Agenda — Monterey Park City Council, February 21, 2024 (part 1 of 3)

CITY COUNCIL OF MONTEREY PARK

THE CITY COUNCIL ACTING ON BEHALF OF THE SUCCESSOR AGENCY OF THE FORMER

REDEVELOPMENT AGENCY, THE HOUSING AUTHORITY, THE MONTEREY PARK FINANCING

AUTHORITY AND THE MONTEREY PARK GEOLOGIC HAZARD ABATEMENT DISTRICT AGENDA

REGULAR CITY COUNCIL MEETING

MONTEREY PARK CITY HALL COUNCIL CHAMBERS
320 W. NEWMARK AVENUE, MONTEREY PARK, CA 91754

Wednesday
February 21, 2024
6:30 p.m.

GENERAL INFORMATION
Documents related to an Agenda item are available to the public in the City Clerk’s Office located at 320 West Newmark Avenue, Monterey Park, CA 91754, during normal business hours and the City’s website at http://www.montereypark.ca.gov/AgendaCenter/City-Council-17.

The public may watch the meeting live on the city’s cable channel MPKTV (AT&T U -verse, channel 99 or Charter Communications, channel 182) or by visiting the city’s website at http://www.montereypark.ca.gov/133/City-Council-Meeting-Videos.P er the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call City Hall at (626) 307- 1359 for reasonable accommodation at least 24 hours before a meeting. Council Chambers are wheelchair accessible.

PUBLIC PARTICIPATION
You may speak up to 5 minutes on Agenda item. You may combine up to 2 minutes of time with another person’s speaking. No person may speak more than a total of 10 minutes. The Mayor and City Council may change the amount of time allowed for speakers. Written Communication will be accepted up to 24 hours before the meeting via email to [email protected].

While all comments are welcome, the Brown Act does not allow the City Council to take action on any item not on the agenda. The Council may briefly respond to comments after Public Communications is closed. Persons may, in addition to any other matter within the City Council's subject-matter jurisdiction, comment on Agenda Items at this time. If you provide public comment on a specific Agenda item at this time, however, you cannot later provide comments at the time the Agenda Item is considered.

MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community.

LAND ACKNOWLEDGMENT
We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño- Tongva people. We show our respect to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor t heir labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.

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Monterey Park City Council Agenda, February 21, 2024 - Page 2

CALL TO ORDER Mayor
FLAG SALUTE The Monterey Park Fire Explores
ROLL CALL Henry Lo, Vinh Ngo, Jose Sanchez, Thomas Wong, Yvonne Yiu

AGENDA ADDITIONS, DELETIONS, CHANGES AND ADOPTIONS

PUBLIC COMMUNICATIONS

STAFF COMMUNICATIONS:
• Police Department
• Recreation and Community Services

[1.] PRESENTATION

1-A. LOS ANGELES COUNTY EFFORTS TO ADDRESS HUMAN TRAFFICKING - UPDATE

[2.] OLD BUSINESS - None

[3.] CONSENT CALENDAR ITEM NOS. 3A-3N

All items under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. Specific items may be removed from the Consent Calendar at the request of any member of the City Council for separate consideration.

3-A. MONTHLY INVESTMENT REPORT – JANUARY 2024
It is recommended that the City Council consider:
(1) Receiving and filing the monthly investment report; and (2) Taking such additional, related, action that may be desirable.

3-B. 2022-2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT
It is recommended that the City Council consider:
(1) Receiving and filing the City’s 2022-2023 Annual Comprehensive Financial Report (ACFR); and
(2) Taking such additional, related, action that may be desirable.

3-C. DIRECT THE CITY MANAGER TO IMPLEMENT THE APPROVED WATER RATES EFFECTIVE MARCH 1, 2024
It is recommended that the City Council consider:
(1) Directing the City Manager to implement the approved water rates effective March 1, 2024; and
(2) Taking such additional, related, action that may be desirable.

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Monterey Park City Council Agenda, February 21, 2024 - Page 3

3-D. NOTICE OF COMPLETION – VARIOUS CAPITAL IMPROVEMENT PROJECTS It is recommended that the City Council consider:
(1) Receiving and filing the Notice of Completion recorded by the Public Works Director on December 4, 2023 accepting the Traffic Signal Improvements Project -HSIP Cycle 7 completed by PTM General Engineering Services, Inc.;
(2) Receiving and filing the Notice of Completion recorded by the Public Works Director on January 2, 2024 accepting HVAC Improvements at Various City Facilities completed by Carrier Corporation;
(3) Receiving and filing the Notice of Completion recorded by the Public Works Director on January 11, 2024 accepting the 2022 Catch Basin Retrofit Device Installation project completed by United Storm Water, Inc.;
(4) Receiving and filing the Notice of Completion recorded by the Public Works Director on January 24, 2024 accepting the Barnes Park Amphitheater Project completed by Irwin Seating Company; and
(5) Taking such additional, related, action that may be desirable.

3-E. NOTICE OF COMPLETION AND TERMINATION OF LOCAL EMERGENCY GOVERNING

THE MONTEREY PASS ROAD EMERGENCY WATERLINE IMPROVEMENTS It is recommended that the City Council consider:
(1) Receiving and Filing the Notice of Completion for CIP 99025 – Monterey Pass Road Waterline Improvements, recorded by the Public Works Director on February 5, 2024; (2) Adopting a resolution terminating the local emergency governing the Monterey Pass Road Waterline Project; and
(3) Taking such additional, related, action that may be desirable.

3-F. LICENSE AGREEMENT WITH THE SALVATION ARMY FOR USE OF SPACE AT THE CITY’S COMMUNITY CLEAN-UP EVENTS
It is recommended that the City Council consider:
(1) Authorizing the City Manager to renew License Agreement 2355 -AD with the Salvation Army, in a form approved by the City Attorney to utilize space within the City’s Community Clean-up events to collect unwanted items from the public; and (2) Taking such additional, related, action that may be desirable.

3-G. FLEET AND FUEL MANAGEMENT SYSTEM – AWARD OF CONTRACT It is recommended that the City Council consider:
(1) Authorizing the City Manager to execute a professional services agreement, in a form approved by the City Attorney, with Faster Asset Solutions in the contract amount of $508,202.00 for the Fleet Management System; and
(2) Taking such additional, related, action that may be desirable.

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Monterey Park City Council Agenda, February 21, 2024 - Page 4

3-H. PLANNING SERVICES AUGMENTATION WITH WILLDAN GROUP, INC.

It is recommended that the City Council consider:
(1) Authorizing the City Manager to utilize Willdan Group, Inc. for providing routine planning services to assist the Community Development Department, not to exceed $150,000 annually; and
(2) Taking such additional, related, action that may be desirable.

3-I. APPROVAL OF AN ALCOHOL CONSUMPTION PERMIT AND PERMIT FEE WAIVER

ALLOWING THE ALHAMBRA EDUCATIONAL FOUNDATION TO CONDUCT ALCOHOL

SALES AT THE HAPPY BIRTHDAY MONTEREY PARK, PLAY DAYS CARNIVAL It is recommended that the City Council consider:
(1) Approving an Alcohol Consumption permit allowing the Alhambra Educational Foundation to conduct alcohol sales at the Play Days Carnival, May 9-12, 2024; (2) Approving an Alcohol Consumption permit fee waiver of $119; (3) Taking such additional, related, action that may be desirable.

3-J. ANNUAL WEED ABATEMENT DECLARATION LIST
It is recommended that the City Council consider:
(1) Adopting the attached Resolution with the Declaration List; and/or (3) Taking such additional, related, action that may be desirable.

3-K. CONSIDERATION AND POSSIBLE ACTION TO ADOPT A RESOLUTION AMENDING THE

MONTEREY PARK BAIL SCHEDULE AND REQUESTING THE PRESIDING JUDGE OF THE

LOS ANGELES SUPERIOR COURT APPROVE THE AMENDED BAIL SCHEDULE FOR

MISDEMEANOR AND INFRACTION VIOLATIONS OF THE MONTEREY PARK MUNICIPAL CODE
It is recommended that the City Council consider:
(1) Adopting a Resolution amending the Monterey Park Bail Schedule and requesting the presiding judge of the Los Angeles Superior Court approve the amended bail schedule for misdemeanor and infraction violations of the Monterey Park Municipal Code; and (3) Taking such additional, related, action that may be desirable.

3-L. RENEWAL OF THE COUNTY OF LOS ANGELES GENERAL SERVICES AGREEMENT It is recommended that the City Council consider:
(1) Authorizing the City Manager to execute a General Services Agreement with the County of Los Angeles in a form approved by the City Attorney; and (3) Taking such additional, related, action that may be desirable.

3-M. 2020 STATE HOMELAND SECURITY GRANT PROGRAM – COST SAVINGS PROJECTS It is recommended that the City Council consider:
(1) Receiving and Filing this Report; and
(3) Taking such additional, related, action that may be desirable.

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M onterey Park City Council Agenda, February 21, 2024 - Page 5 3-N. F ISCAL YEAR 2023 ASSISTANCE TO FIREFIGHTERS GRANTS (AFG) PROGRAM It is recommended that the City Council consider:
(1) Adopting a resolution authorizing the City Manager or designee, to apply for, receive, and appropriate grant funds for the Fiscal Year 2023 Assistance to Firefighters Grant Program; (2) Authorizing the City’s Finance Department to appropriate money from the General Fund balance to fund the required applicant match if the grant is awarded; (3) Taking such additional, related, action that may be desirable. [4.] PUBLIC HEARING – None.
[5.] NEW BUSINESS – None.
[6.] CITY COMMUNICATIONS (CITY COUNCIL)
6 -A. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTEREY PARK, CALIFORNIA, DECLARING AND RECOGNIZING MARCH 2 -6, 2024, AS READ ACROSS

AMERICA WEEK (REQUESTED BY COUNCIL MEMBER SANCHEZ)
It is recommended that the City Council consider:
(1) Adopting a Resolution declaring and recognizing March 2- 6, 2024, as Read Across America Week: and
(2) Taking such additional, related, action that may be desirable. [7.] FUTURE AGENDA ITEMS
[8.] CLOSED SESSION (IF REQUIRED; CITY ATTORNEY TO ANNOUNCE) A
DJOURN

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City Council Staff Report
DATE: Februar y 21, 2024
AGENDA ITEM NO: Consent Calendar - 3A
TO: The Honorabl
e Mayor and City Council
FROM: Amy Lee, City Treasurer
SUBJECT: Monthly Investment Report – January 2024

RECOMMENDA
TION:

It is recommended that the City Council consider:

1. Receiving and filing the monthly investment report; and

2. Taking such additional, related, action that may be desirable.

EXECUTIVE SUMM
ARY:

As of January 31, 202 4, invested funds for the City of Monterey Park total $66,820,043.27.

BACKGROUND:

In accordance with the City’s Investment Policy, a monthly investment report is presented to the City Council showing the types of investments, dates and maturities, amounts of deposits, rates of interest, and the current market values for securities with maturity more than 12 months. The attached monthly investment report includes a summary investment report for the LA County Pooled Investment Fund, which displays the composition by type for the entire pooled investment fund.

Respectfully submitted by: Prepared by:

Amy Lee
City Treasurer
Martha Garcia
Finance Director
Approved by:

Inez Alvarez
City Manager

ATTACHMEN
T:

1. Monthly Investment Report

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Staff Report
February 21, 2024

ATTACHMENT 1
Monthly Investment Report

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66,820, 043.27$
INVESTMENTS PORTFOLIO PROFILE:

TOTAL BALANCE AT 01/31/2024

INVESTMENT COMPOSITION
(1) LA COUNTY POOLED INVESTMENT FUND ON DEMAND 4.170% 44,727,446.05$ (See Schedule A for LA County Pool Composition)
(2) LOCAL AGENCY INVESTMENT FUND ON DEMAND 3.670% 14,247,597.22$ Purchase Maturity Interest
(3) CERTIFICATES OF DEPOSIT Date Date Rate
1 SALLIE MAE BANK 08/11/21 08/12/24 0.70% 245,000
2 TOYOTA FINANCIAL SAVINGS BANK 09/16/21 09/16/24 0.65% 245,000 3 SYNCHRONY BANK 09/17/21 09/17/24 0.65% 245,000
4 UBS BANK USA 09/22/21 09/23/24 0.65% 245,000
5 STATE BANK OF INDIA 10/18/21 10/18/24 0.70% 245,000
6 MEDALLION BANK UTAH 01/28/22 01/28/25 1.25% 245,000
7 PENTAGON FEDERAL UNION 01/31/22 01/31/25 1.25% 245,000 8 BEAL BANK 02/02/22 01/29/25 1.15% 245,000
9 VALLIANCE BANK 03/18/22 03/18/25 1.40% 245,000
10 STATE BANK OF TEXAS 03/25/22 03/25/25 1.45% 245,000 11 FIRST FED SAVINGS & LOAN 03/30/22 03/31/25 2.00% 245,000 12 LAFAYETTE FEDERAL CREDIT UNION 03/30/22 03/31/25 2.20% 245,000 13 ALLY BANK 03/31/22 03/28/24 1.95% 245,000
14 COMENITY CAPITAL BANK 04/14/22 04/14/25 2.55% 245,000 15 AMERICU CREDIT UNION 04/21/22 04/21/25 2.30% 245,000 16 BALBOA THRIFT & LOAN 04/29/22 04/29/25 2.00% 245,000 17 CONNEXUS CREDIT UNION 05/26/22 05/28/24 2.65% 245,000 18 METRO CREDIT UNION 07/13/22 07/12/24 3.20% 245,000
19 FIRST TECHNOLOGY CREDIT UNION 08/05/22 08/05/24 3.25% 245,000 20 AUSTIN TELCO FEDERAL CREDIT UNION 12/16/22 12/16/24 5.00% 245,000 21 GREENWOOD MUNICIPAL FED CREDIT UNIO 01/27/23 01/27/25 4.80% 245,000 22 RAIZ CREDIT UNION 01/27/23 01/27/25 4.75% 245,000
23 WORKERS 01/27/23 01/27/25 4.70% 245,000
24 MANUF & TRADERS TRUST CO 01/31/23 01/31/26 4.25% 245,000 25 ALPINE BANK 01/31/23 01/31/25 4.55% 245,000
26 TECHNOLOGY FCU 02/10/23 02/24/25 5.00% 245,000
27 RED CROWN FCU 02/14/23 02/21/25 4.85% 245,000
28 UFIRST FEDERAL CREDIT UNION 02/15/23 02/25/25 4.85% 245,000 29 SEA COMM FEDERAL CREDIT UNION 02/23/23 03/03/25 4.90% 245,000 30 GLOBAL CREDIT UNION 05/02/23 05/12/25 4.85% 245,000 31 WESTERN ALLIANCE BANK 05/02/23 05/05/25 4.85% 245,000 32 PREFERRED BANK 09/03/23 09/03/24 4.16% 100,000
33 PREFERRED BANK 09/08/23 09/08/24 4.16% 150,000
Total CDs (33) 3.254% 7,845,000.00$
OTHER INFORMATION:

BANK BALANCE: (1)
$7,858,472.76
AVERAGE MATURITY DAYS 58
AVERAGE INTEREST RATE FOR THE MONTH 3.857%

THE CITY'S INVESTMENT HAS SUFFICIENT LIQUIDITY TO MEET THE CITY'S EXPENDITURE REQUIREMENTS FOR THE NEXT 180 DAYS. THE 180-DAY LIQUIDITY DISCLOSURE IS REQUIRED PER GOVERNMENT CODE 53646.

THERE HAVE BEEN NO VARIANCES TO THE INVESTMENT POLICY.
(1) Bank balance is maintained to cover outstanding warrants, payroll checks and on-going operating costs.

CITY OF MONTEREY PARK

INVESTMENT REPORT
JANUARY 31, 2024

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City Council Staff Report
DATE: February 21, 2024
AGENDA ITEM NO: Consent Calendar - 3B
TO: The Honorable Mayor and City Council
FROM: Martha Garcia, Director of Finance
SUBJECT: 2022-2023 Annual Comprehensive Financial Report RECOMMENDATION:

It is recommended that the City Council consider:

1. Receiving and filing the City’s 2022-2023 Annual Comprehensive Financial Report (ACFR); and

2. Taking such additional, related, action that may be desirable.

EXECUTIVE SUMMARY:

The City’s auditor, The Pun Group LLP, an independent auditor and one of the nation’s leading CPA firms, completed the audit of the City’s annual financial statements for the fiscal year ending June 30, 2023. The audited financial statements are incorporated into an ACFR.

This is the first year that the Pun Group is performing the annual audit of the City’s financial records. The auditor issued an unmodified (“clean”) opinion on the City’s financial statements.

An unmodified opinion indicates that the financial data of the City is fairly presented in accordance with generally accepted accounting principles (GAAP) in the United States of America and the standards are applicable to the financial audits contained in Government Audit Standards, issued by the Comptroller General of the United States. These standards require that the auditors plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement and accurately reflect the City’s financial position. Additionally, the auditors’ report does not indicate any negative findings, internal control deficiencies, or instances of noncompliance with applicable laws and regulations.

BACKGROUND:

The ACFR includes the financial information for all funds of the City. The Introductory Section of the report includes a table of contents, the organization chart, a transmittal letter, and financial awards. The Financial Section contains the independent auditor’s report, the management discussion and analysis (MD&A), the financial statements, notes to the financial statements, and supplementary information. The Statistical Section provides financial trend and demographic data, which is useful for assessing the City’s financial condition. Users of the ACFR should read the financial statements in conjunction with the transmittal letter, MD&A, notes, and supplementary information to gain a full understanding of the City’s financial activities.

The City’s ACFR was prepared according to the Governmental Accounting Standard Board (GASB) Statement, and the government-wide financial statements provide information about the City’s overall financial status with the addition of long-term perspective. The focus is on the City, as a whole organization, providing a comprehensive presentation of the City’s financial information from a commercial (private) business point of view. Full accrual accounting and

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Staff Report

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February 21, 2023
information for capital assets (including infrastructure) and long-term obligations are required as part of the financial statements. The City’s ACFR is submitted to the Government Financial Officer’s Association of the United States and Canada (GFOA) for consideration of Award of the Certificate of Achievement for Excellence in Financial Reporting. To receive the award, a government must publish an efficiently organized report that satisfies both GAAP and applicable laws and regulations. The City has recei ved this award for 34 consecutive years and staff has again submitted the 2022-2023 ACFR for award consideration.

On June 30, 2023, the City’s net position totaled $50.5 million in the Statement of Net Position, reflecting total assets and deferred outflow of resources for $ 298 million, and liabilities and deferred inflow of resources for $ 247.9 million. Net position serves as an indicator of a government’s financial position over time. The City’s financial results displayed a positive financial position.

On June 30, 202 3, the City’s governmental funds reported combined fund balances of $ 92.8 million, which is a decrease of $1.5 million from $94.3 million on June 30, 2022. The decrease is related to the spending down of the one-time American Rescue Plan Act funds.

Among all governmental funds, the General Fund is a major governmental fund and the most important fund of the City. The General Fund’s balance has decreased by $ 500 thousand from $28.9 million on June 30, 2022 to $28.4 million as of June 30, 2023.

General Fund revenues have increased by $7.3 million from $49.1 million on June 30, 2022, to $56.4 million on June 30, 202 3. The increase was due to the passing of Measure MP, higher than anticipated Transient Occupancy Tax and an increase in investment income. General Fund expenses and other financing uses increased $1.3 million from $52.4 million on June 30, 2022, to $53.7 million on June 30, 2023. The increase is mostly attributed to higher service and supply costs.

The following table details the General Fund balances breakdown:

GF Fund Balances as of June 30, 2023
Non-spendable:

Advances to Other Funds $ 77,450
Total Non-spendable: $ 77,450
Committed:

Catastrophic Event / Stabilization $ 8,340,000
Economic Development (2002 Bonds Proceeds) $ 1,886,927 Total Committed $ 10,226,927
Assigned:

Carryover POs and Capital Improvements $ 18,029,418
Total Assigned $ 18,029,418
Unassigned:

Unassigned $ 119,426
Total Unassigned $ 119,426
Total GF Fund Balances $ 28,453,221

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Staff Report

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February 21, 2023

The $28.4 million fund balance of the General Fund as of June 30, 2023, is comprised of $77,450 non-spendable, $10.2 million committed, $18 million assigned, and $119 thousand unassigned.

FISCAL IMPACT:

There is no fiscal impact associated with receiving and filing the City’s 2022-2023 Annual Comprehensive Financial Report

Respectfully submitted by: Prepared by:

Martha Garcia
Director of Finance

Laura Borjon
Finance Manager

Approved by:

Reviewed by:

Inez Alvarez
City Manager
Karl H. Berger
City Attorney

ATTACHMENT:

1. 2022-2023 Annual Comprehensive Financial Report

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Staff Report

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February 21, 2023

ATTACHMENT 1
2022-2023 Annual Comprehensive
Financial Report

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City of
Monterey Park
C a l i f o r n i a
Annual Comprehensive Financial Report Year
Ended June 30, 2023

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City of Monterey Park, California

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
Year ended June 30, 202
Prepared by the )LQDQFHDepartment
Martha Garcia
Director of )LQDQFH

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City of Monterey Park
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
i
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents
.......................................................................................................................................................... i Monterey Park City Officials ........................................................................................................................................ v Organizational Chart .................................................................................................................................................... vi Letter of Transmittal ................................................................................................................................................... vii GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................................... xiii

FINANCIAL SECTION
Independent Auditors’ Report on the Audit of the Financial St atements ............................................................. 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ......................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ..................................................................................................... ......................... 18 Statement of Activities ................................................................................................................................... 20 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet .......................................................................................................................................... 26 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ......................................................................... 29 Statement of Revenues, Expenditures, and
Changes in Fund Balances ................................................................................................................ 30 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................................................... 32 Proprietary Fund Financial Statements:

Statement of Net Position ........................................................................................................................ 34 Statement of Revenues, Expenses, and Changes in Net Position ............................................................ 37 Statement of Cash Flows ......................................................................................................................... 38 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position ........................................................................................................ 43 Statement of Changes in Fiduciary Net Position ..................................................................................... 44 Notes to the Basic Financial Statements ........................................................................................................... 49

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City of Monterey Park
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
ii
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios CalPERS Miscellaneous Plan
...................................................................................................................... 104 CalPERS Safety Plan ................................................................................................................................... 106 Massachusetts Mutual Retirement Plan (“MMRP”) .................................................................................... 108 Schedule of Plan Contributions - Pensions
CalPERS Miscellaneous Plan
...................................................................................................................... 110 CalPERS Safety Plan ................................................................................................................................... 112 Massachusetts Mutual Retirement Plan (“MMRP”) .................................................................................... 114 Schedule of Changes in the Net OPEB Liability and Related Ratios .............................................................. 117 Schedule of Contribution
s – OPEB .................................................................................................................. 118 Budgetary Comparison Schedules
General Fund .................................................................................................................. .............................. 119 Grants Special Revenue Fund
...................................................................................................................... 120 Retirement/Pension Liability Special Revenue Fund ............................................................................. ..... 121 Housing Special Revenue Fund ................................................................................................................... 122 Notes to the Budgetary Comparison Schedules ................................................................................................ 123 Supplementary Information:

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

Street Capital Projects Fund .................................................................................................................. 127 Nonmajor Governmental Funds:

Combining Ba
lance Sheet ............................................................................................................................ 130 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 136 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Proposition A Fund Special Revenue .................................................................................................... 142 Gas Tax Fund Special Revenue ............................................................................................................. 143 Measure W Fund Special Revenue ........................................................................................................ 144 Proposition C Fund Special Revenue .................................................................................................... 145 Air Quality Improvement Fund Special Revenue ................................................................................. 146 Asset Forfeiture Fund Special Revenue ................................................................................................ 147 Parks/Library/Facilities DIF Fund Special Revenue ............................................................................. 148 Business Improvement Area #1 Fund Special Revenue ........................................................................ 149 Maintenance District 93-1 Fund Special Revenue ................................................................................ 150 Law Enforcement/Fire/Medic DIF Fund Special Revenue ................................................................... 151 Public Safety Augmentation Fund Special Revenue ............................................................................. 152 Measure R Fund Special Revenue ......................................................................................................... 153 Circulation DIF Fund Special Revenue ................................................................................................. 154 CERCLA Liability Fund Special Revenue ............................................................................................ 155 SB1 - RMRA Fund Special Revenue .................................................................................................... 156 Measure M Fund Special Revenue ........................................................................................................ 157 SB2 - Planning Grant Fund Special Revenue ........................................................................................ 158

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City of Monterey Park
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
iii
Page
FINANCIAL SECTION (Continued)
Supplementary Information (Continued):

Measure B F
und Special Revenue ......................................................................................................... 159 Bike Route Fund Special Revenue ........................................................................................................ 160 Highway Safety Improvement Fund Special Revenue .......................................................................... 161 Sales Tax Bond Debt Service Fund ....................................................................................................... 162 Internal Service Funds:

Combining Statement of Net Position ................................................................................................... 164 Combining Statement of Revenues, Expenses and Changes in Net Position ........................................ 166 Combining Statement of Cash Flows .................................................................................................... 168 STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents
............................................................................................................... 173 Financial Trends:

Net Position by Components - Last Ten Fiscal Years ........................................................................................... 174 Changes in Net Position - Last Ten Fiscal Years ............................................................................... ................... 176 Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................................... 180 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................ 182 Revenue Capacity:

Assessed Value of Taxable Property - Last Ten Fiscal Years ............................................................................... 185 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years .................................................................... 186 Principal Property Taxpayers - Current Year and Nine Years Ago ....................................................................... 188 Property Tax Levies and Collections - Last Ten Fiscal Years ............................................................................... 190 Debt Capacity:

Outstanding Debt by Type - Last Ten Fiscal Years ............................................................................................... 192 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years .................................................................... 194 Direct and Overlapping Debt ................................................................................................................................. 195 Legal Debt Margin Information - Last Ten Fiscal Years ....................................................................................... 196 Demographic and Economic Information:

Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................... 199 Principal Employers – Current Year and Five Years Ago ..................................................................................... 200 Operating Information:

City Employees by Function – Last Ten Fiscal Years ........................................................................................... 203 Operating Indicators by Function / Program – Last Ten Fiscal Years ................................................................... 204 Capital Assets by Function – Last Ten Fiscal Years ............................................................................................. 206 Water District Schedules for Revenue Capacity
Water Sold by Type of Customer .......................................................................................................................... 208 Water Rates ............................................................................................................................................................ 209 Top Ten Water Customers ..................................................................................................................................... 210

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iv
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MONTEREY PARK

CITY OFFICIALS

CITY COUNCIL
Jose Sanchez, Mayor
Thomas Wong, Mayor Pro Tem
Vinh Ngo
Council Member
Yvonne Yiu
Council Member
Henry Lo
Council Member

ELECTED OFFICIALS
Maychelle Yee, City Clerk
Amy Lee, City Treasurer

EXECUTIVE TEAM
Inez Alvarez….………………………………………………………………………………………..City Manager Diana Garcia....………………………………………………………………………..Assistant City Manager Karl H. Ber
ger………………………………………………………………………………………….City Attorney
Scott Wiese……………………………………………………………..…………………………………Police Chief Matt Hallock……………
……………………………………………………………………………………Fire Chief
Martha Garcia…………………………………………………………........................Director of Finance Christine Tomi
kawa………………………….Director of Human Resources/Risk Management Shawn Igoe……………………..………….......................Director of Public Works/City Engineer Jessica Serrano……………………………………….............Director of Community Development Robert Aguir
re…………………………………………Director of Recreation/Community Services Kristin Olivarez-Becerra…..………………………………………………………………………City Librarian v

