, do hereby certify the foregoing to be a true and exact copy of Resolution No. 2026- , duly passed and adopted by the City Council of said City on said date and by the vote therein recited.

MEGAN WIEGELMAN, CMC, City Clerk
(SEAL OF CITY)

4140 Oceanside Blvd. #159-152, Oceanside, Ca 92056 • Telephone: 619.884.8608 • www.compassrosegis.com City of La Mesa
GIS Proposal FY 26-27
April 28, 2026

PROJECT OVERVIEW
The City of La Mesa’s Public Works Department continues to improve their GIS program and serve a wider audience with data and web mapping applications. Compass Rose GIS has been supporting these efforts by providing overall GIS program management and technical services.

Details for on-going and future projects are included in the Scope of Work below. The GIS project team will work closely with the City’s project manager to continue to prioritize projects.

SCOPE OF WORK
The section below highlights three project categories. The GIS team will track and report monthly on progress and estimate to complete.

1. GIS Database Management
• Continued editing of City GIS database
• Documentation & training associated with GIS data updates • Enterprise database management
• Map service publishing & maintenance
• Versioning management & back up procedures

2. Online Mapping
• Management of the City’s ArcGIS Online account
o Licensing
o Esri credits management
o Users & roles
o Map application design & maintenance
o Training & documentation
• Requirements gathering for online map requests
o Development
o Testing
o Publication

4140 Oceanside Blvd. #159-152, Oceanside, Ca 92056 • Telephone: 619.884.8608 • www.compassrosegis.com

3. Enterprise GIS
• Support administration of City’s AWS account
• System integrations
o Cartegraph EAM
o GraniteNET
• Technical and end user support
• Documentation & training associated with enterprise systems listed above

PROJECT LIST
• ArcGIS Online
o Continue to improve & enhance existing applications
▪ Internal & external map galleries
o Configure data collection apps as needed for City asset inventory o Train staff to edit and manage subject matter data sets o Share data with partner agencies and the public via Open Data Portal • Database management
o Continue to maintain City assets in enterprise geodatabase o Project priorities
▪ Sewer
▪ Storm Water
▪ Streets
▪ Sidewalks
o Documentation & metadata preparation and maintenance
• Cartegraph
o Synchronize assets as needed
o Expand functionality using container components
▪ Traffic Signals
▪ Parks
▪ Facilities
o Data export and mapping
o Technical support – end user experience
o Customizations and automation as needed
• Granite Net
o Support City staff as needed
▪ Engineering users
▪ Truck data updates
▪ Troubleshooting
o Create new users and demo application for Engineering contractors o Edit or upload project inspection files

4140 Oceanside Blvd. #159-152, Oceanside, Ca 92056 • Telephone: 619.884.8608 • www.compassrosegis.com

SCHEDULE
The GIS project team will work with the City’s project manager to define individual project needs and schedule to complete.

FEES SCHEDULE FY 25-26
• GIS Project Manager $145
• Solutions Architect $130
• GIS Technician $85
The fee for the GIS Services described in this scope of work is not to exceed $150,000. Estimated breakdown per category is as follows:

Task Description Budget
1 GIS Database Management $ 70,000.00
2 Online Mapping $ 40,000.00
3 Enterprise GIS $ 40,000.00
Totals $ 150,000.00

DATE: June 23, 2026
TO: Mayor and Members of the City Council
FROM: Shannon Esenwein, CPA, Director of Finance
VIA: Greg Humora, City Manager
SUBJECT: ACCEPTANCE OF ANNUAL COMPREHENSIVE FINANCIAL REPORT,

INCLUDING THE BASIC FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR’S REPORT FOR THE CITY OF LA MESA
FOR THE YEAR ENDING JUNE 30, 2025
Rogers, Anderson, Malody & Scott, LLP., the City’s independent auditor, has completed the audit for the fiscal year ending June 30, 2025. The auditor issued an unmodified opinion, confirming the City’s financial statements are fairly and accurately presented in all material respects. The Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2025, including the basic financial statements and independent auditor’s report is attached to this memo.

After the City Council accepts and approves the report, staff will publish the ACFR to meet the requirements of the California State Controller’s Office, the Federal Audit Clearinghouse, bond rating agencies, and other continuing disclosure requirements.

Attachments: A. Annual Comprehensive Financial Report for the fiscal year ended June 30, 2025
B. Statement on Auditing Standards 114 - Auditor’s Communication with Those Charged with Governance
C. Independent Accountant’s Report on Agreed-Upon Procedures Applied to the Appropriations Limit (GANN) Worksheet

FISCAL YEAR ENDED
JUNE 30, 2025

LA MESA
JEWEL of the HILLS

CITY OF
ANNUAL

COMPREHENSIVE

FINANCIAL REPORT

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City of La Mesa
La Mesa, California
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Prepared by the Finance Department

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CITY OF LA MESA
Basic Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page

INTRODUCTORY SECTION
Transmittal Letter i
Organizational Chart xi
List of Elected and Appointed Officials xii

FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 4
Basic Financial Statements
Government-Wide Financial Statements:

Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet 20
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balances 22 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities 23
Proprietary Fund Financial Statements:

Statement of Net Position 24
Statement of Revenues, Expenses, and Changes in Fund Net Position 25 Statement of Cash Flows 26
Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position 27
Statement of Changes in Fiduciary Net Position 28
Index to Notes to the Basic Financial Statements 29
Notes to the Basic Financial Statements 31
Required Supplementary Information
Budgetary Information 89
Budgetary Comparison Schedule – General Fund 90
Budgetary Comparison Schedule – Miscellaneous Grants Fund 91 Schedules of Changes in Net Pension Liability and Related Ratios 92 Schedule of Plan Contributions 95
Schedule of Changes in Net OPEB Liability and Related Ratios 98 Schedule of OPEB Contributions 100

CITY OF LA MESA
Basic Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page
Supplementary Information
Non-Major Governmental Funds:

Description of Funds 101
Combining Balance Sheet 103
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances 109
Budgetary Comparison
Housing Rehabilitation/CDBG Administration 115
Gas Tax 116
Street Parking 117
Environmental Services 118
Community Service Improvement 119
Public Safety Augmentation 120
Supplemental Law Enforcement 121
Community Service Grants 122
Public Safety Grants 123
CIP Grants 124
CASP Fund 125
Road Maintenance Fund 126
PEG Fund 127
Drug Asset Seizure 128
Housing Asset Fund 129
2006 Certificates of Participation 130
2016 Government Obligation Refunding Bonds 131
Transportation CIP 132
Public Building 133
Storm Drains 134
Parks and Recreation 135
Miscellaneous Capital Improvement 136
Internal Service Funds:

Combining Statement of Net Position 137
Combining Statement of Revenues, Expenses, and Changes in Net Position 138 Combining Statement of Cash Flows 139

STATISCAL SECTION
Net Position by Component 140
Changes in Net Position 142
Fund Balances of Governmental Funds 146
Changes in Fund Balances of Governmental Funds 148
Ratios of Outstanding Debt by Type 150
Direct and Overlapping Debt 151
2024/25 Use Category Summary 152
Property Tax Dollar Breakdown 153
2024/25 Roll Summary 154
Net Taxable Assessed Value History 155

CITY OF LA MESA
Basic Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page

STATISCAL SECTION
Assessed Value of Taxable Property 156
2024/25 Top Ten Property Taxpayers 157
2015/16 Top Ten Property Taxpayers 158
Direct and Overlapping Property Tax Rates 159
Demographic and Economic Statistics 160
Sales Value History 161
Taxable Sales by Category 162
Top 25 Sales Tax Producers 2024 163
Top 25 Sales Tax Producers 2015 164

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June 17, 2026
Honorable Mayor, City Council,
and Residents of the City of La Mesa
City of La Mesa
La Mesa, California

LETTER OF TRANSMITTAL
FISCAL YEAR 2024-2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT Honorable Mayor, City Council, and Residents:

I am pleased to present the Fiscal Year 2024-25 Annual Comprehensive Financial Report for the City of La Mesa (“City”). The information found in this report is provided by management to the City Council and the public to assist those interested in understanding the fiscal condition of the City as of June 30, 2025.

Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls established for this purpose. Because the cost of internal controls should not outweigh their benefits, the City’s framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement.

This report is intended to satisfy applicable state and local reporting requirements and has been prepared in conformity with generally accepted accounting principles (GAAP) and the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB).

Rogers, Anderson, Malody & Scott, LLP, a firm of certified public accountants, audited the City’s financial statements with a goal to provide reasonable assurance that the basic financial statements of the City for the fiscal year ended June 30, 2025, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified (“clean”) opinion that the City’s basic financial statements for the fiscal year ended June 30, 2025, were fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.

Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. This letter is intended to summarize key conditions, policies, and initiatives and not to duplicate the detailed financial information presented in the MD&A or in the notes to the financial statements.

As a recipient of federal and state financial assistance, the City is required to have a Single Audit performed when federal award expenditures meet the applicable threshold. The Single Audit is designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are issued separately and made publicly available on the City’s website.

PROFILE OF THE CITY OF LA MESA
The City of La Mesa is nestled in the rolling hills of eastern San Diego County, where a temperate climate, established neighborhoods, community parks, and a vibrant historic downtown village combine to create a distinctive small-town atmosphere within the larger San Diego region. Known as the “Jewel of the Hills,” La Mesa provides residents and businesses with convenient access to regional employment centers, transit, retail, recreation, and civic amenities while preserving a strong sense of community identity.

La Mesa serves approximately 61,000 residents and 3,500 small businesses. The City’s location, local business environment, public facilities, and community events support a diverse and active community. The City encompasses approximately 9.1 square miles and maintains a substantial local network of streets, parks, public facilities, and utility infrastructure.

City Government
Incorporated in 1912, the City of La Mesa is a municipal corporation operating under the councilmanager form of government. The City Council, serving as the City’s legislative body, establishes policy direction and adopts local laws and ordinances. The City Manager is the chief executive and administrative officer and is responsible for overseeing the day-to-day operations of the City and implementing Council policies.

The City Council consists of an elected mayor and four elected councilmembers, each serving four-year terms. Councilmembers and the mayor are elected at-large. The City Treasurer is an elected official whose primary responsibility is the investment of surplus funds in the City Treasury in accordance with applicable State law and the City’s investment policy.

Financial Reporting Entity
The City’s financial reporting entity includes the financial activities of the primary government and its component units. The La Mesa Public Financing Authority is reported as a blended component unit because of its operational and financial relationship with the City and because its governing body is composed of members of the City Council. Readers should refer to the notes to the financial statements for a complete description of the reporting entity, component units, fiduciary activities, and the City’s basis of accounting and measurement focus.

Services Provided
The City provides a full range of municipal services normally associated with a general-purpose local government. Major services include police protection, fire and emergency medical response through Heartland Fire & Rescue, public works and engineering, street and traffic management, sewer and stormwater services, planning and building services, parks and recreation programs, environmental sustainability programs, finance and purchasing, records and elections administration, risk management, human resources, information technology, and general government administration.

Budget Process
La Mesa adopts a two-year biennial budget. The biennial budget adopted by the City Council provides for the general operation of the City, includes proposed expenditures and the means of financing them, and serves as a management control device during the year. The City Council approves total budgeted appropriations and amendments to appropriations, while the City Manager may transfer amounts between accounts within a single department or activity when determined to be in excess of actual requirements.

The revenues and expenditures reported on June 30, 2025, were authorized as part of Year 2 of the FY 2023-2025 Biennial Budget. The Fiscal Year 2025-2027 Biennial Budget, approved in October 2025, represents the City’s thirteenth biennial budget since the two-year process began in 2001. A comprehensive mid-biennium review is performed to evaluate revenues, expenditures,

staffing, capital needs, and any recommended amendments for the second year of the biennial cycle. Starting in Fiscal Year 2027, quarterly budget monitoring reports will be resumed to inform the City Council and the public of significant revenue, expenditure, reserve, and economic trends.

THE CITY’S STRATEGIC PLAN
The City of La Mesa is guided by a Strategic Plan that identifies the vision, mission, values, goals, and strategies necessary to deliver services, invest in infrastructure, and preserve financial sustainability. The Strategic Plan is supported by an implementation action plan and is reflected in the City’s biennial budget, capital improvement planning, and departmental work plans.

The City’s current vision is that “La Mesa is a thriving community where everyone feels at home.” The mission is to reliably deliver high-quality public services that enhance the quality of life for all. The organizational values of welcoming, accessibility, accountability, excellent customer

service, and integrity are intended to guide how services are delivered as well as what services are provided.

The City’s goals are organized around maintaining a safe community; ensuring financial sustainability; promoting livability; investing in infrastructure and amenities; and maintaining a high-performing organization. These goals frame the City’s major policy choices, including public safety staffing, infrastructure reinvestment, customer service modernization, financial planning, and the prudent allocation of limited resources.

ECONOMIC AND FISCAL ISSUES FACING THE CITY
At the time of developing and monitoring the City’s current budget, national economic indicators reflected a volatile and gradual cooling of economic activity while local conditions remained stable. The City continues to monitor inflation, labor-market conditions, sales tax performance, interest earnings, construction activity, pension costs, negotiated labor costs, equipment replacement, supplies, professional services, utilities, and overtime because each of these factors can affect the cost of maintaining service levels.

During the second quarter of Fiscal Year 2025-2026, General Fund revenues were tracking close to expectations, expenditures remained manageable, and reserve levels continued to exceed policy targets. Sales tax and Proposition L revenues remain important and economically sensitive revenue sources, while property tax continues to provide a more stable foundation for the General Fund.

Cannabis revenue has slowed, consistent with a statewide trend. The City’s conservative budgeting practices and quarterly monitoring help identify early warning indicators and provide the City Council with information needed to respond to economic uncertainty.

The Fiscal Year 2025-2027 Biennial Budget anticipates increases in property taxes, Proposition L sales tax, transient occupancy tax, cannabis tax revenue, and charges for services, while also noting that cannabis revenues have leveled off, and that expenditures are being affected by CalPERS unfunded accrued liability payments, salary increases, equipment replacement, materials, supplies, and other costs. Current analysis shows a flattening of most General Fund tax revenue apart from property tax which still anticipates increases. Continued financial discipline remains essential to preserving services and maintaining the City’s long-term fiscal position. In September/October, management plans to bring forward a revised 2026-2027 budget to the City Council that reflects the need to adjust cost estimates and revenues to address the volatility in the markets and the growing uncertainty in the broader economy.

Actual General Fund reserves ended the fiscal year on June 30, 2025, at $59,495,458 million, or 82% of the $72.5 million Operating Expenditures (including Transfers of $1.5 million). The 82% actual General Fund reserve is expected to decrease to 64.3% and 60.1% in fiscal year 2025-2026 and 2026-2027, respectively, due to the use of “one time” fund balances for equipment and capital improvements. Here is the outlook for the next two years:

LONG-TERM FINANCIAL PLANNING
Strategic planning begins with determining the City’s fiscal capacity based upon long-term forecasts of recurring revenues, future obligations, and known service demands. The City uses financial planning and forecasting to evaluate internal and external issues affecting the City’s financial condition and to support decisions about service levels, staffing, infrastructure investment, and the responsible use of reserves.

The City’s long-term planning framework is intended to help the City attain and maintain financial sustainability; have sufficient long-term information to guide financial decisions; provide programs and services for residents, businesses, and stakeholders; identify risks to ongoing operations and communicate these risks through the budget process; and identify changes in revenue or expenditure structures necessary to deliver services or meet City Council goals.

As economic conditions change, the City will continue to review assumptions, compare actual results to projections, and adjust its strategies to preserve financial stability.

FINANCIAL MANAGEMENT POLICIES
Revenue Policies
The development and maintenance of balanced and reliable revenue streams will remain a primary revenue objective of the City. Revenue estimates are prepared using accepted standards and will be estimated conservatively to promote fiscal sustainability. Alternative revenue sources will be evaluated and modified as necessary to maintain a diversified and growing revenue base that improves the City’s ability to handle fluctuations in individual revenue sources.

Revenues from one-time or limited-duration revenue sources should not be used for ongoing operating expenses. Fees and charges for services should be evaluated and, if necessary, adjusted to generate sufficient revenues to meet service delivery costs. The City also considers market rates and charges imposed by similar municipalities when establishing rates, fees, and charges.

Expenditure and Budget Policies
The City operates on a current funding basis. Expenditures are budgeted and controlled so that annual operating expenditures do not exceed annual operating revenues plus the planned use of accumulated fund balance, unless otherwise directed by the City Council. Budget status reports and quarterly monitoring are used to preserve budget integrity through systematic checks and balances and internal controls.

The Finance Department, in coordination with the City Manager’s Office, monitors expenditures throughout the fiscal year to ensure that spending remains within the limits approved by the City Council. This approach helps the City maintain service levels while responding to changing economic conditions and operational needs.

Reserve Policies
The City’s General Fund Reserve Policy establishes two reserve targets: a 15 percent Rainy Day Reserve for one-time or extraordinary costs and a 25 percent Cash Flow Reserve to manage seasonal cash fluctuations, which totals a combined 40% reserve in the General Fund. As stated above, the General Fund ended the Fiscal Year 2024-2025 with $59.5 million in unassigned fund balances.

As of June 30, 2025, General Fund reserves totaled $59.5 million and are projected to be $55.5 million in Fiscal Year 2025-2026 and $52.3 million in Fiscal Year 2026-2027, remaining above the combined policy target.

At the discretion of the City Council, reserve levels in excess of policy targets may be used for one-time opportunity costs or other specific purposes approved through the budget process or separate Council action. As a general budget principle, reserves should not be used to support ongoing operating costs unless directed by City Council in response to extraordinary circumstances or a clearly identified fiscal strategy.

Retirement Costs and Pension Stabilization
Employee retirement costs continue to require ongoing prudent fiscal management. The City established a Section 115 Pension Trust in 2016 to help manage pension rate volatility, enhance local control of funds, and stabilize future pension payments. The 2025-2027 Biennial Budget reports an unadjusted trust value of approximately $7.7 million and notes that pension costs are expected to peak around 2030 before gradually declining over the next several years. The trust provides a funding buffer to help stabilize annual payments.

MAJOR BUDGETARY INITIATIVES AND CURRENTLY KNOWN CONDITIONS The Fiscal Year 2025-2027 Biennial Budget reflects significant investments intended to maintain service levels, improve public safety, preserve infrastructure, and advance the City’s Strategic Plan. The budget includes 15 new staff positions and three reclassifications over the two-year period. These changes are designed to strengthen police patrol and detective services, community engagement, dispatch capacity, fire administration and prevention support, public works tree maintenance, information technology, cybersecurity, cloud modernization, and human resources support.

The City continues to fund the Homeless Outreach and Mobile Engagement (HOME) program, support implementation of the Climate Action Plan, pursue park and restroom accessibility improvements, advance traffic calming and street improvements, improve streetlights and traffic signals, invest in sewer system replacement and rehabilitation, and plan for major capital equipment such as public safety vehicles and fire apparatus. The City also continues planning for Civic Center improvements, including work related to City Hall space needs and related public facility opportunities.

In 2024, voters extended Proposition L, the City’s local sales tax. This revenue source remains an important component of the City’s ability to maintain essential services, support public safety, and invest in infrastructure and recreation. Because sales tax is sensitive to changes in the economy, continued monitoring of sales tax, Proposition L, cannabis tax, and other local revenues will remain important to the City’s long-term fiscal health.

CAPITAL IMPROVEMENT PROGRAM
The Capital Improvement Program (CIP) reflects the City’s ongoing commitment to maintaining high-quality infrastructure and public facilities for the community today and in the future. It is a planning document, not a commitment for spending. The CIP identifies expenditures for future capital projects and the corresponding revenues or funding sources expected to pay for those expenditures.

The City’s current CIP budget presentation shifts project management from line-item budgeting to an expanded project accounting focus. This approach is intended to better identify CIP projects, costs, and available funding sources in the City’s budget and financial reporting. The current twoyear CIP budget totals approximately $93.1 million, including $21.6 million in Fiscal Year 2025-

26 and $71.5 million in Fiscal Year 2026-27. The five-year plan includes 91 CIP projects, of which 71 are programmed for the next two-year phase of the five-year CIP plan. The Civic Center improvements that were included in the Fiscal Year 2026-2027 CIP budget will be deferred to a future fiscal year.

CIP Appropriations by Project Type
Project Type Projects Two-Year Budget
Facilities 26 $39.5 million
Transportation 20 $29.8 million
Wastewater 8 $12.7 million
Miscellaneous 2 $8.3 million
Storm Drain 6 $2.0 million
Parks 9 $0.8 million
Long-range planning and responsible asset management play key roles in the development of future capital projects. The City uses infrastructure master plans, pavement management tools, public input, condition assessments, technical evaluations, and available funding sources to prioritize projects that support community needs and City Council goals. The Engineering Division supports this work through CIP management, development services, construction inspection, funding coordination, and infrastructure policy implementation.

ACKNOWLEDGEMENTS
The preparation of this report reflects the collective efforts of many individuals across a wide range of responsibilities. It was made possible through the dedication of the Finance Department, the collaboration of all City departments, and the support of the City Manager’s Office. Appreciation is also extended to the independent auditors for their professionalism in conducting the audit of this financial report. Special recognition is given to John Herrera, CPA, municipal consultant, for leading the development of the City’s first Annual Comprehensive Financial Report.

Credit also is due to the Mayor and City Council for their leadership and continuing support in maintaining high standards of professionalism, transparency, accountability, and fiscal stewardship in the management of the City’s finances.

Respectfully submitted,
Greg Humora
City Manager

CITY OF LA MESA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2025

CITY OF LA MESA ORGANIZATIONAL CHART

xii

ELECTED OFFICIALS & EXECUTIVE STAFF
FISCAL YEAR 2024-2025

CITY OF LA MESA

ELECTED OFFICIALS
Mayor ............................................................................................................. Mark Araposthathis Councilmember ...................................................................................................Lauren Cazares Councilmember ...................................................................................................... Patricia Dillard Councilmember ....................................................................................................... Laura Lothian Councilmember ................................................................................................ Genevieve Suzuki City Treasurer ........................................................................................................ Matt Strabone

EXECUTIVE STAFF & ADMINISTRATION OFFICIALS
City Manager .......................................................................................................... Greg Humora City Attorney ........................................................................................................... Glenn Sabine City Clerk ........................................................................................................ Megan Wiegelman Fire Chief ..................................................................................................................... Bent Koch Police Chief ............................................................................................................. Ray Sweeney Director of Community Development ................................................................... Lynnette Santos Director of Finance ................................................................................ Shannon Esenwein, CPA Director of Human Resources ........................................................................... Gretchen Spaniol Director of Public Works ....................................................................................... Michael Throne Director of Parks and Recreation ........................................................................ Misty Thompson

Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408

CERTIFIED PUBLIC ACCOUNTANTS
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Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
City of La Mesa, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Mesa (the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards).

Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As described in Note 1 to the financial statements during the year ended June 30, 2025, the City adopted new accounting guidance under Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences. Our opinions are not modified with respect to this matter.

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

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

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

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and the required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

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We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

Other Information
Management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated.

If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 17, 2026 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

San Bernardino, California
June 17, 2026

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CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-4-
As management of the City of La Mesa (City), we offer readers of these financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2025. We encourage readers to consider the information presented here in conjunction with the Basic Financial Statements and attached notes. The reader should consider the prior period adjustments that will modify the amounts and percentages highlighted in the narrative below.

Financial Highlights
• The total assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources (net position) by $190.8 million at the close of fiscal year 2024-2025. Due to the implementation of GASB Statements No. 68 and No. 75 and the recognition of the City’s long-term pension and OPEB-related balances in the statement of net position, the City reported a negative unrestricted net position of $33.3 million. • The City’s total net position increased $6.6 million from the restated beginning net position during the fiscal year. Ending net position was $10.9 million higher than the prior fiscal year as previously reported, which includes a correction of error of $4.3 million related to corrections to capital assets and revenue accruals.
• At the close of the current fiscal year, the City’s governmental funds reported combined fund balances of $99.4 million, an increase of $7.5 million from the prior year as previously reported. After consideration of prior period adjustments, fund balances increased $4.3 million from the restated beginning fund balance. Approximately 52.8% of this amount, or $55.8 million, is available for spending at the government's discretion (unassigned fund balance).
• At the end of the current fiscal year, the General Fund unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) was $59.5 million, or approximately 83.8% of actual General Fund expenditures. • The City’s total capital assets (net of depreciation and amortization) increased by $4.4 million, for a total of $209.9 million, and total long-term liabilities decreased by $1.7 million during the current fiscal year, to $33.6 million.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components: 1) government-wide financial statements, 2) governmental fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The Government-wide Financial Statements report information about the City as a whole, using accounting methods similar to those used by privatesector companies. The Statement of Net Position includes all of the City’s assets and liabilities.

All of the current year’s revenues and expenses are accounted for in the Statement of Activities, regardless of when cash is received or paid.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-5-
The two Government-wide Financial Statements report the City’s net position and how it has changed. Net position – the difference between the City’s assets and liabilities – is one way to measure the City’s financial health, or position. Over time, increases or decreases in the City’s net position are an indicator of whether the City’s financial health is improving or deteriorating.