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City of
Monterey Park
Organization
Chart
Monterey Park
Citizens
City Clerk
Mayor &
City Council
City Manager
*Successor Agency
*Economic Development
*Media Production and Communications
*Business Improvement Area
Police Department
*Police Administration
*Traffic Bureau
*Field Services
*Investigations
*Animal Services
*Communications
*Jail
*Records
*Computer Services
*Community Engagement
Fire Department
*Fire Administration
*Fire Prevention
*Emergency Operations
*Emergency Medical Services
*Comm. Risk Reduction
*Code Compliance
Human Resources & Risk
Management
*Human Resources
*Risk Management
Finance
Department
*Finance
*Information Technology
*Community Housing
Assistance
*Revenue Collection
M.P. Bruggemeyer Library
*Library Administration
*Reference & Adult Services
*Technical Services
*Literacy
*Children Services
Public Works
*Community Transportation
*Street Maintenance & Street Cleaning
*Storm Drain Maintenance
*Sanitary Sewer Maintenance
*Traffic Control & Street Lighting
*Refuse Collection
*Building Maintenance
*Motor Pool Shop
*Engineering
**Parks & Parkway Maintenance
*Water & Wells
Recreation & Community
Services
*Recreation Facilities
*Aquatics
*Senior Programs
*Youth Programs
*Recreation Programs
*Special Events
*Community Transportation
Community
Developement
*Planning
*Building Safety
Boards &
Commissions
City Attorney
City
Treasurer
vi

Page 22 of 576 ends

Pride in the Past x Faith in the Future

CITY OF MONTEREY PARK

320 West Newmark Avenue x Monterey Park x California 91754-2896 www.montereypark.ca.gov
City Council
Henry Lo
Vinh Ngo
Jose Sanchez
Thomas Wong
Yvonne Yiu
City Clerk
Maychelle Yee
City Treasurer
Amy Lee
&ĞďƌƵĂƌǇϭϱ͕ϮϬϮϰ
dŽƚŚĞ,ŽŶŽƌĂďůĞDĂǇŽƌ͕DĞŵďĞƌƐŽĨƚŚĞŝƚǇŽƵŶĐŝůĂŶĚƚŚĞŝƚŝǌĞŶƐŽĨƚŚĞŝƚǇŽĨDŽŶƚĞƌĞǇ WĂƌŬ͕ ĂůŝĨŽƌŶŝĂ^ƚĂƚĞůĂǁƌĞƋƵŝƌĞƐƚŚĂƚĂůůŐĞŶĞƌĂůͲƉƵƌƉŽƐĞůŽĐĂůŐŽǀĞƌŶŵĞŶƚƐƉƵďůŝƐŚǁŝƚŚŝŶƐŝǆŵŽŶƚŚƐŽĨƚŚĞĐůŽƐĞ ŽĨ ĞĂĐŚ ĨŝƐĐĂů ǇĞĂƌ Ă ĐŽŵƉůĞƚĞ ƐĞƚ ŽĨ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ ƉƌĞƐĞŶƚĞĚ ŝŶ ĐŽŶĨŽƌŵŝƚǇ ǁŝƚŚ ŐĞŶĞƌĂůůǇ ĂĐĐĞƉƚĞĚ ĂĐĐŽƵŶƚŝŶŐ ƉƌŝŶĐŝƉůĞƐ ;'WͿ͕ ĂƐ ƉƌŽŵƵůŐĂƚĞĚ ďǇ ƚŚĞ 'ŽǀĞƌŶŵĞŶƚĐĐŽƵŶƚŝŶŐ ^ƚĂŶĚĂƌĚƐ ŽĂƌĚ ;'^Ϳ ĂŶĚ ĂƵĚŝƚĞĚ ŝŶ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ ŐĞŶĞƌĂůůǇ ĂĐĐĞƉƚĞĚ ĂƵĚŝƚŝŶŐ ƐƚĂŶĚĂƌĚ Ɛ ďǇ Ă Ĩŝƌŵ ŽĨ ůŝĐĞŶƐĞĚ ĐĞƌƚŝĨŝĞĚ ƉƵďůŝĐ ĂĐĐŽƵŶƚĂŶƚƐ͘WƵƌƐƵĂŶƚƚŽƚŚĂƚ͕ǁĞŚĞƌĞďǇƐƵďŵŝƚ͕ĨŽƌǇŽƵƌŝŶĨŽƌŵĂƚŝŽŶĂŶĚƌĞǀŝĞǁ͕ƚŚĞŶŶƵĂůŽŵƉƌĞŚĞŶƐŝǀĞ &ŝŶĂŶĐŝĂůZĞƉŽƌƚ;&ZͿĨŽƌƚŚĞŝƚǇŽĨDŽŶƚĞƌĞǇWĂƌŬ͕ĂůŝĨŽƌŶŝĂ͕ĨŽƌƚŚĞĨŝƐĐĂůǇĞĂƌĞŶĚŝŶŐ:ƵŶĞϯϬ͕ϮϬϮϯ͘ dŚŝƐƌĞƉŽƌƚĐŽŶƐŝƐƚƐŽĨŵĂŶĂŐĞŵĞŶƚ͛ƐƌĞƉƌĞƐĞŶƚĂƚŝŽŶƐĐŽŶĐĞƌŶŝŶŐ ƚŚĞĨŝŶĂŶĐĞƐŽĨƚŚĞŝƚǇŽĨDŽŶƚĞƌĞǇWĂƌŬ͘ ŽŶƐĞƋƵĞŶƚůǇ͕ ŵĂŶĂŐĞŵĞŶƚ ĂƐƐƵŵĞƐ ĨƵůů ƌĞƐƉŽŶƐŝďŝůŝƚǇ ĨŽƌ ƚŚĞ ĐŽŵƉůĞƚĞŶĞƐƐ ĂŶĚ ƌĞůŝĂďŝůŝƚǇ ŽĨ Ăůů ƚŚĞ ŝŶĨŽƌŵĂƚŝŽŶ ƉƌĞƐĞŶƚĞĚ ŝŶ ƚŚŝƐ ƌĞƉŽƌƚ͘ dŽ ƉƌŽǀŝĚĞ Ă ƌĞĂƐŽŶĂďůĞ ď ĂƐŝƐ ĨŽƌ ŵĂŬŝŶŐ ƚŚĞƐĞ ƌĞƉƌĞƐĞŶƚĂƚŝŽŶƐ͕ ŵĂŶĂŐĞŵĞŶƚŚĂƐĞƐƚĂďůŝƐŚĞĚĂŶŝŶƚĞƌŶĂůĐŽŶƚƌŽůƐǇƐƚĞŵƚŚĂƚŝƐĚ ĞƐŝŐŶĞĚƚŽƉƌŽƚĞĐƚŝƚǇĂƐƐĞƚƐĂŶĚƚŽĞŶƐƵƌĞ ƚŚĂƚƚŚĞĂĐĐŽƵŶƚŝŶŐƌĞĐŽƌĚƐƉƌŽǀŝĚĞĂƌĞůŝĂďůĞďĂƐŝƐĨŽƌƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘ĞĐĂƵƐĞ ƚŚĞ ĐŽƐƚ ŽĨ ŝŶƚĞƌŶĂů ĐŽŶƚƌŽů ƐŚŽƵůĚ ŶŽƚ ĞǆĐĞĞĚ ĂŶƚŝĐŝƉĂƚĞĚ ďĞŶĞĨŝƚƐ͕ ƚŚĞ ŽďũĞĐƚŝǀĞ ŝƐ ƚŽ ƉƌŽǀŝĚĞ ƌĞĂƐŽŶĂďůĞ͕ ƌĂƚŚĞƌƚŚĂŶĂďƐŽůƵƚĞ͕ĂƐƐƵƌĂŶĐĞƚŚĂƚ
ƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐǁŝůůďĞĨƌĞĞŽĨĂŶǇŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚƐ͘Ɛ ŵĂŶĂŐĞŵĞŶƚ͕ǁĞĂƐƐĞƌƚƚŚĂƚ͕ƚŽƚŚĞďĞƐƚŽĨŽƵƌŬŶŽǁůĞĚŐĞĂŶĚďĞ ůŝĞĨ͕ƚŚŝƐĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝƐĐŽŵƉůĞƚĞĂŶĚ ƌĞůŝĂďůĞŝŶĂůůŵĂƚĞƌŝĂůƌĞƐƉĞĐƚƐ͘
dŚĞŝƚǇ͛ƐĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŚĂǀĞďĞĞŶĂƵĚŝƚĞĚďǇdŚĞWƵŶ'ƌ ŽƵƉ>>W͕ĂĨƵůůǇůŝĐĞŶƐĞĚĂŶĚƋƵĂůŝĨŝĞĚƉƵďůŝĐ ĂĐĐŽƵŶƚŝŶŐ ĨŝƌŵƚŚĂƚƉĞƌĨŽƌŵƐĂƵĚŝƚƐŽĨƚŚĞ^ƚĂƚĞĂŶĚůŽĐĂůŐŽǀ ĞƌŶŵĞŶƚƐǁŝƚŚŝŶƚŚĞ^ƚĂƚĞŽĨĂůŝĨŽƌŶŝĂ͘dŚĞ ŐŽĂůŽĨƚŚĞŝŶĚĞƉĞŶĚĞŶƚĂƵĚŝƚǁĂƐƚŽƉƌŽǀŝĚĞƌĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞƚŚĂƚƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŽĨƚŚĞŝƚǇŽĨ DŽŶƚĞƌĞǇ WĂƌŬ ĨŽƌ ƚŚĞ ĨŝƐĐĂů ǇĞĂƌ ĞŶĚŝŶŐ :ƵŶĞ ϯϬ͕ ϮϬϮϯ͕ ĨĂŝƌůǇ ƐƚĂƚĞ ƚŚĞ ŝƚǇΖƐ ĨŝŶĂŶĐŝĂů ƉŽƐŝƚŝŽŶ͘ dŚĞ ŝŶĚĞƉĞŶĚĞŶƚĂƵĚŝƚŝŶǀŽůǀĞƐĞǆĂŵŝŶŝŶŐ͕ŽŶĂƚĞƐƚďĂƐŝƐ͕ĞǀŝĚĞŶĐĞƐƵƉƉŽƌƚŝŶŐƚŚĞĂŵŽƵŶƚƐĂŶĚĚŝƐĐůŽƐƵƌĞƐŝŶƚŚĞ ĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͖ĂƐƐĞƐƐŝŶŐƚŚĞĂĐĐŽƵŶƚŝŶŐƉƌŝŶĐŝƉůĞƐƵƐĞĚĂŶĚƐŝŐŶŝĨŝĐĂŶƚĞƐƚŝŵĂƚĞƐŵĂĚĞďǇŵĂŶĂŐĞŵĞŶƚ͖ ĂŶĚĞǀĂůƵĂƚŝŶŐƚŚĞŽǀĞƌĂůůĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƉƌĞƐĞŶƚĂƚŝŽŶ͘dŚĞŝŶĚĞƉĞŶĚĞŶƚĂƵĚŝƚŽƌƐĐŽŶĐůƵĚĞĚ͕ďĂƐĞĚƵƉŽŶ ƚŚĞĂƵĚŝƚ͕ƚŚĂƚƚŚĞƌĞǁĂƐĂƌĞĂƐŽŶĂďůĞďĂƐŝƐĨŽƌƌĞŶĚĞƌŝŶŐĂŶƵŶŵŽĚŝĨŝĞĚŽƉŝŶŝŽŶƚŚĂƚƚŚĞŝƚǇŽĨDŽŶƚĞƌĞǇ WĂƌŬ͛Ɛ ϮϬϮϮͲϮϯ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ ĂƌĞ ĨĂŝƌůǇ ƉƌĞƐĞŶƚĞĚ ŝŶ ĐŽŶĨŽƌŵŝƚǇ ǁŝƚŚ ŐĞŶĞƌĂůůǇ ĂĐĐĞƉƚĞĚ ĂĐĐŽƵŶƚŝŶŐ ƉƌŝŶĐŝƉůĞƐ;'WͿ͘dŚĞŝŶĚĞƉĞŶĚĞŶƚĂƵĚŝƚŽƌƐ͛ƌĞƉŽƌƚŝƐƉƌĞƐĞŶƚĞĚĂƐƚŚĞĨŝƌƐƚĐŽŵƉŽŶĞŶƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƐĞĐƚŝŽŶ ŽĨƚŚŝƐƌĞƉŽƌƚ͘
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viii

DĂŶĂŐĞŵĞŶƚŝƐĐƵƐƐŝŽŶΘŶĂůǇƐŝƐ

ŶĂƌƌĂƚŝǀĞ ŝŶƚƌŽĚƵĐƚŝŽŶ͕ ŽǀĞƌǀŝĞǁ͕ ĂŶĚ ĂŶĂůǇƐŝƐ ĂĐĐŽŵƉĂŶǇ ƚŚĞďĂƐŝĐ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ ŝŶ ƚŚĞ ĨŽƌŵ ŽĨ DĂŶĂŐĞŵĞŶƚΖƐŝƐĐƵƐƐŝŽŶĂŶĚŶĂůǇƐŝƐ;DΘͿ͘dŚŝƐůĞƚƚĞƌŽĨƚƌĂ ŶƐŵŝƚƚĂůŝƐĚĞƐŝŐŶĞĚƚŽĐŽŵƉůĞŵĞŶƚDΘ ĂŶĚƐŚŽƵůĚďĞƌĞĂĚŝŶĐŽŶũƵŶĐƚŝŽŶǁŝƚŚŝƚ͘dŚĞŝƚǇΖƐDΘŝŵŵĞ ĚŝĂƚĞůǇ ĨŽůůŽǁƐƚŚĞŝŶĚĞƉĞŶĚĞŶƚĂƵĚŝƚŽƌΖƐ ƌĞƉŽƌƚŝŶƚŚĞĨŝŶĂŶĐŝĂůƐĞĐƚŝŽŶŽĨƚŚĞ&Z͘

WƌŽĨŝůĞŽĨƚŚĞŝƚǇŽĨDŽŶƚĞƌĞǇWĂƌŬ

dŚĞŝƚǇŽĨDŽŶƚĞƌĞǇWĂƌŬǁĂƐŝŶĐŽƌƉŽƌĂƚĞĚŝŶϭϵϭϲĂƐĂŐĞŶĞƌĂů ůĂǁĐŝƚǇ͘ dŚĞŶĂŵĞŽĨΗDŽŶƚĞƌĞǇWĂƌŬΗǁĂƐ ƚĂŬĞŶĨƌŽŵŽůĚŐŽǀĞƌŶŵĞŶƚŵĂƉƐƚŚĂƚĚĞƐĐƌŝďĞĚƚŚĞŽĂŬͲĐŽǀĞƌĞĚŝŶĐůŝŶĞƐƚŚĂƚŵĂĚĞƵƉƚŚĞĂƌĞĂĂƐDŽŶƚĞƌĞǇ ,ŝůůƐ͘dŚĞŝƚǇŽƉĞƌĂƚĞƐƵŶĚĞƌƚŚĞĐŽƵŶĐŝůͲŵĂŶĂŐĞƌĨŽƌŵŽĨŵƵŶŝĐŝƉĂůŐŽǀĞƌŶŵĞŶƚ͘dŚĞŝƚǇŽƵŶĐŝůĐŽŶƐŝƐƚƐŽĨ ĨŝǀĞŵĞŵďĞƌƐƌĞƉƌĞƐĞŶƚŝŶŐĞĂĐŚŽĨƚŚĞĨŝǀĞĚŝƐƚƌŝĐƚƐ͕ĂŶĚĞĂĐŚƐĞƌǀĞƐĂƚĞƌŵŽĨĨŽƵƌǇĞĂƌƐ͘ dŚĞŝƚǇůĞƌŬĂŶĚ ƚŚĞŝƚǇdƌĞĂƐƵƌĞƌĂƌĞĂůƐŽĞůĞĐƚĞĚďǇƚŚĞĐŝƚŝǌĞŶƐ͘DŽŶƚĞƌĞǇW ĂƌŬKƌĚŝŶĂŶĐĞϮϬϵϲŝŵƉŽƐĞƐƚĞƌŵůŝŵŝƚƐŽĨŶŽ ŵŽƌĞƚŚĂŶƚǁŽĐŽŶƐĞĐƵƚŝǀĞƚĞƌŵƐŽŶĂůůĞůĞĐƚĞĚŽĨĨŝĐŝĂůƐ͘dŚĞŝƚǇŽƵŶĐŝůĂƉƉŽŝŶƚƐƚŚĞŝƚǇDĂŶĂŐĞƌ͕ǁŚŽŚĂƐ ƚŚĞ ƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐ ŽĨ ŽǀĞƌƐĞĞŝŶŐ ŝƚǇ ƐĞƌǀŝĐĞƐ ĂŶĚ ŽƉĞƌĂƚŝŽŶƐ͘ IŶ ĂĚĚŝƚŝŽŶ ƚŽ ŐŽǀĞƌŶŝŶŐ ƚŚĞ ŝƚǇ͕ ƚŚĞ ŝƚǇ ŽƵŶĐŝů ƐĞƌǀĞƐ ĂƐ ƚŚĞ ŐŽǀĞƌŶŝŶŐ ďŽĂƌĚ ŽĨ ƚŚĞ ^ƵĐĐĞƐƐŽƌ ŐĞŶĐǇ ŽĨ ƚŚĞ &ŽƌŵĞƌ ZĞĚĞǀĞůŽƉŵĞŶƚ ŐĞŶĐǇ͕ ƚŚĞ DŽŶƚĞƌĞǇWĂƌŬ&ŝŶĂŶĐŝŶŐƵƚŚŽƌŝƚǇ͕ƚŚĞ,ŽƵƐŝŶŐƵƚŚŽƌŝƚǇ͕ĂŶĚƚŚĞ'ĞŽůŽŐŝĐ,ĂǌĂƌĚďĂƚĞŵĞŶƚŝƐƚƌŝĐƚ͘dŚĞ ĨŝŶĂŶĐŝĂůŝŶĨŽƌŵĂƚŝŽŶŽĨƚŚĞƐĞĐŽŵƉŽŶĞŶƚƵŶŝƚƐŚĂƐďĞĞŶŝŶĐůƵĚĞĚǁŝƚŚƚŚĞŝƚǇ͘WůĞĂƐĞƐĞĞEŽƚĞϭƚŽ&ŝŶĂŶĐŝĂů ^ƚĂƚĞŵĞŶƚƐĨŽƌĚŝƐĐƵƐƐŝŽŶŽĨƚŚĞĐŽŵƉŽŶĞŶƚƵŶŝƚƐ͘

DŽŶƚĞƌĞǇWĂƌŬŝƐĂĨƵůůͲƐĞƌǀŝĐĞŝƚǇ͕ŽĨĨĞƌŝŶŐŝƚƐƌĞƐŝĚĞŶƚƐĂ ǁŝĚĞƌĂŶŐĞŽĨŵƵŶŝĐŝƉĂůƐĞƌǀŝĐĞƐ͕ŝŶĐůƵĚŝŶŐƉƵďůŝĐ ƐĂĨĞƚǇ͕ƐƚƌĞĞƚƐ͕ƐĂŶŝƚĂƚŝŽŶ͕ǁĂƚĞƌĂŶĚƐĞǁĞƌƐĞƌǀŝĐĞƐ͕ĚĞǀĞůŽƉŵ ĞŶƚĂŶĚƉƵďůŝĐ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞŝŵƉƌŽǀĞŵĞŶƚƐ͕ ĐƵůƚƵƌĞĂŶĚůĞŝƐƵƌĞƉƌŽŐƌĂŵŵŝŶŐ͕ĂŶĚŐĞŶĞƌĂůŐŽǀĞƌŶŵĞŶƚĨƵŶĐƚŝŽ ŶƐ͘dŚĞŝƚǇƐƚƌŝǀĞƐƚŽƉƌŽǀŝĚĞŚŝŐŚͲƋƵĂůŝƚǇ ƉƵďůŝĐ ƐĞƌǀŝĐĞƐ ƚŚĂƚ ĞŵƉŚĂƐŝǌĞ ŽƌŐĂŶŝǌĂƚŝŽŶĂů ĞĨĨŝĐŝĞŶĐǇ͕ ŝŶĨƌĂ ƐƚƌƵĐƚƵƌĞ ŝŶǀĞƐƚŵĞŶƚ͕ ĂŶĚ ĞĐŽŶŽŵŝĐ ĚĞǀĞůŽƉŵĞŶƚ͘/ŶϮϬϭϳ͕ƚŚĞŝƚǇǁĂƐůŝƐƚĞĚĂƐ ŽŶĞŽĨƚŚĞƚŽƉƚŚƌĞĞďĞƐƚƉůĂĐĞƐƚŽůŝǀĞŝŶŵĞƌŝĐĂďǇƚŚĞDŽŶĞǇ DĂŐĂǌŝŶĞ͘

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ĐŽŶŽŵŝĐŽŶĚŝƚŝŽŶ

DŽŶƚĞƌĞǇWĂƌŬŝƐůŽĐĂƚĞĚƐŝǆŵŝůĞƐĞĂƐƚŽĨ>ŽƐŶŐĞůĞƐĂƚƚŚĞǁ ĞƐƚĞƌŶŐĂƚĞǁĂǇƚŽƚŚĞ^ĂŶ'ĂďƌŝĞůsĂůůĞǇ͘/ƚ ĞŶĐŽŵƉĂƐƐĞƐ ĂŶ ĂƌĞĂ ŽĨ ϳ͘ϳϯ ƐƋƵĂƌĞ ŵŝůĞƐ ǁŝƚŚ Ă ƉŽƉƵůĂƚŝŽŶ ŽĨ ĂƉƉƌŽǆŝŵĂƚĞůǇ ϲϭ͕ϬϬϬ͘ DŽŶƚĞƌĞǇ WĂƌŬ ŝƐ ƉƌŝŵĂƌŝůǇĂƌĞƐŝĚĞŶƚŝĂůĐŽŵŵƵŶŝƚǇ͕ǁŝƚŚϳϴйŽĨŝƚƐůĂŶĚǌŽŶĞĚĨ ŽƌƐŝŶŐůĞĂŶĚŵƵůƚŝƉůĞĨĂŵŝůǇŚŽƵƐŝŶŐ͘/ŶϮϬϮϯ͕ ƚŚĞŵĞĚŝĂŶƐĂůĞƐƉƌŝĐĞŽĨĚĞƚĂĐŚĞĚƐŝŶŐůĞͲĨĂŵŝůǇŚŽŵĞƐŝŶDŽŶƚĞ ƌĞǇWĂƌŬǁĂƐΨϵϬϭ͕ϴϭϴ͘dŚŝƐŵĞĚŝĂŶƐĂůĞƐ ƉƌŝĐĞǁĂƐϬ͘ϳйďĞůŽǁƚŚĞϮϬϮϮŵĞĚŝĂŶƐĂůĞƐƉƌŝĐĞŽĨΨϵϬϴ͕ϱϬϬ͘d ŚĞŶƵŵďĞƌŽĨĚĞƚĂĐŚĞĚƐŝŶŐůĞͲĨĂŵŝůǇŚŽŵĞ ƐĂůĞƐĨŽƌϮϬϮϯǁĂƐůĞƐƐƚŚĂŶϮϬϮϮ͕ǁŚŝĐŚŝƐĐŽŶƐŝƐƚĞŶƚǁŝƚŚǁŚĂƚŝƐƐĞĞŶŝŶŵŽƐƚĂƌĞĂƐŽĨĂůŝĨŽƌŶŝĂ͘dŚŝƐĚĞĐůŝŶĞ ŝƐĚƵĞƚŽŚŝŐŚŝŶƚĞƌĞƐƚƌĂƚĞƐ͘

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ƵƌƌĞŶƚ ĞĐŽŶŽŵŝĐ ĐŽŶĚŝƚŝŽŶƐ ŽĨ ŚŝŐŚ ŝŶĨůĂƚŝŽŶ͕ ŚŝŐŚ ŝŶƚĞƌĞƐƚ ƌĂ ƚĞƐ ĂŶĚ ĂŶ ŽǀĞƌĂůů ĚĞĐƌĞĂƐĞ ŝŶ ĐŽŶƐƵŵĞƌ ĐŽŶĨŝĚĞŶĐĞŚĂǀĞƌĞƐƵůƚĞĚŝŶƚĂǆƌĞǀĞŶƵĞƐůŽǁĚŽǁŶƐ͘ŽŶƐƵŵĞƌƐƉĞŶĚŝŶŐŝŶĚŝƐĐƌĞƚŝŽŶĂƌǇĂƌĞĂƐ͕ƐƵĐŚĂƐŐĞŶĞƌĂů ĐŽŶƐƵŵĞƌŐŽŽĚƐ͕ƚŚĞŝƚǇ͛ƐůĂƌŐĞƐƚďƵƐŝŶĞƐƐƐĞĐƚŽƌ͕ĞǆƉĞƌŝĞŶĐĞĚĚĞĐƌĞĂƐĞƐ͘dŚŝƐĐĂƚĞŐŽƌǇŝŶĐůƵĚĞƐƐƵďͲƐĞĐƚŽƌƐ ƐƵĐŚĂƐĨĂŵŝůǇĂƉƉĂƌĞů͕ĚŝƐĐŽƵŶƚƐƚŽƌĞƐ͕ƐŚŽĞƐƐƚŽƌĞƐ͕ĂŶĚŽƚŚĞ ƌƐƉĞĐŝĂůƚǇƐƚŽƌĞƐ͘ZĞƐƚĂƵƌĂŶƚƐŚĂǀĞďĞĞŶƚŚĞ ďƌŝŐŚƚƐƉŽƚĂƐĐŽŶƐƵŵĞƌƐĐŽŶƚŝŶƵĞĚƚŽĞŶũŽǇƚŚĞĂďŝůŝƚǇƚŽďĞŽ ƵƚƐŝĚĞďǇƉƵƐŚŝŶŐƚŚĞƐĞĐƚŽƌƚŽĂŶŝŶĐƌĞĂƐĞŝŶ ƌĞǀĞŶƵĞ͘&ŽŽĚΘĚƌƵŐƐ ĞǆƉĞƌŝĞŶĐĞĚĂƐůŝŐŚƚƵƉƚŝĐŬĚƵĞƚŽŝŶĨůĂƚ ŝŽŶĂƌǇŝŵƉĂĐƚƐŽŶŐƌŽĐĞƌǇƐƚŽƌĞƐĂŶĚŽƚŚĞƌ ŐƌŽĐĞƌǇͲƌĞůĂƚĞĚŝƚĞŵƐ͘dŚĞŝƚǇ͛ƐƐŚĂƌĞŽĨƚŚĞĐŽƵŶƚǇǁŝĚĞƵƐĞƚĂǆƉŽŽůĚĞĐƌĞĂƐĞĚϭ͘ϱйǁŚĞŶĐŽŵƉĂƌĞĚƚŽƚŚĞ ƐĂŵĞƉĞƌŝŽĚŝŶƚŚĞƉƌŝŽƌǇĞĂƌ͘
dŚƌŽƵŐŚƚŚĞ&ĞĚĞƌĂůŵĞƌŝĐĂŶZĞƐĐƵĞWůĂŶ;ZWͿ͕ƚŚĞŝƚǇǁĂƐĂůůŽĐĂƚĞĚΨϭϱŵŝůůŝŽŶĨŽƌKs/ͲϭϵƉĂŶĚĞŵŝĐ ƌĞĐŽǀĞƌǇĞĨĨŽƌƚƐ͘dŚĞĨŝƌƐƚůƵŵƉƐƵŵǁĂƐƌĞĐĞŝǀĞĚŝŶ:ƵŶĞϮϬϮϭĂŶĚƚŚĞƐĞĐŽŶĚĂŶĚĨŝŶĂůůƵŵƉƐƵŵǁĂƐƌĞĐĞŝǀĞĚ ŝŶ:ƵŶĞϮϬϮϮ͘dŚĞŝƚǇƵƐĞƐZWĨƵŶĚƐƚŽǁĂƌĚƐŐŽǀĞƌŶŵĞŶƚĂůƐĞƌ ǀŝĐĞƐŝŶĐůƵĚŝŶŐƌĞŚŝƌŝŶŐƉĂƌƚͲƚŝŵĞĂŶĚĨƵůůͲ ƚŝŵĞƐƚĂĨĨƚŽƉƌĞͲƉĂŶĚĞŵŝĐůĞǀĞůƐ͕ĂŶĚŝŶǀĞƐƚŝŶŐŝŶƉƵďůŝĐƐĂĨĞƚǇĂŶĚĐǇďĞƌƐĞĐƵƌŝƚǇ͘
&ŝŶĂŶĐŝĂůKǀĞƌǀŝĞǁĂŶĚWŽůŝĐŝĞƐ

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dŚĞŝƚǇĐŽŶƚŝŶƵĞƐƚŚĞƌĞƉŽƌƚŝŶŐƌĞƋƵŝƌĞŵĞŶƚƉĞƌ'^^ƚĂƚĞŵĞŶƚ EŽ͘ϲϴĂŶĚϳϭ͕ĨŽƌƉĞŶƐŝŽŶůŝĂďŝůŝƚŝĞƐ͘dŚĞ ŝƚǇ ĂůƐŽ ĐŽŶƚŝŶƵĞƐ ƚŚĞ ƌĞƉŽƌƚŝŶŐ ĨŽƌ '^ ^ƚĂƚĞŵĞŶƚ EŽ͘ ϳϱ͕ Đ ĐŽƵŶƚŝŶŐ ĂŶĚ &ŝŶĂŶĐŝĂů ZĞƉŽƌƚŝŶŐ ĨŽƌ WŽƐƚĞŵƉůŽǇŵĞŶƚĞŶĞĨŝƚƐKƚŚĞƌdŚĂŶWĞŶƐŝŽŶƐ͕ĨŽƌŽƚŚĞƌƉŽƐƚĞŵƉů ŽǇŵĞŶƚďĞŶĞĨŝƚƐůŝĂďŝůŝƚŝĞƐŽŶƚŚĞĨĂĐĞŽĨ ƚŚĞ^ƚĂƚĞŵĞŶƚŽĨEĞƚWŽƐŝƚŝŽŶ͘
ǆĐůƵĚŝŶŐĂůůƉŽƐƚĞŵƉůŽǇŵĞŶƚďĞŶĞĨŝƚƐ;ƉĞŶƐŝŽŶƐĂŶĚKW
ͿůŝĂďŝůŝƚŝĞƐ͕ƚŚĞŝƚǇΖƐ
ĞŶĚŽĨǇĞĂƌĨŝŶĂŶĐŝĂůĐŽŶĚŝƚŝŽŶĨŽƌϮϬϮϮͲϮϯĚŝƐƉůĂǇĞĚĂƉŽƐŝƚŝǀĞŽƉĞƌĂƚŝŶŐƉŽƐŝƚŝŽŶĚƵĞƚŽƚŚĞŝƚǇΖƐĐŽŶƐĞƌǀĂƚŝǀĞ ĨŝŶĂŶĐŝĂůƉůĂŶŶŝŶŐĂŶĚŵĂŶĂŐĞŵĞŶƚ͘

ƐƚŚĞŝƚǇ͛ƐĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚƐĐŽŶƚŝŶƵĞƚŽĞǆƉĂŶĚĂŶĚŵŽǀĞĨŽƌǁĂƌĚƚŚĂƚǁŝůůŐĞŶĞƌĂƚĞĂůĂƌŐĞŶƵŵďĞƌŽĨ ŶĞǁũŽďƐĂŶĚƚĂǆƌĞǀĞŶƵĞƐĨŽƌƚŚĞŝƚǇ͘

dŚĞĂŶŶƵĂůďƵĚŐĞƚƐĞƌǀĞƐĂƐƚŚĞĨŽƵŶĚĂƚŝŽŶĨŽƌƚŚĞŝƚǇ͛ƐĨŝŶĂŶĐŝĂůƉůĂŶŶŝŶŐĂŶĚĐŽŶƚƌŽů͘dŚĞŝƚǇƐƚĂƌƚƐŝƚƐ ďƵĚŐĞƚƉƌŽĐĞƐƐŝŶ:ĂŶƵĂƌǇ͘dŚĞďƵĚŐĞƚĚĞǀĞůŽƉŵĞŶƚŝƐďĂƐĞĚŽŶƚŚĞŝƚǇΖƐĨŝǀĞͲǇĞĂƌĐŝƚǇǁŝĚĞŐŽĂůƐ͗
ƌĞĂƚĞĂĐůĞĂŶĞƌĂŶĚŵŽƌĞĂƚƚƌĂĐƚŝǀĞŝƚǇ

ŶŚĂŶĐĞĐŽŵŵƵŶŝƚǇĂŶĚŶĞŝŐŚďŽƌŚŽŽĚĚĞǀĞůŽƉŵĞŶƚ

ŶƐƵƌĞƋƵĂůŝƚǇĐƵƐƚŽŵĞƌƐĞƌǀŝĐĞ
&ŽĐƵƐŽŶZĞĚĞǀĞůŽƉŵĞŶƚ
/ŵƉƌŽǀĞĂŶĚĚĞǀĞůŽƉƚŚĞŝƚǇ͛ƐŝŶĨƌĂƐƚƌƵĐƚƵƌĞ
/ŵƉƌŽǀĞƐĞƌǀŝĐĞƐƚŚƌŽƵŐŚƚŚĞĞĨĨĞĐƚŝǀĞƵƐĞŽĨƚĞĐŚŶŽůŽŐǇ WƌĂĐƚŝĐĞƐŽƵŶĚĨŝƐĐĂůŵĂŶĂŐĞŵĞŶƚ
>ŝǀĞǁŝƚŚŝŶŽƵƌŵĞĂŶƐǁŚŝůĞŝŶǀĞƐƚŝŶŐŝŶƚŚĞĨƵƚƵƌĞ
/ŶǀĞƐƚŝŶƚŚĞŝƚǇ͛ƐĞŵƉůŽǇĞĞƐƚŚƌŽƵŐŚĚĞǀĞůŽƉŵĞŶƚĂŶĚƌĞĐŽŐŶŝƚŝŽŶǭ
dŚĞƐĞŐŽĂůƐƐĞƌǀĞĂƐƚŚĞŐƵŝĚĞůŝŶĞƐƚŽŝĚĞŶƚŝĨǇĐŽŵŵƵŶŝƚǇƉƌŝŽƌ ŝƚŝĞƐĂŶĚĞĨĨĞĐƚŝǀĞůǇĂůŝŐŶƌĞƐŽƵƌĐĞƐƚŽĂĐŚŝĞǀĞ

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ŽƵƌ ŵŝƐƐŝŽŶ͘ dŚĞ ŝƚǇ DĂŶĂŐĞƌ ƉƌĞƐĞŶƚƐ ƚŚĞ ƉƌŽƉŽƐĞĚ ďƵĚŐĞƚ ƚŽ ƚŚĞ ŝƚǇ ŽƵŶĐŝů ĨŽƌ ƌĞǀŝĞǁ ƉƌŝŽƌ ƚŽ ƚŚĞ ďĞŐŝŶŶŝŶŐŽĨĞĂĐŚĨŝƐĐĂůǇĞĂƌĂŶĚƚŚĞŝƚǇŽƵŶĐŝůŚŽůĚƐƉƵďůŝĐ ŚĞĂƌŝŶŐƐƚŽƌĞǀŝĞǁĂŶĚĂƉƉƌŽǀĞƚŚĞƉƌŽƉŽƐĞĚ ďƵĚŐĞƚ͘dŚĞĨŝŶĂůĂĚŽƉƚĞĚďƵĚŐĞƚ͕ƌĞĨůĞĐƚŝŶŐƚŚĞŝƚǇŽƵŶĐŝůΖƐĚŝƌĞĐƚŝŽŶƐ͕ŝƐƉƵďůŝƐŚĞĚŶŽůĂƚĞƌƚŚĂŶ:ƵŶĞϯϬ͘ >ĞŐĂů ďƵĚŐĞƚĂƌǇ ĐŽŶƚƌŽů ĨŽƌ ŽƉĞƌĂƚŝŶŐ ďƵĚŐĞƚƐ ŝƐ ĞǆĞƌĐŝƐĞĚ Ăƚ ƚŚĞ ĚĞƉĂƌƚŵĞŶƚ ĂŶĚ ĨƵŶĚ ůĞǀĞů͘ dŚĞ ŝƚǇ ŝƐ ƌĞƋƵŝƌĞĚƚŽĂĚŽƉƚĂďĂůĂŶĐĞĚďƵĚŐĞƚĨŽƌŝƚƐ'ĞŶĞƌĂů&ƵŶĚĂƚƚŚĞďĞŐŝŶŶŝŶŐŽĨƚŚĞĨŝƐĐĂůǇĞĂƌ͘ &ŽƌŵĂů ďƵĚŐĞƚĂƌǇ ŝŶƚĞŐƌĂƚŝŽŶ ĂŶĚ ĞŶĐƵŵďƌĂŶĐĞ ĂĐĐŽƵŶƚŝŶŐ ĂƌĞ ĞŵƉůŽǇĞĚ ĂƐ ŵĂŶĂŐĞŵĞŶƚ ĐŽŶƚƌŽů ĚĞǀŝĐĞƐ ĚƵƌŝŶŐƚŚĞǇĞĂƌĨŽƌĂůůĨƵŶĚƐ͘
dŚĞ ϮϬϮϮͲϮϯ ĚŽƉƚĞĚ ƵĚŐĞƚ ŝŶĐůƵĚĞƐ Ă ĐŽŶƐĞƌǀĂƚŝǀĞ ĨŝƐĐĂů ƐƉĞŶĚ ŝŶŐ ƉůĂŶ ĂŶĚ ƌĞĨůĞĐƚƐ ΨϮϴ ŵŝůůŝŽŶ ĨŽƌ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ĂŶĚ ĐĂƉŝƚĂů ŝŵƉƌŽǀĞŵĞŶƚƐ͕ ƐƉĞĐŝĨŝĐĂůůǇ ǁĂƚĞƌ͕ ƐĞ ǁĞƌ͕ ƐƚƌĞĞƚ ƉƌŽũĞĐƚƐ ĂŶĚ ƉƵďůŝĐ ƐĂĨĞƚǇ ĞƋƵŝƉŵĞŶƚ͘dŚĞŝƚǇĐŽŶƚŝŶƵĞƐŝŵƉƌŽǀŝŶŐĞĨĨŝĐŝĞŶĐŝĞƐďǇĂůŝŐŶŝŶŐĐůŽƐĞůǇƌĞůĂƚĞĚƉƌŽŐƌĂŵƐƚŽĂĐŚŝĞǀĞůŽŶŐͲƚĞƌŵ ĨŝŶĂŶĐŝĂůƐƚĂďŝůŝƚǇ͘
DĂũŽƌĐĐŽŵƉůŝƐŚŵĞŶƚƐ
dŚĞŝƚǇŽĨDŽŶƚĞƌĞǇWĂƌŬΖƐŵĂũŽƌĂĐĐŽŵƉůŝƐŚŵĞŶƚƐĚƵƌŝŶŐƚŚĞ&ŝƐĐĂůzĞĂƌϮϬϮϮͲϮϯ͕ǁŚŝĐŚĚŝƐƉůĂǇĞĚƐŝŐŶŝĨŝĐĂŶƚ ĨŝŶĂŶĐŝĂůŝŵƉĂĐƚƐ͕ŝŶĐůƵĚĞĚ͗
¾ DŽŶƚĞƌĞǇWĂƌŬWƵďůŝĐ^ĂĨĞƚǇƌĞƐƉŽŶĚĞĚƚŽƚŚĞ:ĂŶƵĂƌǇϮϭ͕ϮϬϮϯ͕ DĂƐƐ^ŚŽŽƚŝŶŐ/ŶĐŝĚĞŶƚ͘ŝƚǇƐƚĂĨĨƉƌŽĚƵĐĞĚ͕ ĐƌĞĂƚĞĚ͕ ĂŶĚ ĚŝƐƐĞŵŝŶĂƚĞĚ ǁĞďƐŝƚĞ ĂůĞƌƚƐ͕ ƐŽĐŝĂů ŵĞĚŝĂ͕ ǀŝĚĞŽ ŵĞƐƐĂŐŝŶŐ ĂŶĚ ŶĞǁƐ ƌĞůĞĂƐĞƐ ƌĞŐĂƌĚŝŶŐ ƚŚĞ ƐŚŽŽƚŝŶŐŝŶĐŝĚĞŶƚ͘
¾ WƵďůŝĐ ƐĂĨĞƚǇ ĚĞƉĂƌƚŵĞŶƚƐ ĂŶĚ ŝƚǇ ƐƚĂĨĨ ĐŽůůĂďŽƌĂƚĞĚ ƚŽ ŵĂŝŶƚĂŝŶ ƐĂĨĞƚǇ ĂŶĚ ŬĞĞƉ ƚŚĞ ƉƵďůŝĐ ĂǁĂƌĞ ĂŶĚ ŝŶĨŽƌŵĞĚŽĨƚŚĞǀŝƐŝƚƐďǇsŝĐĞWƌĞƐŝĚĞŶƚ<ĂŵĂůĂ,ĂƌƌŝƐĂŶĚWƌĞƐŝĚĞŶƚ:ŽĞŝĚĞŶƚŽDŽŶƚĞƌĞǇWĂƌŬ͘ ¾ ŽŶĚƵĐƚĞĚĂ'ĞŶĞƌĂůĂŶĚ^ƉĞĐŝĂů
ůĞĐƚŝŽŶŝŶEŽǀĞŵďĞƌϮϬϮϮƚŽĨŝůůƚŚƌĞĞŝƚǇŽƵŶĐŝůƉŽƐŝƚŝŽŶƐŝŶŝƐƚƌŝĐƚEŽƐ͘ ϭ͕ϯ͕ϱ͖ĂŝƚǇůĞƌŬƉŽƐŝƚŝŽŶ͖ĂŝƚǇdƌĞĂƐƵƌĞƌƉŽƐŝƚŝŽŶ͖ĂŶĚĂŐĞŶĞƌĂůƚĂǆƉƌŽƉŽƐŝƚŝŽŶ͕DĞĂƐƵƌĞDW͘ ¾ /ŵƉůĞŵĞŶƚĞĚĂƉƌŽĐĞƐƐĨŽƌĚŝŐŝƚĂůƐŝŐŶĂƚƵƌĞƚŽĨĂĐŝůŝƚĂƚĞŽƌŐĂŶŝǌĂƚŝŽŶĂůĞĨĨĞĐƚŝǀĞŶĞƐƐĂŶĚĞĨĨŝĐŝĞŶĐǇƚŽƌĞĚƵĐĞ ƉĂƉĞƌǁĂƐƚĞ͘
¾ /ŵƉůĞŵĞŶƚĞĚĂƌŽďƵƐƚĚŝƐĂƐƚĞƌƌĞĐŽǀĞƌǇƉůĂŶ͕ƌĞŵŽǀĞĚĂůůtŝŶĚŽǁƐϳĂŶĚŽůĚĞƌĐŽŵƉƵƚĞƌƐŽĨĨƚŚĞŶĞƚǁŽƌŬ͕ ƵƉŐƌĂĚĞĚ ŝƚǇ tŝͲ&ŝ ĨƌŽŵ ϮϬϬDďƉƐ ƚŽ ϭ'ďƉƐ͕ ĂŶĚ ŝŶĐƌĞĂƐĞĚ ĐǇďĞƌ ƐĞĐƵƌŝƚǇ ƉŽƐŝƚŝŽŶ ŽĨ ĞŶƚŝƌĞ ŝƚǇ /d ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͘/ŶƐƚĂůůĞĚŝƚǇǁŝĚĞĐĂŵĞƌĂƐƚŽĂůůĐŝƚǇŽǁŶĞĚƉƌŽƉĞƌƚǇ͘ ¾ ŽŶĚƵĐƚĞĚ Ă ĐŝƚǇǁŝĚĞ ĐůĂƐƐŝĨŝĐĂƚŝŽŶ ĂŶĚ ĐŽŵƉĞŶƐĂƚŝŽŶ ƐƚƵĚǇ ĂŶĚĐŽŵƉůĞƚĞĚ ŶĞŐŽƚŝĂƚŝŽŶƐ ǁŝƚŚ ŽŶĞ ƐǁŽƌŶ ďĂƌŐĂŝŶŝŶŐƵŶŝƚ͘
¾ WůĂŶŶŝŶŐ ŝǀŝƐŝŽŶ ƐƉĞĂƌŚĞĂĚĞĚ Ă ĐŽŵŵƵŶŝƚǇͲǁŝĚĞ ĐĂŵƉĂŝŐŶ ĐĂůůĞĚ͞'ŽŝŶŐ 'ƌĞĞŶ͕͟ ǁŚŝĐŚ ŝŶǀŽůǀĞƐ Ăůů ŝƚǇ ĞƉĂƌƚŵĞŶƚƐ ĂŶĚ ǁŝůů ďĞ ƌŽŽƚĞĚ ŝŶ ƚŚĞ ĐŽŵŵƵŶŝƚǇ ƚŽ ĚĞǀĞůŽƉ ĂŶĚŝŵƉůĞŵĞŶƚ ƐƚƌĂƚĞŐŝĞƐ ǁŚŝĐŚ ǁŝůů ŚĞůƉ ŵŝƚŝŐĂƚĞĐůŝŵĂƚĞĐŚĂŶŐĞĂŶĚĂĚĂƉƚƚŽĐůŝŵĂƚĞĐŚĂŶŐĞƚŚĂƚŝƐĂůƌĞĂĚǇŽĐĐƵƌƌŝŶŐ͘^ƚĂĨĨĐŽŶŶĞĐƚĞĚǁŝƚŚŽǀĞƌϭ͕ϬϬϬ ĐŽŶƐƚŝƚƵĞŶƚƐ ĚƵƌŝŶŐ ŽƵƚƌĞĂĐŚ ƌĞůĂƚĞĚ ƚŽ ƚŚĞ ĐĂŵƉĂŝŐŶ͕ ƚŚƌŽƵŐŚ Ă ƐƵƌǀĞǇ͕ ĐŽŵŵƵŶŝƚǇ ǁŽƌŬƐŚŽƉƐ͕ ĂŶĚ ĐŝƚǇ ĞǀĞŶƚƐ͕ĂŵŽŶŐŽƚŚĞƌƐ͘
¾ ƵŝůƚƚŚĞWŽůŝĐĞĞƉĂƌƚŵĞŶƚ͛ƐƵƐŝŶĞƐƐtĂƚĐŚ͕dŽǁŶ,ĂůůŵĞĞƚŝŶŐƐ͕ŝƚŝǌĞŶƐĐĂĚĞŵǇ͕ƐŽĐŝĂůŵĞĚŝĂ͕ĂŶĚǀŝƌƚƵĂů ĞŶŐĂŐĞŵĞŶƚƉƌŽŐƌĂŵƐƚŽƉƌŽĂĐƚŝǀĞůǇĞŶŐĂŐĞǁŝƚŚƚŚĞĐŽŵŵƵŶŝƚǇƚŚƌŽƵŐŚĚŝĂůŽŐƵĞ͕ĐŽůůĂďŽƌĂƚŝŽŶ͕ĐŽŵŵƵŶŝƚǇ

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ŝŶƉƵƚ͕ƉĂŶĞůĚŝƐĐƵƐƐŝŽŶƐ͖ĂŶĚǁŽƌŬĞĚǁŝƚŚĐŽŵŵƵŶŝƚǇůĞĂĚĞƌƐƚŽďĞƚƚĞƌƵŶĚĞƌƐƚĂŶĚƚŚĞŶĞĞĚƐĂŶĚĐŽŶĐĞƌŶƐŽĨ ƚŚĞĐŽŵŵƵŶŝƚǇ͘
¾ ZĞĐĞŝǀĞĚ ĂŶĚ ĂƐƐĞƐƐĞĚ ƚŚĞ ĐŽŵƉůĞƚĞĚ ϱͲǇĞĂƌ ĂůƚƌĂŶƐ ĂůŝĨŽƌŶŝĂZŽĂĚ ^ǇƐƚĞŵ ĂŶĂůǇƐŝƐ͘ dŚŝƐ ĐŽŵƉƌĞŚĞŶƐŝǀĞ ƌĞƉŽƌƚ ŝƐ ŶŽǁ ŝŶĐŽƌƉŽƌĂƚĞĚ ŝŶƚŽ ŽƵƌ >ŽĐĂů ZŽĂĚ ^ĂĨĞƚǇ WůĂŶ͘ ZŽĂ Ě ƐĂĨĞƚǇ ŝŵƉƌŽǀĞŵĞŶƚƐ ĂƌĞ ŶŽǁ ďĞŝŶŐ ŝŵƉůĞŵĞŶƚĞĚďĂƐĞĚŽŶƚŚŝƐƌĞƉŽƌƚ͘&ŽƵƌŽĨƚŚĞƚŽƉƐĞǀĞŶƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐŚĂǀĞďĞĞŶĐŽŵƉůĞƚĞĚ͘ ¾ ŽŵƉůĞƚĞĚ ƐƚƌĞĞƚ ƌĞƐƵƌĨĂĐŝŶŐ ĂŶĚ ƌĞŚĂďŝůŝƚĂƚŝŽŶ ŝŵƉƌŽǀĞŵĞŶƚƐ Ăƚ ǀĂƌŝŽƵƐ ůŽĐĂƚŝŽŶƐ ƚŚƌŽƵŐŚŽƵƚ ƚŚĞ ŝƚǇ ĂƐ ƌĞĐŽŵŵĞŶĚĞĚďǇƚŚĞWĂǀĞŵĞŶƚDĂŶĂŐĞŵĞŶƚ^ƚƵĚǇ͘
¾ /ŶŝƚŝĂƚĞĚ ĂŶ ĞŵĞƌŐĞŶĐǇ ǁĂƚĞƌ ŵĂŝŶ ƌĞƉůĂĐĞŵĞŶƚ ŽĨ ƚŚĞ ĐĂƚĂƐƚƌŽƉŚŝĐ ĨĂŝůŝŶŐ ŽĨ ƚŚĞ ϭϮ͟ ǁĂƚĞƌ ŵĂŝŶ ůŝŶĞ Ăƚ DŽŶƚĞƌĞǇ WĂƐƐ ZŽĂĚ͘ dŚĞ ƵƉŐƌĂĚĞ ŝŵƉƌŽǀĞĚ ǁĂƚĞƌ ƌĞůŝĂďŝůŝƚǇ ĨŽƌ ƚŚĞ ŽŶĞͲŵŝůĞ ƐĞŐŵĞŶƚ ŝŶ ƚŚĞ ĐŽŵŵĞƌĐŝĂů ĚŝƐƚƌŝĐƚ͘
'ĂŶŶ^ƉĞŶĚŝŶŐ>ŝŵŝƚĂƚŝŽŶ
ƌƚŝĐůĞy///ŽĨƚŚĞĂůŝĨŽƌŶŝĂŽŶƐƚŝƚƵƚŝŽŶ͕ǁŚŝĐŚǁĂƐĂĚŽƉƚĞĚ ŝŶϭϵϳϵĂŶĚĂŵĞŶĚĞĚŝŶϭϵϵϬďǇWƌŽƉŽƐŝƚŝŽŶ ϭϭϭ͕ ĞƐƚĂďůŝƐŚĞƐ Ă ůŝŵŝƚ ŽŶ ŐŽǀĞƌŶŵĞŶƚ ƐƉĞŶĚŝŶŐ͘ dŚĞ ůŝŵŝƚ ŝƐ ĐĂůĐƵůĂƚĞĚ ďĂƐĞĚ ŽŶ Ă ŐŽǀĞƌŶŵĞŶƚΖƐ ϭϵϳϴͲϳϵ ĂƉƉƌŽƉƌŝĂƚŝŽŶƐĂĚũƵƐƚĞĚĞĂĐŚǇĞĂƌďǇƚŚĞĐŚĂŶŐĞŝŶĂůŝĨŽƌŶŝĂƉĞƌĐĂƉŝƚĂŝŶĐŽŵĞŽƌƚŚĞĐŚĂŶŐĞŝŶŶŽŶƌĞƐŝĚĞŶƚŝĂů ĂƐƐĞƐƐĞĚǀĂůƵĂƚŝŽŶĐŽŵďŝŶĞĚǁŝƚŚƚŚĞĐŚĂŶŐĞŝŶĐŝƚǇŽƌĐŽƵŶƚǇƉ ŽƉƵůĂƚŝŽŶ͘dŚĞŝƚǇΖƐϮϬϮϮͲϮϯĂƉƉƌŽƉƌŝĂƚŝŽŶƐ ůŝŵŝƚǁĂƐΨϭϬϱ͘ϲŵŝůůŝŽŶĂŶĚƚŚĞŝƚǇΖƐĂĐƚƵĂůĂƉƉƌŽƉƌŝĂƚŝŽŶƐƵďũĞĐƚƚŽƚŚĞůŝŵŝƚǁĂƐϱϮйďĞůŽǁƚŚĞůĞŐĂůůŝŵŝƚ͘ ĂƐĞĚ ŽŶ ƚŚĞ ƉĂƐƚ ƚƌĞŶĚ ĂŶĚ ƉƌŽũĞĐƚĞĚ ĨƵƚƵƌĞ ŐƌŽǁƚŚ͕ ƚŚĞ ŝƚǇ ďĞůŝĞǀĞƐ ŝƚƐ ĂƉƉƌŽƉƌŝĂƚŝŽŶƐ ǁŝůů ĐŽŶƚŝŶƵĞ ƚŽ ƌĞŵĂŝŶǁŝƚŚŝŶƚŚĞůĞŐĂůůŝŵŝƚ͘
ĞďƚĚŵŝŶŝƐƚƌĂƚŝŽŶ
dŚĞƉƌŝŵĂƌǇŽďũĞĐƚŝǀĞŽĨƚŚĞŝƚǇ͛ƐĚĞďƚĂĚŵŝŶŝƐƚƌĂƚŝŽŶŝƐƚŽŵ ĂŝŶƚĂŝŶŝƚƐĂĐĐĞƐƐŝďŝůŝƚǇƚŽĐĂƉŝƚĂůŵĂƌŬĞƚĂƚƚŚĞ ůŽǁĞƐƚƉŽƐƐŝďůĞĐŽƐƚ͖ŝ͘Ğ͘ŝŶƚĞƌĞƐƚĐŽƐƚ͕ǁŝƚŚŽƵƚĞŶĚĂŶŐĞƌŝŶŐŝ ƚƐĂďŝůŝƚǇƚŽĨŝŶĂŶĐĞĞƐƐĞŶƚŝĂůƐĞƌǀŝĐĞƐ͘dŚĞŝƚǇ ƵƐĞƐĚĞďƚĨŝŶĂŶĐŝŶŐŽŶůǇĨŽƌĐĂƉŝƚĂůŝŵƉƌŽǀĞŵĞŶƚƐŽƌƉƌŽũĞĐƚƐƚŚĂƚ ĐĂŶŶŽƚďĞĨŝŶĂŶĐĞĚĨƌŽŵĐƵƌƌĞŶƚƌĞǀĞŶƵĞƐ͘ dŚĞŝƚǇŚĂƐďĞĞŶƐƵĐĐĞƐƐĨƵůŝŶŽďƚĂŝŶŝŶŐĨŝŶĂŶĐŝŶŐĨŽƌǀĂƌŝŽƵƐ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞŝŵƉƌŽǀĞŵĞŶƚƐ͕ƐƵĐŚĂƐƉĞŶƐŝŽŶ ŽďůŝŐĂƚŝŽŶƐ͕WŽůŝĐĞϵϭϭĐŽŵƉƵƚĞƌƐǇƐƚĞŵ͕ǁĂƚĞƌƚƌĞĂƚŵĞŶƚƉůĂŶƚƐ͕ĂŶĚĐŝƚǇǁŝĚĞƐŵĂƌƚŵĞƚĞƌƐͬĞŶĞƌŐǇƌĞƚƌŽĨŝƚ ƉƌŽũĞĐƚ͘
ĂƐŚDĂŶĂŐĞŵĞŶƚ
tŚŝůĞ ƚŚĞ ŝƚǇ ŵŽŶŝƚŽƌƐ ŝƚƐ ĐĂƐŚ ďĂůĂŶĐĞ ĚĂŝůǇ ĂŶĚ ŝŶǀĞƐƚƐ ƚĞŵƉŽƌĂƌŝůǇ ŝĚůĞ ĨƵŶĚƐ ŝŶ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ ƚŚĞ 'ŽǀĞƌŶŵĞŶƚŽĚĞĂŶĚƚŚĞŝƚǇ͛Ɛ/ŶǀĞƐƚŵĞŶƚWŽůŝĐǇ͕ƚŚĞƌĞŝƐƉŽƚĞŶƚŝĂůƚŽĨƵƌƚŚĞƌĞŶŚĂŶĐĞŽƵƌƌĞƚƵƌŶƐĂŶĚĐĂƐŚ ŵĂŶĂŐĞŵĞŶƚ͘dŚĞŝƚǇΖƐŝŶǀĞƐƚŵĞŶƚĂŶĚĐĂƐŚŵĂŶĂŐĞŵĞŶƚŝƐŚĂŶĚůĞĚƚŚƌŽƵŐŚƚŚĞƉŽŽůŝŶŐŽĨǀĂƌŝŽƵƐŝƚǇĨƵŶĚƐ ƚŽŵĂǆŝŵŝǌĞƐĂĨĞĂŶĚĞĨĨŝĐŝĞŶƚŝŶǀĞƐƚŵĞŶƚŽƉĞƌĂƚŝŽŶƐ͘/ŶǀĞƐƚŵĞŶƚĞĂƌŶŝŶŐƐĂƌĞĚŝƐƚƌŝďƵƚĞĚďĂƐĞĚŽŶĂǀĞƌĂŐĞ ĐĂƐŚ ďĂůĂŶĐĞ͘ dŚĞ &ŝŶĂŶĐĞ ƐƚĂĨĨ ĐĂƌƌŝĞƐ ŽƵƚ ƚŚĞ ĚĂŝůǇ ŝŶǀĞƐƚŵĞŶƚ ŽƉĞƌĂƚŝŽŶƐ͘ ƚ :ƵŶĞ ϯϬ͕ ϮϬϮϯ͕ ƚŚĞ ŝƚǇΖƐ ŝŶǀĞƐƚŵĞŶƚďĂůĂŶĐĞƐ͕ŝŶĐůƵĚŝŶŐĂŵŽƵŶƚƐŚĞůĚďǇĨŝƐĐĂů ĂŐĞŶƚ͕ǁĞƌĞΨϳϱ͘ϭŵŝůůŝŽŶ͘ dŚĞŝƚǇƉĞƌŝŽĚŝĐĂůůǇƐƵďŵŝƚƐŝƚƐ/ŶǀĞƐƚŵĞŶƚWŽůŝĐǇƚŽƚŚĞDƵŶŝĐŝƉĂůdƌĞĂƐƵƌĞƌƐƐƐŽĐŝĂƚŝŽŶŽĨhŶŝƚĞĚ^ƚĂƚĞƐĂŶĚ ĂŶĂĚĂĨŽƌĐĞƌƚŝĨŝĐĂƚŝŽŶƚŽĞŶƐƵƌĞƚŚĞWŽůŝĐǇŵĞĞƚƐƚŚĞĐƌŝƚĞƌŝ ĂĞƐƚĂďůŝƐŚĞĚďǇƚŚĞƐƐŽĐŝĂƚŝŽŶ͛Ɛ/ŶǀĞƐƚŵĞŶƚ WŽůŝĐǇ ĞƌƚŝĨŝĐĂƚŝŽŶ WƌŽŐƌĂŵ͘ dŚĞ ŝƚǇΖƐ /ŶǀĞƐƚŵĞŶƚ WŽůŝĐǇ ǁĂƐƌĞĐĞƌƚŝĨŝĞĚ ĨŽƌ ƚŚĞ ĞƌƚŝĨŝĐĂƚĞ ŽĨ ǆĐĞůůĞŶĐĞ
ǁĂƌĚ͘
ZŝƐŬDĂŶĂŐĞŵĞŶƚ