The Government-wide Financial Statements of the City are divided into two categories:
• Governmental activities – Most of the City’s basic services, such as police, fire, public works, community development, community services, and internal services are included here. Taxes, revenues from other governments and agencies, income from property and investments, grants and contributions, and charges for services finance most of these activities. • Business-type activities – The City charges fees to customers to cover the cost of certain services it provides. The City’s wastewater operations is the business-type activity.

The government-wide financial statements include the City (known as the primary government) and the La Mesa Public Financing Authority, a separate legal entity for which the City is financially accountable. The Public Financing Authority, although legally separate, functions for all practical purposes as a department of the City and therefore has been included as an integral part of the primary government.

Fund financial statements. The Fund Financial Statements provide more detailed information about the City’s most significant funds – not the City as a whole. Funds are accounting devices used by the City to keep track of specific sources of funding and spending for particular purposes.

Governmental funds. Most of the City’s basic services are included in governmental funds.

These funds are used to account for (1) cash and other financial assets that can readily be converted to cash, and (2) balances left at year-end that are available for future spending.

Consequently, the Governmental Funds Statements provide a detailed short-term view that helps the reader determine the amount of financial resources that can be spent in the near future to finance the City’s programs. The statements are presented on a modified accrual basis of accounting. Reconciliation between the long-term and short-term focus of the Government-wide Financial Statements is provided following each statement.

Proprietary funds.

Services for which the City charges customers a fee are generally reported in proprietary funds.

Proprietary funds, like Government-wide Financial Statements, provide both long- and short-term financial information, and are presented on an accrual basis of accounting.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-6-
There are two types of proprietary funds, enterprise funds and internal service funds:

Enterprise funds are used to report activities that provide business-type services, generally to external customers. City’s wastewater operations fall under these criteria. In both the Government-wide Financial Statements and the Fund Financial Statements, these funds are shown under business-type activities.
• Internal service funds are used to report activities that provide services and supplies for the City’s other programs and activities, such as Employee Benefits, Workers’ Compensation Insurance, Equipment Replacement, and Liability Risk Insurance. Because these services predominantly benefit governmental rather than business-type functions, they have been included with governmental activities in the government-wide financial statements.

Fiduciary funds. Included in fiduciary funds are private purpose trust funds. The private purpose trust funds were established during the dissolution of redevelopment. The private purpose trust funds account for the City of La Mesa Successor Agency and the La Mesa Redevelopment Obligation Retirement Fund.

Fiduciary activities are reported in accordance with GASB Statement No. 84, as applicable.

Notes to the financial statements. The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements and can be found in the Notes to the Basic Financial Statements section.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning financial and budgetary information for the General Fund and the City’s progress in funding its obligation to provide pension and OPEB benefits to its employees. Included in the required supplementary information is information related to the City’s implementation of GASB Statements No. 68 and No. 75 and related schedules of changes in net pension liability and net OPEB asset or liability.

All required supplementary information is found in the RSI section of this report.

Combining and individual fund statements and schedules for non-major governmental, internal service, and fiduciary funds are found in the supplementary information section of this report.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-7-
Government-wide Overall Financial Analysis
2025 2024 2025 2024 2025 2024
ASSETS
Current and other assets 149,440,992 $ 153,095,707 $ 6,468,865 $ 5,234,655 $ 155,909,857 $ 158,330,362 $ Capital assets, net 173,057,232 168,469,194 36,821,595 36,960,293 209,878,827 205,429,487 Total assets 322,498,224 321,564,901 43,290,460 42,194,948 365,788,684 363,759,849

DEFERRED OUTFLOWS OF RESOURCES
Pension related 27,307,624 34,239,314 1,074,483 1,328,456 28,382,107 35,567,770 OPEB related 1,653,786 2,384,206 224,022 322,966 1,877,808 2,707,172 Loss on refunding 335,133 365,599 - - 335,133 365,599
Total deferred outflows of resources 29,296,543 36,989,119 1,298,505 1,651,422 30,595,048 38,640,541

LIABILITIES
Net pension liability 117,994,265 119,829,877 5,029,808 5,165,063 123,024,073 124,994,940 Net OPEB liability - 666,024 - 90,220 - 756,244
Other long-term liabilities outstanding 23,127,536 25,613,836 9,049,476 10,346,747 32,177,012 35,960,583 Other current liabilities 20,662,517 24,973,619 1,547,794 1,492,055 22,210,311 26,465,674 Total liabilities 161,784,318 171,083,356 15,627,078 17,094,085 177,411,396 188,177,441

DEFERRED INFLOWS OF RESOURCES
Pension related 481,360 1,448,765 - 22,370 481,360 1,471,135 OPEB related 1,337,066 1,228,886 181,119 166,465 1,518,185 1,395,351 Unearned revenue 342,017 342,017 - - 342,017 342,017
Leases 25,834,673 26,780,790 - - 25,834,673 26,780,790
Total deferred inflows of resources 27,995,116 29,800,458 181,119 188,835 28,176,235 29,989,293

NET POSITION
Net investment in capital assets 155,771,840 149,156,146 26,624,102 25,577,084 182,395,942 174,733,230 Restricted 41,110,105 41,579,121 591,669 494,797 41,701,774 42,073,918 Unrestricted (34,866,612) (33,065,061) 1,564,997 491,569 (33,301,615) (32,573,492) Total net position 162,015,333 $ 157,670,206 $ 28,780,768 $ 26,563,450 $ 190,796,101 $ 184,233,656 $ Condensed Statement of Net Position
As of June 30,
Governmental Activities Business-Type Activities Total
Figure 1 - Primary Government Net Position by Category, Fiscal Years 2025 and 2024

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-8-
Analyzing total net position over time may serve as a useful indicator of a government’s financial position. Increases or decreases in total net position indicate whether the financial position of the government is improving or deteriorating. As of June 30, 2025, the City’s total assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $190.8 million.

The largest portion of the City’s total citywide net position, $182.4 million and an increase of $7.6 million over the prior year, reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City’s net position, $41.7 million and an decrease of $0.4 million over the previous year, represents resources that are subject to external restrictions on how they may be used. The decrease was primarily attributable to higher restricted balances for community services, public safety, debt service, and net pension and OPEB assets, offset by a decrease in the Section 115 Trust balance and capital project restrictions.

As it has been since fiscal year 2015 and the implementation of GASB 68 and subsequent addition of ongoing long-term pension-related liabilities, deferred outflows, and deferred inflows to the Statement of Net Position, the City’s unrestricted net position is again negative. Governmental activities unrestricted net position improved by $1.8 million to negative $34.9 million. The City’s negative unrestricted net position does not indicate that the City is unable to meet its current ongoing obligations; rather, the net position presents a long-term view and highlights the importance of managing future pension obligations.

The biggest impact to the citywide net position continues to be related to the implementation of GASB 68, and net pension liability.

Deferred outflows and inflows represent flows of resources into and out of a government that are related to future periods. In the case of deferred outflows and inflows of pension and OPEBrelated resources, amounts arising from a single pension or OPEB-related source, that is, from differences between expected and actual experience with regard to economic or demographic factors, changes of assumptions, or differences between projected and actual earnings on pension plan investments, in different periods are reported as either deferred outflows or deferred inflows. Deferred outflows increase a City’s net position while they are being deferred and, conversely, deferred inflows decrease a City’s net position while they are being deferred.

Additional information related to pensions and OPEB can be found in Notes 11, 14 and 15.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-9-
2025 2024 2025 2024 2025 2024

REVENUES
Program revenues:

Charges for services 9,757,827 $ 9,427,195 $ 14,939,864 $ 13,425,593 $ 24,697,691 $ 22,852,788 $ Operating grants and contributions 7,386,027 10,040,773 43,737 31,170 7,429,764 10,071,943 Capital grants and contributions 9,228,624 1,394,065 - - 9,228,624 1,394,065 General revenues:

Property taxes 22,572,562 21,773,572 - - 22,572,562 21,773,572 Sales taxes 30,302,483 30,767,274 - - 30,302,483 30,767,274 Other taxes 5,846,676 7,345,802 - - 5,846,676 7,345,802 Investment earnings 5,876,497 3,959,800 269,352 482,727 6,145,849 4,442,527 Other 751,195 559,557 - - 751,195 559,557
Transfers 1,108,980 2,325,792 (1,108,980) (2,325,792) - - Total revenues 92,830,871 87,593,830 14,143,973 11,613,698 106,974,844 99,207,528

EXPENSES
General government 12,508,226 10,059,759 - - 12,508,226 10,059,759 Police 32,358,121 29,587,205 - - 32,358,121 29,587,205
Fire 19,283,415 18,835,881 - - 19,283,415 18,835,881
Public works 15,796,254 15,845,956 - - 15,796,254 15,845,956 Community services 3,395,332 3,277,035 - - 3,395,332 3,277,035 Community development 4,475,634 3,477,726 - - 4,475,634 3,477,726 Interest on long-term debt 668,762 728,880 - - 668,762 728,880 Wastewater - - 11,926,655 12,279,769 11,926,655 12,279,769 Total expenses 88,485,744 81,812,442 11,926,655 12,279,769 100,412,399 94,092,211 Change in net position 4,345,127 5,781,388 2,217,318 (666,071) 6,562,445 5,115,317 Net position, beginning, as restated 157,670,206 151,888,818 26,563,450 27,229,521 184,233,656 179,118,339 Net position, ending 162,015,333 $ 157,670,206 $ 28,780,768 $ 26,563,450 $ 190,796,101 $ 184,233,656 $ For the Year Ended June 30,
Governmental Activities Business-Type Activities Total
Condensed Statement of Activities
The change in net position was $6.6 million in the current year, while ending net position from all activities increased by $10.9 million when compared to last fiscal year, including the effect of the beginning net position restatement.

Figure 2 - Primary Government Revenues by Source, Fiscal Year 2025

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-10-
Governmental activities. Most of the City’s basic services are included here. These services are funded primarily by taxes, revenues from other governments and agencies, income from property and investments, grants and contributions, and in some instances also by charges for services. • Total governmental revenues exceeded expenses by approximately $4.3 million. When compared to the previous year, total revenues were $5.2 million, or 6.0 percent higher. • Sales taxes decreased by $0.5 million, operating grants and contributions decreased by $2.7 million, and other taxes decreased by $1.5 million. These decreases were offset by increases of $7.8 million in capital grants and contributions, $1.9 million in investment earnings, and $0.8 million in property taxes.
• When compared to the previous year, total expenses were $6.7 million, or 8.2 percent higher.

Police expenses increased $2.8 million, general government increased $2.4 million, community development increased $1.0 million, and fire increased $0.4 million. Public works expenses were essentially unchanged, decreasing by less than $0.1 million.

Citywide governmental expenses are reported on an accrual basis and include items such as depreciation, long-term debt, interest payable, and true pension expense that are not reported in the fund financial statements.

Figure 3 - Governmental Activities Expenses by Function, Fiscal Year 2025

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-11-
Business-type activities. The City charges fees to customers to cover the cost of certain services it provides. The business type activities for the City include Wastewater which provides engineering, construction, administration, and maintenance of the City’s wastewater system. • Wastewater charges for services increased by $1.5 million, or 11.3 percent, when compared to 2024. Investment earnings decreased by $0.2 million. • Wastewater expenses (excluding transfers) decreased over the prior year by $0.4 million, or 2.9 percent, primarily due to decreases in professional services, partially offset by increases in salaries and payroll, supplies, maintenance, and depreciation.

Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s short-term outlook. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

At June 30, 2025, the City's governmental funds reported combined fund balances of $99.4 million, an increase of $4.3 million from current-year operations after the prior period adjustment to beginning fund balance. Approximately 56.2 percent, or $55.9 million, was unassigned and available for discretionary spending. The remaining $43.5 million was either not in spendable form ($4.5 million) or legally restricted for specific purposes ($39.0 million).

Figure 4 - Governmental Fund Balance by Classification, June 30, 2025

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-12-
Miscellaneous Grants
The Miscellaneous Grants Fund reported an ending deficit fund balance of $0.8 million, an improvement of approximately $0.3 million from the prior year deficit of $1.1 million. Revenues increased to $3.3 million, primarily from intergovernmental grants and use of money and property, and were partially offset by $1.0 million in community development expenditures and $2.0 million in transfers out.

General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the total fund balance was $71.7 million, of which $59.5 million is considered unassigned fund balance and therefore available for discretionary use.

The remaining fund balance is made up of non-spendable fund balances of $4.5 million and restricted fund balances of $7.7 million.

Restricted fund balances are those resources that are subject to externally enforceable legal restrictions such as creditors, grantors, contributors and other governmental agencies.

Restrictions also can arise when the authorization to raise revenues is conditioned upon the revenue being used for a particular purpose, pursuant to enabling legislation. At June 30, 2025, $7.7 million is restricted for the Section 115 Pension Trust Account as stated above.

Non-spendable fund balances are those assets that will never convert to cash (e.g., prepaid items and inventories of supplies), assets that will not convert to cash soon enough to affect the current period (e.g., the long-term portion of loans receivable), and resources that must be maintained intact pursuant to legal or contractual requirements. At June 30, 2025, the General Fund reported $4.0 million in advances to other governments comprising the remaining balance owed by the former Redevelopment Agency for the old police station site. Other non-spendable items were $462,984 in inventories and $23,794 for prepaid expenditures.

General Fund Budgetary Highlights
The final General Fund revenue budget for 2024-2025 totaled $63.7 million. Actual revenues were $71.2 million. Actual revenues plus transfers totaled $72.6 million for Fiscal Year 2025, $8.9 million over budgeted amounts.

Most categories of General Fund revenue were received either at or above budgetary levels.

Property taxes were received above the target at $20.2 million. Use of money and property exceeded budget by $4.0 million, intergovernmental revenues exceeded budget by $1.3 million, licenses and permits exceeded budget by $0.7 million, and other revenues exceeded budget by $0.7 million. Charges for services ended $0.1 million below budget, while other taxes were generally consistent with budget.

The final General Fund expenditure budget for 2024-2025, including prior year carry forward encumbrances, was $77.1 million. Actual expenditures and transfers were $72.5 million, under budgeted appropriations by $4.5 million.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-13-
General Government, Public Works, Community Development, and Community Services were below budget by $4.4 million, $1.6 million, $1.9 million, and $0.2 million, respectively. Police and Fire exceeded budget by $1.0 million and $0.7 million, respectively, and debt service and transfers out contributed additional outflows of $1.9 million. The City’s budget has historically been conservatively estimated, and actual revenues exceeded budget forecasts, which resulted in several General Fund departments under budget and fund balances above estimates.

Figure 5 - General Fund Budgetary Comparison, Fiscal Year 2025 Capital Asset and Debt Administration
Capital assets. The City’s total investment in capital assets includes land, buildings, improvements, equipment, infrastructure, and construction in progress. This investment for its governmental and business-type activities, net of accumulated depreciation and amortization, totaled $209.9 million at June 30, 2025, an increase of $4.4 million from 2024. The increase was primarily attributable to infrastructure and vehicle and equipment additions, partially offset by depreciation and amortization.
2025 2024 2025 2024 2025 2024
Land and right-of-way 27,304,163 $ 27,304,163 $ - $ - $ 27,304,163 $ 27,304,163 $ Construction in progress 7,626,980 7,703,999 805,276 - 8,432,256 7,703,999 Buildings and improvements 32,531,751 32,915,012 - - 32,531,751 32,915,012 Vehicles and equipment 9,849,133 9,660,101 726,387 875,191 10,575,520 10,535,292 Infrastructure 95,035,020 89,873,994 35,272,038 36,014,768 130,307,058 125,888,762 Right-to-use assets 710,185 1,011,925 17,894 70,334 728,079 1,082,259 Total 173,057,232 $ 168,469,194 $ 36,821,595 $ 36,960,293 $ 209,878,827 $ 205,429,487 $ Capital Assets
As of June 30,
Governmental Activities Business-Type Activities Total

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-14-
Figure 6 - Capital Assets by Category, June 30, 2025
Additional information on the City’s capital assets can be found in Note 6 in the Notes to Basic Financial Statements section of this report.

Long-term Liabilities. At June 30, 2025, the City had long-term liabilities totaling $33.6 million, a decrease of $1.7 million from the prior year. Of the total long-term obligations, $15.8 million is general obligation refunding bond debt, $0.9 million is Certificates of Participation, $6.1 million is for compensated absences due City employees, $10.2 million is a State Water Resources Control Board revolving fund loan, $0.1 million is financed purchases payable, and $0.4 million is lease and subscription liabilities.
2025 2024 2025 2024 2025 2024
Compensated absences 5,917,266 $ 4,618,672 $ 230,529 $ - $ 6,147,795 $ 4,618,672 $ General obligation refunding bonds 15,797,930 16,806,925 - - 15,797,930 16,806,925 Certificates of participation 915,000 1,325,000 - - 915,000 1,325,000 Financed purchases payable 144,382 284,845 - - 144,382 284,845 Leases/SBITA liabilities 428,080 896,278 - 51,320 428,080 947,598 State revolving fund loan - - 10,197,493 11,383,209 10,197,493 11,383,209 Total 23,202,658 $ 23,931,720 $ 10,428,022 $ 11,434,529 $ 33,630,680 $ 35,366,249 $ Governmental Activities Business-Type Activities Total
Long-Term Liabilities
As of June 30,

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-15-
Figure 7 - Long-Term Liabilities by Type, June 30, 2025 There were no new borrowings on the State Water Resources Control Board revolving fund loan during the current fiscal year. The outstanding loan balance decreased by $1.2 million due to scheduled principal payments.

Additional information on the City’s long-term liabilities including compensated absences can be found in Notes 7, 8, 9 and 10 in the Notes to Basic Financial Statements section of this report.

Economic Factors and Next Year’s Budget
• Total assessed valuation in the City continued to increase during fiscal year 2024-2025, and property tax revenues increased by approximately $0.8 million over the prior year. The increase reflects the continuing strength of the City’s property tax base in the current economic environment.
• Sales tax revenues decreased by approximately $0.5 million in fiscal year 2024-2025 when compared to the previous year, reflecting modest softening in taxable sales activity. • The Proposition L sales tax continued to be collected during fiscal year 2024-2025. This tax measure was passed by La Mesa voters on November 4, 2008, and became effective on April 1, 2009. Proceeds from the tax measure continue to be used to fund vital City services that otherwise could be reduced.
• Cannabis business tax revenues, approved by voters in November 2018 and implemented in July 2019, continue to be included in the City’s revenue base and considered in the City’s ongoing budget planning.

CITY OF LA MESA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Fiscal Year Ended June 30, 2025
-16-
• California Public Employees Retirement System (CalPERS) employer contribution rates continue to be a primary driver of citywide operating costs, exceeding many other expenditure categories in terms of percentage increase and real dollar costs. Prior changes that had a significant impact on the City’s pension costs include changes to the employer contribution methodology and phased-in reductions to the discount rate. Beginning in 2023, CalPERS implemented a new amortization policy which requires that future gains and losses be amortized over a fixed 20-year period. Adjustments to the discount rate and other foreseeable changes to valuation will continue to be monitored through the budget process. • To help offset the impact of the CalPERS retirement rates, the City established a Section 115 Retirement Trust Fund in 2015. Combined with investment earnings, the balance in this fund was $7.7 million as of June 30, 2025. The City’s expectation is that these contributions and accumulated investment earnings will be used to help mitigate the impact of employer retirement contribution rates.

All the above factors will continue to be considered in the City's budget planning and related multiyear financial planning.

REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of La Mesa Finance Department, 8130 Allison Avenue, La Mesa, CA 91942.

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BASIC FINANCIAL STATEMENTS

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GOVERNMENT–WIDE FINANCIAL STATEMENTS

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CITY OF LA MESA
Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -17-
Governmental Business-Type
Activities Activities Total
Assets
Current assets:

Cash and investments 88,489,533 $ 5,055,567 $ 93,545,100 $ Receivables:

Accounts, net 245,973 7,015,497 7,261,470
Loans - 378,784 378,784
Grants - 2,783,714 2,783,714
Interest - 566,564 566,564
Lease - 171,612 171,612
Inventory - 462,984 462,984
Prepaid items 575,656 23,794 599,450
Advances to other agency 4,021,001 - 4,021,001
Land held for resale - 8,350,000 8,350,000
Total current assets 112,263,483 5,877,196 118,140,679
Noncurrent assets:

Restricted cash and investments 7,913,767 508,728 8,422,495 Lease receivable - 28,527,201 28,527,201
Net pension asset - 124,255 124,255
Net OPEB asset 82,941 612,286 695,227
Capital assets:

Nondepreciable 805,276 34,931,143 35,736,419
Depreciable, net 138,126,089 36,016,319 174,142,408
Total capital assets 173,057,232 36,821,595 209,878,827 Total noncurrent assets 210,234,741 37,413,264 247,648,005 Total assets 43,290,460 322,498,224 365,788,684
Deferred Outflows of Resources
Pension related 1,074,483 27,307,624 28,382,107
OPEB related 224,022 1,653,786 1,877,808
Loss on refunding - 335,133 335,133
Total deferred outflows of resources 29,296,543 1,298,505 30,595,048 Liabilities
Current liabilities:

Accounts payable 20,375 2,281,946 2,302,321
Salaries payable 46,572 1,252,438 1,299,010
Deposits - 4,244,946 4,244,946
Interest payable 102,301 280,125 382,426
Unearned revenue - 7,088,252 7,088,252
Compensated absences payable - due within one year 3,768,675 170,875 3,939,550 Long-term liabilities - due within one year 247,140 - 247,140 Long-term debt - due within one year 1,498,995 1,207,671 2,706,666 Total current liabilities 20,662,517 1,547,794 22,210,311 Non-current liabilities:

Claims and judgments payable 5,439,688 - 5,439,688
Compensated absences payable 2,148,591 59,654 2,208,245 Long-term liabilities - due in more than one year 325,322 - 325,322 Long-term debt - due in more than one year 15,213,935 8,989,822 24,203,757 Net pension liability 117,994,265 5,029,808 123,024,073 Total noncurrent liabilities 141,121,801 14,079,284 155,201,085 Total liabilities 15,627,078 161,784,318 177,411,396
Deferred Inflows of Resources
Pension related - 481,360 481,360
OPEB related 181,119 1,337,066 1,518,185
Unearned revenue - housing loans 342,017 - 342,017
Leases - 25,834,673 25,834,673
Total deferred inflows of resources 27,995,116 181,119 28,176,235 Net Position
Net investment in capital assets 155,771,840 26,624,102 182,395,942 Restricted for:

Investment in Section 115 7,676,639 - 7,676,639
General government - 257,157 257,157
Public safety - 2,844,683 2,844,683
Capital projects - 7,442,139 7,442,139
Community services 3,796,514 - 3,796,514
Community development 13,378,373 - 13,378,373
Debt service 508,728 4,978,059 5,486,787
Net pension and OPEB asset 736,541 82,941 819,482
Total restricted 41,110,105 591,669 41,701,774
Unrestricted (deficit) (34,866,612) 1,564,997 (33,301,615) Total net position 162,015,333 $ 28,780,768 $ 190,796,101 $

CITY OF LA MESA
Statement of Activities
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -18-
Operating Capital Total
Charges for Contributions Contributions Program
Functions/Programs Expenses Services and Grants and Grants Revenues Primary government:

Governmental activities:

General government 12,508,226 $ 675,996 $ 3,130,083 $ - $ 3,806,079 $ Police 32,358,121 622,448 1,255,699 - 1,878,147
Fire 19,283,415 430,019 1,429,583 - 1,859,602
Public works 15,796,254 1,024,852 1,385,101 9,228,624 11,638,577 Community services 3,395,332 2,191,478 79,023 - 2,270,501 Community development 4,475,634 4,813,034 106,538 - 4,919,572 Interest on long-term debt 668,762 - - - -
Total governmental activities 88,485,744 9,757,827 7,386,027 9,228,624 26,372,478 Business-type activities:

Wastewater 11,926,655 14,939,864 43,737 - 14,983,601
Total business-type activities 11,926,655 14,939,864 43,737 - 14,983,601 Total primary government 100,412,399 $ 24,697,691 $ 7,429,764 $ 9,228,624 $ 41,356,079 $ General revenues:

Taxes:

Property taxes
Sales taxes
Franchise taxes
Motor vehicle license
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position, as previously stated
Adjustments
Net position, beginning of year, as restated
Net position, end of year
Program Revenues

The accompanying notes are an integral part of these financial statements. -19-
Governmental Business-Type
Activities Activities Total
$ - (8,702,147) $ (8,702,147) $
- (30,479,974) (30,479,974)
- (17,423,813) (17,423,813)
- (4,157,677) (4,157,677)
- (1,124,831) (1,124,831)
- 443,938 443,938
- (668,762) (668,762)
- (62,113,266) (62,113,266)
3,056,946 - 3,056,946
3,056,946 - 3,056,946
3,056,946 (62,113,266) (59,056,320)
22,572,562 - 22,572,562
30,302,483 - 30,302,483
1,861,230 - 1,861,230
- 95,607 95,607
3,889,839 - 3,889,839
- 58,721,721 58,721,721
269,352 5,876,497 6,145,849
- 751,195 751,195
(1,108,980) 1,108,980 -
(839,628) 66,458,393 65,618,765
2,217,318 4,345,127 6,562,445
26,712,408 153,221,932 179,934,340
(148,958) 4,448,274 4,299,316
26,563,450 157,670,206 184,233,656
$ 28,780,768 162,015,333 $ 190,796,101 $
and Changes in Net Position
Net (Expense) Revenue