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DŽŶƚĞƌĞǇWĂƌŬŝƐƐĞůĨͲŝŶƐƵƌĞĚĨŽƌŐĞŶĞƌĂůůŝĂďŝůŝƚǇĂŶĚǁŽƌŬĞƌƐΖĐŽŵƉĞŶƐĂƚŝŽŶ͘dŚĞŝƚǇŚĂƐĂĐƋƵŝƌĞĚĞǆĐĞƐƐ ĐŽǀĞƌĂŐĞĨŽƌďŽƚŚƵŶĚĞƌĂ:ŽŝŶƚWŽǁĞƌƵƚŚŽƌŝƚǇŐƌĞĞŵĞŶƚ;:WͿǁŝƚŚWƵďůŝĐZŝƐŬ/ŶŶŽǀĂƚŝŽŶ^ŽůƵƚŝŽŶƐ ĂŶĚ DĂŶĂŐĞŵĞŶƚ ;WZ/^DͿ͘ WZ/^D ŝƐ Ă ŵĞŵďĞƌͲĚŝƌĞĐƚĞĚ ƌŝƐŬ ƐŚĂƌŝŶŐ ƉŽŽů ŽĨ ƉƵďůŝĐ ĂŐĞŶĐŝĞƐ ĐŽŵŵŝƚƚĞĚ ƚŽ ƉƌŽǀŝĚŝŶŐƌŝƐŬĐŽǀĞƌĂŐĞƉƌŽŐƌĂŵƐĂŶĚƌŝƐŬŵĂŶĂŐĞŵĞŶƚƐĞƌǀŝĐĞƐ͕ǁŚŝĐŚĚƌŝǀĞŵĞŵďĞƌƐƚĂďŝůŝƚǇ͕ĞĨĨŝĐŝĞŶĐǇ͕ĂŶĚďĞƐƚ ƉƌĂĐƚŝĐĞƐ͘dŽĨŝŶĂŶĐĞƌŝƐŬŵĂŶĂŐĞŵĞŶƚ͕ƚŚĞŝƚǇŵĂŝŶƚĂŝŶƐŝŶƚĞƌŶĂůƐĞƌǀŝĐĞĨƵŶĚƐĨŽƌŐĞŶĞƌĂůůŝĂďŝůŝƚǇĂŶĚ ǁŽƌŬĞƌƐΖ ĐŽŵƉĞŶƐĂƚŝŽŶ ŝŶƐƵƌĂŶĐĞƐ͘ dŚĞ ĐůĂŝŵƐ ƉĂǇĂďůĞ ŝŶĐůƵĚĞƐ ŝ ŶĐƵƌƌĞĚͲďƵƚͲŶŽƚͲƌĞƉŽƌƚĞĚ ĐůĂŝŵƐ͘ ,ŽǁĞǀĞƌ͕ƚŚĞĐůĂŝŵǀĂůƵĞƐĐŽŶƐŝĚĞƌƚŚĞŝŶĚĞŵŶŝƚǇĂŶĚĞǆƉĞŶƐĞĞǆƉŽƐƵƌĞƐĂŶĚĂƌĞďĂƐĞĚŽŶŬŶŽǁŶĨĂĐƚƐ ĂƚƚŚĞƚŝŵĞŽĨĞǀĂůƵĂƚŝŽŶ͘dŚĞŝƚǇĚŽĞƐŶŽƚǁĂƌƌĂŶƚǇƚŚĞƵůƚŝŵ ĂƚĞǀĂůƵĞƐŽĨŝŶĐƵƌƌĞĚͲďƵƚͲŶŽƚͲƌĞƉŽƌƚĞĚ ĐůĂŝŵƐ͕ ǁŚŝĐŚ ĐŽƵůĚ ďĞ ƐŝŐŶŝĨŝĐĂŶƚůǇ ĚŝĨĨĞƌĞŶƚ ĨƌŽŵ ƚŚĞ ĨŝŶĂů ƐĞƚƚůĞŵĞŶƚ͘ dŚĞ ŝƚǇ ĂĐƚŝǀĞůǇ ĂĚŵŝŶŝƐƚĞƌƐ ǀĂƌŝŽƵƐƌŝƐŬŵĂŶĂŐĞŵĞŶƚƉƌŽŐƌĂŵƐŝŶĐůƵĚŝŶŐĞŵƉůŽǇĞĞĂĐĐŝĚĞŶƚƉƌ ĞǀĞŶƚŝŽŶƚƌĂŝŶŝŶŐ͕ĐůĂŝŵƐƌĞǀŝĞǁ͕ĂŶĚ ƐĂĨĞƚǇŵĞĞƚŝŶŐƐƚŽƌĞĚƵĐĞƚŚĞŝƚǇ͛ƐĞǆƉŽƐƵƌĞƚŽůŽƐƐ͘ ǁĂƌĚƐĂŶĚĐŬŶŽǁůĞĚŐĞŵĞŶƚƐ
dŚĞ'ŽǀĞƌŶŵĞŶƚ&ŝŶĂŶĐĞKĨĨŝĐĞƌƐƐƐŽĐŝĂƚŝŽŶŽĨƚŚĞhŶŝƚĞĚ^ƚĂƚĞƐĂŶĚĂŶĂĚĂ;'&KͿĂǁĂƌĚƐĂĞƌƚŝĨŝĐĂƚĞ ŽĨ ĐŚŝĞǀĞŵĞŶƚ ĨŽƌ
ǆĐĞůůĞŶĐĞ ŝŶ &ŝŶĂŶĐŝĂů ZĞƉŽƌƚŝŶŐ͘ dŚĞ ŝƚǇ ŽĨ DŽŶƚĞƌĞǇ WĂƌŬ ǁĂƐ ĂǁĂƌĚĞĚ ƚŚĞ ĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚďǇ'&KĨŽƌŝƚƐŶŶƵĂůŽŵƉƌĞŚĞŶƐŝǀĞ&ŝŶĂŶĐŝĂůZĞƉŽƌƚ;&ZͿĨŽƌƚŚĞĨŝƐĐĂů ǇĞĂƌĞŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϮ͘ dŚŝƐǁĂƐƚŚĞϯϰ
ƚŚĐŽŶƐĞĐƵƚŝǀĞǇĞĂƌƚŚĞŝƚǇƌĞĐĞŝǀĞĚƚŚŝƐĂǁĂƌĚ͘dŚĞĞƌƚŝĨŝĐĂƚĞ ŽĨĐŚŝĞǀĞŵĞŶƚŝƐĂƉƌĞƐƚŝŐŝŽƵƐŶĂƚŝŽŶĂůĂǁĂƌĚƌĞĐŽŐŶŝǌŝŶŐĐŽŶĨŽƌŵĂŶĐĞǁŝƚŚƚŚĞŚŝŐŚĞƐƚƐƚĂŶĚĂƌĚƐĨŽƌ ƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƐƚĂƚĞĂŶĚůŽĐĂůŐŽǀĞƌŶŵĞŶƚĨŝŶĂŶĐŝĂůƌĞƉŽƌƚƐ ͘ /ŶŽƌĚĞƌƚŽďĞĂǁĂƌĚĞĚĂĞƌƚŝĨŝĐĂƚĞŽĨ ĐŚŝĞǀĞŵĞŶƚ͕ Ă ŐŽǀĞƌŶŵĞŶƚ ƵŶŝƚ ŵƵƐƚ ƉƵďůŝƐŚ ĂŶ ĞĂƐŝůǇ ƌĞĂĚĂďůĞ ĂŶĚ ĞĨĨŝĐŝĞŶƚůǇ ŽƌŐĂŶŝǌĞĚ ĂŶŶƵĂů ĐŽŵƉƌĞŚĞŶƐŝǀĞ ĨŝŶĂŶĐŝĂů ƌĞƉŽƌƚ͕ ǁŚŽƐĞ ĐŽŶƚĞŶƚƐ ĐŽŶĨŽƌŵ ƚŽ ƉƌŽŐƌĂŵ ƐƚĂŶĚĂƌĚƐ͘^ƵĐŚ Ă ƌĞƉŽƌƚ ŵƵƐƚ ƐĂƚŝƐĨǇďŽƚŚŐĞŶĞƌĂůůǇĂĐĐĞƉƚĞĚĂĐĐŽƵŶƚŝŶŐƉƌŝŶĐŝƉůĞƐĂŶĚĂƉƉůŝĐĂďůĞůĞŐĂůƌĞƋƵŝƌĞŵĞŶƚƐ͘ dŚĞĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚĨŽƌ
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ŝƚǇDĂŶĂŐĞƌ ŝƌĞĐƚŽƌŽĨ&ŝŶĂŶĐĞ
DĂƌƚŚĂ
'ĂƌĐŝĂ
/ ů

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

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200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707

INDEPENDENT AUDITORS’ REPORT

To the Honorable Mayor and Members of the City Council
of the City of Monterey Park
Monterey Park, California

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Monterey Park, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the fina ncial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referre d to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof 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 accept ed 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 Auditors’ Responsib ilities for the Audit of the Financial Statements section of our report. We are required to be inde pendent 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

Prior Period Adjustments

As discussed in Note 18 to the basic financial statements, net pension liabi lities and net OPEB liabilities and related deferred outflows of resources and deferred inflows of resources were reallocated from business-type activities to governmental activities in amounts of $ 827,918 and $1,210,777, respectively, a nd corrections were made to lease receivable in the governmental activities in the amount of $45,951 and pension related deferred outflows of resources for in the governmental activities in the amount of $1,319,564. Accordingly, beginning net position as of July 1, 2022, of the governmental activities and business-type activities were restated to reflect the co rrection of these errors. Our opinions are not modified with respect to these matters.

Implementation of New GASB Pronouncements

As discussed in Note 1 and Note 18 to the basic financial statements, the City implemented Governmental Accounting Standards Board (“GASB”) Statement No. 96, Subscription Based Information Technology Arrangements during the year. The implementation of GASB Statement No. 96 requires the City to record right to use-subscription assets and corresponding subscription liabilities. As a result of the impl ementation, the City reported restatements of its net position. Our opinion is not modified with respect to this matter.

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To the Honorable Mayor and the Members of the City Council of the City of Monterey Park
Monterey Park, California

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2 Responsibilities of Management for the Financial Statements

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, a nd to issue an auditors’ 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 cont rol-related matters that we identified during the audit.

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To the Honorable Mayor and the Members of the City Council of the City of Monterey Park
Monterey Park, California

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3 Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Sc hedules, the Schedules of Changes in Net Pension Liability and Related Ratios, and the Schedules of Contributions - Pensions, the Schedule of Changes in Ne t OPEB Liability and Related Ratios and Schedule of Contributions - OPEB, be presented to supplement the basic financial statements. Such information is the responsibility of mana gement and, although not a part of the basic financial statements, is required by the Governmental Accounting Standard s Board who considers it to be an essen tial part of financial reporting for placing the basic financial statements in an appropriate opera tional, economic, or historical context. We have applied certain limited procedures to the required supplementary in formation in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited pro cedures 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 a nd Individual Fund Fi nancial 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 Combining and Individual Fund Financial Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

Management is responsible for the othe r information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ 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 basi c financial statements, our responsibility is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially mi sstated. 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.

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To the Honorable Mayor and the Members of the City Council of the City of Monterey Park
Monterey Park, California

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4 Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our repor t dated February 15, 2024, on our consideration of City’s internal cont rol over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemen ts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control ove r financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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 City’s internal control over financial reporting and compliance.

Santa Ana, California
February 15, 2024

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City of Monterey Park
Management Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2023

5 Introduction

The Management Discussion and Analysis provides a narrative introduction, analysis, and overview that will assist in understanding of the City’s financial statements. This analysis should be read in conjunction with the City’s financial statements as of June 30, 2023, the transmittal letter, and notes to the basic financial statements.

Government-wide Financial Statements

The government-wide financial statements are designed to provide information of the City’s financial activities in a manner similar to a private-sector company. Government-wid e financial statements consist of the statement of net position and the statement of activities, which are prepared using the economic resources measurement focus and the accrual basis of accounting. These statements provide both s hort-term and long-term information about the City’s financial position, which is helpful in assessing the City’s economic condition at the end of the fiscal year.

The statement of net position presents all of the City’s financial resources along with its capital assets and long-term obligations. The difference between the assets and the liabilities is reported as the net position.

The statement of activities reports the gross and net costs of various activities carried out by the City and how the City’s net position changed during the fiscal year. This statement summarizes the cost of providing services by the City and includes all current year revenues and expenses.

Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (i.e. governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (i.e. business-type activities). The governmental activities of the City include general government, public safety, comm unity development, culture and recreation, highways and streets, health, and debt service. The business-type activ ities reflect the City’s water system operations, waste management activities, and sanitary sewer activities.

The government-wide financial statements include not only th e City but also those lega lly separate entities for which the City is financially accountable. These entities include the Monterey Park Housing Authority and the Monterey Park Public Financing Authority. Financial information for these component units is reported as an integral part of the City.

Please refer to Note Number 1A of the Notes to the Basic Financial Statements.

Fund Financial Statements

A fund is a grouping of related accounts used to control resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure a nd demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

6 Governmental Funds

Governmental funds are used to acco unt for essentially the same governmental activities in the government-wide financial statements. However, unlike the government-w ide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Governmental funds are accounted for using the modified accrual basis of accounting, which provides a detailed view of the City’s current financial resources and the City’s ability to meet its current expenditure needs. Such information may be useful in evaluating a govern ment's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditur es, and changes in fund balances provi de a reconciliation to facilitate this comparison between governmental funds and government-wide activities.

The City maintains 19 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditur es, and changes in fund balances for General Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, and Special Revenue Housing Fund, which are reported as major funds. Information for the other 15 governmental funds is combined into a single column under Nonmajor Special Revenue Government al Funds. Data for the nonmajor governmental funds is provided in the combining statements in this report.

The City adopts an annual appropriated budget for its governmental funds. Budgeted expenditures are controlled at the fund level. Budgetary comparison statements have been pr ovided to demonstrate compliance with this budget. Please refer to the Notes to Required Supplementary Information.

Proprietary Funds

Proprietary funds use the accrual basis of accounting, which is the same method used by private businesses. Proprietary fund financial statements provide the same type of information as the governme nt-wide financial statements, only in more detail.

The City maintains two different types of proprietary funds: enterprise funds and internal service funds. The enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the operations for its water system, waste management activities, and sanitary sewer activities. Internal service f unds are used to accumulate a nd allocate costs internally among the City’s various functions, which include vehicle operation, workers compensation insurance, retiree medical benefits, general liability insurance, separation benefits, and t echnology development. Because the internal service operations benefit both governmental and business-type functions, they have been proportionally allocated and included within the governmental and business-like activities in the government-wide financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in this report.

Fiduciary Funds

Fiduciary funds are used to account for activities when the City acts as a trust or fiduciary to hold resources for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s programs.

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

7 Notes to the Basic Financial Statements

The notes to the basic financial statements provide additio nal information that is essentia l for a full understanding of the data provided in the government-wide and fund financial statements.

Required Supplementary Information

The required supplementary information further explains and supports the information in the financial statements. This section includes the schedules of the City’s funding for its employee pension program, other post-employment benefits program, and the budgetary comparison for the General Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, and the Special Revenue Housing Fund.

Other Supplementary Information

Other supplementary information includes combining and individual budgetary comparison schedules for Nonmajor Governmental Funds, and combining statements for Agency Funds and Internal Service Funds.

Financial Highlights

 Total 2022-23 net position increased by $4.8 million from 2021-22, which is the net of the $11.6 million increase in governmental activities and the $6.8 decrease in business-type activities. The $11.6 million increase in governmental activities was attributed to an overall increas e in revenue including inter est income, property taxes and sales tax revenue from Measure MP. The $6.8 decrease in business-type activities was attributed to operational and Capital Improvement Project costs exceeding revenue received across all enterprise funds.

 As of June 30, 2023, the City’s assets and deferred outflow of resources exceeded its liabilities and deferred inflow of resources by $50.5 million, of whic h $111 million was related to the ne t investment in capital assets, $41.3 million was restricted for special revenues, and a negative $101.8 million was unrestricted.

 At the 2022-23 year-end, the General Fund total fund balance was $28.5 million, a $0.5 million decrease from the prior year. The decrease was related to capital outlay projects.

 The City kept the residential trash rates at the same level as 2021-22. However, the service contract cost for the trash provider was adjusted by CPI, per the contractual agreement.

 The City continued to serve as the Successor Agency for its former Redevelopment Agency, and reported the former RDA assets and liabilities in the Fiduciary Fund as a Private Purpose Trust Fund.

Government-wide Financial Analysis

The net position of the City is deri ved from the total assets and deferred outflows of resources less its liabilities and deferred inflows of resources at the end of a reporting period. It serves as an indicator of a government's financial position at a certain point in time. As of June 30, 2023, the City’s combined assets (governmental and business-type activities) totaled $258.8 million, down $47.4 million from last year. The decr ease was primarily attributed to $49 million decrease in net pension assets. The City’s total deferred outflow of resources increased $33.6 million, from $6 million to $39.6 million. The increase was due to the City’s pension plans. The City’s liabilities totaled $240.2 million, up $17.4 million from last year. The City’s total deferre d inflow of resources decreased $37.1 million, from $44.8 million to $7.7 million. The decrease was related to the City’s pension plans and other post-employment benefits. As a result, the City’s combined net position totaled $50.5 million, up $4.8 million from last year.

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

8 Net position consists of three categories: net investment in capital assets, restrict ed fund balances, and an unrestricted fund balance. The largest portion of the City’s net position, approximately $111 million, is the City’s investment in capital assets, including land, buildings, equipment, and infrastructure net of accumulated depreciation and related debt for acquiring these capital assets. Since the capital assets are used to provide services to citizens, they are not available to fund the City’s day-to-day activities.

The City’s restricted net position totaled $41.3 million at June 30, 2023. These are assets subject to external restrictions, constitutional provisions, or enabling legislation that limit how these assets may be used . The restricted net position includes primarily grants, retirement/pension funds, and vari ous nonmajor special revenue funds. The unrestricted net position is available for use by the City for any legal purpose. As of June 30, 2023, the City’s total unrestricted net position was a negative $101.8 million.

6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Assets:

Current 106,976 $ 106,619 $ 20,640 $ 30,665 $ 127,616 $ 137,284 $ Non Current
Capital Assets 75,924 66,474 53,594 47,601 129,518 114,075$ Other 1,675 51,912 - 2,637 1,675 54,549 $ Total Assets: 184,575 225,005 74,234 80,903 258,809 305,908$ Deferred Outflow of Resources 36,708 5,397 2,910 592 39,618 5,989 $ Liabilities:

Current 36,369 28,063 6,402 5,015 42,771 33,078 $ Long-Term 178,258 172,362 19,173 16,033 197,431 188,395 Total Liablilities 214,627 200,425 25,575 21,048 240,202 221,473$ Deferred Inflow of Resources 6,979 41,931 763 2,851 7,742 44,782 $ Net Position:

Net Investment in Capital
Assets 68,652 60,290 42,384 35,741 111,036 96,031 $ Restricted 41,268 52,853 - 2,637 41,268 55,490 Unrestricted (110,243) (125,097) 8,423 19,218 (101,820) (105,879) Total Net Position (323)$ (11,954)$ 50,807$ 57,596 $ 50,484 $ 45,642$ *Fiscal Year End 6.30.2022 figures were restated, see note 18 Governmental
Activities
Business-type
Activities Total
Statement of Net Position
F
or Fiscal Years Ended June 30, 2023 and June 30, 2022
(In thousands)

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

9 Governmental Activities Financial Analysis

Overall governmental activities increased the City’s net position by $11.6 million. The increase in net position was due primarily to the implementation of the ¾ cent sales tax Measure MP.

6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Revenues
Program Revenues:

Charges for Services 11,840$ 12,031$ 23,125$ 24,327$ 34,965$ 36,358$ Operating Grants &
Contributions 19,676 14,676 - - 19,676 14,676 Captial Grants &
Contributions 773 - - 881 773 881 General Revenues:

Taxes 52,704 46,432 - - 52,704 46,432 Revenues from Use of
Money and Property 1,355 (1,859) 558 - 1,913 (1,859) Other 1,183 1,445 - - 1,183 1,445 Total Revenues: 87,531$ 72,725$ 23,683$ 25,208$ 111,214$ 97,933$ Expenses:

General Government 13,258 5,717 - - 13,258 5,717 Public Safety 40,065 32,975 - - 40,065 32,975 Comm. Development 7,570 7,545 - - 7,570 7,545 Culture & Recreation 4,437 7,250 - - 4,437 7,250 Highway & Streets 6,953 5,301 - - 6,953 5,301 Health 293 234 - - 293 234 Interest & Fiscal Charges 3,803 3,717 - - 3,803 3,717 Water/Refuse/Sewer - - 29,993 22,009 29,993 22,009 Total Expenses: 76,379$ 62,739$ 29,993$ 22,009$ 106,372$ 84,748$ Transfers 479 474 (479) (474) - - Changes in Net Position 11,631 10,460 (6,789) 2,725 4,843 13,185 Net Position July 1 (11,954) (22,414) 57,595 54,870 45,641 32,456 Net Position June 30 (324)$ (11,954)$ 50,806$ 57,595$ 50,484$ 45,641$ *Fiscal Year End 6.30.2022 figures were restated, see note 18 Statement of Activities
For Fiscal Years Ended June 30, 2023 and June 30, 2022
(In thousands)
Governmental
Activities
Business-type
Activities Total

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

10 Governmental Funds

The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the City’s governmental funds is to provide information on near-term inflows and outflows during the fiscal year and balances of spendable resources at the end of the fiscal year. Such information is useful in assessing the City’s financing requirements to meet the current needs. Unassigned fund ba lance may serve as a useful measure of the City’s net resources available for appropriation.

As of June 30, 2023, the City’s gove rnmental funds reported a combined e nding fund balance of $69.5 million, a decrease of $4.7 million from the prior year. The fund ba lance categories of the governmental funds show $77,450 as nonspendable, $41 million as restricted, $10.4 million as co mmitted, $18 million as assigned, and negative $493 as unassigned. (Please refer to Note 16 of the Notes to Basic Financial Statements for detailed breakdown.)

There are five major funds in the governmental funds: Ge neral Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, Special Revenue Housing Fund, and the Capital Projects Street Fund.

The General Fund is the main operating fund of the City, which accounts for the majority of the police, fire, recreation, parks maintenance, public works, library, community development, and general administrative services. General Fund revenues and transfers in for 2022-23 totaled $61.5 million, an increase of $12.5 million from 2021-22. The increase was primarily due to improved economic conditions and additional revenue received from voter-approved ¾ cent sales Measure MP. Total 2022-23 general fund expenditures and transfer s out were $62 million, reflecting an increase of $12.9 million from 2021-22. As of June 30, 2023, the tota l fund balance of the General Fund was $28.5 million, a decrease of $0.5 million from last year.

The Special Revenue Grants Fund reports the activities of various grants that the City received from Federal, State, and County agencies. Unspent grant funds are accumulated for expenditures in future years. Total grants received for governmental activities and transfers in for 2022-23 were $8.2 million, up $4 million from last year. Total 2022-23 grant funded expenditures and transfers out were $8.7 million, reflecting an increase of $4.5 million from 2021-22.

Total fund balance of the Special Revenue Grants Fund as of June 30, 2023 was $.7 million a decrease of $.5 million from last year.

Special Revenue Retirement/Pension Liability Fund accounts for revenue received from the voter-approved property tax levied to provide for employee retirement costs. Total revenues and transfers for 2022-23 were approximately $12.9 million, an increase of $1.1 million over 2021-22. Total expenditures for 2022-23 were $10.8 million, up $1.9 million from 2021-22. The increase in expenditures was due to an additional payment of the Unfunded Accrued Liability (UAL). The total fund balance in the Retirement/Pension Li ability Fund as of June 30, 2023 was $4.7 million, all of which is restricted for employee retirement costs.

The Special Revenue Housing Fund accounts for housing activities. The City assumed the responsibility of the housing assets and functions after the dissolution of the City's Redevelopment Agency. Total revenues for 2022-23 were $36,007. There were no housing expenditures for 2022-23. As of June 30, 2023, the fund balance of the Special Revenue Housing Fund was $3.7 million.

Capital Projects Street Fund accounts for revenue received from Series 2021 bond proceeds to provide for street improvements. There were no revenues for 2022-23. Total expenditures for 2022-23 were $8.3 million. As of June 30, 2023, the fund balance of the Capital Projects Street Fund was $12.1 million.

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

11 Nonmajor Governmental Funds account for various activities including street maintenance, transportation, air quality improvement, lighting and landscaping district, public safet y activity, and development impact improvements. Total revenues and transfers-in for 2022-23 were $12 million, up $3.5 million from 2021-22. Total expenditures and transfers-out for 2022-23 were $10 million, an increase of $1.6 million over 2021-22. As of June 30, 2023, the fund balance of the Nonmajor Governmental Funds totaled $17.5 million, up $0.5 million from 2021-22.

Business-type Activities Financial Analysis

The business-type activities reflect the City’s water system, which includes water operation and water treatment, waste management activities and sanitary sewer activities.

Total 2022-23 water revenues were $13.4 million, down $0. 8 million from 2021-22. The decrease in water revenues was primarily due to increased conservation measures throughout the community. Water operating expenses were $18 million, up $4 million from 2021-22. The increase was primarily due to the purchase of water, and the increased costs for the water production and water treatment operations. The net position for the Water Fund was $47.3 million, down $5.4 million from the previous year at June 30, 2023.

Refuse Fund revenues for 2022-23 were at $7 million, up $0.2 million from the previous year. Operating expenditures were $7.7 million, up $1.1 million from last year. The net position for the Refuse Fund was $0.4 million at June 30, 2023, a decrease of $0.7 million from the prior year.

Sewer Fund revenues were $3.3 million, up $0.1 million from last year. Operating expenditures were $3.4 million, up $1.1 million from last year. The increase was primarily due to increased operational costs. The net position for the Sewer Fund increased to $11.0 million, a decrease of $58,237 from the prior year.

General Fund Budgetary Highlights

The originally adopted General Fund budget for this fiscal year was $50.5 million. The final amended budget of $50.5 million reflecting City Council approved amendments throughout the year.

The budget amendments included additional funds for minimu m wage mandates, service costs, negotiated salary and benefit increases with all full-time employee units and addition of staff.

Overall, actual revenues in the General Fund were higher than the budgeted revenues. The increase was $5.9 million.

Primarily due to increased tax revenue $5 million higher than budgeted. Revenue from licenses and permits was higher than budgeted by $109 thousand. Revenue from fines a nd forfeitures and investment income were lower by $57 thousand and $67 thousand, respectively. Actual expenses in the General Fund were under budget in all the major categories, except for public safety, community development, capital outlay and debt service. General government was under budget $0.3 million, and culture and recreation was under budget $0.1 million. These were due to the City’s cost control measures in response to the revenue drop and unc lear economic outlook. Public Safety, however, was over budget by $0.4 million, community development was over by $5 million, capital outlay was under budget by $ 0.2 million and debt service was over by $0.2 million. These reflected the City’s commitment and reallocation of resources from non-urgent services to crucial and necessary services. Overall, actual expenditures were $4.7 million more than budgeted. Most of the capital outlay budget that was not spent will be rolled over into the 2023-24 budget.

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

12 Capital Asset Administration

The City’s capital assets, net of accumulated depreciation, for its governmental and business-type activities as of June 30, 2023, totaled $129.5 million, an increase of $14.7 million from prior year. The capital assets include land, buildings, improvements, machinery and equipment, parks, roads, traffic lights, and traffic signals . (Readers desiring more detailed information on capital asset activity should refer to Note 7 of the Notes to the Basic Financial Statements.)

Major capital asset additions during the fiscal year included the following:

 Continued IT software and hardware upgrades for enhanced cybersecurity  Sewer Improvements at North Atlantic
 Continued Groundwater Treatment System improvements
 Continued street and sidewalk improvements
 Continued traffic signal upgrades at Garvey/Alhambra intersection  Citywide cameras
 Monterey Pass Road Mainline Improvements
 Edison Trails Playground Equipment

Debt Administration

As of June 30, 2023, the City’s long-term debt decreased by $5.9 million from the prior year at $182.3 million to $176.4 million was due prima rily to the City’s Pension Obliga tion Bonds and Cap ital Leases. (Please refer to number 8 of the Notes to the Basic Financial Statements for detailed information.)

State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total assessed valuation. The current debt limitation for the City is $1.21 billion.

6/30/2023 6/30/2022 * 6/30/2023 6/30/2022 * 6/30/2023 6/30/2022 Land 8,465 $ 8,465 $ 500 $ 500 $ 8,965$ 8,965$ Buildings 13,638 14,231 127 132 13,765 14,363 Improvements 20,682 20,500 28,415 29,792 49,097 50,292 Construction in Progress 13,997 4,669 21,050 14,313 35,047 18,982 Equipment 5,850 4,593 972 229 6,822 4,823 Infrastructure 12,345 13,919 2,507 2,632 14,852 16,551 Leased Assets 74 98 2 3 76 101 Subscription Assets 872 1,471 21 28 893 1,500 75,924$ 67,945$ * 53,594$ 47,630 $ 128,648 $ 113,975$ *Fiscal Year End 6/30/2022 was restated, see Note 7
Capital Assets Net of Depreciation
For Fiscal Years Ended June 30, 2023 and June 30, 2022
(In thousands)
Governmental
Activities
Business-type
Activities Total

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

13 Economic Factors and Next Year's Budget

 The City’s total assessed valuation is $8.8 billion, up 8.6%, or $560 million, from 2021-22.

 The fiscal year 2022-23 City Budget is balanced. The City is conservative in projecting future revenues. The City’s spending plan follows the City Council’s direction in maintaining excellent community service, enhancing organizational efficiency, and fundin g much needed infrastructure and cap ital improvements. The City will conclude labor negotiations with the remaining misce llaneous bargaining units. Any potential salary and benefit contract adjustments will be considered during the mid-year budget process.

 Steady household spending, despite historically low unemp loyment, has shielded the economy from recession, a unique situation even as inflation exceeded Federal Reserve targets and interest rates on loans and credit cards rose. In California, sales tax performance for fiscal year 2022-23 grew by 2.1%, but it lags far behind the double- digit growth seen during the pandemic recovery. Looki ng ahead, households face tight budgets, and various industries grapple with challenges like labor costs, inve ntory issues, and competition. Spending generating sales taxes is expected to dip slightly in fiscal year 2023-24, with limited expansion anticipated in the following year.

 On the November 8, 2022, voters adopted Measure MP which authorizes a ¾ cent transactions and use (sales) tax. The measure was adopted based upon a 58.14% voter approval. Businesses began to collect this tax April 1, 2023. It generated $1.3 million in FY2022-2023.

 The Federal American Rescue Plan (ARPA) funds allocated to the City for COVID-19 pandemic recovery efforts continue to subsidize the General Fund.

 The Courtyard by Marriott transient occupancy tax (TOT) revenue is anticipated to continue to do well.

 The City will be completing a Proposition 218 water and sewer rate study in FY 2023-24. 6/30/2023 6/30/2022 6/30/2023 6/30/2022 6/30/2023 6/30/2022 Capital Leases 4,242 $ 4,969 $ 6,646$ 7,310$ 10,888$ 12,279$ SGVMWD Loan - - 4,000 4,000 4,000 4,000 Lease Liablility 74 96 2 3 76 99 Subscription Payable 725 1,397 9 12 734 1,409 Section 108 Loan - 539 - - - 539 Pension Obligation Bonds 105,185 109,267 5,085 5,282 110,270 114,549 Sales Tax Revenue Bonds 17,280 17,585 - - 17,280 17,585 Premium 3,058 3,167 - - 3,058 3,167 Compensated Absences 5,309 5,212 263 224 5,572 5,436 Insurance Assessments
Payable 654 818 - - 654 818 Claims and Judgements 23,896 22,443 - - 23,896 22,443 160,423$ 165,493$ 16,005$ 16,831 $ 176,428$ 182,324$ *Fiscal Year End 6.30.2022 figures were restated, see note 18 Long-term Debt
For Fiscal Years Ended June 30, 2023 and June 30, 2022
(In thousands)
Governmental
Activities
Business-type
Activities Total

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City of Monterey Park
Management Discussion and Analysis (Unaudited)(Continued) For the Year Ended June 30, 2023

14 Requests for Information

This financial report is designed to pr ovide a general overview of the City’s finances for all interested persons and organizations. The report is published on the City’s official website. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to City of Monterey Park, Finance Department, 320 West Newmark Avenue, Monterey Park, CA 91754.

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BASIC FINANCIAL STATEMENTS
15

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16

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GOVERNMENT-WIDE FINANCIAL STATEMENTS
17

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Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 70,588,584 $ 23,178,607 $ 93,767,191 $ Cash and investments with fiscal agent 19,298,152 - 19,298,152 Accounts receivable 6,471,758 5,187,167 11,658,925 Receivable from Successor Agency 137,342 - 137,342 Prepaid items 77,450 - 77,450 Interest receivable 260,449 170,807 431,256 Lease receivable - due within one year 298,353 - 298,353 Loans receivable 1,947,808 - 1,947,808 Internal balance 7,896,263 (7,896,263) - Total current assets 106,976,159 20,640,318 127,616,477 Noncurrent assets:

Receivable from Successor Agency 758,967 - 758,967 Lease receivable - due in more than one year 916,522 - 916,522 Capital assets - nondepreciable 22,462,426 21,549,771 44,012,197 Capital assets - depreciable and amortization, net 53,461,512 32,044,321 85,505,833 Total capital assets 75,923,938 53,594,092 129,518,030 Total noncurrent assets 77,599,427 53,594,092 131,193,519 Total assets 184,575,586 74,234,410 258,809,996

DEFERRED OUTFLOWS OF RESOURCES
Pension related 33,605,277 2,274,750 35,880,027 OPEB related 3,102,548 635,461 3,738,009 Total deferred outflows of resources 36,707,825 2,910,211 39,618,036 Primary Government
City of Monterey Park
Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements 18

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Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 11,551,387 $ 3,711,097 $ 15,262,484 $ Accrued payroll and benefits 1,117,308 58,256 1,175,564 Retention payable 972,734 552,679 1,525,413 Deposits payable 390,571 472,032 862,603 Interest payable 306,745 25,892 332,637 Due to other governmental agencies 761,585 - 761,585 Unearned revenues 6,377,287 - 6,377,287 Long-term liabilities - due within one year 14,891,227 1,582,165 16,473,392 Total current liabilities 36,368,844 6,402,121 42,770,965 Noncurrent liabilities:

Long-term liabilities - due in more than one year 145,532,395 14,423,057 159,955,452 Aggregate net pension liabilities 14,648,950 1,047,133 15,696,083 Net OPEB liabilities 18,076,998 3,702,517 21,779,515 Total noncurrent liabilities 178,258,343 19,172,707 197,431,050 Total liabilities 214,627,187 25,574,828 240,202,015

DEFERRED INFLOWS OF RESOURCES
Lease-related items 1,378,304 - 1,378,304 Pension-related items 2,778,864 185,017 2,963,881 OPEB-related items 2,821,774 577,954 3,399,728 Total deferred inflows of resources 6,978,942 762,971 7,741,913

NET POSITION
Net investment in capital assets 68,652,436 42,383,764 111,036,200 Restricted for:

Grants 744,046 - 744,046 Retirement/pension 4,695,755 - 4,695,755 Housing 3,885,246 - 3,885,246 Public safety 1,711,079 - 1,711,079 Community development 204,355 - 204,355 Culture and recreation 1,114,503 - 1,114,503 Highways and streets 28,348,465 - 28,348,465 Debt service 564,038 - 564,038 Total restricted 41,267,487 - 41,267,487 Unrestricted (deficit) (110,242,641) 8,423,058 (101,819,583) Total net position (deficit) (322,718)$ 50,806,822 $ 50,484,104 $ Primary Government
City of Monterey Park
Statement of Net Position (Continued)
June 30, 2023
See accompanying Notes to the Basic Financial Statements 19

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Capital Grants
Charges for Operating Grants and
Expenses Services and Contributions Contributions
Functions/Programs
Governmental Activities:

General government 13,258,409 $ 2,656,843 $ 111,978 $ - $ Public safety 40,064,832 2,993,687 8,721,706 24,412 Community development 7,570,239 510,301 447,363 - Culture and recreation 4,436,619 3,009,094 574,207 9,750 Highway and streets 6,952,909 2,670,460 9,640,135 738,669 Health 292,969 - 180,226 - Interest and fiscal charges 3,803,497 - - - Total Governmental Activities 76,379,474 11,840,385 19,675,615 772,831 Business-Type Activities:

Water utility 18,647,640 12,752,125 - - Refuse 7,797,114 7,041,047 - - Sewer 3,547,895 3,331,412 - - Total Business-Type Activities 29,992,649 23,124,584 - - Total Primary Government 106,372,123$ 34,964,969 $ 19,675,615 $ 772,831 $ City of Monterey Park
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
See accompanying Notes to the Basic Financial Statements 20

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Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:

General government (10,489,588) $ - $ (10,489,588)$ Public safety (28,325,027) - (28,325,027) Community development (6,612,575) - (6,612,575) Culture and recreation (843,568) - (843,568) Highway and streets 6,096,355 - 6,096,355 Health (112,743) - (112,743) Interest and fiscal charges (3,803,497) - (3,803,497) Total Governmental Activities (44,090,643) - (44,090,643) Business-Type Activities:

Water utility - (5,895,515) (5,895,515) Refuse - (756,067) (756,067) Sewer - (216,483) (216,483) Total Business-Type Activities - (6,868,065) (6,868,065) Total Primary Government (44,090,643) (6,868,065) (50,958,708) General Revenues:

Taxes:

Property taxes 31,571,303 - 31,571,303 Special assessment 1,035,312 - 1,035,312 Sales taxes 11,640,655 - 11,640,655 Utility user taxes 3,799,736 - 3,799,736 Franchise taxes 1,230,330 - 1,230,330 Business license taxes 713,015 - 713,015 Transient occupancy taxes 2,653,156 - 2,653,156 Vehicle in-lieu taxes
(Unrestricted, Intergovernmental) 62,585 - 62,585 Revenues from use of money and property 1,354,512 558,250 1,912,762 Other 1,182,587 - 1,182,587 Total General Revenues 55,243,191 558,250 55,801,441 Transfers 479,141 (479,141) - Changes in Net Position 11,631,689 (6,788,956) 4,842,733 Net Position (Deficit) - Beginning, as restated (Note 18) (11,954,407) 57,595,778 45,641,371 Net Position (Deficit) - Ending (322,718)$ 50,806,822$ 50,484,104$ Net (Expense) Revenue and Changes in Net Position
City of Monterey Park
Statement of Activities (Continued)
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 21

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FUND FINANCIAL STATEMENTS
23

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GOVERNMENTAL FUND FINANCIAL STATEMENTS
25

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Retirement/
General Grants Pension Liability Housing
ASSETS
Cash and investments 28,487,640 $ 7,410,100 $ 4,306,141 $ 1,590,235 $ Cash and investments with fiscal agents 6,076 - 211,460 - Receivables:

Accounts 5,266,736 119,675 179,792 - Interest 146,659 8,899 - 8,124 Loans and notes - 761,585 - 1,186,223 Due from other funds 1,601,998 - - - Lease receivable 1,214,875 - - - Prepaid items 77,450 - - - Receivable from Successor Agency - - - 896,309 Total assets 36,801,434$ 8,300,259 $ 4,697,393 $ 3,680,891 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 4,089,660 344,802 1,638 - Accured payroll 1,034,158 31,524 - - Retention payable 553,573 4,977 - - Deposit payable 390,571 - - - Unearned revenue - 6,377,287 - - Due to other funds - 30,913 - - Due to other governmental agencies - 761,585 - - Total liabilities 6,067,962 7,551,088 1,638 - Deferred inflows of resources:

Related to leases 1,378,304 - - - Unavailable revenues 901,947 5,125 - - Total deferred inflows of resources 2,280,251 5,125 - - Fund balances:

Nonspendable 77,450 - - - Restricted - 744,046 4,695,755 3,680,891 Committed 10,226,927 - - - Assigned 18,029,418 - - - Unassigned (deficit) 119,426 - - - Total fund balances 28,453,221 744,046 4,695,755 3,680,891 Total liabilities, deferred inflows
of resources, and fund balances 36,801,434$ 8,300,259 $ 4,697,393 $ 3,680,891 $ Special Revenue Funds
Major Funds
City of Monterey Park
Balance Sheet
June 30, 2023
Governmental Funds
See accompanying Notes to the Basic Financial Statements 26

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Major Funds
Nonmajor Total
Capital Projects Governmental Governmental
Street Fund Funds Funds
ASSETS
Cash and investments - $ 19,295,086$ 61,089,202 $ Cash and investments with fiscal agents 18,515,956 564,038 19,297,530 Receivables:

Accounts - 890,053 6,456,256 Interest - 96,767 260,449 Loans and notes - - 1,947,808 Due from other funds - - 1,601,998 Lease receivable - - 1,214,875 Prepaid items - - 77,450 Receivable from Successor Agency - - 896,309 Total assets 18,515,956$ 20,845,944 $ 92,841,877 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 5,220,187$ 561,639 $ 10,217,926 $ Accured payroll - 24,109 1,089,791 Retention payable 368,705 45,479 972,734 Deposit payable - - 390,571 Unearned revenue - - 6,377,287 Due to other funds 779,347 387,510 1,197,770 Due to other governmental agencies - - 761,585 Total liabilities 6,368,239 1,018,737 21,007,664 Deferred inflows of resources:

Related to leases - - 1,378,304 Unavailable revenues - - 907,072 Total deferred inflows of resources - - 2,285,376 Fund balances:

Nonspendable - - 77,450 Restricted 12,147,717 19,794,723 41,063,132 Committed - 152,403 10,379,330 Assigned - - 18,029,418 Unassigned (deficit) - (119,919) (493) Total fund balances 12,147,717 19,827,207 69,548,837 Total liabilities, deferred inflows
of resources, and fund balances 18,515,956$ 20,845,944 $ 92,841,877 $ City of Monterey Park
Balance Sheet (Continued)
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements 27

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Total Fund Balances - Total Governmental Funds 69,548,837$ Nondepreciable, net of $1,635,459 reported in the Internal Service Fund 20,826,967 $ Depreciable/amortizable, net of $1,377,602 reported in the Internal Service Fund 52,083,910 72,910,877 Bonds payable (122,465,192)$
Premium on bonds payable (3,057,713)
Loans payable, net of $(1,002,198) reported in Internal Service Fund (3,239,735) Interest payable (306,745)
Lease liabilities, net of $(24,525) reported in the Internal Service Funds (49,805) Subscription liabilities, net of $(122,953) reported in the Internal Service Funds (601,833) Compensated absences, net of $(151,791) reported in the Internal Service Funds (5,157,593) (134,878,616) Pension related deferred outflows of resources, net of $1,338,089 reported in the Internal Service Funds 32,267,188$
Aggregate net pension liability, net of $(615,960) reported in the Internal Service Funds (14,032,990) Pension related deferred inflows of resources,net of $(108,834) reported in the Internal Service Funds (2,670,030) 15,564,168 Deferred outflows of resources, net of $(373,800)
reported in the Internal Service Funds 2,728,748$
Net OPEB liability, net of $(2,177,950) reported in the Internal Service Funds (15,899,048) Deferred inflows of resources, net of $(339,974)
reported in the Internal Service Funds (2,481,800) (15,652,100) 907,072
(8,722,956)
Net Position (Deficit) of Governmental Activities (322,718)$

City of Monterey Park
Reconciliation of the Governmental Funds Balance Sheet to the June 30, 2023
Government-Wide Statement of Net Position
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:

Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position:

Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment replacement 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, net of the portion of net deficit allocated to business-type activities of $(7,896,263).

Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and, therefore, the revenue is recognized when eligibility requirements are met and earned.

Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Net OPEB liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

See accompanying Notes to the Basic Financial Statements 29

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General Retirement/
Fund Grants Pension Liability Housing
Revenues:

Taxes 42,160,583$ 165,270$ 8,797,182$ -$ Intergovernmental 275,444 7,900,440 - - Charges for services 9,499,865 - - - Licenses and permits 2,533,406 - - - Fines and forfeitures 318,112 - - - Investment income 1,006,690 126,283 176,742 36,007 Miscellaneous 635,492 58,360 145,152 - Total revenues 56,429,592 8,250,353 9,119,076 36,007 Expenditures:

Current:

General government 9,479,899 2,086,352 558,784 -
Public safety 31,313,417 3,845,974 2,944,940 -
Community development 7,246,617 182,187 88,173 -
Culture and recreation 1,458,740 1,222,060 54,496 -
Highways and street 2,903,671 48,250 57,402 - Health - - - - Captial outlay 406,195 791,423 - - Debt service:

Principal retirement 849,624 545,907 4,082,698 -
Interest and fiscal charges 88,925 6,696 3,032,004 -
Total expenditures 53,747,088 8,728,849 10,818,497 - Revenues over (under)
expenditures 2,682,504 (478,496) (1,699,421) 36,007 Other financing sources (uses):

Issurnace of subscription liabilities 25,811 - - - Transfers in 5,153,633 - 3,829,401 - Transfers out (8,328,041) - - - Total other financing sources (uses) (3,148,597) - 3,829,401 - Net Change in Fund Balances (466,093) (478,496) 2,129,980 36,007 Fund balances:

Beginning of year, as restated (Note 18) 28,919,314 1,222,542 2,565,775 3,644,884 End of year 28,453,221$ 744,046$ 4,695,755$ 3,680,891$ Special Revenue Funds
Major Funds
City of Monterey Park
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 30

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Major Funds
Nonmajor Total
Capital Projects Governmental Governmental
Street Fund Funds Funds
Revenues:

Taxes -$ 7,186,722$ 58,309,757 $ Intergovernmental - 4,457,295 12,633,179 Charges for services - 456,660 9,956,525 Licenses and permits - - 2,533,406 Fines and forfeitures - 2,947 321,059 Investment income - 1,015,410 2,361,132 Miscellaneous - - 839,004 Total revenues - 13,119,034 86,954,062 Expenditures:

Current:

General government - 6,949 12,131,984 Public safety - 1,053,264 39,157,595 Community development - 28,876 7,545,853 Culture and recreation - 1,203,467 3,938,763 Highways and street - 5,052,058 8,061,381 Health - 292,969 292,969
Captial outlay 8,306,129 1,908,476 11,412,223 Debt service:

Principal retirement - 317,323 5,795,552 Interest and fiscal charges - 749,087 3,876,712 Total expenditures 8,306,129 10,612,469 92,213,032 Revenues over (under)
expenditures (8,306,129) 2,506,565 (5,258,970) Other financing sources (uses):

Issurnace of subscription liabilities - 41,090 66,901 Transfers in - 1,053,450 10,036,484 Transfers out - (1,229,302) (9,557,343) Total other financing sources (uses) - (134,762) 546,042 Net Change in Fund Balances (8,306,129) 2,371,803 (4,712,928) Fund balances:

Beginning of year, as restated (Note 18) 20,453,846 17,455,404 74,261,765 End of year 12,147,717$ 19,827,207$ 69,548,837$ City of Monterey Park
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 31

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Net Change in Fund Balances - Total Governmental Funds (4,712,928)$ Capital outlay, net of $209,701 in the Internal Service Funds 14,179,923 $ Depreciation and amortization, net of $996,286 in the Internal Service Fundss (5,415,073) 8,764,850 577,960
(66,901)
Bonds payable 887,074$
Loans payable, net of $379,204 reported in the Internal Service Funds 4,387,698 Lease liabilities, net of $31,296 reported in the Internal Service Funds 18,656 Subscription liabilities, net of $236,957 reported in the Internal Service Funds 502,124 5,795,552 5,793
109,204
(77,429)
(1,339,109)
4,599,560
(2,024,863)
Change in Net Position of Governmental Activities 11,631,689$ Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment replacement, to individual funds. The net revenue of the Internal Service Funds is reported in governmental activities. This amount excludes $(579,296) charged to the business-type activities.

Certain pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Certain other postemployement benefits expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Compensated absences were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, compensated absences were not reported as expenditures in the governmental funds, net of $(19,674) reported in the Internal Service Funds Net change in revenues that was considered unavailable in the governmental funds. These items have been reported as revenue in the Statement of Activities.

Amortization of bond premium was recognized in interest expense on the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore amortization of bond discount was not reported as an expenditure in the governmental funds.

Proceeds from the issuance of subscription liabilities is not a revenue in the Statement of Activities, but is reported as a liability on the Government-Wide Statement of Net Position.

Principal repayment on long-term debt is not an expense in the Statement of Activities, but is considered an expenditure in governmental funds.

Interest accrued on long-term debt is reported in the Statement of Activities, but does not require the use of current financial resources. Therefore, accrued interest is not reported as an expenditure in governmental funds. This amount represents the change in accrued interest from the prior year.

Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds.

Governmental activities in the Statement of Activities were reported differently because:

City of Monterey Park
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes For the Year Ended June 30, 2023
in Fund Balances to the Government-Wide Statement of Activities See accompanying Notes to the Basic Financial Statements 32

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PROPRIETARY FUND FINANCIAL STATEMENTS
33

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Internal
Water Utility Refuse Sewer Total Service Funds
ASSETS
Current assets:

Cash and investments 15,955,496 $ 434,502 $ 6,788,609 $ 23,178,607 $ 9,499,382 $ Cash and investments with fiscal agent - - - - 622 Accounts receivable 3,886,440 878,626 422,101 5,187,167 15,502 Interest receivable 139,359 - 31,448 170,807 - Total current assets 19,981,295 1,313,128 7,242,158 28,536,581 9,515,506 Noncurrent assets:

Capital assets:

Nondepreciable 19,769,174 - 1,780,597 21,549,771 1,635,459 Depreciable and amortizable, net 28,451,436 47,918 3,544,967 32,044,321 1,377,602 Total noncurrent assets 48,220,610 47,918 5,325,564 53,594,092 3,013,061 Total assets 68,201,905 1,361,046 12,567,722 82,130,673 12,528,567

DEFERRED OUTFLOWS OF RESOURCES
Pension related 1,605,706 133,809 535,235 2,274,750 1,338,089 OPEB related 448,561 37,380 149,520 635,461 373,800 Total deferred outflows of resources 2,054,267$ 171,189 $ 684,755 $ 2,910,211 $ 1,711,889 $ City of Monterey Park
Enterprise Funds
June 30, 2023
Proprietary Funds
Statement of Net Position
Governmental
ActivitiesBusiness-Type Activities
See accompanying Notes to the Basic Financial Statements 34

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Internal
Water Utility Refuse Sewer Total Service Funds

LIABILITIES
Current liabilities:

Accounts payable 3,627,325 $ 6,255 $ 77,517 $ 3,711,097$ 1,333,461 $ Accrued liabilities 40,517 4,436 13,303 58,256 27,517 Retention payable 436,503 - 116,176 552,679 - Interest payable 22,870 1,538 1,484 25,892 - Deposit payable 472,032 - - 472,032 - Due to other funds - - - - 404,228 Loans payable, due within one year 1,127,507 - - 1,127,507 391,393 Bonds payable, due within one year 139,914 30,635 29,568 200,117 - Insurance assessment payable, due within one year - - - - 163,514 Leases liabilities, due within one year 649 - - 649 12,488 Subscription liabilities, due within one year 2,914 - - 2,914 79,856 Compensated absences, due within one year 192,633 16,165 42,180 250,978 144,982 Claims payable, due within one year - - - - 3,865,253 Total current liabilities 6,062,864 59,029 280,228 6,402,121 6,422,692 Noncurrent liabilities:

Loans payable, due more than one year 9,518,803 - - 9,518,803 610,805 Bonds payable, due more than one year 3,415,191 747,771 721,729 4,884,691 - Insurance assessment payable, due more than one year
- - - - 490,543 Leases liabilities, due more than one year 1,460 - - 1,460 12,037 Subscription liabilities, due more than one year 6,316 - - 6,316 43,097 Compensated absences, due more than one year 9,047 759 1,981 11,787 6,809 Claims payable, due more than one year - - - - 20,030,974 Net pension liability 739,153 61,596 246,384 1,047,133 615,960 Net OPEB liability 2,613,541 217,795 871,181 3,702,517 2,177,950 Total noncurrent liabilities 16,303,511 1,027,921 1,841,275 19,172,707 23,988,175 Total liabilities 22,366,375 1,086,950 2,121,503 25,574,828 30,410,867

DEFERRED INFLOW OF RESOURCES
Pension related 130,601 10,883 43,533 185,017 108,834 OPEB related 407,968 33,997 135,989 577,954 339,974 Total deferred inflows of resources 538,569 44,880 179,522 762,971 448,808

NET POSITION
Net investment in capital assets 37,126,458 47,918 5,209,388 42,383,764 1,863,385 Restricted - - - - 622 Unrestricted (deficit) 10,224,770 352,487 5,742,064 16,319,321 (18,483,226) Total net position (deficit) 47,351,228$ 400,405$ 10,951,452$ 58,703,085$ (16,619,219)$ Adjustment to reflect the consolidation of internal service funds activities to related enterprise funds (6,829,215) (949,337) (117,711) (7,896,263) Net position (deficit) of business-type activities 40,522,013$ (548,932)$ 10,833,741$ 50,806,822$ Enterprise Funds
City of Monterey Park
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
Governmental
ActivitiesBusiness-Type Activities
See accompanying Notes to the Basic Financial Statements 35