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FUND FINANCIAL STATEMENTS

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GOVERNMENTAL FUND FINANCIAL

STATEMENTS

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CITY OF LA MESA
Balance Sheet
Governmental Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -20-
Non-Major
General Miscellaneous Governmental
Fund Grants Funds Totals
Assets
Cash and investments 51,848,943 $ 5,443,965 $ 22,461,154 $ 79,754,062 $ Restricted:

Cash and investments - - 223,967 223,967
Investment in Section 115 Trust 7,676,639 - - 7,676,639 Receivables:

Accounts 6,406,820 - 570,630 6,977,450
Loans 36,767 - 342,017 378,784
Grants - - 2,783,714 2,783,714
Interest 456,092 29,760 80,712 566,564
Lease 28,331,258 - 367,555 28,698,813
Due from other funds 4,029,892 - - 4,029,892
Inventory 462,984 - - 462,984
Prepaid items 23,794 - - 23,794
Advances to other governments 4,021,001 - - 4,021,001
Land held for resale - - 8,350,000 8,350,000
Total assets 103,294,190 $ 5,473,725 $ 35,179,749 $ 143,947,664 $ Liabilities
Liabilities:

Accounts payable 661,248 $ 58,752 $ 336,808 $ 1,056,808 $ Salaries payable 1,212,662 - 29,737 1,242,399
Deposits 4,244,946 - - 4,244,946
Due to other funds - - 3,104,187 3,104,187
Unearned revenue - 6,184,941 903,311 7,088,252
Total liabilities 6,118,856 6,243,693 4,374,043 16,736,592 Deferred Inflows of Resources
Unavailable revenue - housing loans - - 342,017 342,017 Unavailable revenue - grants - 1,620,948 1,620,948
Leases 25,495,458 - 339,215 25,834,673
Total deferred inflows of resources 25,495,458 - 2,302,180 27,797,638 Fund Balances
Non-spendable:

Inventory 462,984 - - 462,984
Prepaids 23,794 - - 23,794
Advances to other governments 4,021,001 - - 4,021,001
Restricted for:

Investment in Section 115 Trust 7,676,639 - - 7,676,639 General government - - 257,157 257,157
Public safety - - 2,844,683 2,844,683
Capital outlays - - 5,821,191 5,821,191
Community services - - 3,796,514 3,796,514
Community development - - 13,378,373 13,378,373
Debt service - - 5,258,184 5,258,184
Unassigned (deficit) 59,495,458 (769,968) (2,852,576) 55,872,914 Total fund balances 71,679,876 (769,968) 28,503,526 99,413,434 Total liabilities, deferred inflows of
resources and fund balances 103,294,190 $ 5,473,725 $ 35,179,749 $ 143,947,664 $ Major Funds

CITY OF LA MESA
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -21-
Fund balances of governmental funds 99,413,434 $
Position are different because:

Capital assets used in governmental activities are not current financial resources. Therefore, they are not reported in the Governmental Funds Balance Sheet. The capital assets and intangible right-to-use assets were adjusted as follows:

Nondepreciable 34,931,143
Depreciable, net 129,335,335
Total capital assets 164,266,478
Accrued interest payable for the current portion of interest due on long-term debt has not been reported in the governmental funds. (275,532) Internal service funds were used by management to charge the costs of certain activities, such as employee benefits, workers' compensation, equipment replacement and liability risk, to individual funds. The assets and liabilities of the internal service funds were included in the governmental activities in the Government-Wide Statement of Net Position, less capital assets net of accumulated depreciation. 9,516,620
Other long-term assets are not available to pay current period expenditures, and therefore, are reported as unavailable revenue in the funds. 1,620,948
Deferred inflows and outflows of resources have not been reported in the governmental funds:

Deferred inflows - pension related (481,360)
Deferred inflows - OPEB related (1, 337,066)
Deferred outflows - pension related 27,307,624
Deferred outflows - OPEB related 1, 653,786
Deferred outflows - loss on refunding 335,133
Long-term liabilities were not due and payable in the current period.

Therefore, they were not reported in the Governmental Funds Balance Sheet:

Compensated absences (5,917,266)
Long-term liabilities (16, 829,742)
Net pension liability ( 117,994,265)
Net Pension asset 124,255
Net OPEB asset 612,286
Total long-term liabilities ( 140,004,732)
Net position of governmental activities 162,015,333 $
Amounts reported for governmental activities in the Statement of Net

CITY OF LA MESA
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -22-
Non-Major
General Miscellaneous Governmental
Fund Grants Funds Totals
Revenues
Property taxes 20,228,630 $ - $ 2,001,786 $ 22,230,416 $ Other taxes 35,577,090 - 481,113 36,058,203
Licenses and permits 2,348,594 - 249,763 2,598,357
Fines and forfeitures 505,304 - 93,196 598,500
Use of money and property 6,154,418 235,228 1,631,384 8,021,030 Intergovernmental 2,880,011 3,055,729 13,723,955 19,659,695 Charges for services 2,531,415 - 475,955 3,007,370
Other revenues 933,052 - 212,920 1,145,972
Total revenues 71,158,514 3,290,957 18,870,072 93,319,543 Expenditures
Current:

General government 9,029,541 - 1,230,614 10,260,155
Police 27,506,233 - 1,734,988 29,241,221
Fire 17,290,901 - - 17,290,901
Public works 11,087,053 - - 11,087,053
Community development 2,930,282 1,017,429 357,795 4,305,506 Community services 2,754,534 - - 2,754,534
Capital outlay - - 10,451,274 10,451,274
Debt service:

Principal retirement 392,131 - 1,382,009 1,774,140
Interest and fiscal charges 9,823 - 723,416 733,239
Total expenditures 71,000,498 1,017,429 15,880,096 87,898,023 Excess (deficiency) of revenues
over (under) expenditures 158,016 2,273,528 2,989,976 5,421,520 Other financing sources (uses)
Transfers in 1,408,566 - 11,825,983 13,234,549
Transfers out (1,546,220) (1,961,782) (10,813,567) (14,321,569) Total other financing sources (uses) (137,654) (1,961,782) 1,012,416 (1,087,020) Net change in fund balances 20,362 311,746 4,002,392 4,334,500 Fund balances (deficit), beginning of year, as previously reported (1,081,714) 68,597,086 24,367,026 91,882,398
Adjustments 3,062,428 - 3,196,536 134,108
Fund balances (deficit), beginning of year, as restated 71,659,514 (1,081,714) 24,501,134 95,078,934 Fund balances (deficit), end of year 71,679,876 $ (769,968) $ 28,503,526 $ 99,413,434 $ Major Funds

CITY OF LA MESA
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -23-
Net change in fund balances - total governmental funds 4,334,500 $ differs because:

Governmental funds report capital outlays as expenditures. However, in the Government-Wide Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation and amortization expense. This was the amount by which
depreciation and amortization expense exceeded capital outlays in the current period (net of internal service funds). 3,552,868 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (2,064,813) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of longterm debt consumes the current financial resources of the governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when the debt is first issued, whereas these amounts are deferred and amortized, in the statement of activities.

Principal repayments 1,774,140
Amortization of premium and loss on refunding, net 33,529 Changes in pension and OPEB related items (3,564,708)
Accrued interest for debt service. This is the net change in accrued interest for the current period. 30,948
Compensated absences expense was reported in the Statement of Activities, but does not require the use of current financial resources and, therefore, the change in compensated absences is not reported as an expenditure in governmental funds. (1,447,552)
Internal service funds were used by management to charge the costs of certain activities, such as employee benefits, workers' compensation, equipment replacement and liability risk, to individual funds. The net revenue (excluding depreciation and amortization) of the internal service funds was reported with governmental activities. 1,696,215 Change in net position of governmental activities 4,345,127 $ Amounts reported for governmental activities in the Statement of Activities

PROPRIETARY FUND FINANCIAL STATEMENTS

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CITY OF LA MESA
Statement of Net Position
Proprietary Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -24-
Governmental
Activities
Internal
Wastewater Service Funds
Assets
Current assets:

Cash and investments 5,055,567 $ 8,735,471 $
Accounts receivable, net 245,973 38,047
Prepaid expenses - 575,656
Total current assets 5,877,196 8,773,518
Noncurrent assets:

Restricted cash and investments 508,728 13,161
Net OPEB asset 82,941 -
Capital assets:

Nondepreciable - 805,276
Depreciable, net 8,790,754 36,016,319
Total capital assets, net 36,821,595 8,790,754
Total noncurrent assets 37,413,264 8,803,915
Total assets 17,577,433 43,290,460
Deferred Outflows of Resources
Pension related - 1,074,483
OPEB related - 224,022
Total deferred outflows of resources 1,298,505 -
Liabilities
Current liabilities:

Accounts payable 1,225,138 20,375
Salaries payable 10,039 46,572
Due to other funds 925,705 -
Interest payable 4,593 102,301
Compensated absences payable - due within one year 170,875 - Long-term liabilities - due in one year - 194,223
Notes payable - due within one year 1,207,671 -
Total current liabilities 1,547,794 2,359,698
Noncurrent liabilities:

Compensated absences payable - due in more than one year 59,654 - Long-term liabilities - due in more than one year - 261,427 Notes payable - due in more than one year 8,989,822 -
Claims payable 5,439,688 -
Net pension liability - 5,029,808
Total noncurrent liabilities 14,079,284 5,701,115
Total liabilities 15,627,078 8,060,813
Deferred Inflows of Resources
OPEB related - 181,119
Total deferred inflows of resources 181,119 -
Net Position
Net investment in capital assets 26,624,102 8,335,104
Restricted for debt service 508,728 13,161
Restricted OPEB asset - 82,941
Unrestricted 1,168,355 1,564,997
Total net position 28,780,768 $ 9,516,620 $

CITY OF LA MESA
Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -25-
Governmental
Activities
Internal Service
Wastewater Funds
Operating revenues
Charges for services 14,939,864 $ 7,680,298 $
Other operating revenues 5,573 321,749
Total operating revenues 14,945,437 8,002,047
Operating expenses
Salaries and payroll 2,526,105 421,469
Professional services 7,870,153 5,199,683
Supplies, materials and miscellaneous 239,835 743,267
Insurance premiums and settlements - 2,591,586
Maintenance 130,074 -
Depreciation 1,003,428 1,359,841
Amortization - 51,027
Total operating expenses 11,769,595 10,366,873
Operating income (loss) 3,175,842 (2,364,826)
Nonoperating revenues (expenses)
Investment income (loss) 269,352 467,161
Interest (expense) (157,060) (12,988)
Intergovernmental 38,164 -
Total nonoperating revenues (expenses) 150,456 454,173
Transfers
Transfers in - 2,196,000
Transfers out (1,108,980) -
Total transfers (1,108,980) 2,196,000
Change in net position 2,217,318 285,347
Net position, beginning of year, as previously reported 26,712,408 10,707,881 Adjustments (148,958) (1,476,608)
Net position, beginning of year, as restated 26,563,450 9,231,273 Net position, end of year 28,780,768 $ 9,516,620 $

CITY OF LA MESA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -26-
Governmental
Activities
Internal
Wastewater Service Funds
Cash Flows from Operating Activities
Cash received from customers/other funds $ 7,642,570 14,849,118 $ Cash payments to suppliers for goods and services (8,319,562) (1,302,369) Cash payments to employees for services (420,200) (2,401,609) Insurance premiums and settlements (8,521,851) -
Other operating revenues 321,749 -
Net Cash Provided by (Used for) Operating Activities 4,127,947 (2,280,101) Cash Flows from Noncapital Financing Activities
Intergovernmental - 38,164
Transfers in 2,196,000 -
Transfers out - (1,108,980)
Cash paid to other funds 925,705 -
Net Cash Provided by (Used for) Noncapital and Related Financing Activities (1,070,816) 3,121,705 Cash Flows from Capital And Related Financing Activities Acquisition of capital assets (1,783,856) (864,730)
Payment of interest (12,988) (169,767)
Payments on notes/leases payable (189,519) (1,251,793)
Net Cash Used for Capital and Related Financing Activities (2,286,290) (1,986,363) Cash Flows from Investing Activities
Investment income 467,161 269,352
Net Cash Provided by Investing Activities 467,161 269,352 Net Increase (Decrease) in Cash and Cash Equivalents 1,040,193 (677,598) Cash and Cash Equivalents - beginning of the year 9,426,230 4,524,102 Cash and Cash Equivalents - end of the year $ 8,748,632 5,564,295 $ Reconciliation to Statement of Net Position
Cash and cash equivalents - current $ 8,735,471 5,055,567 $ Cash and cash equivalents - restricted 13,161 508,728
Total cash and cash equivalents $ 8,748,632 5,564,295 $ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:

Operating income (loss) $ (2,364,826) 3,175,842 $
Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation expense 1,359,841 1,003,428
Amortization expense 51,027 -
Changes in assets and liabilities:

Accounts receivable (37,728) (96,319)
Deferred outflows of resources - 352,917
Accounts payable (508,412) (79,500)
Claims payable (781,272) -
Salaries and benefits payable 1,269 6,140
Compensated absences - 81,571
Deferred inflows of resources - (7,716)
Net pension liability - (135,255)
Net OPEB asset - (173,161)
Net Cash Provided by (Used for) Operating Activities 4,127,947 $ (2,280,101) $ Noncash Financing Activities
None

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FIDUCIARY FUND FINANCIAL STATEMENTS

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CITY OF LA MESA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -27-
Successor
Agency
Cash and investments 660,596 $
Receivables:

Interest 2,400
Capital assets not being depreciated:

Land 160,000
Total assets 822,996
Salaries payable 1,821
Advance from other governments 4,021,001
Due to other governments 761,260
Total liabilities 4,784,082
Held in trust for successor agency (3,961,086) $
Net Position (Deficit)
Assets
Liabilities

CITY OF LA MESA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -28-
Successor
Agency
RPTTF Distribution $ 896,912
Investment Income 18,972
Total additions 915,884
Administrative expenses 77,281
Contributions to other agencies 171,664
Total deductions 248,945
Change in net position 666,939
Net position (deficit), beginning of year (4,628,025)
Net position (deficit), end of year (3,961,086) $
Additions
Deductions

CITY OF LA MESA
Index to Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-29-
Page
Note 1 – Summary of Significant Accounting Policies 31
A. Description of the Reporting Entity 31
B. Basis of Accounting and Measurement Focus 31
C. Fund Classifications 34
D. Use of Restricted/Unrestricted Net Position 35
E. Cash, Cash Equivalents and Investments 35
F. Restricted Cash and Investments 36
G. Inventories 36
H. Interfund Transactions 36
I. Capital Assets 37
J. Compensated Absences 37
K. Long-Term Debt 37
L. Interest Payable 38
M. Property Taxes 38
N. Pension Plan 38
O. Other Postemployment Benefits (OPEB) 39
P. Net Position 39
Q. Fund Balances 40
R. Use of Estimates 40
S. Implementation of New GASB Pronouncement 41
Note 2 – Cash and Investments 41
A. Cash Deposits 41
B. Investments 42
C. Risk Disclosures 42
D. Summary of Investments to Maturity 44
E. Section 115 45
F. Fair Value Measurements 45
Note 3 – Loans Receivable 46
Note 4 – Lease Receivable 46
Note 5 – Interfund Transactions 47
A. Advances From/To Other Governments 47
B. Due To/From Other Funds 47
C. Transfers In and Out 48
Note 6 – Capital Assets 50

CITY OF LA MESA
Index to Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-30-
Page
Note 7 – Long-Term Debt 53
A. Governmental Activities Long-Term Debt 53
B. Business-Type Activities Long-Term Debt 56
Note 8 – Financed Purchase 57
Note 9 – Lease and Subscription Liability 58
Note 10 – Compensated Absences 60
Note 11 – Other Post Employment Benefits 60
Note 12 – Other Required Disclosures 66
Note 13 – Risk Management 66
Note 14 – Defined Benefit Pension Plans 68
A. General Information about the Pension Plans 68
B. Net Pension Liability 70
C. Changes in Net Pension Liability 73
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions 75
E. Payable to the Pension Plan 78
Note 15 – Retirement Enhancement Plan 79
A. PARS Retirement Enhancement Plan 80
B. Net Pension Liability/ (Asset) 81
C. Changes in the Net Pension Liability / (Asset) 83
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions 85
E. Payable to the Pension Plan 86
Note 16 – Commitments and Contingencies 86
Note 17 – Related Party Transactions 86
Note 18 – Successor Agency 87
Note 19 – Risk, Uncertainties & Contingencies 87
Note 20 – Prior Period Adjustment - Restatement 88

NOTES TO THE BASIC FINANCIAL STATEMENTS

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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-31-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of La Mesa, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.

A. Description of the Reporting Entity
The basic financial statements of the City include the financial activities of the City and its component units. The component units discussed below are included in the City's reporting entity through a blended presentation because of the significance of their operational and financial relationship with the City. Although these component units are legally separate from the City, they are reported as part of the primary government because their boards consist of all members of the City Council.

Blended Component Units
The La Mesa Public Financing Authority (Financing Authority) - The City established the Financing Authority on April 11, 2006, by and among the City and the La Mesa Community Redevelopment Agency (Members). The Financing Authority was created for the purpose of providing financing for public capital improvements to be owned by any of the Members. The Financing Authority was included within the scope of the reporting entity of the City because its governing body is composed in its entirety of council members of the City. There were no separate financial statements prepared for the Financing Authority.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to, and accounted for, in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government - Wide Financial Statements
The 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.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-32-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) B. Basis of Accounting and Measurement Focus, (continued) Government - Wide Financial Statements, (continued)
These basic financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets and longterm 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.

Certain types of transactions are reported as program revenues for the City in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made as prescribed by generally accepted accounting principles in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
• Due to/from other funds
• Advances to/from other funds
• Transfers in/out
The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations currently in effect).

Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these Statements to the Net Position presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-33-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) B. Basis of Accounting and Measurement Focus, (continued) Governmental Fund Financial Statements, (continued)
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting.

Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

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

Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Unavailable revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unavailable revenue is removed from the Combined Balance Sheet and revenue is recognized.

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

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have also been combined with the governmental activities in the Government-Wide Financial Statements.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-34-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) B. Basis of Accounting and Measurement Focus, (continued) Proprietary Fund Financial Statements, (continued)
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred.

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

C. Fund Classifications
The City reports the following major governmental funds:

General Fund – The General Fund is the City’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Miscellaneous Grants Fund – The Miscellaneous Grants Fund is used for reporting of grants that are not public safety or community services related. This includes, but is not limited to, COVID-19 relief grants.

The City reports the following major enterprise funds:

Wastewater Fund – The Wastewater Fund accounts for the operation and maintenance of the City’s wastewater system.

Additionally, the City reports the following funds:

Special Revenue Funds – Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditure for specified purposes other than debt service or capital projects. These funds ensure that the revenue is used only for its intended purpose, such as funding for road maintenance, public safety, or grants.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-35-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) C. Fund Classification, (continued)
Capital Projects Funds – Capital projects funds are used to account for financial resources that are restricted, committed, or assigned to the acquisition or construction of major capital assets (other than those financed by proprietary funds or trust funds).

These funds help track the inflows and outflows related to large-scale infrastructure projects.

Debt Service Funds – Debt service funds are used to account for the accumulation of resources that are restricted, committed, or assigned to the payment of principal and interest on general long-term debt. These funds ensure that the government sets aside sufficient resources to meet its debt obligations as they come due.

Internal Service Funds – Internal service funds account for the financing of equipment and fleet, risk management services, and benefit services to other departments on a cost reimbursement basis.

Private Purpose Trust Fund – The Private Purpose Trust Fund holds the assets of the Successor Agency which were received from the City’s former redevelopment agency.

The redevelopment agency was dissolved per Assembly Bill X1 26 which dissolved redevelopment agencies in California.

D. Use of Restricted/Unrestricted Net Position
When an expense is incurred for purposes for which both restricted and unrestricted net position is available, the City's policy is to apply restricted net position first.

E. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition.

Cash and cash equivalents are combined with investments and displayed as Cash and Investments.

In accordance with generally accepted accounting principles, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.

The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF) which has invested a portion of the pool funds in Structured Notes and Asset-backed Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-backed Securities are subject to market risk as to change in interest rates.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-36-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) E. Cash, Cash Equivalents and Investments, (continued)
For purposes of reporting cash flows, the City considers each fund's share in the cash and investments pool to be cash and cash equivalents including cash with fiscal agents.

In accordance with generally accepted accounting principles, certain disclosure requirements, if applicable for deposit and investment risk are specified for the following areas:
 Interest Rate Risk
 Credit Risk
• Overall
• Custodial Credit Risk
• Concentration of Credit Risk
 Foreign Currency Risk
F. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. Cash and investments are also restricted for deposits held for others within the enterprise funds.

G. Inventories
Inventory is valued at the lower of cost (first-in, first-out) or market value and consists of expendable supplies held for consumption. Inventories are recorded using the consumption (capitalization) method.

H. 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 noncurrent portion of 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."

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-37-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) I. Capital Assets
The City's assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting general capital assets at $8,500 and for reporting infrastructure assets at $25,000. Gifts or contributions of capital assets are reported at acquisition value when received. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:

Buildings and Improvements 40 years
Improvements other than buildings 12 – 50 years
Machinery and Equipment 5 – 20 years
Infrastructure 20 – 60 years
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include the streets, sewer collection and treatment system, park and recreation lands and improvement system, storm water conveyance system, and buildings combined with the site amenities, such as parking and landscaped areas used by the City in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

Right-to-use lease and subscription assets are amortized over the life of the associated contract.

J. Compensated Absences
The City accounts for compensated absences (unpaid vacation, sick leave and compensatory time) in accordance with generally accepted accounting principles. In governmental fund types, compensated absences are recorded as expenditures in the year paid, as it is the City's policy to liquidate any unpaid vacation or sick leave at June 30 from future resources rather than currently available expendable resources.

K. Long-Term Debt
In the Government-Wide Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are expensed in the period incurred. Bonds payable are reported net of the applicable bond premium or discount.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-38-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) K. Long-Term Debt (continued)
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financial sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

L. Interest Payable
In the Government-Wide Financial Statements, interest payable on long-term debt is recognized as the liability is incurred for governmental fund types and proprietary fund types.

In the fund financial statements, propriety fund types recognize the interest payable when the liability is incurred.

M. Property Taxes
Under California law, property taxes are assessed and collected by the counties at 1% of assessed value, plus other increases approved by the voters. The property taxes are pooled and are then allocated to the cities based on complex formulas.

Accordingly, the City accrues only those taxes which are received within 60 days after year-end.

The City's property taxes are levied and collected by the San Diego County Treasurer.

Property taxes (secured and unsecured) are levied on July 1 based on the previous March 1 assessed values as determined by the San Diego County Assessor. Secured taxes are due in two equal installments on November 1 and February 1 following the levy date and become delinquent on December 10 and April 10 following the levy date.

Unsecured taxes are due on July 1 and become delinquent August 31 following the levy date.

N. Pension Plan
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 Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-39-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) N. Pension Plan (continued)
Generally accepted accounting principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.

Valuation Date (VD) June 30, 2023
Measurement Date (MD) June 30, 2024
Measurement Period (MP) July 1, 2023 to June 30, 2024
The City additionally reports a PARS Retirement Enhancement Pension Plan for which the following actuarial valuation timeframes are used:

Valuation Date (VD) January 1, 2023
Measurement Date (MD) June 30, 2024
Measurement Period (MP) July 1, 2023 to June 30, 2024
O. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows and inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value.

Generally accepted accounting principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date (VD) July 1, 2023
Measurement Date (MD) June 30, 2024
Measurement Period (MP) July 1, 2023 to June 30, 2024
P. Net Position
In the Government-Wide Financial Statements, net position are classified in the following categories:

Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-40-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) P. Net Position (continued)
Unrestricted Net Position - This amount is all net position that do not meet the definition of "net investment in capital assets" or "restricted net position." Q. Fund Balances
In accordance with generally accepted accounting principles, the following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:
• Nonspendable – amounts that are not in a spendable form (such as inventory) or are required to be maintained intact.
• Restricted – amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation.
• Committed – amounts constrained to specific purposes by a government itself, using the highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint.
• Assigned – amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority.
• Unassigned – amounts that are for any purpose; positive amounts are reported only in a general fund.

The City Council establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance or resolution. The Director of Finance has the authority, granted by the Council, to commit City resources. When both restricted and unrestricted resources are available for use when an expenditure is incurred, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. It is also the City’s policy to consider committed amounts as being reduced first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

R. Use of Estimates
The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions.

These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-41-

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) S. Implementation of New GASB Pronouncement
For the year ended June 30, 2025, the financial statements include the adoption of GASB Statement No. 101 – Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. The related disclosures required by this standard are included in Note 10.

2. CASH AND INVESTMENTS
The following is a summary of cash and investments at June 30, 2025:

Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Fiduciary Assets Total
Cash and investments 88,489,533 $ $ 5,055,567 $ 94,205,696 660,596 $ Restricted:

Cash and investments 237,128 508,728 - 745,856
Investments in Section 115 Trust 7,676,639 - - 7,676,639 Total $ 5,564,295 96,403,300 $ 660,596 $ 102,628,191 $
Government-Wide
Statement of Net Position
Cash, cash equivalents, and investments consisted as follows, at June 30, 2025:

Cash and cash equivalents:

Petty Cash $ 1,250
Demand Deposit* (1,484,185)
Total cash and cash equivalents (1,482,935)
Investments:

Local Agency Investment Fund 50,253,107
Investment in Section 115 Trust 7,676,639
Negotiable Certificates of Deposit 10,105,712
U.S. Government Obligations 36,075,668
Total Investments 104,111,126
Total cash and investments $ 102,628,191
*Negative demand deposit balance as of June 30, 2025 was corrected in July 2025 through transfers from LAIF.