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36

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Internal
Water Utility Refuse Sewer Total Service
OPERATING REVENUES:

Charges for services 12,585,699 $ 7,041,047 $ 3,331,412 $ 22,958,158 $ 14,813,970 $ Meter installations 166,426 - - 166,426 - Miscellaneous - - - - 166,095 Total operating revenues 12,752,125 7,041,047 3,331,412 23,124,584 14,980,065 OPERATING EXPENSES:

Operation 11,860,266 7,070,660 2,065,827 20,996,753 - Salaries and Benefits 3,526,785 364,486 1,083,798 4,975,069 5,339,240 General and administrative 1,155,284 303,284 32,694 1,491,262 - Depreciation and amortization expense 1,692,004 10,400 247,865 1,950,269 996,286 Materials and supplies - - - - 2,590,242 Insurance and claims - - - - 8,616,674 Total operating expenses 18,234,339 7,748,830 3,430,184 29,413,353 17,542,442 OPERATING (LOSS) (5,482,214) (707,783) (98,772) (6,288,769) (2,562,377) NONOPERATING REVENUES (EXPENSES):

Investment earnings 650,145 154 159,288 809,587 - Interest expense (243,663) (3,873) (3,801) (251,337) (41,782) Total nonoperating income (loss) 406,482 (3,719) 155,487 558,250 (41,782) NET INCOME (LOSS) BEFORE TRANSFERS (5,075,732) (711,502) 56,715 (5,730,519) (2,604,159) TRANSFERS:

Transfers out (330,177) (34,012) (114,952) (479,141) - Total transfers (330,177) (34,012) (114,952) (479,141) - CHANGES IN NET POSITION (5,405,909) (745,514) (58,237) (6,209,660) (2,604,159) NET POSITION (DEFICIT):

Beginning of the year, as restated (Note 18) 52,757,137 1,145,919 11,009,689 64,912,745 (14,015,060) End of the year 47,351,228$ 400,405 $ 10,951,452 $ 58,703,085 $ (16,619,219) $ Change in Net Position (5,405,909) $ (745,514) $ (58,237) $ (6,209,660)$ Adjustment to Reflect the Consolidation of
Internal Service Fund Activities to
Related Enterprise Fund (413,301) (48,284) (117,711) (579,296) Changes in Net Position
of Business-type Activities (5,819,210) $ (793,798) $ (175,948) $ (6,788,956) $ City of Monterey Park
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023
Enterprise Funds
Business-Type Activities
Governmental
Activities
See accompanying Notes to the Basic Financial Statements 37

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Internal
Water Utility Refuse Sewer Total Service Fund

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users 13,537,828 $ 6,944,311 $ 3,307,670 $ 23,789,809 $ 14,980,065 $ Cash paid to suppliers for goods and services (12,008,493) (7,400,508) (2,028,344) (21,437,345) (2,602,048) Cash paid to employees for services (2,021,301) (220,373) (754,762) (2,996,436) (3,132,052) Cash paid for insurance claims - - - - (6,972,616) Net cash provided by
(used in) operating activities (491,966) (676,570) 524,564 (643,972) 2,273,349 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash recevied from other funds - - - - 193,993 Principal paid on pension obligation bonds (135,961) (14,006) (47,335) (197,302) - Interest paid on pension obligation bonds (194,216) (20,006) (24,083) (238,305) - Net cash provided by (used in)
noncapital financing activities (330,177) (34,012) (71,418) (435,607) 193,993

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (5,510,419) (42,760) (2,300,595) (7,853,774) (209,701) Principal paid (604,399) (34,077) (29,152) (667,628) (810,971) Interest paid (444,929) (18) (47,290) (492,237) (41,782) Net cash (used in) capital and related
financing activities (6,559,747) (76,855) (2,377,037) (9,013,639) (1,062,454) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 538,622 1,278 136,198 676,098 - Net cash provided by investing activities 538,622 1,278 136,198 676,098 -

Net change in cash and cash equivalents (6,843,268) (786,159) (1,787,693) (9,417,120) 1,404,888 CASH AND CASH EQUIVALENTS:

Beginning of year 22,798,764 1,220,661 8,576,302 32,595,727 8,095,116 End of year 15,955,496$ 434,502 $ 6,788,609 $ 23,178,607 $ 9,500,004 $ CASH AND CASH EQUIVALENTS:

Cash and investments 15,955,496 $ 434,502 $ 6,788,609 $ 23,178,607 $ 9,499,382 $ Cash and investments with fiscal agent - - - - 622 Total cash and cash equivalents 15,955,496$ 434,502 $ 6,788,609 $ 23,178,607 $ 9,500,004 $ For the Year Ended June 30, 2023
Proprietary Funds
Statement of Cash Flows
City of Monterey Park
Enterprise Funds
Governmental
ActivitiesBusiness-Type Activities
See accompanying Notes to the Basic Financial Statements 38

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Internal
Water Utility Refuse Refuse Sewer Service Fund
Reconciliation of operating (loss) to
net cash provided by (used in) operating activities:

Operating (loss) (5,482,214) $ (707,783) $ (98,772) $ (6,288,769) (2,562,377) $ Adjustments to reconcile to net cash provided by
Operating activities:

Depreciation/Amortization 1,692,004 10,400 247,865 1,950,269 996,286 Changes in assets and liabilities:
(Increase) decrease in accounts receivables 778,204 (96,736) (23,742) 657,726 - (Increase) decrease in deferred outflows
-pension related (1,377,681) (112,168) (461,734) (1,951,583) (1,276,992) (Increase) decrease in deferred outflows
- OPEB related (249,534) (22,440) (82,822) (354,796) (296,697) Increase (decrease) in accounts payable 1,007,057 (26,564) 70,177 1,050,670 1,178,731 Increase (decrease) in accrued liabilities 9,537 1,316 1,501 12,354 (4,975) Increase (decrease) in deposits payable 7,499 - - 7,499 - Increase (decrease) in compensated absences 143,802 1,115 (106,209) 38,708 19,674 Increase (decrease) in claims payable - - - - 1,453,521 Increase (decrease) in net pension liability 4,208,727 390,884 1,364,760 5,964,371 1,545,596 Increase (decrease) in total OPEB liability 1,144,330 107,506 378,818 1,630,654 1,608,778 Increase (decrease) in deferred inflows
- pension related (2,307,105) (220,473) (742,232) (3,269,810) (544,326) Increase (decrease) in deferred inflows
- OPEB related (66,592) (1,627) (23,046) (91,265) 156,130 Net cash
provided by (used in)
operating activities (491,966)$ (676,570) $ 524,564 $ (643,972) $ 2,273,349 $ NONCASH ITEMS:

Acquisition of right to use lease assets -$ - $ - $ - $ (95,424)$ Issuance of lease and subscription liabilities -$ -$ -$ -$ 95,424$ Enterprise Funds
City of Monterey Park
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 39

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40

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FIDUCIARY FUND FINANCIAL STATEMENTS
41

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42

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Private-Purpose
ASSETS Trust Fund
Current assets:

Cash and investments 171,640$
Cash and investments with fiscal agent 1,925,722
Total assets 2,097,362

LIABILITIES
Current liabilities:

Accounts payable 52
Accured liabilities 2,084
Interest payable 122,821
Advances from City of Monterey Park, due within one year 137,342 Long term debt, due within one year 2,231,391
Total current liabilities 2,493,690
Noncurrent liabilities
Advances from City of Monterey Park, due in more than one year 758,967 Long-term debt, due in more than one year 94,175,675
Total Noncurrent liabilities 94,934,642

NET POSITION (DEFICIT)
Restricted for:

Successor Agency (95,330,970)$
June 30, 2023
Statement of Fiduciary Net Position
City of Monterey Park
Fiduciary Fund
See accompanying Notes to the Basic Financial Statements 43

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Private-Purpose
Trust Fund

ADDITIONS
Redevelopment property tax trust fund 2,547,790$
Investment income 25,447
Total additions 2,573,237

DEDUCTIONS
Administration 190,002
Interest expense and fiscal charges 5,894,715
Total deductions 6,084,717
CHANGE IN NET POSITION (3,511,480)

NET POSITION (DEFICIT)
Beginning of year (91,819,490)
End of year (95,330,970)$
City of Monterey Park
Statement of Change in Fiduciary Net Position
Fiduciary Fund
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 44

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45 NOTES TO THE BASIC FINANCIAL STATEMENTS

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46 This page intentionally left blank.

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City of Monterey Park
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023

47 Page

Note 1 – Summary of Significant Accounting Policies ..................................................................................... 49

A. Description of the Reporting Entity ........................................................................................ ....... 49 B. Basis of Accounting and Measurement Focus ............................................................................... 49 C. Cash and Investments ....................................................................................................... .............. 52 D. Accounts Receivable and Due from Other Governments .............................................................. 53 E. Loans and Notes Receivable .......................................................................................................... 53 F. Prepaid Items .................................................................................................................................. 53 G. Leases ..................................................................................................................... ........................ 54 H. Capital Assets ............................................................................................................. .................... 55 I. Subscription-Based Information Technology Arrangements (SBITAs) ........................................ 56 J. Deferred Outflows/Inflows of Resources ..................................................................................... .. 57 K. Unearned and Unavailable Revenue ........................................................................................... ... 57 L. Compensated Absences .................................................................................................................. 57 M. Net Pension Liability ...................................................................................................... ................ 57 N. Other Postemployment Benefits Liability .................................................................................... .. 58 O. Claims Payable ............................................................................................................................... 58 P. Net Position ............................................................................................................... ..................... 58 Q. Fund Balances .............................................................................................................. .................. 59 R. Property Taxes ............................................................................................................. .................. 60 S. Use of Estimates ........................................................................................................... .................. 60 T. Implementation of New GASB Pronouncements .......................................................................... 60

Note 2 – Cash and Investments .......................................................................................................................... 61

A. Demand Deposits ............................................................................................................ ............... 61 B. Investments Authorized by the California Government
Code and the City's Investment Policy ........................................................................................ ... 62 C. Investments Authorized by Debt Agreement ................................................................................. 6 3 D. Investment in Local Agency Investment Fund (LAIF) .................................................................. 63 E. Fair Value Measurements .................................................................................................... ........... 63 F. Disclosures Relating to Interest Rate Risk ..................................................................................... 63 G. Disclosures Relating to Credit Risk ........................................................................................ ....... 64 H. Concentration of Credit Risk ............................................................................................... ........... 64 I. Custodial Credit Risk ...................................................................................................... ............... 64

Note 3 – Loans Receivable .................................................................................................................................. 65

Note 4 – Leases Receivable ................................................................................................................................. 66

Note 5 – Interfund Transactions ........................................................................................................................ 67

A. Due to/from Other Funds .................................................................................................... ........... 67 B. Transfers .................................................................................................................. ....................... 68

Note 6 – Receivables From Successor Agency ................................................................................................... 68

Note 7 – Capital Assets ........................................................................................................................................ 69

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City of Monterey Park
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023

48 Page

Note 8 – Long-Term Liabilities ........................................................................................................................... 71

A. Governmental Activities .................................................................................................... ............. 71 B. Business-Type Activities ................................................................................................... .............. 76 C. Fiduciary Activities ......................................................................................................................... 78

Note 9 – Due To Other Governmental Agencies .............................................................................................. 81

Note 10 – Defined Benefit Pension Plans ............................................................................................................ 81

California Public Employees’ Retirement System Plan (Continued) A. General Information a bout the Pension Plans ................................................................................. 81 B. Net Pension Liability ...................................................................................................... ................. 83 C. Changes in the Net Pension Liability ....................................................................................... ....... 84 D. Pension Expenses and Deferred Outflows/Inflo ws of Resources Related to Pensions ................... 87

Massachusetts Mutual Retirement Plan - Defined Benefit Plan E. General Information a bout the Pension Plans ................................................................................. 88 F. Net Pension Liability ...................................................................................................... ................. 88 G. Changes in the Ne t Pension Liability .............................................................................................. 90 H. Pension Expenses and Deferred Outflows/Inflo ws of Resources Related to Pensions ................... 91

Note 11 – Defined Contribution Pension Plans - Monterey Park Part-Time Retirement Plan .................... 91

Note 12 – Other Postemployment Healthcare Plan ........................................................................................... 92

A. Plan Description ........................................................................................................... ................... 92 B. Total OPEB Liability ....................................................................................................... ............... 93 C. Changes in total OPEB Liability ............................................................................................ ......... 94 D. OPEB Expense and Deferred Outflows/Inf lows of Resources Related to OPEB ........................... 95

Note 13 – Risk Management ................................................................................................................................ 96

Note 14 – Stewardship, Compliance and Accountability .................................................................................. 97

A. Deficit Fund Balance/Net Position .......................................................................................... ........ 97 B. Excess of Expenditures over Appropriations ................................................................................. . 98

Note 15 – Net Investment in Capital Assets ....................................................................................................... 98

Note 16 – Classification of Fund Balances ......................................................................................................... 99

Note 17 – Commitments ......................................................................................................... ........................... 100

A. Commitments ................................................................................................................ ................ 100 B. Contingencies .............................................................................................................. .................. 100

Note 18 – Prior Period Adjustments ................................................................................................................. 100

Page 78 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023

49 Note 1 – Summary of Significant Accounting Policies

The basic financial statements of the City of Monterey Park, California, (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial re porting principles. The following is a summary of the City’s significant policies:

A. Description of the Reporting Entity

The City was incorporated May 29, 1916 under the genera l laws of the State of California and enjoys all the rights and privileges pertaining to General Law cities. The City is governed by an elected five-member City Council. As required by generally accepted accounting principles in the United States of America, the financial statements include the financial activities of the City (the primary government), the Monterey Park Public Financing Authority (the “Financing Authority”), and the Monterey Park Housing Authority (the “Housing Authority”). Although the Financing Authority and Housing Authority are legally separate from the City, they have been “blended” as though they are part of the City because the component units’ governing body are substantially the same as the City’s and there is a financ ial benefit or burden relationship between the City and the component units; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though they do not provide services directly to it.

Blended Component Units

The Monterey Park Public Financing Authority

The Financing Authority was organized in May 1989 unde r a joint exercise of power agreement to provide for the financing of public capital improvements for the City and the former Redevelopment Agency of Monterey Park. The members of the City Council act as the govern ing board of the Financing Authority and there is a financial benefit or burden relationship between the City and the Fina ncing Authority. The Financing Authority does not issue separate financial statements.

The Monterey Park Housing Authority

The Housing Authority was established in September 1992 to provide affordable housing within the City. The members of the City Council act as the governing board of the Housing Authority and there is a financial benefit or burden relationship between the City and the Housing Authority. The Housing Authority does not issue separate financial statements.

B. Basis of Accounting and Measurement Focus

Government-Wide Financial Statements

The City Government–Wide Financial Statements incl ude 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, the primary government, accompanie d by a total column. Fiduciary activities of the City are not included in these statements.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

50 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Accounting and Measurement Focus (Continued)

Government-Wide Financial Statements (Continued)

Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are include d 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 GASB Statement No. 34 in regard 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 th e total primary government column. However, those transactions between governmental and business-type ac tivities 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 accounts of the City are organized on the basis of fu nds, each of which is cons idered a separate accounting entity. The operations of each fund are accounted for by pr oviding a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpo se and is used to aid management in demonstrating compliance with finance-related lega l and contractual provisions. The mini mum number of funds is maintained in accordance with legal and managerial requirements.

Governmental Fund Financial Statements

Governmental Fund Financial Statements include a Ba lance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differen ces between fund balance 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.

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 Ba lances presents increases (revenues and other financing sources) and decreases (e xpenditures and other financ ing 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.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

51 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Accounting and Measurement Focus (Continued)

Governmental Fund Financial Statements (Continued)

Revenues are recognized as soon as they are both “measura ble” and “available”. Revenues are considered to be available when they are collectible within the current period or soon enoug h thereafter to pay liabilities of the current period. For this purpose, the City considers revenu es to be available if they ar e collected within 60 days of the end of the current fiscal period. The primary reve nue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergove rnmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The City reports the following major governmental funds:

General Fund – This fund is used to account for r esources traditionally associated with governments which are not required by law or sound financial management to be accounted for in another fund.

Special Revenue Grants Fund - This fund has been established to account for the grants requiring

segregated fund accounting. Financing is provided by federal, state and county agencies.

Special Revenue Retirement/Pension Liability Fund – This fund was established to account for revenue received from voter-approved pr operty tax levied to provide for em ployee retirement costs, as established pursuant to Monterey Park Municipal Code Sectio n 2.40.060 and to account fo r the financial resources provided by the City in anticipation of estimated increases in retirement costs.

Special Revenue Housing Fund – This fund is used to account for housing activities for the City and revenue
received from housing loan repayments and rental income.

Capital Projects Streets Fund – This fund is used to account for funds accumulated for street related capital projects.

Proprietary Funds Financial Statements

Proprietary Funds Financial Statements include a Statemen t 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 been combined with the governmental and business-type activities in the Government-Wide Financial Statements. The City’s internal service funds include three individual funds which provide services directly to other City funds. These areas of service include Separation Benefits, General Liability, Workers’ Compensation, Shop, Information Technology, and Fringe Benefits.

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 presents 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 rec ognized in the period in which the liability is incurred.

In these funds, receivables have been recorded as reve nue and provisions have been made for uncollectible amounts.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

52 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Accounting and Measurement Focus (Continued)

Operating revenues in the proprietary funds are those re venues that are generated fro m the primary operations of the fund. All other revenues are repor ted as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The City reports the following major enterprise funds:

The Water Utility Enterprise Fund is used to account for operations that are financed and operated in a
manner similar to private business enterprises and where the intent of the City is that the costs (expenses, including depreciation) of providing goods services to the general public on a continuing basis be financed or recovered primarily through user charges. The City accounts for its water utility in this fund.

The Refuse Enterprise Fund is used to account for receipts and expenditures relating to waste management activities including refuse collection, disposal and reduction.

The Sewer Enterprise Fund is used to account for r eceipts and expenses for construction and improvement to deficient sanitary mains identified in the Sewer Master Plan.

Additionally, the City reports the following proprietary fund types:

Internal Service Funds

The Internal Service Funds are utilized to finance and account for activities involved in rendering services
to departments within the City. Co sts of services are accumulated in these funds and charged to user departments as such cost s are incurred. The City maintains six internal service funds for separation benefits, general liability claims, workers’ compensation claims, auto shop operations, technology development, and fringe benefits.

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a Statement of Fiduciary Net Position. The City maintains a fiduciary fund (private–purpose trust fund) for the Successor Agen cy to the former Community Development Agency.

Private-purpose trust funds include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. the private purpose trust funds are accounted for on the full accrual basis of accounting where the assets associated with the activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from govern ment-mandated nonexchange transactions or voluntary nonexchange transactions.

C. Cash and Investments

The City pools its available cash for investment purposes. 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.

U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

53 Note 1 – Summary of Significant Accounting Policies (Continued)

C. Cash and Investment (Continued)

The three levels of the fair value measurement hierarchy are described below:

Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets at the measurement date.

Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets and liabilities through corroboration with market data at the measurement date.

Level 3 – Unobservable inputs that reflect management’s be st estimate of what market participants would use in pricing the assets and liabilities at the measurement date.

The statement of cash flows requires presentation of “cash and cash equivalents”. For this purpose, the City considers all proprietary fund pooled cash and investments as “cash and cash equivalents”, as such funds are available to the various funds as needed.

Certain disclosure requirements, if applicable, for Deposits and Investment Risks in the following areas:

 Interest Rate Risk
 Credit Risk
- Overall
- Custodial Credit Risk
- Concentration of Credit Risk

In addition, other disclosures are speci fied including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

D. Accounts Receivable and Due from Other Governments

All accounts and due from other governments are shown ne t of any allowance for uncollectible accounts, if applicable, and estimated refunds due.

E. Loans and Notes Receivable

The accompanying financial statements reflect the record ing of certain loans and notes receivable that represent loans made to various parties for homebuyer and rehabilitation loan programs. Where reasonably estimable, an allowance for doubtful accounts has been recorded to re flect management’s best estimate of probable losses associated with nonrepayment. An estimate of any a dditional potential losses associated with nonrepayment cannot be reasonably estimated at this time.

F. Prepaid Items

Prepaid items are payments made to vendors for services th at will benefit periods beyond the fiscal year ended using consumption method.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

54 Note 1 – Summary of Significant Accounting Policies (Continued)

G. Leases

Lessor

The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Sub sequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencemen t date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

 The City uses the average of the LAIF rate and the incremental borrowing rate (IBR) provided by the City’s financial institution for existing leases or the current rate at the time a new lease is executed.  The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
 Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circum stances that would require a remeasureme nt of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that ar e expected to significantly affect the amount of the lease receivable.

Lessee

The City has a policy to recognize a lease liability and a right -to-use asset (lease asset) in the financial statements with an initial, individual value of $5 ,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying asset s are not included in the measurement of the lease liability.

At the commencement of a lease, the lease liability is measured at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. L ease assets are amortized using the straight–line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the State has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

55 Note 1 – Summary of Significant Accounting Policies (Continued)

G. Leases (Continued)

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

 The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the noncancelable period of the lease, plus any option periods that are reasonably certain to be exercised.
 Lease payments included in the measurement of the le ase liability are composed of fixed payments and purchase option price that the City is reasonably certa in to exercise. The City monitors changes in circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported as right-to-use along with other capital assets and lease liabilities are reported as long- term liabilities on the statement of net position.

H. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (roads, sidewalks, drainage systems, lighting systems, etc.), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. These assets are valued at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are valued at their acquisition value. Leased assets, which include equipment, follow the same capitalization thresholds as capital assets. Leased assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term.

The costs of normal maintenance and repairs that do not ad d to the value of the asset or materially extend the life of assets are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. The capitalization threshold for property, plant and equipment is $5,000 and for infrastructure assets is $200,000. Depreciation is recorded in the government-w ide financial statements on a straight-line basis over the useful life of the depreciable assets.

Depreciation is charged to operations, using a straight-line method based on the following average useful lives of the assets:

Buildings 40 to 50 years
Improvements 10 to 50 years
Equipment 5-20 years
Water Meters 20 years
Water Mains 40 to 75 years
Water Hydrants 40 years
Wells 40 years
Other Water Equipment 5 to 40 years

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

56 Note 1 – Summary of Significant Accounting Policies (Continued)

H. Capital Assets (Continued)

Infrastructure:

Roadway 25 years
Bridge 40 years
Sewer System 50 years
Streetlight 20 years
Traffic Signal 20 years

I. Subscription-Based Information Technology Arrangements (SBITAs)

The City has a policy to recognize a subscription liability and a right ‐to‐use subscription asset (subscription asset) in the financial statements. The City recognizes sub scription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than on e year. Variable payments based on future performance of the City, usage of the underlying IT asset, or number of user seats are not included in the measurement of the subscription liability, rather, those variable payments ar e recognized as outflows of resources (expenses) in the period the obligation for those payments is incurred.

At the commencement of a SBITA, th e City initially measures the subscrip tion liability at the present value of payments expected to be made during the subscription term. Subsequently, the sub scription liability is reduced by the principal portion of subscription payments made.

Subscription assets are recorded at the amount of the initia l measurement of the subscription liabilities, less any payments made to the SBITA vendor before the commencement of the subscription term, and capitalizable initial implementation cost, less any incentives received from the SBITA vendor at or before the commencement of the subscription term.

 Preliminary Project Stage: Outlays are expensed as incurred.  Initial Implementation Stage: Outlays are capitalized as an addition to the subscription asset.

Upon adoption, the City elected to exclude the capitali zable outlays associated with the initial implementation stage and the operation and additional implementation stage that were incurred prior to the implementation of this Statement in the measurement of subscription assets as of July 1, 2022.

Subscription assets are reported within capital assets and subscription liabilities are reported with long-term liabilities on the statement of net position. Subscription assets are amortized using the straight-line method over the shorter of the subscription term or the useful life of the underlying IT asset, unless the subscription contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the subscription asset is amortized over the useful life of the underlying IT asset.

Key estimates and judgments related to SBITA include how the City determines (1) the discount rate it uses to discount the expected subscription payments to presen t value, (2) subscription term, and (3) subscription payments.

 The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITA.

Page 86 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

57 Note 1 – Summary of Significant Accounting Policies (Continued)

I. Subscription-Based Information Technology Arrangements (SBITAs) (Continued)

 The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

J. Deferred Outflows/Inflows of Resources

The statement of financial position reports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods. The City reports pension contribution after m easurement date and deferred loss related to pension, OPEB, debt refunding in this category.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods. The City reports unavailable revenues and deferred gain related to pension and OPEB in this category.

K. Unearned and Unavailable Revenue

Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues are prepaid charges for services.

In the governmental fund financial st atements, unavailable revenue is repor ted when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City reports unavailable revenue when an asset is reported in governmen tal fund financial statements but the revenue is not available.

L. Compensated Absences

The cost of earned but unused vacation and sick leave, for which the City has a future obligation to pay, is recognized in the government-wide financial statem ents. A liability for these amounts is reported in governmental funds only if they become due and payable as a result of employee resignations or retirements.

M. Net Pension Liability

For purposes of measuring the net pension liability, defe rred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the plans. 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.

The following timeframes are used for pension reporting:

CalPERS MMRP
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2023
Measurement Period July 1, 2021 to June 30, 2022 July 1, 2022 to June 30, 2023

Page 87 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

58 Note 1 – Summary of Significant Accounting Policies (Continued)

M. Net Pension Liability (Continued)

Gains and losses related to changes in total pension lia bility 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 categor ized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. Th e amortization period differs depending on the source of the gain or loss. The diff erence between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amorti zed straight-line 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.

N. Other Postemployment Benefits Liability

For purposes of measuring the net OPEB liability and de ferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary ne t position of the City’s California Public Employees Medical and Hospital Care Act (PEMCHA) plans (OPEB Plans) and additions to/deductions from the OPEB Plans’ fiduciary net position have been determined on the same basis as th ey are reported by PEMCHA. For this purpose, the City’s OPEB Plan recognizes benefit paym ents when due and payabl e in accordance with the benefit terms. Investments are reported at fair value.

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

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022

Gains and losses related to changes in total OPEB liab ility and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categor ized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in fu ture pension expense. The amortization period differs depending on the source of the gain or loss. The differ ence between projected and actual earnings is amortized straight-line over five years. All other amounts are amortized straight-line 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.

O. Claims Payable

The accrual for workers’ compensation and general liability claims is based upon past experience which has been modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2023 is dependent on future developments , based on information from the plan administrators, City management believes that the aggregate accrual is adequate to cover such losses, including amounts for incurred but not reported claims.

P. Net Position

In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation and amortization and related deferred charges on refunding, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those items, including retention payable, net of unspent debt proceeds.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

59 Note 1 – Summary of Significant Accounting Policies (Continued)

P. Net Position (Continued)

Restricted – This component of net position consists of r estricted assets reduced by liabilities and deferred inflows of resources related to those assets. Separa te line items are used to distinguish among major categories of restrictions and are further displayed as expendable or nonexpendable based on the nature of the restriction.

Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of res ources that are not included in the de termination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purpo ses for which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of ne t position first, then the unrestricted component of net position as needed.

Q. Fund Balances

In the governmental fund financial statements, fund balances are classified as follows:

Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The City’s nonspendable fund balance represents prepaid items, and loans receivabl e unless the proceeds from the collection of those loans receivable is restricted, committed, or assigned.

Restricted fund balance encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restric tions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of othe r governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed fund balance This amount indicates the portion of fund balances which can only be used for specific purposes pursuant to formal resolution of the City Council. The City Council is considered the highest authority for the City. Adoption of a resolution by the City Council is required to commit resources or to rescind the commitment.

Assigned fund balance consists of funds that are set aside for sp ecific purposes by the City’s highest level of decision-making authority or a body or official that has been given the authority to assign funds. The City Manager is authorized by the City Council by resolution to determine and define the amount of assigned fund balances.

Unassigned fund balance is the residual classification for the City ’s fund balance and includes all spendable amounts not contained in the other classifications. This category also provides the resources necessary to meet unexpected expenditures and reve nue shortfalls. The General Fund is the only fund that reports a positive unassigned fund balance amount.

When expenditures are incurred for purposes where only unr estricted fund balances are available, the City uses the unrestricted resources in the following order, excep t for instances wherein an ordinance specifies the fund balance:

 Restricted
 Committed
 Assigned
 Unassigned

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

60 Note 1 – Summary of Significant Accounting Policies (Continued)

R. 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. Property taxes collect ed go into a pool and are then allocated to the cities based on a predetermined formula. The City accrues only those taxes which are received from the County of Los Angeles within 60 days after year-end.

Lien Date: Janurary 1
Levy Date: July 1 to June 30
Due Dates: November 1 and Feburary 1
Delinquent Dates: December 11 and April 11

S. Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly actual results could differ from those estimates.

T. Implementation of New GASB Pronouncements

During fiscal year ended June 30, 2023, the City has implemented the following new GASB Pronouncements:

GASB Statement No. 96 In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements (GASB Statement No. 96), to provide guidance on the accounting and financial reporting for subscription based information technology arrangements (SBITAs) fo r government end users (governments). This Statement (1) defines a SBITA; (2 ) establishes that a SBITA results in a right-to-use subscription asset- -an intangible asset and a corresponding subscription liability: (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. See rest atement at Note 18 for the implementation of GASB Statement No 96.

GASB Statement No. 99 - In April 2022, the GASB issu ed Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accountin g and financial reporting for financial guarantees. The Statement is effective immediately for the requirements re lated to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary tr ansactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63. The Statement is effective for fiscal year years beginning after June 15, 2022 for requirements related to leases, PPPs, and SBITAS. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2023.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

61 Note 2 – Cash and Investments

The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

Statement of
Governmental Business-type Fiduciary
Activities Activities Total Net Position Total
Cash and investments 70,588,584 $ 23,178,607 $ 93,767,191 $ 171,640 $ 93,938,831 $ Cash and investment with fiscal agent 19,298,152 - 19,298,152 1,925,722 21,223,874 Total cash and investments 89,886,736 $ 23,178,607 $ 113,065,343 $ 2,097,362 $ 115,162,705 $ Government-Wide Statement of Net Position

Cash and investments at June 30, 2023 consisted of the following:

Cash and cash equivalents:

Petty cash 28,550 $
Demand deposits with financial institutions 2,988,858
Time certificates of deposit 256,025
Total cash and cash equivalents 3,273,433
Investments:

Local Agency Investment Fund 35,843,032
Negotiable Certificates of Deposit 7,380,544
Los Angeles County Treasury Pool 41,634,594
Money Market Mutual Fund 5,807,228
Investments with Fiscal Agent:

Money Market Mutual Fund 21,223,874
Total investments 111,889,272
Total cash and investments 115,162,705$

A. Demand Deposits

The carrying amount of the City’s demand deposits were $2,988,858 at June 30, 2023. Bank balances before reconciling items were $4,533,598 at that date, the total amount of which was insured or collateralized with securities held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securiti es 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 depos its by pledging first trust deed mort gage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insuran ce Corporation (“FDIC”). The City has not waived the collateralization requirements.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

62 Note 2 – Cash and Investments (Continued)

A. Demand Deposits (Continued)

The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond i ndentures. Interest income earned on pooled cash and investments is allocated quarterly to the General Fund and certain designated Special Revenue Funds based on the month-end cash and investment balances. Proceed s obtained from long-term debt issuances including construction, lease payment and reserve fund balances are held by the City or by fiscal agents on behalf of the City and invested in the City’s name. Interest income on proceeds of debt is credited di rectly to the related fund, as defined by the Bond Indenture.

Tax allocation bonds reserve balances held by fiscal agents were transferred to the Successor Agency from the Former Monterey Park Redevelopment Agency and were reported in the Fiduciary Fund.

B. Investments Authorized by the California Government Code and the City's Investment Policy

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

Maximum Maximum
Maximum Percentage of Investment in One
Authorized Investment Type Maturity Portfolio Issuer
Local Agency Bonds 5 years None None
U.S. Treasury Obligation 5 years None None
U.S. Government Sponsored Agency Securities 5 years None None State Obligations - CA and Others 5 years None None
Collateralized Bank Deposits 5 years None None
Medium Term Notes issued by corporations 5 years 30% "A" or better ranking by nationally recognized rating service; U.S. domiciled corporations or licensed
depository
Local Agency Investment Fund (LAIF) N/A None None
Negotiable Certificates of Deposit 5 years 30% None
Maximum Maximum
Maximum Percentage of Investment in One
Los Angeles County Pooled Investment Fund None 10% of LACPIF pool balance
None
Banker's Acceptances 180 days 40% of portfolio (no
more than 30% in any
once commercial
bank)
"A" or higher rating for issuer's debt within U.S.
corporations and have assets in excess of $500 million.

Commercial Paper 270 days 10% None
Repurchase Agreement Not allowable Not allowable Not allowable Financial Futures & Financial option contracts 5 years 30% None Reverse Repurchase Agreements & Securities Lending
Agreements
Not allowable Not allowable Not allowable
Mortgage Pass-Through Securities 5 years 20%
"A" or better ranking by nationally recognized rating
service
Money Market Mutual Funds 5 years 20% Highest ranking by not less than 2 largest rating services, have an SEC registered investment advisor
with 5+ years experience, assets under management
>$500 million

Page 92 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

63 Note 2 – Cash and Investments (Continued)

C. Investments Authorized by Debt Agreement

In addition to the investment types listed above, the City may also invest funds in money market mutual funds in accordance with bond indentures.

D. Investment in Local Agency Investment Fund (LAIF)

The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. As of June 30, 2023, the City had $35,843,032 invested in LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

E. Fair Value Measurements

At June 30, 2023, investments are reported at fair valu e. The following table presents the fair value measurement of investments on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2023:

Primary Government Total Level 2 Uncategorized
Negotiable Certificates of Deposit 7,380,544$ 7,380,544$ -$ Local Agency Investment Fund 35,843,032 - 35,843,032 Los Angeles County Treasury Pool 41,634,594 - 41,634,594 Money Market Mutual Funds 27,031,102 - 27,031,102 Total Investments 111,889,272$ 7,380,544$ 104,508,728$

F. Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an inv estment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of th e fair values of the City's investments to market interest rate fluctuations is as follows:

12 Months More than
Investment Type Total or less 25-36 36 Months
Negotiable Certificates of Deposit 7,380,544$ 740,000$ 6,395,544$ 245,000$ Local Agency Investment Fund 35,843,032 35,843,032 - - Los Angeles County Treasury Pool 41,634,594 41,634,594 - - Money Market Mutual Funds 27,031,102 27,031,102 - - Total 111,889,272$ 105,248,728$ 6,395,544$ 245,000$ Remaining Maturity (in Months)

Page 93 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

64 Note 2 – Cash and Investments (Continued)

G. Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an i nvestment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating requi red by (where applicable) the California Government Code, the City’s investment policy or debt agreements, and the actual rating by Standard & Poor’s as of year-end for each investment type.

Minimum
Legal
Investment Type Total Rating
Negotiable Certificates of Deposit 7,380,544 $ N/A Local Agency Investment Fund 35,843,032 N/A Los Angeles County Treasury Pool 41,634,594 N/A Money Market Mutual Funds 27,031,102 AAA
Total 111,889,272$

H. Concentration of Credit Risk

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

I. Custodial Credit Risk

The Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of a third party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a governme nt will not be able to recover the value of investment or collateral securities that are in the possession of the thir d party. At June 30, 2023, none of the City’s deposits or investments were exposed to custodial credit risk.

Note 3 – Loans Receivable

Loans receivables of the City as of June 30, 2023, were

Residential Rehabilitation (CDBG) 48,015$
SERA Program 4,322
Pacific Housing Loan 267,295
Pacific Bridge Loan 441,953
First Time Home Buyer Program 41,695
Critical Maintenance (Housing) 42,771
Critical Maintenance (Grants) 1,278,923
Abajo del Sol Loan (Grants) 2,252,905
LINC Community Development (Housing) 2,537,498
LINC Community Development (Grants) 1,019,411
Low/Mod Housing Deferred Loans 1,186,222
Subtotal 9,121,010
Less:Allowance for uncollectible loans (7,173,202)
Total Loans Receivable 1,947,808$

Page 94 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

65 Note 3 – Loans Receivable (Continued)

Residential Rehabilitation – The City provided low interest financing fo r the rehabilitation of residential sites within the City through the Community Development Block Grant program. The amount of outstanding loan balance at June 30, 2023, is $48,015 and has been recorded as notes receivable in the Special Revenue Grants Fund.

SERA Program – The City participated in the State Earthquake Rehabilitation Assistance (SERA) program to assist residents with the application and loan processes for residential repairs and rehabilitation following the October 1987 Whittier-Narrows earthquake. The outs tanding balance of loans placed th rough the program is $4,322 at June 30, 2023, and has been recorded as notes receivable in the Special Revenue Grants Fund with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.

Pacific Housing Loan – On July 21, 2004, the City entered into an agreement to provide a loan to Pacific Housing Development Corporation for the purpose of construction and renovation of an affordable housing facility for persons with developmental disabilities. The loan, funded in April 2005, consists of a permanent residual receipts loan in the amount of $175,000 and a subordinated c onstruction loan in the amount of $225,000. The subordinated construction loan has been paid off by Pacific Housing in 2008-09. Other remaining amounts bear interest at the rate of 3% per annum until paid. The loan was funded by use of Federal HOME Program funds and is reported in the Special Revenue Grants Fund. At June 30, 2023, outstanding principal and interest are $175,000 and $92,295, respectively.

Pacific Bridge Loan – In 1995, the former Redevelopment Agency ente red into a thirty- year loan agreement with Pacific Bridge Housing Corporation for the purpose of cons truction and renovation of a disabled adult affordable housing facility. In the agreement the former Redevelopmen t Agency agreed to loan to Pacific Bridge Housing Corporation up to the maximum sum of $240,478 bearing interest at the rate of 3% per annum until paid. Principal and interest payments are due in annu al installments commencing upon February 15 of the first full calendar year following the date of the initial occu pancy of the facility and continuing annually thereafter on each successive February 15 through and including the date which is thirty (30) years after the Repayment Commencement Date. The amount of such annual installments payable by Borrower is based on the Annual Residential Receipt Installments as described in the agreement. During 1996-97, the loan was funded by the use of federal HOME Program funds, and is reported in the Special Revenue Grants Fund. At June 30, 2023, outstanding principal and interest are $240,478 and $201,475, respectively.

First Time Homebuyers – Beginning 1996-97, the City provided second mortgage loans through the First-Time Homebuyer Program to assist qualified fi rst-time homebuyers to purchase residences. All second loans will be fixed at an interest rate of five percent (5%) and for a term of thirty (30) years. If the buyer retains the property for thirty (30) years, both principal and interest will be forgiven. The loans were transferred from the former Redevelopment Agency’s Housing Capital Projects Fund to the City’s Special Revenue Housing Fund on February 1, 2012 due to the dissolution of the former Redevelopment Agency. At June 30, 2023, $41,695 is the amount of outstanding loan balances with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.

Critical Maintenance – Beginning in 1997-98, the City offered low interest rate loans through the Critical Maintenance Loan Program to assist low and moderate income homeowners for essential or emergency repairs. At June 30, 2023, the loans outstanding totaled $1,321,694 . Of this amount, $42,771 is funded by the former Redevelopment Agency’s Housing Capital Projects Fund and $1,278,923 is funded by the Federal HOME Program Grants Fund. The outstanding loan balance of $42,771 was transferred from the former Redevelopment Agency’s Housing Set Aside Fund to the City’s Special Revenue Housing Fund and has been reported as loans receivable. The outstanding balances were offset with allowance for uncollectible in the fund level financial statements and in the government-wide financial statements.

Page 95 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

66 Note 3 – Loans Receivable (Continued)

Abajo del Sol – In 1998, the Housing Authority and the Abajo del Sol, Limited Partnership had entered into a housing development agreement. Under the agreement, the Authority provided to the Developer a $1.2 million loan bearing interest at the rate of 5.1% per annum for th e construction of 60 units of affordable housing for senior citizens. On or before March 15th of each year, the Borro wer shall pay lender an amount equal to the applicable percentage of the Net Cash Flow attributable to the prior calendar year. The loan is funded by the Federal HOME Program Grants Fund. At June 30, 2023, outstanding principal and interest being recorded as notes receivable are $1,187,344 and $1,065,561, respectively, in the Special Re venue Grants Fund with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.

LINC Community Development – In 2015, the Monterey Park Successor Housing Agency and City entered into a housing development agreement with LINC Community De velopment Corporation (LINC). Under the agreement, the Monterey Park Successor Housing Agency sold 5 proper ties to the developer in exchange for a $2,080,000 loan bearing compound interest at the rate of 2.41% per annum for 5 units of affordable rental housings. At June 30, 2023, outstanding principal and interest being recorded as not es receivable are $2,080,000 and $457,498, respectively, in the Housing Fund with an offset of allowance for uncollectib le notes in the fund level financial statement and in the government-wide statements. The properties were purchased with former Redevelopm ent Agency’s Housing Set Aside fund. As a result, the loan was reported in the City ’s Special Revenue Housing Fund and with an offset of allowance for uncollectible notes in the fund level financia l statements and in the government-wide statements. As part of the development agreement, the City also sold one of the City’s parking lots to the LINC for development of a 6-unit affordable rental housing. The City also used the Federal HOME Program Grants Fund to provide construction loan bearing simple interest at the rate of 3% per annum . As of June 30, 2023, $1,019,411 has been funded and is reported as loans receivables in the Special Revenue Grants F und with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.

Low/Mod Housing Deferred Loans – State law requires redevelopment agencies to set aside 20% of their tax increment revenues for low/mod housing. In 1997, the form er Redevelopment Agency approved a plan to set aside future tax increment revenue in addition to the regula r 20% set aside requirements. The former Redevelopment Agency was dissolved on February 1, 2012. This commi tment became a liability to the Successor Agency due to the City’s Special Revenue Housing Fund. A summary of the repayment plan is presented below:

Year ending
June 30, Amount
2024-2029 500,000$
2030-2034 450,000
2035-2039 236,222
Total 1,186,222$

Note 4 – Leases Receivable

The City leases various types of property including land, a nd buildings. Leases receivable consist of agreements with other entities for the “right–to–use” the underlying assets at various locations owned by the City. The remaining terms of the agreements range from 1 to 38 years. The inte rest rates used calculated the net present value of the lease receivable ranged from 0.19% to 1.71%.

For the fiscal year ended June 30, 2023, the City recognized $306,747 in lease reve nue and $17,931 in interest revenue, and the outstanding net present value of the lease receivable amount is $1,214,875.

Page 96 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

67 Note 4 – Leases Receivable (Continued)

At June 30, 2023, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2024 298,353 $ 15,165 $ 313,518 $ 2025 256,763 12,434 269,197 2026 145,081 9,930 155,011 2027 125,301 7,799 133,100 2028 75,193 3,557 78,750 2029 - 2033 35,407 25,597 61,004 2034 - 2038 43,537 22,348 65,885 2039 - 2043 48,682 18,422 67,104 2044 - 2048 52,977 14,128 67,105 2049 - 2053 57,650 9,455 67,105 2054 - 2058 62,735 4,370 67,105 2059 13,196 225 13,421 Total 1,214,875$ 143,430 $ 1,358,305 $

Note 5 – Interfund Transactions

A. Due to/from Other Funds

The following is a summary of due to and due from other funds as of June 30, 2023:

Street Capital Internal Nonmajor
Grant Funds Projects Fund Service Funds Governmental Funds Total General Fund 30,913 $ 779,347 $ 404,228 $ 387,510 $ 1,601,998 $ Due From Other Funds
Due to Other Funds

The interfund balances resulted from borrowing of cash fo r temporary purposes. For Street Capital Project Fund, the drawdown from fiscal agent fund in subsequent year will pay back General Fund. For Nonmajor Gov Fund and Grant Fund, balances are expected to be re imbursed when received fund from Granting Agency. For Technology Internal Service Fund, City intends to balance fund by reallocating the expenditures.

Page 97 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

68 Note 5 – Interfund Transactions (Continued)

B. Transfers

During the year ended June 30, 2023, the City had the following transfers:

Nonmajor Water Utility Refuse Sewer
Governmental Enterprise Enterprise Enterprise
Transfers In General Fund Funds Fund Fund Fund Total
General Fund 5,153,633$ -$ -$ -$ -$ 5,153,633$ Retirement 3,172,408 177,852 330,177 34,012 114,952 3,829,401 Nonmajor Governmental Funds 2,000 1,051,450 - - - 1,053,450 Total 8,328,041$ 1,229,302$ 330,177$ 34,012$ 114,952$ 10,036,484$ Transfers Out

General Fund support of certain capital projects, pension and OPEB contribution, and other administration of General Fund.

Other Governmental Funds transfers to the Retirement Fund to support fringe benefit costs.

Enterprise Funds transfers to the Retirement Fund to support fringe benefit costs.

Note 6 – Receivables From Successor Agency

In 2009, the State passed legislation in taking away redevel opment funds from local Agencies as part of an effort to address its budget deficit. Furthermor e, SB 68 was signed into law which allowed agencies to use accumulated housing funds to pay for the State required Supplemental Educational Revenue A ugmentation Funds (SERAF) payments. On August 4, 2010, the fo rmer Redevelopment Agency passed two resolutions, RA 661 and 662, authorizing the Takeaway Loan to be made from the fo rmer Redevelopment Agency Capital Projects Fund (Housing Set Aside Fund) to the former Redevelopment Agency Debt Service Fund (Atlantic-Garvey and Merged Project Areas), in an amount of $1,459,258 and $1,142,640, respectively, without interest.

On May 4, 2011, the former Redevelopment Agency passed two resolutions, RA 682 and 683, authorizing additional Takeaway Loans to be made from th e Redevelopment Agency Capital Projects Fund (Housing Set Aside Fund) to the Redevelopment Agency Debt Service Fund (Atlantic -Garvey and Merged Project Areas), in an amount of $300,436 and $235,249, respectively. The interest is accumulated at LAIF rate.

On February 1, 2012, $2,617,203 was transferred from the former Redevelopment Agency Debt Service Fund to the Successor Agency due to the dissolution of the former Redevelopment Agency.

The Receivable from Successor Agency balance at June 30, 2023, amounted to $896,309. This loan will be paid back to the Special Revenue Housing Fund according to a specific formula through the Recognized Obligation Payment Schedule distribution per the State of California Department of Finance (“DOF”).

Page 98 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

69 Note 7 – Capital Assets

Governmental Activities

The following is a summary of cha nges in capital assets for the governme ntal activities for the year ended June 30, 2023:

Balance
July 1, 2022 Balance
(As restated) Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated/amortized
Land 8,465,051 $ - $ - $ - $ 8,465,051$ Construction in progress 4,668,763 11,816,303 - (2,487,691) 13,997,375 Total capital assets not being depreciated/amortized 13,133,814 11,816,303 - (2,487,691) 22,462,426 Capital assets, being depreciated
Building and improvements 30,391,663 - - - 30,391,663 Improvement 28,501,442 - - 1,084,166 29,585,608 Equipment and furniture 30,903,878 2,418,001 (124,609) 1,403,525 34,600,795 Infrastructure 39,271,505 - - - 39,271,505 Total capital assets being depreciated 129,068,488 2,418,001 (124,609) 2,487,691 133,849,571 Accumulated depreciation:

Buildings (16,160,927) (592,933) - - (16,753,860) Improvements (8,001,964) (901,780) - - (8,903,744) Equipment (26,310,405) (2,564,513) 124,609 - (28,750,309) Infrastructure (25,352,593) (1,573,861) - (26,926,454) Total accumulated depreciation (75,825,889) (5,633,087) 124,609 - (81,334,367) Total capital assets being depreciated, net 53,242,599 (3,215,086) - 2,487,691 52,515,204 Right to use assets, being amortized
Lease assets - machinery, equipment and vehicles 145,316 28,523 (37,686) - 136,153 Subscription assets 1,471,256 126,797 - - 1,598,053 To
tal right to use lease assets, being amortized 1,616,572 155,320 (37,686) - 1,734,206 Accumulated amortization:

Lease assets - machinery, equipment and vehicles (47,312) (52,381) 37,686 - (62,007) Subscription assets - (725,891) - - (725,891) Total accumulated amortization (47,312) (778,272) 37,686 - (787,898) Total right to use assets, being amortized, net 1,569,260 (622,952) - - 946,308 Total capital assets, net 67,945,673$ 7,978,265$ -$ -$ 75,923,938$

Depreciation and amortization expense was charged to f unctions/programs of governmental activities for the year ended June 30, 2023 as follows:

General government 866,411$
Public safety 2,382,632
Community services 54,151
Recreation 1,462,070
Highway and streets 649,809
Internal service 996,286
Total depreciation and
amortization expense 6,411,359$

Page 99 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

70 Note 7 – Capital Assets (Continued)

Business-Type Activities

The following is a summary of cha nges in capital assets for the business- type activities for the year ended June 30, 2023:

Balance
July 1, 2022 Balance
(As restated) Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated/amortized
Land 499,975$ -$ -$ -$ 499,975$ Construction in progress 14,312,747 7,239,512 - (502,463) 21,049,796 Total capital assets not being depreciated/amortized 14,812,722 7,239,512 - (502,463) 21,549,771 Capital assets, being depreciated
Building and improvements 285,050 - - - 285,050 Improvement 59,388,553 49,291 - 178,731 59,616,575 Equipment and furniture 3,690,041 626,098 - 323,732 4,639,871 Infrastructure 12,043,370 - - - 12,043,370 Total capital assets being depreciated 75,407,014 675,389 - 502,463 76,584,866 Accumulated depreciation:

Buildings (152,811) (4,841) - - (157,652) Improvements (29,597,019) (1,604,914) - - (31,201,933) Equipment (3,460,649) (207,438) - - (3,668,087) Infrastructure (9,411,105) (125,190) - - (9,536,295) Total accumulated depreciation (42,621,584) (1,942,383) - - (44,563,967) Total capital assets being depreciated, net 32,785,430 (1,266,994) - 502,463 32,020,899 Right to use assets, being amortized
Lease assets - machinery, equipment and vehicles 3,537 - (312) - 3,225 Subscription assets 28,356 - - - 28,356 Total right to use lease assets, being amortized 31,893 - (312) - 31,581 Accumulated amortization:

Lease assets - machinery, equipment and vehicles (585) (797) 312 - (1,070) Subscription assets - (7,089) - - (7,089) Total accumulated amortization (585) (7,886) 312 - (8,159) Total right to use assets, being amortized, net 31,308 (7,886) - - 23,422 Total capital assets, net 47,629,460$ 5,964,632$ -$ -$ 53,594,092$

Depreciation and amortization expense was charged to the Enterprise funds as follows:

Water 1,692,004$
Refuse 10,400
Sewer 247,865
Total depreciation and
amortization expense 1,950,269$

Page 100 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

71 Note 8 – Long-Term Liabilities

A. Governmental Activities

The following is a summary of changes in the City’s long-term liabilities for the fiscal year ended June 30, 2023:

Balance
July 1, 2022 Balance Due within Due in more
(As restated) Additions Deletions June 30, 2023 One Year than One Year Public offering:
2004 Taxable Pension
Obligation Bonds 11,345,000$ -$ (425,000)$ 10,920,000$ 410,000$ 10,510,000$ 2021 Taxable Pension
Obligation Bonds 97,922,890 - (3,657,698) 94,265,192 3,709,883 90,555,309 2022 Sales Tax Revenue Bonds 17,585,000 - (305,000) 17,280,000 320,000 16,960,000 Premium 3,166,917 - (109,204) 3,057,713 - 3,057,713 Total Public offerings 130,019,807 - (4,496,902) 125,522,905 4,439,883 121,083,022 Direct borrowings:

Financing purchase 4,969,211 - (727,278) 4,241,933 756,473 3,485,460 HUD Section 108 Loan payable 539,000 - (539,000) - - - Total direct borrowings: 5,508,211 - (1,266,278) 4,241,933 756,473 3,485,460 Other long-term liabilities
Lease liabilities 95,759 28,523 (49,952) 74,330 27,914 46,416 Subscription liabilities 1,396,966 66,901 (739,081) 724,786 566,987 157,799 Claims payable (Note 13) 22,442,706 5,089,000 (3,635,479) 23,896,227 3,865,253 20,030,974 Insurance assessment payable (Note 13) 817,571 - (163,514) 654,057 163,514 490,543 Compensated absences 5,212,281 5,620,169 (5,523,066) 5,309,384 5,071,203 238,181 Total long-term liabilities 165,493,301$ 10,804,593$ (15,874,272)$ 160,423,622$ 14,891,227$ 145,532,395$ Classification

2004 Taxable Pension Obligation Bonds

On June 29, 2004, the City pursuant to an Agreemen t with the California Statewide Communities Development Authority, issued $17,405,000 in Taxable Pension Obliga tion Bonds, 2004 Series A-1. These Bonds were issued to fund the unfunded liabilities of the City’s Safety Plan to the California Public Employees’ Retirement System (CALPERS). The City is contractually obligated to a ppropriate and make payments to CALPERS arising as a result of retirement benefits accruing to members of CALPERS. The City’s obligation includes, among others, the requirement to amortize the unfunded accrued actuarial liability over a multi-year period. On June 29, 2004, the City contributed $17,012,841 of the bond proceeds to CALPERS to fund a portion of the unfunded liability for the Safety Plan that provides retirement benefits to the City’s sworn Police Officers and Firefighters.

Bond interest is payable semi-annually on June 1 and December 1 commencin g December 1, 2004. The rate of interest varies from 4.510% to 6.076% per annum. Prin cipal is payable in annual installments ranging from $25,000 to $1,350,000 commencing on June 1, 2009 and ending on June 1, 2034. On or before August 1st of each year, the City is required to deposit with the tr ustee the amount equal to the next year’s debt service payment in lieu of a reserve requirement.

Page 101 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

72 Note 8 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

2004 Taxable Pension Obligation Bonds (Continued)

Optional Redemption: The bonds maturing on or before J une 1, 2016 were not subject to optional redemption.

The bonds maturing on June 1, 2024 and on June 1, 2034 ar e subject to optional redemption prior to maturity at the option of the Authority, in whole or in part on any da te at a redemption price equal to the greater of (1) 100% of principal to be redeemed or (2) present value of th e remaining debt service discounted at Treasury Rate plus

10.0 basis points for the 2024 Term Bonds or plus 12.5 basis points for the 2034 Term Bonds. Bonds will be selected for redemption on a pro rata basis for both th e optional and mandatory sinking fund redemption. The outstanding balance of the 2004 Taxable Pension Obligation Bonds was $10,920,000 at June 30, 2023.

The annual debt service requirements to maturity fo r the Refunding Lease Revenue Bonds 2013 Series are as follows:

Year ending
June 30, Principal Interest Total
2024 410,000$ 662,761 $ 1,072,761 $
2025 795,000 638,588 1,433,588
2026 845,000 590,283 1,435,283
2027 895,000 538,941 1,433,941
2028 950,000 484,561 1,434,561
2029-2033 5,675,000 1,485,582 7,160,582
2034 1,350,000 82,026 1,432,026
Total 10,920,000$ 4,482,742 $ 15,402,742 $

2021 Taxable Pension Obligation Bonds

On February 16, 2021, the City issued $106,335,000 in Taxable Pension Obligation Bonds, 2021 Series A. These Bonds were issued to fund the unfunded liabilities of the C ity’s Miscellaneous and Safety Plans to the California Public Employees’ Retirement System (CALPERS). The City is contractually obligated to appropriate and make payments to CALPERS arising as a result of retirement be nefits accruing to members of CALPERS. The City’s obligation includes, among others, the requirement to am ortize the unfunded accrued actuarial liability over a multi-year period. On February 16, 2021, the City cont ributed $105,545,217 ($41,146,631 to the Miscellaneous Plan and $64,398,586 to the Safety Plan) of the bon d proceeds to CALPERS to fund a portion of the unfunded liability for the Miscellaneous and Safety Plans that provides retirement benefits to the City’s eligible employees.

This transaction and future debt service requirements on th e bonds are being shared between the City’s General Fund and enterprise funds.