A. Cash Deposits
As of June 30, 2025, none of the City's cash deposits with financial institutions in excess of federal depository insurance limits was held in uncollateralized accounts.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-42-

2. CASH AND INVESTMENTS, (continued)
B. Investments
The City is authorized by State statutes and in accordance with the City's Investment Policy (Policy) to invest in the following:
• Certificates of Deposit California Local Agency Investment Fund (LAIF) Repurchase Agreements
• Negotiable Certificates of Deposit Mutual Funds
• U.S. Treasury Obligations Commercial Paper
• U.S. Agency Securities Municipal Securities
• Bankers Acceptances Corporate Note
The Policy, in addition to State statutes, establishes that funds on deposit in banks must be federally insured or collateralized and investments shall: (1) have maximum maturity not to exceed five years; (2) be laddered and based on cash flow forecasts; and (3) be subject to limitations to a certain percent of the portfolio for each of the authorized investments.

The City's investments with Local Agency Investment Fund (LAIF) at June 30, 2025 included a portion of the pooled funds invested in Structured Notes and Assets-Backed Securities. These investments included the following:

Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMO's) or credit card receivables.

As of June 30, 2025, the City had $50,253,107 invested in LAIF.

C. Risk Disclosures
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy requires structuring the portfolio in a way so that securities mature to meet the City’s cash requirements for ongoing obligations; investing primarily in shorter term securities; and not paying a premium for any secondary market security which includes a call feature. The City is in compliance with this provision of the Policy.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-43-

2. CASH AND INVESTMENTS, (continued)
C. Risk Disclosures, (continued)
Credit Risk
The City's Policy limits investments in commercial paper to the highest grade of standalone or enhanced (prime) commercial paper as rated by Moody's Investor Service, Standard & Poor's Corporation, or Fitch Financial Services and requires that the management company of mutual funds must have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.

The City's investments are rated by the nationally recognized statistical rating organizations as follows:

Moody's Standard & Poor's
Investment Pools:

State of California - Local Agency Investment Fund Not Rated Not Rated Investment in Section 115 trust Not Rated Not Rated
Negotiable Certificates of Deposit Aaa AAA
U.S. Government Agencies:

FNMA Aa1 AA+
FHLB Aa1 AA+
FHLMC Aa1 AA+
Concentration of Credit Risk
The City’s Investment Policies instructs the city to remain within defined portfolio percentages to prevent a substantial loss related to the failure of one issue or issuer.

For the Local Agency Investment Fund, there is no dictated percentage limit over the investment. For the Investment in Section 115 trust, there is no dictated percentage limit over the investment. For Certificates of Deposit, the City’s Investment Policy dictates that no more than 30% of the total portfolio may be invested in all Certificates of Deposits. As of June 30, 2025, the City is in compliance with its investment policies.

In addition, GASB 40 requires a separate disclosure if any single issuer comprises more than 5% of the total investment value. As of June 30, 2025, the City had the following investments in a single issuer that exceeded 5% of the total investment value.

Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement.

Reported
Issuers Investment Type Amount Percentage
Federal Home Loan Bank U.S. Agency Securities 25,365,650 $ 54.93% Federal National Mortgage Association U.S. Agency Securities 4,239,168 9.18% Federal Home Loan Mortgage Corporation U.S. Agency Securities 3,499,730 7.58%

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-44-

2. CASH AND INVESTMENTS, (continued)
C. Risk Disclosures, (continued)
Custodial Credit Risk
The California Government Code (Code) requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor.

Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits.

The City has waived collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City’s cash balances held with financial institutions in excess of the FDIC limit are held in collateralized accounts.

The following is a chart of City's investment portfolio:

Amount
Moody's Rating Invested
Aaa 489,390 $
Aa1 34,075,468
Aa2 486,545
N/A 4,957,835
Not rated 64,101,888
Total $ 104,111,126
D. Summary of Investments to Maturity
Investments held in the City Treasury grouped by maturity date at June 30, 2025, are shown below:

Investment Type Total 0-11 months 12-23 months 24-35 months 36-47 months 48-59 months Local Agency Investment Fund 50,253,107 $ 50,253,107 $ - $ - $ - $ - $ Investment in Section 115 Trust 7,676,639 7,676,639 - - - - Negotiable Certificates of Deposit 9,619,168 1,222,953 4,402,793 2,969,664 1,023,758 - U.S. Government Obligations 36,075,667 9,835,410 17,497,920 999,290 997,320 6,745,727 Medium Term Note 486,545 486,545 - - - -
Total 104,111,126 $ 69,474,654 $ 21,900,713 $ 3,968,954 $ 2,021,078 $ 6,745,727 $ Maturity

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-45-

2. CASH AND INVESTMENTS, (continued)
E. Section 115
The City has established an irrevocable CalPERS Section 115 Pension Trust (“115 Trust”) to prefund future employer pension contributions. Trust assets are invested in accordance with the investment policy. The Trust is administered by CalPERS through the California Employers’ Pension Prefunding Trust (CEPPT). The CalPERS Board of Administration provides oversight, establishes investment guidelines, and manages trust assets in accordance with the CEPPT Investment Policy. The City retains authority over the timing and amount of contributions and withdrawals. The City reports the investment at the amortized cost, which approximates the fair value.

F. Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2025:

Investments by Fair Value Level Total Level 1 Level 2 Level 3 Negotiable Certificates of Deposit 10,105,712 $ - $ 10,105,712 $ - $ U.S. Government Obligations 36,075,668 36,075,668 - -
Total investments by fair value 46,181,380 36,075,668 $ 10,105,712 $ - $ Investments not subject to GASB 72:

Investment in Section 115 trust 7,676,639
Local Agency Investment Fund 50,253,107
Total 104,111,126 $
Fair Value Measurement Using

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-46-

3. LOANS RECEIVABLE
As of June 30, 2025 the following loans were outstanding:

Governmental
Funds
Computer Loan Program $ 36,767
Housing Rehabilitation Loan Program 117,017
Housing Successor Loans 225,000
Total $ 378,784
Computer Loan Program
Zero interest loans were provided to City employees for purchases of personal computers.

Loan payments are deducted from bi-weekly paychecks and are secured by the employees' accrued vacation hours. At June 30, 2025, the outstanding amount due to the City was $36,767.

Housing Rehabilitation Loan Program
Low interest loans were provided to qualified borrowers for financial assistance for improvements to low and moderate income housing. The loans, which are secured by trust deeds on the property, are due upon sale of property or death of the homeowner. At June 30, 2025, the outstanding amount due to the City was $117,017.

Housing Successor Loans
Housing Successor loans in the amount of $225,000 consist of low and moderate income housing loans for three properties located on Lubbock Avenue.

The low and moderate income housing loans are secured by trust deeds on the individual properties and are payable upon sale or transfer of the property by the original property owner.

4. LEASE RECEIVABLE
As of June 30, 2025, the City had 5 active leases. The leases have receipts that range from $8,978 to $414,691 and interest rates that range from 0.6720% to 2.5800%. As of June 30, 2025, the total combined value of the lease receivable is $28,698,813, and the combined value of the deferred inflow of resources is $25,834,673.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-47-

5. INTERFUND TRANSACTIONS
A. Advances From/To Other Governments
As of June 30, 2025, balances of advances from/advances to were as follows:

Governmental Activities:

General Fund 4,021,001 $
Total 4,021,001 $
Advances to Other
Governments
Successor
Agency
Advances From
Other
Governments
The advance from the Housing Successor Agency to the City represents the amount owed for the sale of the site of the former police station for the purposes of developing low and moderate income housing. At June 30, 2025, the outstanding balance is $4,021,001.

B. Due To/From Other Funds
Interfund receivable and payable balances at June 30, 2025 were as follows:

Non-Major
Governmental
Funds
Internal
Service Funds Total
General
Fund $ 925,705 3,104,187 $ 4,029,892 $
Due From
Other Funds
Due to Other Funds
The above amounts represent short-term borrowings from the General Fund for temporary cash shortfalls for the funds listed above.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-48-

5. INTERFUND TRANSACTIONS (continued)
C. Transfers In and Out
Transfers in and out for the year ended June 30, 2025 were as follows:

Non-Major Internal
General Governmental Service
Fund Funds Funds Total
Governmental Activities:

General Fund - $ 459,200 $ 1,087,020 $ 1,546,220 $
Miscellaneous Grants 22,960 1,938,822 - 1,961,782
Non-Major Governmental Funds 1,385,606 9,427,961 - 10,813,567 Business-Type Activities:

Wastewater - - 1,108,980 1,108,980
Total $ 11,825,983 1,408,566 $ 2,196,000 $ 15,430,549 $ Transfers out
Governmental Activities
Transfers In
Throughout the year, transfers are used to move revenues from the fund with collection authority to the fund with spending authority. This is the case with all transfers shown in the table above. Below is a description of the dollar amounts shown in the schedule of transfers:

The General Fund transferred $459,200 to the 2006 COP Debt Service Fund to pay principal and interest for the year, and $1,087,020 to the Liability Risk Financing Fund to pay for general liability and related claims, judgements, and settlements, as well as costs related for legal matters.

The Gas Tax Fund transferred $1,917,831 for street-related maintenance and constructions costs in the amounts of $1,135,606 to the General Fund, $111,654 to the Transportation Fund, and $670,570 to the Storm Drain Maintenance Fund.

The Transportation Improvement Fund transferred $150,000 to the General Fund to cover part of maintenance costs of City streets, and $1,129,745 for streets reconstruction in the Transportation CIP Fund, and $1,100,117 to the Storm Drains Fund for the same purpose.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-49-

5. INTERFUND TRANSACTIONS, (continued)
C. Transfers In and Out (continued)

The Wastewater enterprise fund transferred $1,108,980 to pay for its share of general liability insurance, claims, and related legal costs during the year.

The Capital Projects Grants Fund transferred $5,914,156 of state and federal grant funding to pay for $4,656,367 in the Transportation CIP Fund, and $1,106,820 transferred to the Storm Drains Fund to pay for streets related repairs and improvements, and $150,969 transferred specifically to pay for a parking lot reconstruction project.

The $1,961,782 transfer from the Miscellaneous Grants Fund transferred approved ARPA projects funds to reimburse $22,960 of salaries in the General Fund for Homeless Diversion programs and the other $1,938,822 to pay for street related improvement projects.

The Road Maintenance Fund transferred $100,000 to reimburse the General Fund for street maintenance costs and additional $346,114 to the Transportation CIP Fund for the street improvements.

The Public Buildings Fund transferred $75,444 for AMR contract rent allocation costs incurred in the Capital Asset Plan Fund.

The Transit Administration Fund transferred $80,160 to pay for traffic signal construction costs in the Transportation CIP Fund.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-50-

6. CAPITAL ASSETS
At June 30, 2025 the City's capital assets consisted of the following:

Governmental Business-Type
Activities Activities Total
Non-depreciable assets:

Land $ 11,398,339 $ - $ 11,398,339
Right-of-way 15,905,824 - 15,905,824
Construction in progress 7,626,980 805,276 8,432,256
Total non-depreciable assets 34,931,143 805,276 35,736,419 Depreciable assets:

Buildings and improvements 50,898,867 - 50,898,867
Vehicles and equipment 23,310,255 2,202,180 25,512,435
Right-to-use asset - equipment 530,443 - 530,443
Right-to-use asset - subscription 1,557,172 157,356 1,714,528 Infrastructure 224,967,609 58,040,756 283,008,365
Total depreciable assets, at cost 301,264,346 60,400,292 361,664,638 Accumulated Depreciation:

Buildings and improvements (18,367,116) - (18,367,116)
Vehicles and equipment (13,461,122) (1,475,793) (14,936,915) Right-to-use asset - equipment (218,385) - (218,385)
Right-to-use asset - subscription (1,159,045) (139,462) (1,298,507) Infrastructure (129,932,589) (22,768,718) (152,701,307) Total accumulated depreciation (163,138,257) (24,383,973) (187,522,230) Total depreciable assets, net 138,126,089 36,016,319 174,142,408 Total capital assets $ 173,057,232 $ 36,821,595 $ 209,878,827

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-51-

6. CAPITAL ASSETS, (continued)
The following is a summary of capital assets for governmental activities:

Governmental activities: Balance Prior Period Balance
June 30, 2024 Adjustment Additions Deletions June 30, 2025 Non-depreciable assets:

Land $ 11,398,339 $ - $ - $ - $ 11,398,339
Right-of-way 15,905,824 - - - 15,905,824
Construction in progress 7,703,999 - 10,346,540 (10,423,559) 7,626,980 Total non-depreciable assets 35,008,162 - 10,346,540 (10,423,559) 34,931,143 Depreciable assets:

Buildings and improvements 50,197,281 - 701,586 - 50,898,867 Vehicles and equipment 18,230,526 3,291,866 1,787,863 - 23,310,255 Right-to-use asset - equipment 530,443 - - - 530,443
Right-to-use asset - subscription 1,557,172 - - - 1,557,172 Infrastructure 215,245,636 - 9,721,973 - 224,967,609
Total depreciable assets, at cost 285,761,058 3,291,866 12,211,422 - 301,264,346 Accumulated Depreciation
Buildings and improvements (17,282,269) - (1,084,847) - (18,367,116) Vehicles and equipment (9,502,779) (2,359,512) (1,598,831) - (13,461,122) Right-to-use asset - equipment (163,324) - (55,061) - (218,385) Right-to-use asset - subscription (912,366) - (246,679) - (1,159,045) Infrastructure (125,371,642) - (4,560,947) - (129,932,589) Total accumulated depreciation (153,232,380) (2,359,512) (7,546,365) - (163,138,257) Total depreciable assets, net 132,528,678 932,354 4,665,057 - 138,126,089 Total governmental activities $ 167,536,840 $ 932,354 $ 15,011,597 $ (10,423,559) $ 173,057,232 Governmental activities depreciation expense for capital assets for the year ended June 30, 2025 was as follows:

General government $ 1,462,804
Police 1,215,501
Fire 816,095
Public works 3,566,982
Community services 476,880
Community development 8,103
Total $ 7,546,365

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-52-

6. CAPITAL ASSETS, (continued)
The following is a summary of capital assets for business-type activities:

Business-Type activities: Balance Prior Period Balance
June 30, 2024 Adjustment Additions Deletions June 30, 2025 Non-depreciable assets:

Construction in progress $ - $ - $ 864,730 $ (59,454) $ 805,276 Total non-depreciable assets - - 864,730 (59,454) 805,276 Depreciable assets:

Vehicles and equipment 2,202,180 - - - 2,202,180
Infrastructure 57,981,302 - 59,454 - 58,040,756
Right-to-use asset - subscription 157,356 - - - 157,356 Total depreciable assets, at cost 60,340,838 - 59,454 - 60,400,292 Accumulated Depreciation:

Vehicles and equipment (1,326,989) - (148,804) - (1,475,793) Infrastructure (21,966,534) - (802,184) - (22,768,718)
Right-to-use asset - subscription (87,022) - (52,440) - (139,462) Total accumulated depreciation (23,380,545) - (1,003,428) - (24,383,973) Total depreciable assets, net 36,960,293 - (943,974) - 36,016,319 Total business-type activities $ 36,960,293 $ - $ (79,244) $ (59,454) $ 36,821,595 Business-type activities depreciation expense of $1,003,428 was charged to the Wastewater fund for the year ended June 30, 2025.

The fund financial statements do not present general government capital assets, but capital assets are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-53-

7. LONG-TERM DEBT
A. Governmental Activities Long-Term Debt
The summary of changes in long-term debt for governmental activities for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Additions Deletions June 30, 2025 One Year Than One Year Bonds payable:
2006 Certificates of participation:

Series A 525,000 $ - $ (160,000) $ 365,000 $ 175,000 $ 190,000 $ Series B 800,000 - (250,000) 550,000 265,000 285,000
2016 General obligation refunding bonds 15,975,000 - (945,000) 15,030,000 995,000 14,035,000 Unamortized bond premium 831,925 - (63,995) 767,930 63,995 703,935 Total $ - 18,131,925 $ (1,418,995) $ 16,712,930 $ 1,498,995 $ 15,213,935 $ Classification
Bonds Payable
2006 Certificates of Participation, Series A and B
On July 27, 2006, the La Mesa Public Financing Authority (The Authority) issued Certificates of Participation, Series 2006A in the amount of $1,830,000 and Series 2006B in the amount of $3,170,000, bearing interest rates of 4.15%-6.32% with maturity dates from August 1, 2007 to 2026. The purpose of the issuance was to provide funds to construct a building and related site improvements at the City of La Mesa's Civic Center, to acquire a municipal bond debt service reserve insurance policy and a municipal bond insurance policy for the certificates, and to pay the costs of issuance incurred in connection with the execution and delivery of the certificates.

Interest is payable on February 1 and August 1 each year, commencing August 1, 2007.

The City has pledged future post office lease revenue to repay the 2006 Certificates of Participation Series A. Total principal and interest remaining on the Certificates of Participation Series A is $388,542 payable through August 1, 2026. Total principal and interest remaining on the Certificates of Participation Series B is $575,760 payable through August 1, 2026.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-54-

7. LONG-TERM DEBT, (continued)
A. Governmental Activities Long-Term Debt, (continued)
Bonds Payable, (continued)
Whenever any event of default referred to in the lease happens and continues, the Trustee, as the assignee of the Authority, is authorized under the terms of Lease to exercise any and all remedies available pursuant to the law or granted pursuant to the Lease; provided, however, that notwithstanding anything therein or in the Trust Agreement to the contrary, there shall be no right under any circumstances to accelerate the lease payments or otherwise declare any lease payments not then due or past due to be immediately due and payable. Neither the Authority nor its assignee shall have any right to reenter or re-let the leased premises except following a default under the lease. Following an event of default, the Trustee or its assignee of the Authority, may elect either to terminate the Lease and seek to collect damages from the City or to maintain the Lease in effect and seek to collect the Lease Payments as they become due. The lease further provides that so long as an event of default exists under the lease, the trustee may reenter the leased premises for the purpose of taking possession of any portion of the leased premises and to re-let the lease premises, and in addition, at its option, with or without such entry to terminate the lease as described therein.

The outstanding principal balances of Series A and B at June 30, 2025 were $365,000 and $550,000 respectively, for a combined balance of $915,000.

The annual debt service requirements for the Series A and B Certificates outstanding at June 30, 2025 were as follows:

Year Ending
June 30, Principal Interest Total
2026 175,000 $ 17,538 $ 192,538 $
2027 190,000 6,004 196,004
Total $ 23,542 365,000 $ 388,542 $
Year Ending
June 30, Principal Interest Total
2026 265,000 $ 19,205 $ 284,205 $
2027 285,000 6,555 291,555
Total $ 25,760 550,000 $ 575,760 $
2006 Certificates of Participation Series B
2006 Certificates of Participation Series A

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-55-

7. LONG-TERM DEBT, (continued)
A. Governmental Activities Long-Term Debt, (continued)
Bonds Payable, (continued)
2016 General Obligation Refunding Bonds
On November 30, 2016, the City issued $21,825,000 in 2016 General Obligation Refunding Bonds for the purpose of refunding the outstanding 2004 General Obligation Bonds, Series A and B. The bonds are general obligation bonds of the City, payable solely from ad valorem property taxes levied on behalf of the City and collected by the County of San Diego. The bonds mature annually each August 1, 2017 through 2036 in amounts ranging from $720,000 to $1,565,000. The bonds bear variable interest rates ranging from 2% to 5%, and are payable semi-annually each February 1 and August 1, commencing February 1, 2017.

In the event of a failure of the City to comply with any provision of the disclosure certificate, the holder or beneficial owner of the bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the disclosure certificate. A default under the disclosure certificate shall not be deemed and event of default under the indenture, and the sole remedy under this disclosure certificate in the event of any failure of the City to comply with the disclosure certificate shall be an action to compel performance.

No holder or beneficial owner of the bonds may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.

The annual requirements for the 2016 General Obligation Refunding Bonds outstanding at June 30, 2025 were as follows:

Year Ending
June 30, Principal Interest Total
2026 995,000 $ 591,325 $ 1,586,325 $
2027 1,050,000 548,075 1,598,075
2028 1,095,000 510,537 1,605,537
2029 1,145,000 471,337 1,616,337
2030 1,190,000 430,475 1,620,475
2031 - 2035 6,810,000 1,392,250 8,202,250
2036 - 2037 2,745,000 127,625 2,872,625
Total $ 4,071,624 15,030,000 $ 19,101,624 $
2016 General Obligation Refunding Bonds

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-56-

7. LONG-TERM DEBT, (continued)
B. Business-Type Activities Long-Term Debt
The summary of changes in long-term debt for business-type activities for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Additions Deletions June 30, 2025 One Year Than One Year Notes payable:

State Revolving Fund Loan $ 11,383,209 $ - $ (1,185,716) $ 10,197,493 $ 1,207,671 $ 8,989,822 Total $ 11,383,209 $ - $ (1,185,716) $ 10,197,493 $ 1,207,671 $ 8,989,822 Classification
State Revolving Fund Loan
On July 25, 2006, the City entered into an agreement to obtain a low interest federal pass-through loan from the State Water Resources Control Board which would allow the City to borrow up to $14,500,000 at 2.4% from January 7, 2006 through February 1, 2028 for sewer system improvements. An additional $5,000,000, $7,000,000, and $970,619 was approved for borrowing on November 3, 2015, July 7, 2020, and February 27, 2023, respectively. At June 30, 2025, the City had borrowed $22,317,101, of which $10,197,493 remains outstanding.

The annual debt service requirements for the State Water Fund Loan outstanding at June 30, 2025 were as follows:

Year Ending June 30, Principal Interest Total
2026 1,207,671 $ 162,569 $ 1,370,240 $
2027 1,230,387 139,854 1,370,241
2028 1,253,577 116,664 1,370,241
2029 972,682 92,989 1,065,671
2030 800,071 76,127 876,198
2031 - 2035 2,313,168 252,486 2,565,654
2036 - 2040 1,830,846 94,324 1,925,170
2041 - 2042 589,091 10,181 599,272
Total $ 945,194 10,197,493 $ 11,142,687 $
State Revolving Fund Loan

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-57-

8. FINANCED PURCHASE
The summary of changes in long-term financed purchases for governmental activities for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Additions Deletions June 30, 2025 One Year Than One Year Financed purchase payable
San Diego County Next Gen RCS - 2017 $ 284,845 - $ $ (140,463) $ 144,382 $ 144,382 $ - Total $ 284,845 $ - $ (140,463) $ 144,382 $ 144,382 $ - Classification
San Diego County Next Gen RCS - 2017
The San Diego-Imperial County Regional Communications System (RCS) is utilized by the Police, Fire and Public Works Departments for their radio communications. The current system has reached end of life, and the RCS has developed plans for a new “next generation system” to meet the region’s needs (NextGen RCS).

On July 12, 2016, the City of La Mesa was notified by San Diego County that a contract for the NextGen RCS system was awarded to Motorola Solutions for $70,065,207. The City of La Mesa’s share of this amount is $1,279,649. The City’s shared infrastructure obligation is financed by the County of San Diego at an annual interest rate of 2.79% per year, for a period of ten years, with an annual payment of $148,411 beginning in FY 16- 17 and continuing for 10 years until the debt is paid. The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2026 144,382 $ 4,028 $ 148,410 $
San Diego County Next Gen RCS - 2017

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-58-

9. LEASE AND SUBSCRIPTION LIABILITY
A. Governmental Activities
The summary of changes in long-term lease and subscription liabilities for governmental activities for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Additions Deletions June 30, 2025 One Year Than One Year Lease liability 370,225 $ - $ (53,116) $ 317,109 $ 53,953 $ 263,156 $ Subscription liability 526,053 - (415,082) 110,971 48,805 62,166 Total $ 896,278 $ - $ (468,198) $ 428,080 $ 102,758 $ 325,322 Classification
Lease Liability
As of June 30, 2025, the City had 2 active leases. The leases have payments that range from $4,163 to $54,822 and interest rates that range from 1.2900% to 1.6000%.

As of June 30, 2025, the total combined value of the lease liability is $317,109. The combined value of the right to use asset, as of June 30, 2025 of $530,443 with accumulated amortization of $218,385 is included within the right-to-use asset – equipment in note 6.

The annual payments as of June 30, 2025 were as follows:

Year Ending
June 30, Principal Interest Total
2026 53,953 $ 5,031 $ 58,984 $
2027 4,189 52,368 56,557
2028 51,449 3,373 54,822
2029 52,272 2,549 54,821
2030 53,109 1,713 54,822
2031 53,958 863 54,821
Total $ 17,718 317,109 $ 334,827 $
Lease Liability

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-59-

9. LEASE AND SUBSCRIPTION LIABILITY (continued)
A. Governmental Activities (continued)
Subscription Liability
As of June 30, 2025, the City had 9 active subscriptions. The subscriptions have payments that range from $4,590 to $169,931 and interest rates that range from

2.0240% to 2.9270%. As of June 30, 2025, the total combined value of the subscription liability is $110,971. The combined value of the right to use asset, as of June 30, 2025 of $1,557,172 with accumulated amortization of $1,159,045 is included within right-touse asset – subscription in note 6.

The annual payments as of June 30, 2025 were as follows:

Year Ending
June 30, Principal Interest Total
2026 48,805 $ 2,534 $ 51,339 $
2027 41,106 1,483 42,589
2028 3,973 617 4,590
2029 4,089 500 4,589
2030 4,209 381 4,590
2031 8,789 388 9,177
Total $ 5,903 110,971 $ 116,874 $
Subscription liability
B. Business-Type Activities
The summary of changes in long-term lease and subscription liabilities for businesstype activities for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Additions Deletions June 30, 2025 One Year Than One Year Subscription liability $ 51,320 $ - $ (51,320) $ - $ - $ - Classification
As of June 30, 2025, the City had 1 active subscription that is split with the General Fund. The subscription has annual payments of $115,340 and interest rates of

2.1840%. As of June 30, 2025, the total combined value of the subscription liability is $0. The combined value of the right to use asset, as of June 30, 2025 of $157,356 with accumulated amortization of $139,462 is included within right-to-use asset – subscription in note 6.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-60-

10. COMPENSATED ABSENCES
The summary of changes in the City’s compensated absences for the year ended June 30, 2025 was as follows:

Balance Balance Due Within Due in More
June 30, 2024 Restatement Net Change June 30, 2025 One Year Than One Year Governmental activities:

Compensated Absences $ 4,618,672 $ (148,958) $ 1,447,552 $ 5,917,266 $ 3,768,675 $ 2,148,591 Balance Balance Due Within Due in More
June 30, 2024 Restatement Net Change June 30, 2025 One Year Than One Year Business-type activities:

Compensated Absences $ - $ 148,958 $ 81,571 $ 230,529 $ 170,875 $ 59,654 Classification
The City’s liability for vested and unpaid compensated absences in the governmental and business-type activities has been accrued and amount to $6,147,795 as of June 30, 2025.

These liabilities have been described in Note 1.

11. OTHER POST– EMPLOYMENT BENEFITS
Plan Description
The City provides the minimum required employer contribution under the CalPERS Health Plan for eligible retirees and surviving spouses in receipt of a pension benefit from CaIPERS. An employee is eligible for this employer contribution provided they are vested in their CalPERS pension benefit and commence payment of their pension benefit within 60 days of retirement with the City. Vesting requires at least 5 years of CalPERS total service. The surviving spouse of an eligible retiree who elected spouse coverage under CalPERS is eligible for the employer contribution upon the death of the retiree. The scheduled minimum required employer contributions for each eligible retiree under the CalPERS Health Plan are $158 per month per employee in 2025. The City does not issue a financial report for the plan. A separate financial report is not prepared for the Plan.

Employees Covered
As of the July 1, 2023 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Active employees 254
Inactive employees or beneficiaries currently receiving benefits 143 Inactive employees entitled to, but not yet receiving benefits - Total 397

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-61-

11. OTHER POST– EMPLOYMENT BENEFITS, (continued)
Contributions
By unanimous vote of the City Council on May 12, 2009, the City adopted pre-funding through the California Employers' Retiree Benefit Trust (CERBT), a GASB eligible trust.

The CERBT has an investment policy with an expected long-term rate of return equal to approximately 6.00% for employers fully funding the annual required contribution each year. For the fiscal year ended June 30, 2025, the City’s cash contributions were $396,253 in payments to the trust and $306,149 in implicit subsidy for the total contribution after the measurement date of $702,402.

Net OPEB Liability / (Asset)
The City’s net OPEB liability/(asset) was measured as of June 30, 2024 based on the following actuarial methods and assumptions:

Actuarial Assumptions June 30, 2024 Measurement Date
Actuarial Valuation Date July 1, 2023
Actuarial cost method Entry age normal
Discount Rate 6.40%
General Inflation 2.50%
Mortality Society of Actuaries (SOA) Pub-2010 Continuing Survivor Headcount Weighted Mortality Table fully
generational using Scale MP-2021.

Retirement, Disability,
Termination
According to the rates under the 2021 experience study
for the CalPERS Pension plan.

Salary increases 2.8% plus merit increases under the 2021 experience study for the CalPERS pension plan
Medical Trend 8.0% for 2025, decreasing to an ultimate rate of 4.5% in 2030 and later years
Healthcare Participation 50% of eligible active employees are assumed to elect medical coverage at retirement.

The long-term expected rate of return on OPEB plan investments was determined using a building –block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-62-

11. OTHER POST– EMPLOYMENT BENEFITS, (continued)
Net OPEB Liability/(Asset) (continued)
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Component Target Allocation
Long-Term
Expected Real
Rate of Return
Global equity 49% N/A
Global debt securities 23% N/A
Inflation assets 5% N/A
Commodities 3% N/A
REITs 20% N/A
Total 100%
Discount Rate
A discount rate of 6.40% was used in the valuation. This discount rate assumes the City continues to fully fund for its retiree health benefits through the CERBT under its investment allocation strategy.

Changes in the OPEB Liability/(Asset)
The changes in the net OPEB liability/(asset) for the Plan are as follows:
(a) (b) (a) - (b) = (c)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
(Asset)
Balance at June 30, 2023 (measurement date) 7,373,548 $ 6,617,304 $ 756,244 $ Changes recognized for the measurement
period:

Service cost 198,340 - 198,340
Interest 468,616 - 468,616
Differences between expected and
actual experience (380,829) - (380,829)
Changes of assumptions 25,712 - 25,712
Contributions – employer - 1,003,552 (1,003,552)
Net investment income - 761,999 (761,999)
Benefit payments (507,380) (507,380) -
Administrative expense - (2,241) 2,241
Net changes (195,541) 1,255,930 (1,451,471)
Balance at June 30, 2024 (measurement date) $ 7,873,234 7,178,007 $ (695,227) $

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-63-

11. OTHER POST– EMPLOYMENT BENEFITS, (continued)
Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Discount Rate The following presents the net OPEB liability/(asset) of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:
1% Decrease
(5.40%)
Current Discount
Rate (6.40%)
1% Increase
(7.40%)
Net OPEB Liability/
(Asset) 161,282 $ (695,227) $ (1,406,354) $
Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Health Care Cost Trend Rates
The following presents the net OPEB liability/(asset) of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:
1% Decrease
Current Healthcare
Cost Trend Rates 1% Increase
Net OPEB Liability/
(Asset) (1,541,064) $ (695,227) $ 350,339 $
OPEB Plan Fiduciary Net Position
CalPERS issues a publicly available CERBT financial report that may be obtained from the CalPERS’ website at www.calpers.ca.gov.

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability/(asset) 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. The net difference between projected and actual earnings on OPEB plan investments is amortized using the straight-line method over 5 years, while all other amounts are amortized over the expected average remaining service lifetime (EARSL) of plan participants.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-64-

11. OTHER POST– EMPLOYMENT BENEFITS, (continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB A complete breakdown of the OPEB expense is as follows:

Service cost 198,340 $
Interest on total OPEB liability 468,616
Projected earnings on OPEB plan investments (439,068)
OPEB plan administrative expense 2,241
Current period recognition of deferred outflows (inflows) of resources:

Differences between expected and actual experience in
measurement of the total OPEB liability (100,360)
Changes of assumptions 19,090
Differences between projected and actual earnings on OPEB plan investments 28,622
Annual OPEB expense 177,481 $
For the fiscal year ended June 30, 2025, the City recognized OPEB expense of $177,481.

As of fiscal year ended June 30, 2025, the City reported deferred inflows and outflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Net difference between projected and actual
earnings on OPEB plan investments 57,409 $ - $
Changes of assumptions 511,730 (444,884)
Difference between expected and actuarial
experience 606,267 (1,073,301)
Contributions to OPEB plan subsequent to the
measurement date 702,402 -
Total 1,877,808 $ (1,518,185) $

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-65-

11. OTHER POST– EMPLOYMENT BENEFITS, (continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (continued)
Contributions subsequent to the measurement date of $702,402, reported as deferred outflows of resources will be recognized as a reduction of the net OPEB liability/(asset) in the upcoming fiscal year. Other amounts reported as deferred outflows or inflows of resources related to OPEB will be recognized as expense as follows:

Fiscal Year
Ended June 30
Deferred
Outflows/(Inflows) of
Resources
2026 (78,723) $
2027 111,109
2028 (154,200)
2029 (145,859)
2030 1,046
Thereafter (76,152)
$ (342,779)
Remainder of this page intentionally left blank.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-66-

12. OTHER REQUIRED DISCLOSURES
Generally accepted accounting principles require disclosure of certain information concerning unrestricted net position (deficit) and fund balance (deficit). At June 30, 2025, the following funds had the following deficit fund balances:

Governmental Funds
Miscellaneous Grants (769,968) $
Non-Major:

Transportation Improvement (1,277,417)
Environmental Services (750,670)
Public Safety Grants (725,412)
Transportation Fund (76,424)
2006 Certificates of Participation (10,669)
Public Building (11,984)
The negative fund balance amount represents expenditures incurred before June 30, 2025, which as of the financial statement date and accrual period, were not yet reimbursed.

13. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft or damage to, and destruction of, assets; errors and omissions; injuries to employees; and natural disasters.

The City manages these risks through a combination of self-insurance, participation in risk-sharing pools, and the purchase of commercial insurance.

Workers’ Compensation
The City is self-insured for workers’ compensation claims and accounts for these activities in an internal service fund—the Workers’ Compensation Fund. Under the current program, the City retains risk for individual claims up to $250,000 per occurrence, including catastrophic illness. Claims in excess of this retention are covered through membership in the Public Entity Risk Management Authority (PERMA), which provides pooled risksharing coverage up to statutory limits for workers' compensation and $5,000,000 per occurrence for employer’s liability.

All City departments participate in the program and are charged based on estimated historical cost data and actuarial estimates of current and incurred-but-not-reported (IBNR) liabilities. Contributions are adjusted as necessary to ensure the fund is adequately financed. There have been no settlements in the past three fiscal years that have exceeded coverage limits.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-67-

13. RISK MANAGEMENT, (continued)
General Liability
The City also self-insures for general liability exposures and participates in PERMA’s pooled liability program. The City retains a Self-Insured Retention (SIR) of $50,000 per claim. PERMA provides pooled coverage from the SIR up to $1,000,000, and excess commercial liability insurance extends the total coverage limit to $50,000,000 per occurrence.

Member contributions to the pool are based on actuarial estimates of the ultimate cost of claims and are subject to retrospective adjustment based on actual loss experience. The City accounts for this activity in an internal service fund.

Property
The City participates in PERMA’s All Risks Property Protection Program, which is underwritten by a commercial insurer. Coverage includes real and personal property, and premiums are based on reported insured values and selected deductible levels. Unlike the liability program, these premiums are not subject to retroactive adjustment.

The claim liability of $5,439,688 reported in the Government-Wide Statement of Net Position in accordance with generally accepted accounting principles, which require a liability for claims be reported if information prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated.

Changes in claims liability amount for fiscal years 2023, 2024 and 2025 were:

Beginning of
Fiscal Year
Liability
Current Year Claims
and Change in
Estimates
Claims
Payments
Balance at
Fiscal Year End
2022 - 2023 5,947,934 $ (614,232) $ $ (136,382) 5,197,320 $ 2023 - 2024 5,197,320 1,083,307 (59,667) 6,220,960
2024 - 2025 6,220,960 (655,887) (125,385) 5,439,688

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-68-

14. DEFINED BENEFIT PENSION PLANS
A summary of pension plans and related deferred inflows and outflows of resources which reconciles to the Statement of Net Position is as follows:

PERS - Misc PERS - Safety PARS Total
Net Pension Liability / (Asset) 42,161,005 $ 80,863,068 $ (124,255) $ 122,899,818 $ Deferred Outflows - Pension Related 9,006,560 19,278,281 97,266 28,382,107 Deferred Inflows - Pension Related - 481,360 - 481,360
A. General Information about the Pension Plans
Plan Description
The Plan is an agent multiple-employer defined benefit pension plan 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 valuation report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of fulltime employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration.

The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-69-

14. DEFINED BENEFIT PENSION PLANS, (continued)
A. General Information about the Pension Plans, (continued) The Plan’s provisions and benefits in effect at June 30, 2025 are summarized as follows:

On or after
January 1, 2011
Prior to And prior to On or after
Hire Date January 1, 2011 January 1, 2013 January 1, 2013 Benefit formula 3.0% @ 60 2.5% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50-67+ 50-67+ 52-67+
Required employer contribution rates 11.900% 11.900% 11.900% On or after
January 1, 2011
Prior to And prior to On or after
Hire Date January 1, 2011 January 1, 2013 January 1, 2013 Benefit formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 50
Required employer contribution rates 21.370% 21.370% 21.370% Miscellaneous
Safety
Employees Covered
At June 30, 2023, (valuation date) the following employees were covered by the benefit terms:

Miscellaneous Safety
Inactive employees or beneficiaries
currently receiving benefits 292 217
Inactive employees entitled to but
not yet receiving benefits 233 75
Active employees 144 106
Total 669 398

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-70-

14. DEFINED BENEFIT PENSION PLANS, (continued)
A. General Information about the Pension Plans, (continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2025 for the miscellaneous and safety plans were $15,722,811 respectively.

B. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-71-

14. DEFINED BENEFIT PENSION PLANS, (continued)
B. Net Pension Liability, (continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2023 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Miscellaneous Safety
Valuation Date June 30, 2023 June 30, 2023
Measurement Date June 30, 2024 June 30, 2024
Actuarial Cost Method Entry Age Normal Entry Age Normal Asset Valuation Method Fair Value of Assets Fair Value of Assets Actuarial Assumptions
Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Salary Increases Varies by Entry Age and Service Varies by Entry Age and Service Mortality Rate Table (1) Derived using CALPERS' Derived using CALPERS' membership data for all funds membership data for all funds Post Retirement Benefit Increase
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

The lesser of contract COLA or

2.30% until Purchasing Power
Protection Allowance floor on
purchasing power applies, 2.30%
thereafter.

The lesser of contract COLA or

2.30% until Purchasing Power
Protection Allowance floor on
purchasing power applies, 2.30%
thereafter.

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

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-72-

14. DEFINED BENEFIT PENSION PLANS, (continued)
B. Net Pension Liability, (continued)
Long-term Expected Rate of Return (continued)
The expected real rates of return by asset class are as follows:

Asset Class1
Assumed Asset
Allocation Real Return 1,2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.85%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage (5.00%) (0.59%)
2 Figures are based on the 2021 Asset Liability Management study. 1 An expected inflation of 2.30% used for this period.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the longterm expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-73-

14. DEFINED BENEFIT PENSION PLANS, (continued)
B. Net Pension Liability, (continued)
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.

C. Changes in Net Pension Liability
The following tables show the changes in net pension liability recognized over the measurement period for each plan.

Miscellaneous Plan:

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (c)=(a)-(b)
Balance at: 6/30/2023 (VD) $ 93,811,848 137,106,593 $ 43,294,745 $ Changes Recognized for the
Measurement Period
• Service Cost 2,114,854 - 2,114,854
• Interest on the Total Pension
Liability 9,423,156 - 9,423,156
• Differences between Expected and
Actual Experience 2,464,104 - 2,464,104
• Contributions from the Employer - 5,202,364 (5,202,364) • Contributions from the Employee - 963,554 (963,554)
• Net Investment Income - 9,046,271 (9,046,271)
• Benefit Payments, including
Refunds of Employee Contributions (8,121,277) (8,121,277) - • Administrative Expense - (76,335) 76,335
Net Change during 2023-24 7,014,577 5,880,837 (1,133,740) Balance at: 6/30/2024 (MD) $ 100,826,425 142,987,430 $ 42,161,005 $ Increases (Decreases)
Valuation Date (VD), Measurement Date (MD).

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-74-

14. DEFINED BENEFIT PENSION PLANS, (continued)
C. Changes in Net Pension Liability, (continued)
Safety Plan:

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (c)=(a)-(b)
Balance at: 6/30/2023 (VD) $ 146,990,543 228,678,719 $ 81,688,176 $ Changes Recognized for the
Measurement Period
• Service Cost 4,162,719 - 4,162,719
• Interest on the Total Pension Liability 15,706,256 - 15,706,256 • Differences between Expected and
Actual Experience 3,241,946 - 3,241,946
• Contributions from the Employer - 8,363,435 (8,363,435) • Contributions from the Employee - 1,602,584 (1,602,584) • Net Investment Income - 14,089,617 (14,089,617)
• Benefit Payments, including Refunds
of Employee Contributions (12,750,270) (12,750,270) -
• Administrative Expense - (119,607) 119,607
Net Change during 2023-24 11,185,759 10,360,651 (825,108) Balance at: 6/30/2024 (MD) $ 158,176,302 239,039,370 $ 80,863,068 $ Increases (Decreases)
Valuation Date (VD), Measurement Date (MD).

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous Plan's
Net Pension Liability 59,748,378 $ 42,161,005 $ 27,565,686 $ Safety Plan's Net
Pension Liability 113,406,044 80,863,068 54,266,700

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-75-

14. DEFINED BENEFIT PENSION PLANS, (continued)
C. Changes in Net Pension Liability, (continued)
Amortization of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Difference between
projected and actual
earnings
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all
members that are provided with benefits (active,
inactive and retired) as of the beginning of the
measurement period
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2023), the net pension liability for the Miscellaneous and Safety Plans is $43,294,745 and $81,688,176, respectively.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-76-

14. DEFINED BENEFIT PENSION PLANS, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
For the measurement period ending June 30, 2024 (the measurement date), the City incurred a pension expense of $6,705,461 and $13,141,834 for the Miscellaneous and Safety Plans, respectively. A complete breakdown of the pension expense is as follows:

Miscellaneous Plan
Description Amount
Service Cost $ 2,114,854
Interest on the Total Pension Liability 9,423,156
Recognized Differences between Expected and Actual Experience 565,574 Recognized Changes in Assumptions 1,703,847
Employee Contributions (963,554)
Projected Earnings on Pension Plan Investments (6,396,744) Recognized Differences between Projected and Actual Earnings on Plan Investments 181,993 Administrative Expense 76,335
Total Pension Expense $ 6,705,461
Safety Plan:

Description Amount
Service Cost $ 4,162,719
Interest on the Total Pension Liability 15,706,256
Recognized Differences between Expected and Actual Experience 2,120,864 Recognized Changes in Assumptions 2,313,826
Employee Contributions (1,602,584)
Projected Earnings on Pension Plan Investments (10,039,229) Recognized Differences between Projected and Actual Earnings on Plan Investments 360,375 Administrative Expense 119,607
Total Pension Expense $ 13,141,834

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-77-

14. DEFINED BENEFIT PENSION PLANS, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
As of June 30, 2025, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Miscellaneous Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected and
Actual Experience 1,783,253 $ - $
Changes of Assumptions - -
Net Difference between Projected and
Actual Earnings on Pension Plan
Investments 1,325,316 -
Pension Contributions Subsequent to
Measurement Date 5,897,991 -
Total $ - 9,006,560 $
Safety Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected and
Actual Experience 5,941,668 $ (481,360) $
Changes of Assumptions 1,272,519 -
Net Difference between Projected and
Actual Earnings on Pension Plan
Investments 2,239,274 -
Pension Contributions Subsequent to
Measurement Date 9,824,820 -
Total $ (481,360) 19,278,281 $

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-78-

14. DEFINED BENEFIT PENSION PLANS, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
Miscellaneous Plan:

These amounts above are net of outflows and inflows recognized in the 2023-2024 measurement period expense. Contributions subsequent to the measurement date of $15,722,811 for both the Miscellaneous and Safety Plans are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the subsequent fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Measurement Period
Deferred
Outflows/(Inflows) of
Ended June 30: Resources
2025 1,228,571 $
2026 2,835,673
2027 (425,768)
2028 (529,907)
2029 -
Thereafter -
Safety Plan:

Measurement Period
Deferred
Outflows/(Inflows) of
Ended June 30: Resources
2025 3,594,680 $
2026 6,210,835
2027 (23,338)
2028 (810,076)
2029 -
Thereafter -
E. Payable to the Pension Plan
At June 30, 2025, the City of La Mesa reported a payable of $0 for the outstanding amount of contributions to the pension plans required for the year ended June 30, 2025.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-79-

15. RETIREMENT ENHANCEMENT PLAN
A. PARS Retirement Enhancement Plan
Plan Description
The plan is an enhanced agent pension plan administered, an agent multiple employer plan, by Public Agency Retirement Services (PARS). The plan enhancement was designed to provide a retirement factor of 3.0% at 60. At the time the plan was implemented, the CalPERS benefit only extended to 2.0% at 55. The plan was closed on January 13, 2006 when employees voted to change to the 3.0% at 60 benefit formula through CalPERS. At this time the nature of the plan changed, and the participants were divided into three groups, those that were already retired and receiving the defined benefit of the enhancement plan, those that are currently inactive and will not receive a defined benefit payment but do have their contributions set aside and available at retirement, and one active employee.

Benefits Provided
The benefit provided by PARS is equal to a percentage of the highest pay multiplied by years of service, with the percentage varying by retirement age based on a modified 3.0% target offset by CalPERS 3.0% at 60 formula for current actives. There are no active participants and twenty-one former employees who retired with PARS or are currently considered inactive. Benefits are increased by a 2% annual COLA after retirement. The plan has been closed to new entrants since January 7, 2006. Employees that elected to change over to the CalPERS 3.0% at 60 formula will receive their contributions made to the plan in a lump sum payment upon retirement.

The Plan’s provisions and benefits in effect at June 30, 2024, (measurement date) are summarized as follows:

Group I Group II Group III
Terminate before Inactive employees Active
Hire Date January 13, 2006 Not yet retired Employee
Benefit formula Modified 3.0% @ 60 Closed Plan Modified 3.0% @ 60 Benefit vesting schedule City CalPERS Service Vested City CalPERS Service Benefit payments
monthly for life-offset by
CalPERS Benefit at Retirement Accumulated Contributions monthly for life-offset by
CalPERS Benefit at Retirement
Retirement age 55-63 55-60 55-60
Monthly benefits, as a % of eligible compensation
combined with CalPERS 2.5%-3.0% N/A 2.7%-3.0%
Required employee contribution rates N/A N/A 1.5%
Required employer contribution rates Closed group-Normal Cost Closed Program Closed group-Normal Cost

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-80-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
A. PARS Retirement Enhancement Plan, (continued)
Employees Covered
At January 1, 2023 (valuation date), the following employees were covered by the benefit terms:

PARS
Inactive employees or beneficiaries
currently receiving benefits 19
Inactive employees entitled to but
not yet receiving benefits 2
Active employees -
Total 21
Contributions
The annual contribution for the PARS plan is determined on an actuarial basis. For the measurement period ended June 30, 2024 (the measurement date), the active employee contribution rate for the plan is 1.5% of annual pay. There are, however, no longer any active employees under this plan. The employer contributes an amount determined by an actuarial study performed at least every two years as long as the Plan exists. This is a closed plan.

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 Plan is measured as of June 30, 2024, using an annual actuarial valuation as of January 1, 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 as follows.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-81-

15. RETIREMENT ENHANCEMENT PLAN (continued)
B. Net Pension Liability/(Asset)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2024 (the measurement date), the total pension liability was determined by rolling forward the January 1, 2023 total pension liability. The June 30, 2023 and June 30, 2024 total pension liabilities were based on the following actuarial methods and assumptions:

PARS
Valuation Date January 1, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age Normal, Level % of Pay
Asset Valuation Method Market value of assets
Actuarial Assumptions
Discount Rate 5.50%
Inflation 2.50%
Mortality Rate Table Mortality projected fully generational with Scale MP-2021 Discount Rate
The discount rate used to measure the total pension liability was 5.50%. The City chose a Moderate Risk Investment Strategy when setting up this plan. The current 5.50% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 5.50% is applied to the plan.

Administrative expenses are expected to be 0.6% of assets, this is added to the discount rate bringing the Expected Long-Term Net Rate of Return to 5.50%.

According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. The 5.50% investment return assumption used in this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be 0.6% of assets. An investment return excluding administrative expenses would have been 6.56%. Using this lower discount rate has resulted in a slightly higher total pension liability and net pension liability.

This difference was deemed immaterial to the plan. Refer to the sensitivity of the net pension liability to changes in the discount rate section of this note, which provides information on the sensitivity of the net pension liability to changes in the discount rate.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-82-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
B. Net Pension Liability/(Asset), (continued)
The following table reflects long-term expected real rate of return by asset class.

Approximate expected real rates of return provided by Foster & Foster’s 2021 capital market assumptions which are based on a survey of various investment advisors’ expected asset class returns. These geometric rates of return are net of administrative expenses.

PARS Moderate Investment Policy
Target
Allocation
PARS -
Moderate
Expected
Real
Return
Global Equity 50.00% 4.56%
Fixed Income 45.00% 0.78%
Cash 5.00% -0.50%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Tern Net Rate of Return, Rounded 5.50%
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in the City’s GASB 68 Employer Accounting Information report. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Investments are reported at fair value.

Remainder of this page intentionally left blank.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-83-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
C. Changes in the Net Pension Liability/(Asset)
The following table shows the changes in net pension liability/(asset) recognized over the measurement period.

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c)=(a)-(b)
Balance at 6/30/2024 (MD) $ 2,342,108 2,354,127 $ 12,019 $ Changes Recognized for the
Measurement Period
• Interest on the Total Pension
Liability 123,753 - 123,753
• Differences between Expected and
Actual Experience - - -
• Changes of Assumptions - - -
• Contributions from the Employer - 55,000 (55,000)
• Contributions from the Employee - - -
• Net Investment Income - 213,410 (213,410)
• Benefit Payments, including
Refunds of Employee Contributions. (208,143) (208,143) - • Administrative Expenses - (8,383) 8,383
Net Change 51,884 (84,390) (136,274)
Balance at: 6/30/2025 (MD) $ 2,393,992 2,269,737 $ (124,255) $ Increases (Decreases)
Measurement Date (MD)
Sensitivity of the Net Pension Liability/(Asset) to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 5.50 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (4.50 percent) or 1 percentage-point higher (6.50 percent) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(4.50%) Rate (5.50%) (6.50%)
PARS Plan's Net Pension
Liability/(Asset) 48,491 $ (124,255) $ (276,053) $

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-84-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
C. Changes in the Net Pension Liability/(Asset), (continued) Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

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

The amortization period differs depending on the source of the gain or loss:

Difference between
projected and actual
earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the
average expected remaining service lives
of all members that are provided with
benefits (active, inactive and retired) as of
the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired).

The EARSL for the Plan for the measurement period is 0 years, which was obtained by dividing the total service years of 0 (the sum of the remaining service lifetimes of the active employee) by 21 (the total number of participants: active, inactive, and retired). The reason the EARSL is 0 is that this is a closed plan and there are no active employees with no remaining service life. The last active employee left the City in fiscal year 2018. There are 21 total covered employees. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

As of the start of the measurement period (July 1, 2023), the net pension liability is $12,019.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-85-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the measurement period ending June 30, 2024 (the measurement date), the City incurred pension expense of $26,967 for the Plan. A complete breakdown of the pension income is as follows:

Description Amount
Interest on the Total Pension Liability 123,753 $
Projected Earnings on Investments (123,008)
Administrative Expenses 8,383
Asset returns 17,839
Total Pension Expense (Income) $ 26,967
As of June 30, 2025, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Net Difference between Projected and
Actual Earnings on Pension Plan
Investments 47,266 $ - $
Pension Contributions Subsequent to
Measurement Date 50,000 -
Total $ - 97,266 $
These amounts above are net of outflows and inflows recognized in the 2023-2024 measurement period expense. Contributions subsequent to the measurement date of $50,000 reported as deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Measurement Period
Deferred
Outflows/(Inflows) of
Ended June 30: Resources
2025 10,332 $
2026 75,649
2027 (20,633)
2028 (18,082)
2029 -
Thereafter -

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-86-

15. RETIREMENT ENHANCEMENT PLAN, (continued)
E. Payable to the Pension Plan
At June 30, 2025, the City of La Mesa reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2025

16. COMMITMENTS AND CONTINGENCIES
Lawsuits in the Normal Course of Business
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City. Additionally, City management believes that the City's insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

17. RELATED PARTY TRANSACTIONS
On November 25, 2008, the City entered into a Purchase and Sale Agreement with the Redevelopment Agency to sell certain real property located at 8181 Allison Avenue, La Mesa, California at the appraised value of $8,350,000 for the purposes of increasing, improving and preserving the community's supply of housing available at affordable cost to persons and families of low or moderate income. The Agency made an initial payment of $1,000,000 at closing and issued a promissory note to the City for $7,350,000.

The outstanding balance was transferred from the Agency to the Successor Agency on February 1, 2012 as part of the dissolution of redevelopment. At June 30, 2025, the outstanding balance of the advances from the City to the Successor Agency relating to this transaction was $4,021,001.

On August 23, 2012, the City of La Mesa acting as Successor Agency filed the Recognized Obligation Payment Schedule (ROPS III) for the January through June 2013 time period.

As it had been for all previous ROPS, included on the ROPS III was the outstanding loan balance ($5,300,000 at June 30, 2012) for the Police Station Land Sale between the General Fund and the Successor Agency and the related annual debt service ($750,000 per year). The Department of Finance denied the debt on the ROPS III as an enforceable obligation, despite approving it on all previous ROPS, stating:

HSC section 34171 (d) defines enforceable obligations. Based on our review and application of the law, Item No.5- a loan agreement between the City of La Mesa (City) and the Agency in the amount of $5.3 million is not an enforceable obligation. The loan was used to purchase the land under the police station. HSC section 34171 (d) (2) states that agreements between the City and the Agency are not enforceable.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-87-

17. RELATED PARTY TRANSACTIONS (continued)
The City requested a Meet and Confer with the Department of Finance, which was held on November 21, 2012. On December 19, 2012, the City received a determination from the Department of Finance that upheld the original determination to deny both the outstanding loan balance and related annual debt service as enforceable obligations.

However, on December 7, 2017, the Oversight Board for the Successor Agency approved a repayment schedule in accordance with the maximum repayment amounts specified in the Dissolution Law including H&S Code Section 34191.4(b)(3) until the loan is repaid in full. On January 23, 2018, the Department of Finance issued a Determination Letter, approving the loan balance of $5,300,000. Repayments of this loan will begin after other deferrals listed on the ROPS are repaid.

18. SUCCESSOR AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of La Mesa that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

In accordance with the Bill, on January 10, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution. The Successor Agency is subject to the control of the oversight board and remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution of the redevelopment agency (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

19. RISK, UNCERTAINTIES & CONTINGENCIES
Grants
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the government expects such amounts, if any, to be immaterial.

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-88-

19. RISK, UNCERTAINTIES & CONTINGENCIES (continued)
Successor Agency
Deductions (expenses) incurred by the Successor Agency for the year ended June 30, 2025 (and subsequent years in which the Successor Agency is in operation) are subject to review by various State agencies and the County in which the Successor Agency resides. If any expenses incurred by the Successor Agency are disallowed by the State agencies or County, the City, acting as the Successor Agency could be liable for the repayment of the disallowed costs from either its own funds or by the State withholding remittances normally paid to the City. The amount, if any, of expenses that may be disallowed by the State agencies or County cannot be determined at this time, although the Successor Agency expects such amounts, if any, to be immaterial.

20. PRIOR PERIOD ADJUSTMENT – RESTATEMENT
During fiscal year 2025, the City implemented GASB Statement No. 101, Compensated Absences, the change in accounting principle is summarized below in the “Restatement – GASB 101 implementation”:

During fiscal year 2025, the City conducted a comprehensive review of its capital asset records and identified various errors in capital asset tracking records. In addition, the City corrected accruals from prior years in the General Fund and various special revenue funds.

Net position/fund
balance (deficit),
beginning of year, as
previously reported
Restatement -
GASB 101
implementation Correction of error
Net position/fund
balance (deficit),
beginning of year,
as restated
Government-wide
Governmental activities 153,221,932 $ 148,958 $ 4,299,316 $ 157,670,206 $ Business-type activities 26,712,408 (148,958) - 26,563,450 Total government-wide $ - 179,934,340 $ 4,299,316 $ 184,233,656 $ Governmental funds
Major funds
General fund 68,597,086 $ - $ 3,062,428 $ 71,659,514 $
Nonmajor funds 24,367,026 - 134,108 24,501,134
Total governmental funds $ - 92,964,112 $ 3,196,536 $ 96,160,648 $ Proprietary funds
Wastewater - Enterprise Fund 26,712,408 $ (148,958) $ - $ 26,563,450 $ Internal service funds 10,707,881 - (1,476,608) 9,231,273 Total proprietary funds $ (148,958) 37,420,289 $ (1,476,608) $ 35,794,723 $

REQUIRED SUPPLEMENTARY

INFORMATION

This page left intentionally blank.

CITY OF LA MESA
Required Supplementary Information
Budgetary Information
For the Year Ended June 30, 2025
-89-
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
• The biennial budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them. • The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. All transfers between funds, departments and/or activities shall be made by the City Council except that the City Manager may, on his own initiative and without prior approval of the City Council, transfer between budget accounts within a single department or activity to any other account or appropriation, or to the reserve, amounts determined to be in excess of actual requirements. Budget figures used in the financial statements are the final adjusted amounts. • Formal budgetary integration is employed as a management control device during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. • Budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent with generally accepted accounting principles in the United States (GAAP).

Accordingly, actual revenues and expenditures can be compared with related budgetary amounts without any significant reconciling items. No budgetary comparisons are presented for proprietary fund types, as the City is not legally required to adopt a budget for these types of funds.

CITY OF LA MESA
Required Supplementary Information
Budgetary Comparison Schedule – General Fund
For the Year Ended June 30, 2025
-90-
The following is a budget comparison schedule for the General Fund.

Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning, as Restated $ 71,659,514 71,659,514 $ 71,659,514 $ - $ Resources (inflows):

Property taxes 19,333,500 19,333,500 20,228,630 895,130 Other taxes 35,638,680 35,638,680 35,577,090 (61,590)
Licenses and permits 1,663,300 1,663,300 2,348,594 685,294 Fines and forfeitures 508,000 508,000 505,304 (2,696)
Use of money and property 2,159,130 2,159,130 6,154,418 3,995,288 Intergovernmental 1,534,050 1,534,050 2,880,011 1,345,961 Charges for services 2,630,050 2,630,050 2,531,415 (98,635) Other revenues 190,460 190,460 933,052 742,592
Transfers from other funds - - 1,408,566 1,408,566
Amount available for appropriations 135,316,684 135,316,684 144,226,594 8,909,910 Charges to appropriations (outflows):

Current:

General government 10,635,750 13,419,544 9,029,541 4,390,003 Police 26,417,439 26,532,202 27,506,233 (974,031)
Fire 16,484,980 16,553,289 17,290,901 (737,612)
Public works 12,405,000 12,730,913 11,087,053 1,643,860 Community development 4,764,548 4,874,736 2,930,282 1,944,454 Community services 2,856,481 2,943,191 2,754,534 188,657 Debt service:

Principal retirement - - 392,131 (392,131)
Interest and fiscal charges - - 9,823 (9,823)
Transfers to other funds - - 1,546,220 (1,546,220)
Total charges to appropriations 73,564,198 77,053,875 72,546,718 4,507,157 Fund Balances - Ending $ 58,262,809 61,752,486 $ 71,679,876 $ 13,417,067 $ Budgeted Amounts

CITY OF LA MESA
Required Supplementary Information
Budgetary Comparison Schedule – Miscellaneous Grants Fund For the Year Ended June 30, 2025
-91-
The following is a budget comparison schedule for the Miscellaneous Grants Fund.

Variance
Budgeted Amounts Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (1,081,714) (1,081,714) $ (1,081,714) $ - $ Resources (inflows):

Use of money and property - - 235,228 235,228
Intergovernmental 120,950 507,770 3,055,729 2,547,959
Amount available for appropriations (960,764) (573,944) 2,209,243 2,783,187 Charges to appropriations (outflows):

Current:

Community development 120,950 1,484,163 1,017,429 466,734 Transfers out - - 1,961,782 (1,961,782)
Total charges to appropriations 120,950 1,484,163 2,979,211 (1,495,048) Fund Balances (Deficit) - Ending $ (2,058,107) (1,081,714) $ (769,968) $ 1,288,139 $

CITY OF LA MESA
Required Supplementary Information Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years -92-
Miscellaneous Plan
6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024

TOTAL PENSION LIABILITY
Service Cost $ 1,587,287 1,605,289 $ 1,736,333 $ 1,745,608 $ 1,735,047 $ 1,821,665 $ 1,895,297 $ 1,996,533 $ 2,084,057 $ 2,114,854 $ Interest on Total Pension Liability 6,823,080 7,124,332 7,316,806 7,602,090 7,944,529 8,219,050 8,555,981 8,647,552 9,026,635 9,423,156 Difference Between Expected and Actual Experience (1,101,092) 263,533 (5,847) 1,300,541 1,569,003 507,760 1,305,190 (1,125,062) 2,075,153 2,464,104 Changes of Benefit Terms - - - - - - - - 181,935 -
Changes of Assumptions (1,539,484) - 5,617,856 (661,183) - - - 3,393,444 - - Benefit Payments, Including Refunds of Employee Contributions (4,592,998) (4,896,950) (5,490,512) (5,923,785) (6,320,349) (6,462,046) (6,878,738) (7,336,269) (7,565,710) (8,121,277) Net Change in Total Pension Liability 1,194,795 4,078,202 9,174,636 4,063,271 4,928,230 4,086,429 4,877,730 5,576,198 5,802,070 5,880,837 Total Pension Liability - Beginning 93,325,032 94,519,827 98,598,029 107,772,665 111,835,936 116,764,166 120,850,595 125,728,325 131,304,523 137,106,593 Total Pension Liability - Ending (a) 94,519,827 98,598,029 107,772,665 111,835,936 116,764,166 120,850,595 125,728,325 131,304,523 137,106,593 142,987,430

PLAN FIDUCIARY NET POSITION
Contributions - Employer 2,233,832 2,553,613 2,693,445 3,000,728 3,398,605 3,871,245 4,230,939 4,676,417 $ 5,146,491 $ 5,202,364 $ Contributions - Employee 699,783 727,594 761,773 739,434 751,231 790,692 852,004 847,804 876,819 963,554 Net Investment Income 1,548,306 378,797 7,561,152 6,214,843 5,041,276 4,031,596 18,659,358 (7,484,578) 5,612,868 9,046,271 Benefit Payments, Including Refunds of Employee Contributions (4,592,998) (4,896,950) (5,490,512) (5,923,785) (6,320,349) (6,462,046) (6,878,738) (7,336,269) (7,565,710) (8,121,277) Net Plan to Plan Resource Movement - - - (180) - - - 1,326 - - Administrative Expense (78,335) (42,421) (100,879) (114,925) (55,269) (113,154) (82,296) (61,774) (66,040) (76,335) Other Miscellaneous Income/(Expense) - - - (218,244) 180 - - - - - Net Change in Fiduciary Net Position (189,412) (1,279,367) 5,424,979 3,697,871 2,815,674 2,118,333 16,781,267 (9,357,074) 4,004,428 7,014,577 Plan Fiduciary Net Position - Beginning 69,795,149 69,605,737 68,326,370 73,751,349 77,449,220 80,264,894 82,383,227 99,164,494 89,807,420 93,811,848 Plan Fiduciary Net Position - Ending (b) 69,605,737 68,326,370 73,751,349 77,449,220 80,264,894 82,383,227 99,164,494 89,807,420 93,811,848 100,826,425 Plan Net Position Liability - Ending (a) - (b) 24,914,090 $ 30,271,659 $ 34,021,316 $ 34,386,716 $ 36,499,272 $ 38,467,368 $ 26,563,831 $ 41,497,103 $ 43,294,745 $ 42,161,005 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 73.64% 69.30% 68.43% 69.25% 68.74% 68.17% 78.87% 68.40% 68.42% 70.51%Covered Payroll $ 10,775,401 9,805,687 $ 10,782,250 $ 9,713,133 $ 10,004,158 $ 9,771,136 $ 9,799,062 $ 10,158,798 $ 10,630,644 $ 12,701,397 $ Plan Net Pension Liability as a Percentage of Covered Payroll 254.08% 280.93% 315.53% 354.02% 364.84% 393.68% 271.09% 408.48% 407.26% 331.94%Notes to Schedule:

Measurement date
Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2021 valuationdate, unless the liability impact is deemed to be material to the Public Agency Pool.Changes in Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectationsas well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-termprojected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes for 2021. For 2020, the Plan adopted anew amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does notutilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or afterJune 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (withouta reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.

CITY OF LA MESA
Required Supplementary Information Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years (Continued)
-93-
Safety Plan
6/30/2016 6/30/2017 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024

TOTAL PENSION LIABILITY
Service Cost $ 2,403,285 2,407,587 $ 2,727,872 $ 3,179,247 $ 3,150,403 $ 3,248,296 $ 3,343,416 $ 3,640,297 $ 4,029,923 $ 4,162,719 $ Interest on Total Pension Liability 11, 11,527,490 178,436 11,719,571 12,328,071 12,871,590 13,344,226 13,814,851 14,074,261 15,029,104 15,706,256 Difference Between Expected and Actual Experience (161,921) (697,636) (1,952,708) 3,953,305 2,005,205 926,691 721,003 (2,888,155) 7,782,892 3,241,946 Changes of Benefit Terms - - - - - - - - 110,883 -
Changes of Assumptions (2,742,320) - 9,776,293 (937,052) - - - 7,635,111 - - Benefit Payments, Including Refunds of Employee Contributions (8,057,546) (8,589,274) (8,796,139) (9,561,683) (10,231,175) (10,543,526) (11,014,303) (11,572,811) (12,356,890) (12,750,270) Net Change in Total Pension Liability 2, 4,643,865 624,236 13,474,889 8,961,888 7,796,023 6,975,687 6,864,967 10,888,703 14,595,912 10,360,651 Total Pension Liability - Beginning 151,852,549 154,476,785 159,120,650 172,595,539 181,557,427 189,353,450 196,329,137 203,194,104 214,082,807 228,678,719 Total Pension Liability - Ending (a) 154,476,785 159,120,650 172,595,539 181,557,427 189,353,450 196,329,137 203,194,104 214,082,807 228,678,719 239,039,370

PLAN FIDUCIARY NET POSITION
Contributions - Employer 3,238,613 3,767,485 4,477,395 4,559,719 5,192,920 5,934,636 6,493,887 7,265,481 8,027,346 8,363,435 Contributions - Employee 840,213 891,198 996,668 1,045,575 1,083,318 1,191,676 1,350,773 1,308,329 1,426,893 1,602,584Net Investment Income 2,541,555 564,745 12,085,214 9,928,189 8,023,831 6,295,868 29,372,461 (11,830,172) 8,770,640 14,089,617Benefit Payments, Including Refunds of Employee Contributions (8,057,546) (8,589,274) (8,796,139) (9,561,683) (10,231,175) (10,543,526) (11,014,303) (11,572,811) (12,356,890) (12,750,270)Net Plan to Plan Resource Movement - - - (288) - - - (1,326) - -Administrative Expense (126,940) (68,743) (161,464) (183,818) (88,062) (179,578) (129,943) (97,275) (103,851) (119,607)Other Miscellaneous Income/(Expense) - - - (349,074) 288 - - - - -Net Change in Fiduciary Net Position (1,564,105) (3,434,589) 8,601,674 5,438,620 3,981,120 2,699,076 26,072,875 (14,927,774) 5,764,138 11,185,759Plan Fiduciary Net Position - Beginning 114,359,508 112,795,403 109,360,814 117,962,488 123,401,108 127,382,228 130,081,304 156,154,179 141,226,405 146,990,543 Plan Fiduciary Net Position - Ending (b) 112,795,403 109,360,814 117,962,488 123,401,108 127,382,228 130,081,304 156,154,179 141,226,405 146,990,543 158,176,302 Plan Net Position Liability - Ending (a) - (b) 41, $ 49,759,836 681,382 $ 54,633,051 $ 58,156,319 $ 61,971,222 $ 66,247,833 $ 47,039,925 $ 72,856,402 $ 81,688,176 $ 80,863,068 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 73.02% 68.73% 68.35% 67.97% 67.27% 66.26% 76.85% 65.97% 64.28% 66.17%Covered Payroll $ 9,570,037 9,288,796 $ 9,992,870 $ 9,226,022 $ 9,535,932 $ 10,584,174 $ 10,463,333 $ 11,505,777 $ 12,204,552 $ 14,314,900 $ Plan Net Pension Liability as a Percentage of Covered Payroll 448.73% 519.95% 546.72% 630.35% 649.87% 625.91% 449.57% 633.22% 669.33% 564.89%Notes to Schedule:

Measurement date
Changes in Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations aswell as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projectedportfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes for 2021. For 2020, the Plan adopted a newamortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize afive-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019.There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, theaccounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pensionplan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2021 valuation date,unless the liability impact is deemed to be material to the Public Agency Pool.

CITY OF LA MESA
Required Supplementary Information Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years (Concluded)
-94-
PARS Retirement Enhancement Plan
6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024

TOTAL PENSION LIABILITY
Service Cost $ 3,000 3,000 $ 3,000 $ 1,527 $ - $ - $ - $ - $ - $ - $ Interest on Total Pension Liability 171,000 178,000 178,000 159,542 157,449 142,093 138,733 127,971 123,635 123,753 Changes of Benefit Terms - - - - - - - - - -
Difference Between Expected and Actual Experience (1,000) - (154,000) - (215,926) - 17,508 - 74,745 - Changes of Assumptions 118,000 - 77,000 - (7,519) - 60,325 - 12,585 - Benefit Payments, Including Refunds of Employee Contributions (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) (200,051) (204,052) (209,516) (208,143) Net Change in Total Pension Liability 113,000 2,000 (83,000) (27,443) (258,278) (54,035) 16,515 (76,081) 1,449 (84,390) Total Pension Liability - Beginning 2,720,000 2,833,000 2,835,000 2,752,000 2,724,557 2,466,279 2,412,244 2,428,759 2,352,678 2,354,127 Total Pension Liability - Ending (a) 2,833,000 2,835,000 2,752,000 2,724,557 2,466,279 2,412,244 2,428,759 2,352,678 2,354,127 2,269,737

PLAN FIDUCIARY NET POSITION
Contributions - Employer 105,800 118,000 118,000 125,000 125,000 125,000 125,000 - 80,000 55,000 Contributions - Employee 2,000 1,000 1,000 1,127 - - - - - -Net Investment Income 50,000 60,000 187,000 123,563 134,170 106,642 472,636 (328,943) 137,377 213,410 Benefit Payments, Including Refunds of Employee Contributions (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) (200,051) (204,052) (209,516) (208,143) Administrative Expenses (22,000) (21,000) (8,000) (8,370) (8,556) (8,629) (8,859) (8,904) (8,405) (8,383) Other Changes in Fiduciary Net Position - - - - - - - - - - Net Change in Fiduciary Net Position (33,200) (30,000) 111,000 52,808 58,332 26,885 388,726 (541,899) (544) 51,884 Plan Fiduciary Net Position - Beginning 2,310,000 2,276,800 2,246,800 2,357,800 2,410,608 2,468,940 2,495,825 2,884,551 2,342,652 2,342,108 Plan Fiduciary Net Position - Ending (b) 2,276,800 2,246,800 2,357,800 2,410,608 2,468,940 2,495,825 2,884,551 2,342,652 2,342,108 2,393,992 Plan Net Position Liability / (Asset) - Ending (a) - (b) 556,200 $ 588,200 $ 394,200 $ 313,949 $ (2,661) $ (83,581) $ (455,792) $ 10,026 $ 12,019 $ (124,255) $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 80.37% 79.25% 85.68% 88.48% 100.11% 103.46% 118.77% 99.57% 99.49% 105.47%Covered Payroll $ 103,896 100,872 $ 105,972 $ 108,096 $ 108,096 $ 113,544 $ 113,544 $ 113,544 $ 120,468 $ 138,744 $ Plan Net Pension Liability / (Asset) as a Percentage of Covered Payroll 551.39% 566.14% 371.99% 290.44% -2.46% -73.61% -401.42% 8.83% 9.98% -89.56%Notes to Schedule:Changes in Assumptions for Measurement Date June 30, 2024:

None
Measurement date

CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years -95-
Miscellaneous Plan
Fiscal Year
Actuarially Determined
Contribution
Contributions in Relation
to the Actuarially
Determined Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2016 2,233,832 $ (2,233,832) $ - $ 10,775,401 $ 20.73% 6/30/2017 2,553,613 (2,553,613) - 10,782,250 23.68%
6/30/2018 2,693,445 (2,693,445) - 9,713,133 27.73%
6/30/2019 3,000,728 (3,000,728) - 10,004,158 29.99%
6/30/2020 3,398,605 (3,398,605) - 9,771,136 34.78%
6/30/2021 3,874,245 (3,874,245) - 9,799,062 39.54%
6/30/2022 4,230,939 (4,230,939) - 10,158,798 41.65%
6/30/2023 4,676,417 (4,676,417) - 10,630,644 43.99%
6/30/2024 5,202,504 (5,202,504) - 11,331,709 45.91%
6/30/2025 5,897,991 (5,897,991) - 12,796,500 46.09%
Notes to Schedule:Actuarial Cost MethodAmortization Method/PeriodAsset Valuation MethodActuarial Assumptions:

Discount RateInflationSalary IncreasesMortality Rate Table

2.30%Varies by Entry Age and ServiceThe probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2024-25 were derived from the June 30, 2022 Funding Valuation Report.

Entry Age Actuarial Cost MethodFor details, see June 30, 2022 Funding Valuation Report.Fair Value of Assets. 6.90%

CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years (Continued)
-96-
Safety Plan
Fiscal Year
Actuarially Determined
Contribution
Contributions in Relation
to the Actuarially
Determined Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2016 3,238,613 $ (3,238,613) $ - $ 9,570,037 $ 33.84% 6/30/2017 3,767,485 (3,767,485) - 9,992,870 37.70%
6/30/2018 4,477,395 (4,477,395) - 9,226,022 48.53%
6/30/2019 4,559,719 (4,559,719) - 9,535,932 47.82%
6/30/2020 5,192,920 (5,192,920) - 10,584,174 49.06%
6/30/2021 5,934,636 (5,934,636) - 10,463,333 56.72%
6/30/2022 6,493,887 (6,493,887) - 11,505,777 56.44%
6/30/2023 7,265,481 (7,265,481) - 12,204,552 59.53%
6/30/2024 8,362,610 (8,362,610) - 13,101,100 63.83%
6/30/2025 9,824,820 (9,824,820) - 15,467,881 63.52%
Notes to Schedule:Actuarial Cost MethodAmortization Method/PeriodAsset Valuation MethodActuarial Assumptions:

Discount RateInflationSalary IncreasesMortality Rate Table

2.30%Varies by Entry Age and ServiceThe probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2024-25 were from the June 30, 2022 Funding Valuation Report.

Entry Age Actuarial Cost MethodFor details, see June 30, 2022 Funding Valuation Report.Fair Value of Assets6.90%

CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years (Concluded)
-97-
PARS Retirement Enhancement Plan
Fiscal Year
Actuarially Determined
Contribution1
Contributions in Relation
to the Actuarially
Determined Contribution2
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2016 118,300 $ (118,300) $ - $ 103,896 $ 113.86%
6/30/2017 - - - 105,972 0.00%
6/30/2018 114,700 (125,000) (10,300) 108,096 106.11%
6/30/2019 114,700 (125,000) (10,300) 108,096 106.11%
6/30/2020 22,800 (125,000) (102,200) 113,544 20.08%
6/30/2021 22,800 (125,000) (102,200) 113,544 20.08%
6/30/2022 - (25,689) (25,689) 113,544 0.00%
6/30/2023 - (80,000) (80,000) 120,468 0.00%
6/30/2024 25,700 (50,000) (24,300) 120,468 21.33%
6/30/2025 25,700 (100,000) (74,300) 138,744 18.52%
Notes to Schedule:
1Actuarially Determined Contributions from the employer's financial statements.2Actual contributions from employer's financial statements.

CITY OF LA MESA
Required Supplementary Information Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years* -98-
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Measurement Period 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Total OPEB Liability
Service cost 177,546 $ 189,976 $ 195,675 $ 210,776 $ 104,011 $ 180,768 $ 220,710 $ 198,340 $ Interest 450,042 465,322 479,727 516,097 415,772 453,954 441,639 468,616 Differences between expected and
actual experience - - 514,636 (1,494,978) 588,094 (86,159) 381,603 (380,829) Changes of assumptions - - (176,855) - 82,245 614,946 (543,748) 25,712 Benefit payments (393,258) (450,210) (460,206) (566,820) (549,584) (510,878) (525,553) (507,380) Net change in total OPEB liability 234,330 205,088 552,977 (1,334,925) 640,538 652,631 (25,349) (195,541)Total OPEB liability - beginning 6,448,258 6,682,588 6,887,676 7,440,653 6,105,728 6,746,266 7,398,897 7,373,548Total OPEB liability - ending (a) 6,682,588 6,887,676 7,440,653 6,105,728 6,746,266 7,398,897 7,373,548 7,178,007 Plan Fiduciary Net Position
Contributions – employer 673,038 744,210 910,206 1,046,550 1,034,864 883,007 1,021,725 1,003,552 Net investment income 240,564 216,245 221,144 155,315 1,279,360 (889,675) 399,722 761,999 Benefit payments (393,258) (450,210) (460,206) (566,820) (549,584) (510,878) (525,553) (507,380) Administrative expense (1,213) (1,484) (1,653) (1,959) (1,763) (1,627) (1,751) (2,241) Other expense - (3,534) - - - - - -
Net change in plan fiduciary net position 519,131 505,227 669,491 633,086 1,762,877 (519,173) 894,143 1,255,930Plan fiduciary net position - beginning 2,152,522 2,671,653 3,176,880 3,846,371 4,479,457 6,242,334 5,723,161 6,617,304Plan fiduciary net position - ending (b) 2,671,653 3,176,880 3,846,371 4,479,457 6,242,334 5,723,161 6,617,304 7,873,234 Net OPEB liability/(asset) - ending (a) - (b) 4,010,935 $ 3,710,796 $ 3,594,282 $ 1,626,271 $ 503,932 $ 1,675,736 $ 756,244 $ (695,227) $ Plan fiduciary net position as a percentage
of the total OPEB liability/(asset) 40.0% 46.1% 51.7% 73.4% 92.5% 77.4% 89.7% 109.7% Covered payroll 20,699,310 $ 21,602,500 $ 22,439,700 $ 23,695,500 $ 30,502,020 $ 28,565,459 $ 29,252,762 $ 31,009,797 $ Net OPEB liability/(asset) as a percentage of covered payroll 19.4% 17.2% 16.0% 6.9% 1.7% 5.9% 2.6% -2.2%

CITY OF LA MESA
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years*
(Concluded)
-99-
Notes to Schedule:

Valuation Date July 1, 2023
Actuarial Cost Method Entry age normal, level percentage of payroll Amortization Methodology Straight-line amortization. For assumption changes and experience gains/losses: Expected Average Remaining Service Lifetime of all members that are provided with benefits. For asset gains and losses: 5 years.

Asset Valuation Method Market value
Discount Rate 6.40% as of June 30, 2024 (for FY 2024/25) and as of June 30, 2023 General Inflation 2.50%
Medical Trend 8.0% for 2025, decreasing to an ultimate rate of 6.5% in 2030 and later years
Mortality Employees and retirees: SOA Pub-2010 General Headcount Weighted Mortality Table fully generational using Scale MP-2021.

Surviving Spouses: SOA Pub-2010 Continuing Survivor Headcount Weighted Mortality Table fully generational using Scale MP-2021.

Disabled Retirees: SOA Pub-2010 Safety Headcount Weighted Mortality Table fully generational using Scale MP-2021
Methods and Assumptions for 2023-2024 Actuarially Determined Contribution *Historical information is required only for measurement periods for which GASB 75 is applicable.

Future years’ information will be displayed up to 10 years as information becomes available.

Fiscal year 2017-18 was the first year of implementation.

CITY OF LA MESA
Required Supplementary Information Schedule of OPEB Contributions Last Ten Years* -100-
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-2022 2022-2023 2023-24 2024-25Actuarially Determined Contribution (ADC) 564,577 $ 582,063 $ 588,161 $ 582,847 $ 549,584 $ 549,584 $ 508,730 $ 290,947 $ Contributions in relation to the ADC 673,038 744,210 719,379 1,046,550 1,034,864 883,007 - 702,402 Contribution deficiency (excess) (108,461) $ (162,147) $ (131,218) $ (463,703) $ (485,280) $ (333,423) $ 508,730 $ (411,455) $ Covered payroll 20,699,310 $ 21,602,500 $ 22,439,700 $ 23,695,500 $ 30,502,020 $ 28,565,459 $ 29,252,762 $ 31,009,797 $ Contributions as a percentage of covered payroll 3.3% 3.4% 3.2% 4.4% 3.4% 3.1% 0.0% 2.3% *Historical information is required only for measurement periods for which GASB 75 is applicable. Future years’ information will be displayed up to 10 years as information becomes available. Fiscal year 2017-18 was the first year of implementation.

SUPPLEMENTARY INFORMATION

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NON-MAJOR GOVERNMENTAL FUNDS

CITY OF LA MESA
Description of Funds
-101-
Special revenue funds:

Special revenue funds are used to account for and report the proceeds of specific revenues that are restricted or committed to expenditures for specified purposes and accounted for separately from the General Fund.

Housing Rehabilitation/CDBG Administration Fund – this fund accounts for Federal Community Development Block Grants (CDBG) revenues and related expenditures for low- to moderate-income housing rehabilitation programs and public services provided to City residents.

Gas tax Fund – this fund accounts for state subvention funds received for streets maintenance and repairs, and capital projects related to streets and improvements.

Transportation Improvement Fund – this fund accounts for funding received from SANDAG for streets improvements and maintenance projects as approved by SANDAG. No budget was adopted.

Street Parking Fund – this fund accounts for parking meter revenue and related expenditures collected throughout the City.

Environmental Services Fund – this fund accounts for grant funding and matching funds from the City to support environmental recycling and environmental programs, including AB 939 waste management activities.

Community Service Improvement Fund – this fund is used to account for public donations to support community services activities.

Public Safety Augmentation Fund – this fund accounts for a ½ cent sales tax. Revenues are used to maintain public safety services.

County Housing Fund – this fund accounts for HOME Consortium program supporting low to moderate housing activities. No budget was adopted.

Drug Asset Seizure Fund – this fund accounts for asset forfeiture funds in compliance with DOJ forfeiture requirements. No budget was adopted.

Supplemental Law Enforcement Fund – this fund accounts for state SLESF law enforcement funding to enhance and support public safety services.

Community Service Grants Fund – this fund accounts for grant revenues, including San Diego Art Matters grants and grants related to Community Services/Parks and Recreation.

Public Safety Grants Fund – this fund accounts for grant revenues collected to augment public safety programs and activities.

CIP Grants Fund – this fund accounts to account for expenditures related to capital improvement projects.

Donations Fund – this fund accounts for donations received to support Citywide events and related activities. No budget was adopted.

CITY OF LA MESA
Description of Funds
-102-
CASP Fund – this fund accounts for state mandated CASP surcharge fees collected through business licenses and remitted in accordance with State requirements.

Road Maintenance Fund – this fund accounts for Road Maintenance and Rehabilitation Account (RMRA) revenues restricted for eligible street maintenance and rehabilitation activities.

PEG Fund – this fund accounts for Public, Educational, and Governmental (PEG) access fee revenues used for technology infrastructure, communication equipment, fiber optic improvements, and related capital projects.

Transportation Fund – this fund accounts for Transit Administration and TDA funding from SANDAG for eligible transit and transportation activities. No budget was adopted.

Housing Asset Fund – this fund accounts for Successor Agency housing activities following the dissolution of RDA Housing activities in 2011-2012. No budget was adopted Debt Service Funds:

Debt Service Funds are used to account for financial resources that are restricted for the payment of principal, interest, and related costs of long-term debt. 2006 Certificates of Participation Fund – this fund accounts for the repayment of debt service on 2006 COPs.
2016 Government Obligation Refunding Bonds Fund – this fund accounts for debt service on the 2016 GO refunding bond issue.

Capital Project Funds:

Capital project funds are used to account for financial resources for the acquisition, construction, and improvement or capital assets and infrastructure. These improvements are funded by the City, loans from other funds of the City, grants, or bond proceeds.

Public Building Fund – this fund accounts for lease revenue and improvements to City owned properties.

Storm Drains Fund – this fund accounts for storm drain activities funded by various sources.

Parks and Recreation Fund – this fund accounts for special project repairs and investments.

Civic Center Fund – this fund accounts for Civic Center capital improvements. No budget was adopted.

Miscellaneous Capital Improvement Fund – this fund accounts for special capital improvements.

Capital Assets Management Plan Fund – this fund accounts for other capital improvements.

No budget was adopted.

Transportation CIP Fund – this fund accounts for other capital improvements.

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
-103-
Housing
Rehabilitation/
CDBG Transportation Street
Administration Gas Tax Improvement Parking
Assets
Cash and investments 247,652 $ 1,946,587 $ - $ 606,788 $ Restricted:

Cash and investments - - - -
Receivables:

Accounts - 146,150 - -
Loans 117,017 - - -
Grants - - 1,470,002 -
Interest 1,283 11,316 - 3,027
Lease - - - -
Land held for resale - - - -
Total assets 365,952 $ 2,104,053 $ 1,470,002 $ 609,815 $ Liabilities
Accounts payable 154 $ - $ - $ 17,202 $
Salaries payable - - - 4,115
Due to other funds - - 1,277,417 -
Unearned revenue - - - -
Total liabilities 154 - 1,277,417 21,317
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - 117,017 - -
Unavailable revenue - grants - - 1,470,002 -
Leases - - - -
Total deferred inflows of resources - 117,017 1,470,002 - Fund Balances
Restricted for:

General government - - - -
Public safety - - - -
Capital outlay - 2,104,053 - -
Community services - - - -
Community development 248,781 - - 588,498
Debt service - - - -
Unassigned - - (1,277,417) -
Total fund balances (deficit) 248,781 2,104,053 (1,277,417) 588,498 Total liabilities, deferred inflows of resources
and fund balances 365,952 $ 2,104,053 $ 1,470,002 $ 609,815 $

SPECIAL REVENUE FUNDS

(Continued)
-104-
Community Public Supplemental
Environmental Service Safety County Drug Asset Law
Services Improvement Augmentation Housing Seizure Enforcement $ 137,799 - $ 1,730,677 $ 788,750 $ 200,355 $ 868,031 $ - - - - - -
3,167 10,653 32,903 - - -
- - - - - -
- 1,088 - - - -
701 - 8,001 3,128 660 4,056
- - - - - -
- - - - - -
$ 141,667 11,741 $ 1,771,581 $ 791,878 $ 201,015 $ 872,087 $ $ - 4,373 $ - $ - $ - $ - $
- 13,462 - - - -
- 744,576 - - - -
- - - - - -
- 762,411 - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - 1,771,581 - 201,015 872,087
- - - - - -
141,667 - - - - -
- - - 791,878 - -
- - - - - -
- (750,670) - - - -
141,667 (750,670) 1,771,581 791,878 201,015 872,087
$ 141,667 11,741 $ 1,771,581 $ 791,878 $ 201,015 $ 872,087 $

SPECIAL REVENUE FUNDS

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
-105-
Community
Service Public Safety CIP Donations
Grants Grants Grants Fund
Assets
Cash and investments 14,599 $ - $ 254,853 $ 7,352 $
Restricted:

Cash and investments - - - -
Receivables:

Accounts - - - -
Loans - - - -
Grants 14,950 326,888 970,786 -
Interest 72 - 1,781 29
Lease - - - -
Land held for resale - - - -
Total assets 29,621 $ 326,888 $ 1,227,420 $ 7,381 $
Liabilities
Accounts payable - $ - $ - $ - $
Salaries payable - 8,995 - -
Due to other funds - 1,043,305 - -
Unearned revenue - - 400,000 -
Total liabilities - 1,052,300 400,000 -
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - - - -
Unavailable revenue - grants - - 70,786 -
Leases - - - -
Total deferred inflows of resources - - 70,786 -
Fund Balances
Restricted for:

General government - - - 7,381
Public safety - - - -
Capital outlays - - 756,634 -
Community services 29,621 - - -
Community development - - - -
Debt service - - - -
Unassigned - (725,412) - -
Total fund balances (deficit) 29,621 (725,412) 756,634 7,381 Total liabilities, deferred inflows of resources
and fund balances 29,621 $ 326,888 $ 1,227,420 $ 7,381 $

SPECIAL REVENUE FUNDS

(Continued)
-106-
DEBT

SERVICE
FUNDS
2006
CASP Road Maintenance PEG Transportation Housing Asset Certificates of Fund Fund Fund Fund Fund Participation
$ 3,194,329 128,087 $ 248,630 $ - $ 3,371,877 $ - $
- - - - - 11,788
291,597 - - 80,160 - -
- - - - 225,000 -
- - - - - -
10,743 470 1,146 - 6,895 -
- - - - 341,619 -
- - - - 8,350,000 -
$ 3,496,669 128,557 $ 249,776 $ 80,160 $ 12,295,391 $ 11,788 $ $ - - $ - $ 76,424 $ 283 $ - $
- - - - 3,165 -
- - - - - 22,457
- - - - - -
- - - 76,424 3,448 22,457
- - - - 225,000 -
- - - 80,160 - -
- - - - 317,727 -
- - - 80,160 542,727 -
- - 249,776 - - -
- - - - - -
- - - - - -
3,496,669 128,557 - - - -
- - - - 11,749,216 -
- - - - - -
- - - (76,424) - (10,669)
3,496,669 128,557 249,776 (76,424) 11,749,216 (10,669)
$ 3,496,669 128,557 $ 249,776 $ 80,160 $ 12,295,391 $ 11,788 $

SPECIAL REVENUE FUNDS

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2025
-107-

DEBT SERVICE
FUNDS
2016 Parks
Government Obligation Public Storm and
Refunding Bonds Building Drains Recreation
Assets
Cash and investments 5,235,489 $ - $ 358,695 $ 228,712 $ Restricted:

Cash and investments - - - 212,179
Receivables:

Accounts 6,000 - - -
Loans - - - -
Grants - - - -
Interest 16,695 - - 4,598
Lease - 25,936 - -
Land held for resale - - - -
Total assets 5,258,184 $ 25,936 $ 358,695 $ 445,489 $
Liabilities
Accounts payable - $ - $ 13,302 $ - $
Salaries payable - - - -
Due to other funds - 16,432 - -
Unearned revenue - - - -
Total liabilities - 16,432 13,302 -
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - - - -
Unavailable revenue - grants - - - -
Leases 21,488 - - -
Total deferred inflows of resources 21,488 - - -
Fund Balances
Restricted for:

General government - - - -
Public safety - - - -
Capital outlays - - 345,393 445,489
Community services - - - -
Community development - - - -
Debt service 5,258,184 - - -
Unassigned - (11,984) - -
Total fund balances (deficit) 5,258,184 (11,984) 345,393 445,489 Total liabilities, deferred inflows of resources
and fund balances 5,258,184 $ 25,936 $ 358,695 $ 445,489 $

CAPITAL PROJECTS FUNDS

(Concluded)
-108-
Total
Misc Capital Asset Non-Major
Civic Capital Management Transportation Governmental
Center Improvement Plan CIP Funds
$ 333,526 97,219 $ 1,146,913 $ 1,314,234 $ 22,461,154 $ - - - - 223,967
- - - - 570,630
- - - - 342,017
- - - - 2,783,714
1,323 386 4,402 - 80,712
- - - - 367,555
- - - - 8,350,000
$ 334,849 97,605 $ 1,151,315 $ 1,314,234 $ 35,179,749 $ $ - - $ - $ 225,070 $ 336,808 $
- - - - 29,737
- - - - 3,104,187
- - - 503,311 903,311
- - - 728,381 4,374,043
- - - - 342,017
- - - - 1,620,948
- - - - 339,215
- - - - 2,302,180
- - - - 257,157
- - - - 2,844,683
334,849 97,605 1,151,315 585,853 5,821,191
- - - - 3,796,514
- - - - 13,378,373
- - - - 5,258,184
- - - - (2,852,576)
334,849 97,605 1,151,315 585,853 28,503,526
$ 334,849 97,605 $ 1,151,315 $ 1,314,234 $ 35,179,749 $

CAPITAL PROJECTS FUNDS

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2025
-109-
Housing
Rehabilitation/
CDBG Transportation Street
Administration Gas Tax Improvement Parking
Revenues:

Property taxes $ - - $ - $ - $
Other taxes - - - -
Licenses and permits - - - -
Fines and forfeitures - - - 80,746
Use of money and property 70,645 10,345 - 447,564
Intergovernmental 1,716,697 91,145 1,833,321 -
Charges for services - - - -
Other revenues - - - -
Total revenues 1,787,342 101,490 1,833,321 528,310
Expenditures:

Current:

General government - - - -
Police - - - 365,079
Community development - 83,724 - 99,299
Capital outlay - - - -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures - 83,724 - 464,378
Excess (deficiency) of
revenues over (under) expenditures 1,787,342 17,766 1,833,321 63,932 Other financing sources (uses):

Transfers in - - - -
Transfers out (1,917,831) - (2,379,862) -
Total other financing sources (uses) (1,917,831) - (2,379,862) - Net change in fund balances (130,489) 17,766 (546,541) 63,932 Fund balances (deficit), beginning of year, as previously reported 2,090,597 231,015 (730,876) 524,566
Adjustments - 143,945 - -
Fund balances (deficit), beginning of year, as restated 231,015 2,234,542 (730,876) 524,566 Fund balances (deficit), end of year 248,781 $ 2,104,053 $ (1,277,417) $ 588,498 $

SPECIAL REVENUE FUNDS

(Continued)
-110-
Community Public Supplemental
Environmental Service Safety County Drug Asset Law
Services Improvement Augmentation Housing Seizure Enforcement $ - - $ - $ - $ - $ - $
- - 422,964 - - -
- - - - - -
- - - - 12,450 -
4,375 - 81,319 24,727 41,512 41,229
- 15,427 - - - 194,664
- 460,562 - - - -
9,502 - - - - -
13,877 475,989 504,283 24,727 53,962 235,893
- 1,066,933 - - - -
- - - - 9,690 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- 1,066,933 - - 9,690 -
13,877 (590,944) 504,283 24,727 44,272 235,893
- - - - - -
- - - - - -
- - - - - -
13,877 (590,944) 504,283 24,727 44,272 235,893
127,790 (159,726) 1,267,298 767,151 156,743 636,194
- - - - - -
127,790 (159,726) 1,267,298 767,151 156,743 636,194
$ 141,667 (750,670) $ 1,771,581 $ 791,878 $ 201,015 $ 872,087 $

SPECIAL REVENUE FUNDS

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2025
-111-
Community
Service Public Safety CIP Donations
Grants Grants Grants Fund
Revenues:

Property taxes $ - - $ - $ - $
Other taxes - - - -
Licenses and permits - - - -
Fines and forfeitures - - - -
Use of money and property - 445 1,780 230
Intergovernmental 970,298 2,432 6,676,815 -
Charges for services - - - -
Other revenues - - - -
Total revenues 970,298 2,877 6,678,595 230
Expenditures:

Current:

General government - - - -
Police 1,359,809 410 - -
Community development - - - -
Capital outlay - - - -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures 1,359,809 410 - -
Excess (deficiency) of
revenues over (under) expenditures (389,511) 2,467 6,678,595 230 Other financing sources (uses):

Transfers in - - - -
Transfers out - - (5,914,156) -
Total other financing sources (uses) - - (5,914,156) -
Net change in fund balances (389,511) 2,467 764,439 230 Fund balances (deficit), beginning of year, as previously reported (335,901) 27,154 (7,805) 7,151
Adjustments - - - -
Fund balances (deficit), beginning of year, as restated 27,154 (335,901) (7,805) 7,151 Fund balances (deficit), end of year 29,621 $ (725,412) $ 756,634 $ 7,381 $

SPECIAL REVENUE FUNDS

(Continued)
-112-

DEBT SERVICE
FUNDS
2006
CASP Road Maintenance PEG Transportation Housing Asset Certificates of Fund Fund Fund Fund Fund Participation
$ - - $ - $ - $ - $ - $
- - 58,149 - - -
- - - - - -
- - - - - -
140,405 3,709 13,614 2,989 281,318 35,972
1,654,729 - - 78,488 - -
- 15,393 - - - -
- - - - 171,664 -
1,795,134 19,102 71,763 81,477 452,982 35,972
- - 152,570 - - 4,700
- - - - - -
- 1,629 - - 173,143 -
- - - - - -
- - 27,009 - - 410,000
- - 547 - - 83,044
- 1,629 180,126 - 173,143 497,744
1,795,134 17,473 (108,363) 81,477 279,839 (461,772)
- - - - - 459,200
(446,114) - - (80,160) - -
(446,114) - - (80,160) - 459,200
1,349,020 17,473 (108,363) 1,317 279,839 (2,572)
2,158,209 111,084 358,139 (78,464) 11,469,377 (8,097)
(10,560) - - 723 - -
2,147,649 111,084 358,139 (77,741) 11,469,377 (8,097)
$ 3,496,669 128,557 $ 249,776 $ (76,424) $ 11,749,216 $ (10,669) $

SPECIAL REVENUE FUNDS

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2025
-113-

DEBT SERVICE
FUNDS
2016 Parks
Government Obligation Public Storm and
Refunding Bonds Building Drains Recreation
Revenues:

Property taxes $ - 2,001,786 $ - $ - $
Other taxes - - - -
Licenses and permits - - - 249,763
Fines and forfeitures - - - -
Use of money and property 98,982 247,832 - 28,661
Intergovernmental - - 17,928 472,011
Charges for services - - - -
Other revenues - - - 31,754
Total revenues 98,982 2,249,618 17,928 782,189
Expenditures:

Current:

General government - 6,411 - -
Police - - - -
Community development - - - -
Capital outlay 227,757 - 4,077,588 438,084
Debt service:

Principal retirement - 945,000 - -
Interest and fiscal charges - 639,825 - -
Total expenditures 227,757 1,591,236 4,077,588 438,084
Excess (deficiency) of
revenues over (under) expenditures (128,775) 658,382 (4,059,660) 344,105 Other financing sources (uses):

Transfers in 150,969 - 4,816,329 -
Transfers out (75,444) - - -
Total other financing sources (uses) 75,525 - 4,816,329 - Net change in fund balances (53,250) 658,382 756,669 344,105 Fund balances (deficit), beginning of year, as previously reported 41,266 4,599,802 (411,276) 101,384
Adjustments - - - -
Fund balances (deficit), beginning of year, as restated 4,599,802 41,266 (411,276) 101,384 Fund balances (deficit), end of year 5,258,184 $ (11,984) $ 345,393 $ 445,489 $

CAPITAL PROJECTS FUNDS

(Concluded)
-114-
Total
Misc Capital Asset Non-Major
Civic Capital Management Transportation Governmental
Center Improvement Plan CIP Funds
$ - - $ - $ - $ $ 2,001,786
- - - - 481,113
- - - - 249,763
- - - - 93,196
10,456 3,048 34,801 5,426 1,631,384
- - - - 13,723,955
- - - - 475,955
- - - - 212,920
10,456 3,048 34,801 5,426 18,870,072
- - - - 1,230,614
- - - - 1,734,988
- - - - 357,795
- - - 5,707,845 10,451,274
-
- - - - 1,382,009
- - - - 723,416
- - - 5,707,845 15,880,096
10,456 3,048 34,801 (5,702,419) 2,989,976
- - 75,445 6,324,040 11,825,983
- - - - (10,813,567)
- - 75,445 6,324,040 1,012,416
10,456 3,048 110,246 621,621 4,002,392
324,393 94,557 1,041,069 (35,768) 24,367,026
- - - - 134,108
324,393 94,557 1,041,069 (35,768) 24,501,134
$ 334,849 97,605 $ 1,151,315 $ 585,853 $ 28,503,526 $

CAPITAL PROJECTS FUNDS

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Housing Rehabilitation/CDBG Administration For the Year Ended June 30, 2025
-115-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 231,015 231,015 $ 231,015 $ - $ Resources (inflows):

Use of money and property 820 820 10,345 9,525
Intergovernmental 86,000 86,000 91,145 5,145
Amount available for appropriations 317,835 317,835 332,505 14,670 Charges to appropriations (outflows):

Community development 85,490 90,035 83,724 6,311
Total charges to appropriations 85,490 90,035 83,724 6,311 Fund Balances - Ending $ 227,800 232,345 $ 248,781 $ 20,981 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Gas Tax
For the Year Ended June 30, 2025
-116-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning, as Restated $ 2,234,542 2,234,542 $ 2,234,542 $ - $ Resources (inflows):

Use of money and property - - 70,645 70,645
Intergovernmental 1,620,742 1,620,742 1,716,697 95,955
Amount available for appropriations 3,855,284 3,855,284 4,021,884 166,600 Charges to appropriations (outflows):

Transfers to other funds - - 1,917,831 (1,917,831)
Total charges to appropriations - - 1,917,831 (1,917,831) Fund Balances - Ending $ 3,855,284 3,855,284 $ 2,104,053 $ (1,751,231) $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Street Parking
For the Year Ended June 30, 2025
-117-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 524,566 524,566 $ 524,566 $ - $ Resources (inflows):

Fines and forfeitures - - 80,746 80,746
Use of money and property - - 447,564 447,564
Amount available for appropriations 524,566 524,566 1,052,876 528,310 Charges to appropriations (outflows):

Police 354,342 392,367 365,079 27,288
Community development 58,940 100,120 99,299 821
Total charges to appropriations 413,282 492,487 464,378 28,109 Fund Balances - Ending $ 32,079 111,284 $ 588,498 $ 556,419 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Environmental Services
For the Year Ended June 30, 2025
-118-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (159,726) (159,726) $ (159,726) $ - $ Resources (inflows):

Intergovernmental - 95,993 15,427 (80,566)
Charges for services 345,000 345,000 460,562 115,562
Other revenues 25,000 25,000 - (25,000)
Amount available for appropriations 210,274 306,267 316,263 9,996 Charges to appropriations (outflows):

General government 826,430 1,335,375 1,066,933 268,442
Total charges to appropriations 826,430 1,335,375 1,066,933 268,442 Fund Balances (Deficit) - Ending $ (1,029,108) (616,156) $ (750,670) $ 278,438 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Community Service Improvement For the Year Ended June 30, 2025
-119-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 127,790 127,790 $ 127,790 $ - $ Resources (inflows):

Use of money and property - - 4,375 4,375
Other revenues 9,700 9,700 9,502 (198)
Amount available for appropriations 137,490 137,490 141,667 4,177 Fund Balances - Ending $ 137,490 137,490 $ 141,667 $ 4,177 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Public Safety Augmentation For the Year Ended June 30, 2025
-120-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 1,267,298 1,267,298 $ 1,267,298 $ - $ Resources (inflows):

Other taxes 397,100 397,100 422,964 25,864
Use of money and property 760 760 81,319 80,559
Amount available for appropriations 1,665,158 1,665,158 1,771,581 106,423 Charges to appropriations (outflows):

Transfers to other funds 397,100 397,100 - 397,100
Total charges to appropriations 397,100 397,100 - 397,100 Fund Balances - Ending $ 1,268,058 1,268,058 $ 1,771,581 $ 503,523 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Supplemental Law Enforcement For the Year Ended June 30, 2025
-121-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 636,194 636,194 $ 636,194 $ - $ Resources (inflows):

Use of money and property 720 720 41,229 40,509
Intergovernmental 148,500 148,500 194,664 46,164
Amount available for appropriations 785,414 785,414 872,087 86,673 Charges to appropriations (outflows):

Transfers to other funds 148,500 148,500 - 148,500
Total charges to appropriations 148,500 148,500 - 148,500 Fund Balances - Ending $ 636,914 636,914 $ 872,087 $ 235,173 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Community Service Grants For the Year Ended June 30, 2025
-122-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 27,154 27,154 $ 27,154 $ - $ Resources (inflows):

Use of money and property - - 445 445
Intergovernmental - 25,000 2,432 (22,568)
Amount available for appropriations 27,154 52,154 30,031 (22,123) Charges to appropriations (outflows):

Police - 25,000 410 24,590
Total charges to appropriations - 25,000 410 24,590
Fund Balances - Ending $ 27,154 27,154 $ 29,621 $ 2,467 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Public Safety Grants
For the Year Ended June 30, 2025
-123-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (335,901) (335,901) $ (335,901) $ - $ Resources (inflows):

Intergovernmental 458,989 1,283,774 970,298 (313,476)
Amount available for appropriations 123,088 947,873 634,397 (313,476) Charges to appropriations (outflows):

Police 177,065 1,028,912 1,359,809 (330,897)
Total charges to appropriations 177,065 1,028,912 1,359,809 (330,897) Fund Balances (Deficit) - Ending $ (81,039) (53,977) $ (725,412) $ (644,373) $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – CIP Grants
For the Year Ended June 30, 2025
-124-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (7,805) (7,805) $ (7,805) $ - $ Resources (inflows):

Use of money and property - - 1,780 1,780
Intergovernmental 732,595 4,232,595 6,676,815 2,444,220 Amount available for appropriations 724,790 4,224,790 6,670,790 2,446,000 Charges to appropriations (outflows):

Transfers to other funds - - 5,914,156 (5,914,156)
Total charges to appropriations - - 5,914,156 (5,914,156) Fund Balances (Deficit) - Ending $ 4,224,790 724,790 $ 756,634 $ (3,468,156) $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – CASP Fund
For the Year Ended June 30, 2025
-125-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 111,084 111,084 $ 111,084 $ - $ Resources (inflows):

Use of money and property - - 3,709 3,709
Charges for services 17,500 17,500 15,393 (2,107)
Amount available for appropriations 128,584 128,584 130,186 1,602 Charges to appropriations (outflows):

Community development 19,050 19,050 1,629 17,421
Total charges to appropriations 19,050 19,050 1,629 17,421 Fund Balances - Ending $ 109,534 109,534 $ 128,557 $ 19,023 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Road Maintenance Fund
For the Year Ended June 30, 2025
-126-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning, as Restated $ 2,147,649 2,147,649 $ 2,147,649 $ - $ Resources (inflows):

Use of money and property - - 140,405 140,405
Intergovernmental 1,336,239 1,336,239 1,654,729 318,490 Amount available for appropriations 3,483,888 3,483,888 3,942,783 458,895 Charges to appropriations (outflows):

Transfers to other funds - - 446,114 (446,114)
Total charges to appropriations - - 446,114 (446,114)
Fund Balances - Ending $ 3,483,888 3,483,888 $ 3,496,669 $ 12,781 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – PEG Fund
For the Year Ended June 30, 2025
-127-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 358,139 358,139 $ 358,139 $ - $ Resources (inflows):

Other taxes 170,000 170,000 58,149 (111,851)
Use of money and property - - 13,614 13,614
Amount available for appropriations 528,139 528,139 429,902 (98,237) Charges to appropriations (outflows):

Current:

General government 256,350 301,350 152,570 148,780
Debt service:

Principal retirement - - 27,009 (27,009)
Interest and fiscal charges - - 547 (547)
Total charges to appropriations 256,350 301,350 180,126 121,224 Fund Balances - Ending $ 226,789 271,789 $ 249,776 $ 22,987 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Drug Asset Seizure
For the Year Ended June 30, 2025
-128-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 156,743 156,743 $ 156,743 $ - $ Resources (inflows):

Fines and forfeitures - - 12,450 12,450
Use of money and property 930 930 41,512 40,582
Amount available for appropriations 157,673 157,673 210,705 53,032 Charges to appropriations (outflows):

Police - - 9,690 (9,690)
Total charges to appropriations - - 9,690 (9,690)
Fund Balances - Ending $ 157,673 157,673 $ 201,015 $ 43,342 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Housing Asset Fund
For the Year Ended June 30, 2025
-129-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 11,469,377 11,469,377 $ 11,469,377 $ - $ Resources (inflows):

Use of money and property - - 281,318 281,318
Intergovernmental 1,700,000 1,700,000 - (1,700,000)
Other revenues - - 171,664 171,664
Amount available for appropriations 13,169,377 13,169,377 11,922,359 (1,247,018) Charges to appropriations (outflows):

Community development 238,667 245,767 173,143 72,624
Total charges to appropriations 238,667 245,767 173,143 72,624 Fund Balances - Ending $ 12,923,610 12,930,710 $ 11,749,216 $ (1,174,394) $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – 2006 Certificates of Participation For the Year Ended June 30, 2025
-130-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning, as Restated $ (8,097) (8,097) $ (8,097) $ - $ Resources (inflows):

Use of money and property - - 35,972 35,972
Transfers from other funds - - 459,200 459,200
Amount available for appropriations (8,097) (8,097) 487,075 495,172 Charges to appropriations (outflows):

Current:

General government 5,380 5,380 4,700 680
Debt service:

Principal retirement 410,000 410,000 410,000 -
Interest and fiscal charges 59,110 59,110 83,044 (23,934) Total charges to appropriations 474,490 474,490 497,744 (23,254) Fund Balances - Ending $ (482,587) (482,587) $ (10,669) $ 471,918 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – 2016 Government Obligation Refunding Bonds For the Year Ended June 30, 2025
-131-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 4,599,802 4,599,802 $ 4,599,802 $ - $ Resources (inflows):

Property taxes 1,712,000 1,712,000 2,001,786 289,786
Use of money and property 10,340 10,340 247,832 237,492 Amount available for appropriations 6,322,142 6,322,142 6,849,420 527,278 Charges to appropriations (outflows):

Current:

General government 8,800 8,800 6,411 2,389
Debt service:

Principal retirement 945,000 945,000 945,000 -
Interest and fiscal charges 639,830 639,830 639,825 5
Total charges to appropriations 1,593,630 1,593,630 1,591,236 2,394 Fund Balances - Ending $ 4,728,512 4,728,512 $ 5,258,184 $ 529,672 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Transportation CIP
For the Year Ended June 30, 2025
-132-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (35,768) (35,768) $ (35,768) $ - $ Resources (inflows):

Use of money and property - - 5,426 5,426
Transfers from other funds - - 6,324,040 6,324,040
Amount available for appropriations (35,768) (35,768) 6,293,698 6,329,466 Charges to appropriations (outflows):

Capital outlay 10,686,908 14,884,333 5,707,845 9,176,488 Total charges to appropriations 10,686,908 14,884,333 5,707,845 9,176,488 Fund Balances - Ending $ (14,920,101) (10,722,676) $ 585,853 $ 15,505,954 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Public Building
For the Year Ended June 30, 2025
-133-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 41,266 41,266 $ 41,266 $ - $ Resources (inflows):

Use of money and property - - 98,982 98,982
Transfers from other funds - - 150,969 150,969
Amount available for appropriations 41,266 41,266 291,217 249,951 Charges to appropriations (outflows):

Capital outlay 1,236,099 1,733,547 227,757 1,505,790
Transfers to other funds - - 75,444 (75,444)
Total charges to appropriations 1,236,099 1,733,547 303,201 1,430,346 Fund Balances (Deficit) - Ending $ (1,692,281) (1,194,833) $ (11,984) $ 1,680,297 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Storm Drains
For the Year Ended June 30, 2025
-134-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances (Deficit) - Beginning $ (411,276) (411,276) $ (411,276) $ - $ Resources (inflows):

Intergovernmental - - 17,928 17,928
Transfers from other funds - - 4,816,329 4,816,329
Amount available for appropriations (411,276) (411,276) 4,422,981 4,834,257 Charges to appropriations (outflows):

Capital outlay 3,280,544 5,330,085 4,077,588 1,252,497
Total charges to appropriations 3,280,544 5,330,085 4,077,588 1,252,497 Fund Balances - Ending $ (5,741,361) (3,691,820) $ 345,393 $ 6,086,754 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Parks and Recreation
For the Year Ended June 30, 2025
-135-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 101,384 101,384 $ 101,384 $ - $ Resources (inflows):

Licenses and permits - 339,670 249,763 (89,907)
Use of money and property - - 28,661 28,661
Intergovernmental - - 472,011 472,011
Other revenues - - 31,754 31,754
Amount available for appropriations 101,384 441,054 883,573 442,519 Charges to appropriations (outflows):

Capital outlay 6,645,957 1,630,952 438,084 1,192,868
Total charges to appropriations 6,645,957 1,630,952 438,084 1,192,868 Fund Balances - Ending $ (1,189,898) (6,544,573) $ 445,489 $ 1,635,387 $ Budgeted Amounts

CITY OF LA MESA
Supplementary Information
Budgetary Comparison Schedule – Miscellaneous Capital Improvement For the Year Ended June 30, 2025
-136-
Variance
Actual with Final
Original Final Amounts Budget
Fund Balances - Beginning $ 324,393 324,393 $ 324,393 $ - $ Resources (inflows):

Use of money and property - - 10,456 10,456
Amount available for appropriations 324,393 324,393 334,849 10,456 Charges to appropriations (outflows):

Capital outlay 129,210 8,335,370 - 8,335,370
Total charges to appropriations 129,210 8,335,370 - 8,335,370 Fund Balances - Ending $ (8,010,977) 195,183 $ 334,849 $ 8,345,826 $ Budgeted Amounts

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INTERNAL SERVICE FUNDS

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CITY OF LA MESA
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
-137-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total
Assets
Current assets:

Cash and investments - $ 5,790,267 $ 2,945,204 $ - $ 8,735,471 $ Accounts receivable, net 1,546 25,427 11,074 - 38,047
Total current assets 1,546 5,815,694 2,956,278 - 8,773,518 Noncurrent assets:

Restricted cash and investments 13,161 - - - 13,161
Capital assets:

Depreciable, net - - 8,790,754 - 8,790,754
Total capital assets - - 8,790,754 - 8,790,754
Total noncurrent assets 13,161 - 8,790,754 - 8,803,915
Total assets 14,707 5,815,694 11,747,032 - 17,577,433
Liabilities
Current liabilities:

Accounts payable 1,212,157 - 12,981 - 1,225,138
Salaries payable - 5,019 - 5,020 10,039
Due to other funds 784,098 - - 141,607 925,705
Interest payable - - 4,593 - 4,593
Long-term liabilities - due in one year - - 194,223 - 194,223 Total current liabilities 1,996,255 5,019 211,797 146,627 2,359,698 Noncurrent liabilities:

Long-term liabilities - due in more than one year - - 261,427 - 261,427 Claims payable - 3,753,393 - 1,686,295 5,439,688
Total noncurrent liabilities - 3,753,393 261,427 1,686,295 5,701,115 Total liabilities 1,996,255 3,758,412 473,224 1,832,922 8,060,813 Net Position
Net investment in capital assets - - 8,335,104 - 8,335,104 Restricted 13,161 - - - 13,161
Unrestricted (1,994,709) 2,057,282 2,938,704 (1,832,922) 1,168,355 Total net position (deficit) (1,981,548) $ 2,057,282 $ 11,273,808 $ (1,832,922) $ 9,516,620 $

CITY OF LA MESA
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2025
-138-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total
Operating Revenues
Charges for services 4,149,826 $ 1,444,716 $ 2,085,756 $ - $ 7,680,298 $ Other operating revenues 109,022 - - 212,727 321,749
Total operating revenues 4,258,848 1,444,716 2,085,756 212,727 8,002,047 Operating Expenses
Salaries and payroll - 209,956 - 211,513 421,469
Professional services 4,759,006 2,634 195,412 242,631 5,199,683 Supplies and materials - 734,558 - 8,709 743,267
Insurance premiums and settlements - 105,860 - 2,485,726 2,591,586 Depreciation - - 1,359,841 - 1,359,841
Amortization - - 51,027 - 51,027
Total operating expenses 4,759,006 1,053,008 1,606,280 2,948,579 10,366,873 Operating income (loss) (500,158) 391,708 479,476 (2,735,852) (2,364,826) Nonoperating Revenues (Expenses)
Investment income 360 308,153 158,648 - 467,161
Interest expense - - (12,988) - (12,988)
Total nonoperating income (loss) 360 308,153 145,660 - 454,173 Income (loss) before transfers (499,798) 699,861 625,136 (2,735,852) (1,910,653) Transfers
Transfers in - - - 2,196,000 2,196,000
Total transfers - - - 2,196,000 2,196,000
Change in net position (499,798) 699,861 625,136 (539,852) 285,347 Net position (deficit), beginning of year, as
previously reported 1,357,421 (2,343,108) 12,986,638 (1,293,070) 10,707,881 Adjustments 861,358 - (2,337,966) - (1,476,608)
Net position (deficit), beginning of year, as
as restated 1,357,421 (1,481,750) 10,648,672 (1,293,070) 9,231,273 Net position (deficit), end of year (1,981,548) $ 2,057,282 $ 11,273,808 $ (1,832,922) $ 9,516,620 $

CITY OF LA MESA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
-139-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total
Cash Flows from Operating Activities
Cash received from other funds 4,148,599 $ 1,419,289 $ 2,074,682 $ - $ 7,642,570 $ Cash payments to suppliers for goods and services - (745,662) (199,745) (356,962) (1,302,369) Cash payments to employees for services - (209,322) - (210,878) (420,200) Insurance premiums and settlements (5,148,993) (871,995) - (2,500,863) (8,521,851) Other operating revenues 109,022 - - 212,727 321,749
Net Cash Provided by (Used for) Operating Activities (891,372) (407,690) 1,874,937 (2,855,976) (2,280,101) Cash Flows from Noncapital Financing Activities
Transfers in - - - 2,196,000 2,196,000
Cash paid to other funds 784,098 - - 141,607 925,705
Net Cash Provided by Noncapital Financing Activities 784,098 - - 2,337,607 3,121,705 Cash Flows from Capital And Related Financing Activities Acquisition of capital assets - - (1,783,856) - (1,783,856) Payment of interest - - (12,988) - (12,988)
Payments on notes/leases payable - - (189,519) - (189,519) Net Cash (Used) for Capital and Related Financing Activities - - (1,986,363) - (1,986,363) Cash Flows from Investing Activities
Investment income 360 308,153 158,648 - 467,161
Net Cash Provided by Investing Activities 360 308,153 158,648 - 467,161 Net Increase (Decrease) in Cash and Cash Equivalents (106,914) (99,537) 47,222 (518,369) (677,598) Cash and Cash Equivalents - beginning of the year 5,889,804 120,075 2,897,982 518,369 9,426,230 Cash and Cash Equivalents - end of the year $ 5,790,267 13,161 $ 2,945,204 $ - $ 8,748,632 $ Reconciliation to Statement of Net Position
Current assets:

Cash and cash equivalents - $ 5,790,267 $ 2,945,204 $ - $ 8,735,471 $ Cash and cash equivalents - restricted 13,161 - - - 13,161 Total cash and cash equivalents 13,161 $ 5,790,267 $ 2,945,204 $ - $ 8,748,632 $ Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income (loss) (500,158) $ 391,708 $ 479,476 $ (2,735,852) $ (2,364,826) $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense - - 1,359,841 - 1,359,841
Amortization expense - - 51,027 - 51,027
Change in assets and liabilities:

Accounts receivable (1,227) (25,427) (11,074) - (37,728) Accounts payable (389,987) (8,470) (4,333) (105,622) (508,412) Claims payable - (766,135) - (15,137) (781,272)
Salaries and benefits payable - 634 - 635 1,269
Net Cash Provided by (Used for) Operating Activities (891,372) $ (407,690) $ 1,874,937 $ (2,855,976) $ (2,280,101) $ Noncash Financing Activities
None

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STATISTICAL SECTION
This part of the City of La Mesa’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

Contents Page
Financial Trends 140
These schedules contain trend information to help the reader understand how the government’s financial performance and wellbeing have changed over time.

Debt Capacity 150
These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future.

Revenue Capacity 152
These schedules contain trend information to help the reader assess the government’s most significant revenue source, property tax.

Demographic and Economic Information 160
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place.

Operating Information 161
These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs.

Sources: Unless otherwise notes, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.

CITY OF LA MESA
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
-140-
Fiscal Year
2016 2017 2018 2019
Governmental Activities:

Net investment in capital assets 145,391,028 $ 145,182,412 $ 144,086,785 $ 144,699,985 $ Restricted for:

Investment in Section 115 - 2,417,191 2,744,670 6,347,644 General government - 1,313,688 1,691,280 1,534,159
Public safety - 528,942 112,534 267,642
Capital projects 4,557,520 8,671,732 8,916,672 8,332,798 Community services - 136,838 174,939 98,043
Community development - 721,427 9,338,876 10,009,238
Debt service 1,894,509 2,158,785 2,120,432 2,566,644
Special projects 3,587,889 - - -
Net pension and OPEB asset - - - -
Unrestricted (deficit) (11,563,257) (15,448,146) (29,041,507) (36,446,588) Total governmental activities net position 143,867,689 $ 145,682,869 $ 140,144,681 $ 137,409,565 $ Business-type activities:

Net investment in capital assets 16,223,356 $ 17,188,648 $ 17,940,834 $ 18,736,867 $ Restricted for:

Debt service - - 213,494 213,494
OPEB asset - - - -
Unrestricted 5,528,002 6,360,406 5,637,560 6,539,389
Total business-type activities net position 21,751,358 $ 23,549,054 $ 23,791,888 $ 25,489,750 $ Primary Government:

Net investment in capital assets 161,614,384 $ 162,371,060 $ 162,027,619 $ 163,436,852 $ Restricted for:

Investment in Section 115 - 2,417,191 2,744,670 6,347,644 General government - 1,313,688 1,691,280 1,534,159
Public safety - 528,942 112,534 267,642
Capital projects 4,557,520 8,671,732 8,916,672 8,332,798 Community services - 136,838 174,939 98,043
Community development - 721,427 9,338,876 10,009,238
Debt service 1,894,509 2,158,785 2,333,926 2,780,138
Special projects 3,587,889 - - -
Net pension and OPEB asset - - - -
Unrestricted (deficit) (6,035,255) (9,087,740) (23,403,947) (29,907,199) Total primary government net position 165,619,047 $ 169,231,923 $ 163,936,569 $ 162,899,315 $

-141-
Fiscal Year
2020 2021 2022 2023 2024 2025
$ 142,339,069 141,743,276 $ 143,675,693 $ 144,716,039 $ 148,223,792 $ 155,771,840 $ 6,958,708 7,983,884 7,365,660 7,938,631 8,642,890 7,676,639 2,343,495 2,425,554 3,050,634 3,906,366 365,290 257,157 320,913 290,189 870,912 1,458,365 2,060,235 2,844,683
7,249,483 7,194,007 7,722,333 8,512,963 10,806,355 7,442,139 104,465 110,260 114,266 161,913 2,424,237 3,796,514
10,594,434 11,470,538 12,192,588 12,522,446 12,992,109 13,378,373 2,844,273 3,370,714 3,339,781 3,587,914 4,288,005 4,978,059 - - - - - -
- - - - - 736,541
(42,373,909) (39,420,224) (35,249,171) (29,466,527) (36,580,981) (34,866,612) $ 132,810,306 132,738,823 $ 143,082,696 $ 153,338,110 $ 153,221,932 $ 162,015,333 $ $ 25,308,485 20,496,129 $ 22,827,894 $ 25,518,104 $ 25,577,084 $ 26,624,102 213,494 213,494 213,494 494,797 494,797 508,728
- - - - - 82,941
(230,764) 5,651,832 3,122,801 1,186,192 640,527 1,564,997 $ 25,291,215 26,361,455 $ 26,164,189 $ 27,199,093 $ 26,712,408 $ 28,780,768 $ $ 167,647,554 162,239,405 $ 166,503,587 $ 170,234,143 $ 173,800,876 $ 182,395,942 $ 7,983,884 6,958,708 7,365,660 7,938,631 8,642,890 7,676,639 2,425,554 2,343,495 3,050,634 3,906,366 365,290 257,157 290,189 320,913 870,912 1,458,365 2,060,235 2,844,683
7,194,007 7,249,483 7,722,333 8,512,963 10,806,355 7,442,139 110,260 104,465 114,266 161,913 2,424,237 3,796,514
11,470,538 10,594,434 12,192,588 12,522,446 12,992,109 13,378,373 3,584,208 3,057,767 3,553,275 4,082,711 4,782,802 5,486,787 - - - - - -
- - - - - 819,482
(42,604,673) (33,768,392) (32,126,370) (28,280,335) (35,940,454) (33,301,615) $ 158,101,521 159,100,278 $ 169,246,885 $ 180,537,203 $ 179,934,340 $ 190,796,101 $