Bond interest is payable semi-annually on June 1 and December 1 commencin g December 1, 2021. The rate of interest varies from 0.213% to 3.021% per annum. Prin cipal is payable in annual installments ranging from $3,130,000 to $7,135,000 commencing on June 1, 2022 and ending on June 1, 2043. On or before August 1st of each year, the City is required to deposit with the tr ustee the amount sufficient to pay debt service on the bonds, the 2004 Bonds and any add itional bonds and refunding obligations as may be issued on a parity basis in accordance with the Trust Agreement.

Page 102 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

73 Note 8 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

2021 Taxable Pension Obligation Bonds (Continued)

Optional Redemption: The bonds maturing on or before June 1, 2032 may be redeemed at the option of the City from any source of funds on any date on or after June 1, 2031 in whole or in part at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium.

The bonds are also subject to redemption prior to June 1, 2031 at the option of the City, in whole or in part, at any time, at a redemption price equal to the greater of: (1 ) 100% of principal amount to be redeemed or (2).the sum, calculated by the City, of the present value of the remaining scheduled payments of principal and interest on the bonds to be redeemed discounted to the date of redemption on a semiannual basis at a Treasury Rate plus 15 basis points, plus accrued and unpaid interest on the bonds being redeemed to the date fixed for redemption.

The outstanding balance of the 2021 Taxable Pension Oblig ation Bonds was $99,350,000 at June 30, 2023, of which $94,265,192 is reported in governmental type activities and $5,084,808 is reported in business-type activities.

Year Ending
June 30, Principal Interest Principal Interest Principal Interest Total 2024 3,709,883$ 2,235,047 $ 200,117 $ 120,562 $ 3,910,000 2,355,609 6,265,609 2025 3,392,029 2,211,823 182,971 119,309 3,575,000 2,331,132 5,906,132 2026 3,420,493 2,181,736 184,507 117,686 3,605,000 2,299,422 5,904,422 2027 3,458,446 2,144,555 186,554 115,681 3,645,000 2,260,236 5,905,236 2028 3,510,631 2,095,099 189,369 113,013 3,700,000 2,208,112 5,908,112 2029-2033 18,530,440 9,500,604 999,560 512,477 19,530,000 10,013,081 29,543,081 2034-2038 26,334,478 7,144,840 1,420,522 385,404 27,755,000 7,530,244 35,285,244 2039-2043 31,908,792 2,949,651 1,721,208 159,109 33,630,000 3,108,760 36,738,760 Total 94,265,192$ 30,463,355$ 5,084,808$ 1,643,241$ 99,350,000$ 32,106,596$ 131,456,596$ Governmental Activties Business-type Activities Total

2022 Sales Tax Revenue Bonds

On October 1, 2022, the Monterey Park Financing Au thority issued $17,750,000 Monterey Park Financing Authority Sales Tax Revenue Bonds. The proceeds were u sed to finance certain public capital improvements in the City, including, but not limited to, rehabilitating, constructing, enlarging, improving, and/or equipping City streets, sidewalks, gutters, curbs and ramps, streetlights, and street signs. Interest on the bonds is payable semi- annually each June 1 and December 1, beginning June 1, 2022. Principal matures each June 1 beginning 2022 and maturing in 2051. Interest rates on the bonds va ry between 4.00% and 5.00%. The principal balance outstanding at June 30, 2023 was $17,280,000.

Future debt service payments are as follows:

Year ending
June 30, Principal Interest Total
2024 320,000$ 731,200 $ 1,051,200 $
2025 335,000 715,200 1,050,200
2026 350,000 698,450 1,048,450
2027 370,000 680,950 1,050,950
2028 385,000 662,450 1,047,450
2029-2033 2,240,000 3,003,250 5,243,250
2034-2038 2,810,000 2,439,800 5,249,800
2039-2043 3,410,000 1,831,800 5,241,800
2044-2048 4,145,000 1,093,400 5,238,400
2049-2051 2,915,000 236,200 3,151,200 Total 17,280,000$ 12,092,700 $ 29,372,700 $

Page 103 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

74 Note 8 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

Finance Purchase Loans

Siemens Loan

On September 23, 2014, the City and Siemens Public, In c. entered into a finance- purchase agreement for an amount of $10,511,901. The City used the monies for en ergy efficiency improvements throughout city parks, facilities and infrastructure. The term of the agreemen t is 15 years, commencing on September 23, 2014 through June 23, 2030, at an interest rate of 2.80%. Principal and interest payments are due quarterly in amounts ranging from $140,217 to $325,545 over the term of the agreement. The transactions are shared by the General Fund and the Water Utility Enterprise Fund. At June 30, 2023, the outstanding balance for the agreement was $6,937,805 of which $1,040,673 is reported in go vernmental type activities and $5,897 ,132 is reported in business-type activities. The annual debt service requirements on the agreement are as follows:

Year Ending
June 30, Principal Interest Principal Interest Principal Interest Total 2024 114,071$ 27,948 $ 646,403 $ 158,372 $ 760,474 $ 186,320 $ 946,794 $ 2025 125,533 24,634 711,354 139,595 836,887 164,229 1,001,116 2026 135,754 21,013 769,269 119,072 905,023 140,085 1,045,108 2027 146,765 17,097 831,670 96,881 978,435 113,978 1,092,413 2028 158,389 12,866 897,540 72,907 1,055,929 85,773 1,141,702 2029-2030 360,161 11,595 2,040,896 65,732 2,401,057 77,327 2,478,384 Total 1,040,673$ 115,153$ 5,897,132$ 652,559$ 6,937,805$ 767,712$ 7,705,517$ TotalGovernmental Activties Business-type Activities

Motorola Loan

On March 16, 2021, the City and Motorola Solutions, Inc. entered into a finance-purchase agreement for police radios, dispatch consoles and station equipment in the amount of $2,682,300. The term of the agreement is ten years through April 2, 2031, at an interest rate of 2.58 %. Annual principal and interest payments of $307,745 are due April 1st of each year commencing in 2022. At June 30, 2023, the outstanding balance for the agreement was $2,199,063. The annual debt service requirements on the agreement are as follows:

Year ending
June 30, Principal Interest Total
2024 251,009$ 56,736 $ 307,745 $
2025 257,485 50,260 307,745
2026 264,128 43,617 307,745
2027 270,942 36,802 307,744
2028 277,933 29,812 307,745
2029-2031 877,566 45,667 923,233 Total 2,199,063$ 262,894 $ 2,461,957 $

Page 104 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

75 Note 8 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

Finance Purchase Loans (Continued)

Fire Engine Loan

On September 28, 2018, the City and Banc of Americ a Public Capital Corporation entered into a finance- purchase agreement for fire engine in the amount of $2, 618,000. The term of the agreement is 8 years at an interest rate of 4.0702%. Principal and interest payments totaling $210,129 are due quarterly over the term of the agreement. At June 30, 2023, the outstanding balance for the agreement was $1,002,197. The annual debt service requirements on the agreement are as follows:

Year ending
June 30, Principal Interest Total
2024 391,393$ 28,864 $ 420,257 $
2025 403,974 16,283 420,257
2026 206,830 3,298 210,128
Total 1,002,197$ 48,445 $ 1,050,642 $

HUD Section 108 Loan Program

In August 2002, the City participated in the U.S. Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program and received note proceeds of $6,500,000. The City uses the proceeds for the development of the Market Place project. The annual debt service payments are funded through the City’s Community Development Block Grant f unds. On May 28, 2015, the City participated in the HUD refinancing program and refinanced the Section 108 Loan for a fixed rate note (Series 2015 A Certificates). Interest payments are made semiannually on August 1 and February 1. Principal payments are made on August 1 of each year and continue until August 2022. The HUD Section 108 Loan was paid off in fiscal year 2023.

Lease Liabilities

The City has entered into leases for equipment and vehi cle uses. The terms of the agreements are between 19 months and 60 months with a range of an implicit rate from 0.2108% to 4.3318%. Principal and interest to maturity are as follows:

Year ending
June 30, Principal Interest Total
2024 27,914 $ 1,054 $ 28,968 $
2025 26,512 524 27,036
2026 17,068 90 17,158
2027 2,836 6 2,842
Total 74,330 $ 1,674 $ 76,004 $

Page 105 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

76 Note 8 – Long-Term Liabilities (Continued)

A. Governmental Activities (Continued)

Subscription Liabilities

The City has entered into subscriptions for informati on technology arrangements. The terms of the arrangements range from 24 to 78 months with an implicit rate of 3.00%. Principal and interest to maturity are as follows:

Year ending
June 30, Principal Interest Total
2024 566,987$ 13,930 $ 580,917 $
2025 113,060 3,139 116,199
2026 44,739 758 45,497
Total 724,786$ 17,827 $ 742,613 $

B. Business-Type Activities

The following is a summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2023:

Balance
July 1, 2022 Balance Due within Due in more
(As restated) Additions Deletions June 30, 2023 One Year than One Year Public offereing;
2021 Taxable Pension
Obligation Bonds 5,282,110 $ - $ (197,302)$ 5,084,808 $ 200,117 $ 4,884,691 $ Direct borrowings:

Finance purchase loans 7,310,035 - (663,725) 6,646,310 727,507 5,918,803 SGVMWD Loan 4,000,000 - - 4,000,000 400,000 3,600,000 Total direct borrowings: 11,310,035 - (663,725) 10,646,310 1,127,507 9,518,803 Lease liabilities 2,888 - (779) 2,109 649 1,460 Subscription liabilities 12,354 - (3,124) 9,230 2,914 6,316 Compensated absences 224,057 353,183 (314,475) 262,765 250,978 11,787 Total long-term liabilities 16,831,444$ 353,183 $ (1,179,405)$ 16,005,222 $ 1,582,165 $ 14,423,057 $ Classification
La Loma Highland Loan

On January 1, 2001, the City and California Infrastructure and Economic Devel opment Bank entered into a finance-purchase agreement for an amount of $2,000,000. The City used th e monies for facility improvements.

The term of the agreement is thirty years through Augus t 1, 2030, at an interest rate of 4.07%. Semiannual principal and interest payments of ranging from $50,450 to $120,953 are due February 1st and August 1st of each year. The annual debt service requirements on the agreement are as follows:

Year ending
June 30, Principal Interest Total
2024 81,104 $ 28,841 $ 109,945 $
2025 84,405 25,473 109,878
2026 87,841 21,968 109,809
2027 91,416 18,320 109,736
2028 95,136 14,524 109,660
2029-2031 309,276 19,216 328,492 Total 749,178$ 128,342 $ 877,520 $

Page 106 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

77 Note 8 – Long-Term Liabilities (Continued)

B. Business-Type Activities (Continued)

SGVMWD Loan

On March 1, 2021, the City and the San Gabriel Valley M unicipal Water District entered into a loan agreement for an amount of $4,000,000. The City used the monies to cover costs related to planning, design, construction and construction administration incurred by the City in fina ncing projects for the benefit of the City. The term of the agreement is ten years commencing on the later of date the Notice of th e Completion of the Project signed by the City or 90 days after the first disbursement of the Loan proceeds with no interest bearing. As of June 30, 2023, the projects are still in progress, and the outstanding balance of the loan was $4,000,000.

Lease Liabilities

Year ending
June 30, Principal Interest Total
2024 649 $ 1,054 $ 1,703 $
2025 653 524 1,177
2026 657 90 747
2027 150 6 156
Total 2,109 $ 1,674 $ 3,783 $

Subscription Liabilities

The City has entered into subscriptions for informati on technology arrangements. The terms of the arrangements range from 24 to 78 months with a implicit rate of 3.00%. Principal and interest to maturity are as follows:

Year ending
June 30, Principal Interest Total
2024 2,914 $ 210 $ 3,124 $
2025 3,074 144 3,218
2026 3,242 74 3,316
Total 9,230 $ 428 $ 9,658 $

Page 107 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

78 Note 8 – Long-Term Liabilities (Continued)

C. Fiduciary Activities

The following is a summary of chang es in the City’s long-term liabilities for fiduciary activities for the fiscal year ended June 30, 2023:

Balance Balance Due within Due in more
July 01, 2022 Additions Deletions Jun e 30, 2023 One Year than One Year Public offering:

Tax Allocation Refunding Bond - 2013A 6,025,000$ -$ (1,175,000)$ 4,850,000$ 1,165,000$ 3,685,000$ Tax Allocation Refunding Bond - 2013B 3,840,000 (480,000) 3,360,000 505,000 2,855,000 Premium 440,774 - (93,417) 347,357 - 347,357 Direct borrowings:

SERAF Loan (Note 6) 1,033,651 - (137,342) 896,309 137,342 758,967 Tax Increment deferred loan-
Atlantic/Garvey Project 14,785,058 1,034,954 - 15,820,012 - 15,820,012 Tax Increment deferred loan-
Merged Project 66,833,659 4,570,924 (561,108) 70,843,475 561,391 70,282,084 Low Mod Housing Payable 1,186,222 - - 1,186,222 - 1,186,222 Total long-term liabilities 94,144,364$ 5,605,878$ (2,446,867)$ 97,303,375$ 2,368,733$ 94,934,642$ Classification

Tax Allocation Refunding Bond, Series 2013A (Atlantic-Garvey Redevelopment Project No. 1)

On December 1, 2013, the County of Los Angeles Redevelopment Refunding Authority assisted the Successor Agency to issue the $13,835,000 Tax Allocation Refunding Bond, Series 2013A, for the Atlantic-Garvey Redevelopment Project No. 1. These Bonds were issued to redeem the out standing 2002 Tax Allocation Revenue Bonds. The Bonds are secured by a pledge of the tax revenues from the Project area with interest rates ranging from 3.0% to 5.0%. Interest payments are payable semiannually on September 1 and March 1. Principal payments are made on September 1 of each year and continue until the year 2026.

Optional Redemption: The Bonds maturing on or before September 1, 2024, are not subject to optional redemption prior to maturity. The Bonds maturing on an d after September 1, 2024, are subject to optional redemption on any date on and after September 1, 2023, in integral mu ltiples of $5,000, from any available source of funds, at the times, at a redemption price equa l to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

The Bonds are secured by a first and prior lien on tax increment revenues, excluding any portion of revenues that are required to be deposited to the Rebate Fund. Annual principal and interest payments on the Bonds are expected to require less than 90% of net revenues. Th e amount of principal outstanding at June 30, 2023 is $4,850,000. The net tax increment revenue is collected and withheld by the County of Los Angeles due to the dissolution of the former Redevelopment Agency.

Page 108 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

79 Note 8 – Long-Term Liabilities (Continued)

C. Fiduciary Activities (Continued)

The annual debt service requirements on the Tax Allo cation Refunding Bond, Series 2013A (Atlantic-Garvey Redevelopment Project No. 1) are as follows:

Year ending
June 30, Principal Interest Total
2024 1,165,000$ 184,256$ 1,349,256$
2025 1,220,000 130,731 1,350,731
2026 1,210,000 80,619 1,290,619
2027 1,255,000 27,453 1,282,453
4,850,000$ 423,059$ 5,273,059$

Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area)

On December 1, 2013, the County of Los Angeles Re development Refunding Authority assisted the Successor Agency to issue this $7,080,000 Tax Allocation Ref unding Bond, Series 2013B, for the Merged Redevelopment Project No. 1. These Bonds were issued to redeem th e outstanding 1998 Tax Allocation Revenue Bonds. The Bonds are secured by a pledge of the tax revenues from the Project area with interest rates ranging from 3.0% to

5.0%. Interest payments are payable semiannually on Sept ember 1 and March 1 Principa l payments are made on September 1 of each year and continue until the year 2028.

The Bonds are secured by a first and prior lien on tax increment revenues, excluding any portion of revenues that are required to be deposited to the Rebate Fund. A nnual principal and interest payments on the bonds are expected to require less than 90% of net revenues. The amount of principal outstanding at June 30, 2023 was $3,360,000. The net tax increment revenue is collected and withheld by the County of Los Angeles due to the dissolution of the former Redevelopment Agency.

Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area) (Continued) The annual debt services requirement on the Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area) are as follows:

Year ending
June 30, Principal Interest Total
2024 505,000$ 142,456 $ 647,456 $
2025 530,000 119,231 649,231
2026 545,000 97,050 642,050
2027 565,000 73,109 638,109
2028 595,000 45,875 640,875
2029 620,000 15,500 635,500
Total 3,360,000$ 493,221 $ 3,853,221 $

Page 109 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

80 Note 8 – Long-Term Liabilities (Continued)

C. Fiduciary Activities (Continued)

Tax Increment Deferred Loan (Atlantic/Garvey Project)

On August 20, 1987, the former Redevelopment Agency entered into an agreement for reimbursement of tax increment funds with the County of Los Angeles (the Count y). In the Agreement, the County agreed to loan its portion of the tax increment revenues received from the am ended area (88 Annex) to the former Redevelopment Agency at a 7% compound interest rate, beginning fi scal year 1989-90. The percentage distribution from the basic tax levy for the 88 Annex areas for the County and th e former Redevelopment Agency is 43.7% and 56.3% respectively. The former Redevelopment Agency will commence repayment of this loan annually beginning with the fiscal year in which the former Redevelopment Agency’s share of tax increment revenues (excluding Housing Fund contributions) from the 88 Annex areas ex ceeds $800,000. The outstanding balance of the Tax Increment Deferred Loan (Atlantic/Garvey Project) was $15,820,012 at June 30, 2023.

The former Redevelopment Agency and the County Ta xing Entities (the County of Los Angeles, the Los Angeles County Flood Control District, and the Los Angeles County Office of Education) entered into four agreements for reimbursement of the tax increment de ferred amounts. In the Agreements, the County Taxing Entities agreed to loan their portions of the tax increment revenues received from th e Southeast Project area, Freeway `99 Annex area, Central Commercial Project area, and Merged Monterey Pass Road area to the former Redevelopment Agency at specified interest rates rang ing from 0% to 7%. The percentage distribution from the basic tax levy and the repayment schedule of the deferre d loans are also based on a specified formula for each taxing entity. The outstanding balance of the Tax Incr ement Deferred Loan (Merged Project) was $70,843,475 at June 30, 2023.

Low/Mod Housing Deferred Loans

State law required former redevelopment agencies to set aside 20% of their tax increment revenues for low/mod housing. In 1997, the former Redevelopment Agency approved a plan to set aside future tax increment revenue in addition to the regular 20% set aside requirements. On February 1, 2012, the commitment was transferred to the Successor Agency due to the dissolution of the former Redevelopment Agency and was approved by the DOF as a payable to the City’s Special Revenue Housing Fund. A summary of the repayment plan is presented below:

Year ending
June 30, Principal
2024 - $
2025 100,000
2026 100,000
2027 100,000
2028 100,000
2029 - 2033 500,000
2034 - 2038 250,000
2039 36,222
Total 1,186,222$

Page 110 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

81 Note 9 – Due To Other Governmental Agencies

In the Special Revenue Grants Fund, an amount equal to the total outstanding balance of the identified loans receivable for the CDBG Residential Rehabilitation Pr ogram in the amount of $48,015, State Earthquake Rehabilitation Assistance (SERA) Program in the amount of $4,322, the Pacific Housing Corporation loan in the amount of $267,295, and the Pacific Bridge Loan in the amount of $441,953, described in Note 3 at June 30, 2023, have been recorded as Due to Other Governmental Agencies. As these notes are repaid, the repayment proceeds must be returned to the applicable government agency.

Residential Rehabilitation (CDBG) 48,015$
SERA Program 4,322
Pacific Housing Loan 267,295
Pacific Bridge Loan 441,953
Total due to other governmental agencies 761,585$

Note 10 – Defined Benefit Pension Plans

California Public Employees’ Retirement System Plan

A. General Information about the Pension Plans

Plan Description
All qualified permanent and probationary employees are elig ible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retir ement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benef it provisions, assumptions a nd membership information that can be found on the CalPERS website.

Benefit Provided
CalPERS provides retirement and disability benefits, annua l cost-of-living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member or PEPRA Safe ty member becomes eligible for Service Retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainme nt of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full-time equivalent monthly pay.

Retirement benefits for classic miscellaneous employees ar e calculated as 2% to 2.7% of the average final 12 months compensation. Retirement benefits for PEPRA miscellaneous employees are calculated as 2% of the average final 36 months compensation. Retirement benef its for classic safety employees are calculated as 3% of the average final 12 months compensation. Retiremen t benefits for PEPRA safety employees are calculated as

2.7% of the average final 36 months compensation.

Participant is eligible for non-industr ial disability retirement if becomes disa bled and has at least 5 years of credited service. There is no special age requirement. Th e standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8% of final compensation, multiplied by service.

Page 111 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

82 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (Continued)

A. General Information about the Pension Plans (Continued)

Benefit Provided (Continued)

Industrial disability benefits are not offered to misce llaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial di sability retirement benefit is a monthly allowance equal to 50% of final compensation.

An employee’s beneficiary may receive the basic death benefit if the employee dies while actively employed.

The employee must be actively employed with the City to be eligible for th is benefit. An employee’s survivor who is eligible for any other pre- retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee’s accumulated contributions, where interest is credited annually at the greater of 6% or the prevailing discount rate through the date of death, plus a lump sum in the amount of one month’s salary for each completed year of current service, up to a maximum of six months’ salary. For purposes of this benefit, one month’s salary is defined as the member’s average monthly full-time rate of compensation during the 12 months preceding death. Upon the death of a retiree, a one-time lump sum payment of $5,000 will be made to the retiree’s designated survivor(s), or to the retiree’s estate.

Benefit terms provide for annual cost-o f-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2%.

Employees Covered by Benefit Terms

At June 30, 2021, the valuation date, the following employees were covered by the benefit terms:

Miscellaneous Safety
Active employees 177 120
Transferred and terminated employees 354 103
Retired Employees and Beneficiaries 359 261
Total 890 484

Contributions

Section 20814(C) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with additional amount to finance any unfunded accrued liability. The City is required to contribute the di fference between the actuarially determined rate and the contributi on rate of employees. For the year ended June 30, 2023, the employer contributions for the miscellaneous plan and the safety plan, were $1,430,911 and $2,647,296, respectively.

Page 112 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

83 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (Continued)

B. Net Pension Liability

The June 30, 2021 valuation was rolled forward to determine the June 30, 2022, measurement date total pension liability, based on following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal in
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase
Varies by Entry Age and Service
1 The mortality table was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from Novermber 2021 that can be found on the CalPERS website.

Derived using CalPERS’ Membership Data for all Funds. .

The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter

Change of Assumptions

Effective with the June 30, 2021 va luation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-te rm expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined w ith 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 projected portfolio return. In addition, demographic assumptions and the inflati on rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.

Long-term Expected Rate of Return

The long-term expected rate of return on pension pl an investments was determined using a building-block method in which expected future real rates of return (e xpected 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 bot h 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 year s using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

84 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (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
Years 1 - 101, 2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

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 w ill 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, th e long-term expected rate of return on plan investments was applied to all periods of proj ected benefit payments to determine the total pension liability.

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City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

85 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (Continued)

C. Changes in the Net Pension Liability

The following tables show th e changes in net pension liability for th e City’s miscellaneous and safety plans recognized over the measurement period.

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) 153,625,934 $ 173,704,489 $ (20,078,555) $ Changes Recognized for the Measurement Period:

Service Cost 2,277,310 - 2,277,310 Interest on the total pension liability 10,590,605 - 10,590,605 Changes of benefit terms - - - Changes of assumptions 4,675,002 - 4,675,002 Difference between expected and actual experience (1,948,123) - (1,948,123) Plan to plan resource movement - - - Contributions from the employer - 1,281,326 (1,281,326) Contributions from employees - 1,068,666 (1,068,666) Net investment income - (12,885,155) 12,885,155 Benefit payments, including refunds of employee
contributions (8,008,871) (8,008,871) - Administrative expenses - (108,208) 108,208 Other Miscellaneous Income/(Expense) - - Net Changes during July 1, 2021 to June 30, 2022 7,585,923 (18,652,242) 26,238,165 Balance at June 30, 2022 (Measurement Date) 161,211,857$ 155,052,247$ 6,159,610$ Increase (Decrease)
Miscellaneous Plan

Page 115 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

86 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (Continued)

C. Changes in the Net Pension Liability (Continued)

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) 240,619,835 $ 272,121,603 $ (31,501,768) $ Changes Recognized for the Measurement Period:

Service Cost 4,273,500 - 4,273,500 Interest on the total pension liability 16,606,680 - 16,606,680 Changes of benefit terms - - - Changes of assumptions 6,196,586 - 6,196,586 Difference between expected and actual experience (2,515,151) - (2,515,151) Plan to plan resource movement - - - Contributions from the employer - 2,584,424 (2,584,424) Contributions from employees - 1,804,252 (1,804,252) Net investment income - (20,264,806) 20,264,806 Benefit payments, including refunds of employee
contributions (11,523,017) (11,523,017) - Administrative expenses - (169,516) 169,516 Other Miscellaneous Income/(Expense) - - Net Changes during July 1, 2021 to June 30, 2022 13,038,598 (27,568,663) 40,607,261 Balance at June 30, 2022 (Measurement Date) 253,658,433$ 244,552,940$ 9,105,493$ Safety
Increase (Decrease)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the City for all Plans, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (5.9%) Rate (6.9%) + 1% (7.9%)
Miscellaneous Plan 27,218,134$ 6,159,610 $ (11,216,859) $ Safety Plan 43,682,176$ 9,105,493 $ (19,251,003) $ Plan's Net Pension Liability/(Asset)

Pension Plans Fiduciary Net Position

Detailed information about each pension plan’s fiduciar y net position is available in the separately issued CalPERS financial reports.

Page 116 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

87 Note 10 – Defined Benefit Pension Plans (Continued)

California Public Employees’ Retirement System Plan (Continued)

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

For the year ended June 30, 2023, the City recognized pension expense of $2,605,499 and $3,131,548, for the Miscellaneous and Safety plan, respectively. At June 30, 2023, the City reported de ferred outflows of resources and deferred inflows of resources related to the pension plan from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date 1,430,911 $ - $ Changes of assumptions 2,448,811 -
Difference between expected and actual experience - (1,088,337) Net difference between projected and actual earning on
pension plan investments 9,501,153 -
Total 13,380,875 $ (1,088,337) $
Miscellaneous Plan

Deferred outflows Deferred inflows
of Resources of Resources
Contribution made after the measurement date 2,647,296 $ - $ Changes of assumptions 4,059,832 -
Difference between expected and actual experience - (1,875,544) Net difference between projected and actual earnings
on pension plan investments 15,160,824 -
Total 21,867,952 $ (1,875,544) $
Safety Plan

The amounts above are net of outflows and inflows recognized in the 2021-2022 measu rement period expense.

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 Miscellaneous Plan and Safety Plan for the 2021-22 measurement period is 2.1, and 2.9 years, which was obtained by dividing the total service years of 1,891 and 1,411 (the sum of remaining service lifetimes of the active employees) by 890 and 484 (the total number of participants: active, inactive, and retired), respectively.

The $1,430,911 and $2,647,296 for the Miscellaneous and Safety Plans, respectively, reported as deferred outflows of resources related to cont ributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year e nding June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the pension plan will be recognized as pension expense as follows:

Measurement
Period Miscellaneous Safety
Ending June 30 Plan Plan
2023 2,951,763$ 3,846,919$
2024 1,761,577 3,781,061
2025 1,217,546 1,960,083
2026 4,930,741 7,757,049
2027 - -
Thereafter - -
10,861,627$ 17,345,112$
Deferred Outflows/(Inflows)
of Resources

Page 117 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

88 Note 10 – Defined Benefit Pension Plans (Continued)

Massachusetts Mutual Retirement Plan - Defined Benefit Plan

E. General Information about the Pension Plans

Plan Description

Certain miscellaneous employees are covered by a retirement plan through the Massachusetts Mutual Life
Insurance Company (MMRP), a single-employer defined benefit pension plan. All miscellaneous employees who were employed prior to April 1, 1976 participated in the MMRP. Miscellaneous employees under the age of 55 joined CalPERS on and after April 1, 1976. However, these employees still remain vested under the MMRP and are eligible to receive retirement benefits at the time of retirement. Miscellaneous employees over the age of 55 (on or before April 1, 1976) could not participate in CalPERS and remain wholly in the MMRP.

The City does not issue a publicly available financial report for the MMRP.

Benefits Provided
The MMRP was amended in 1976 to provide equivalent retirement benefits to all miscellaneous employees, whether totally vested in CalPERS, totally vested in the MMRP or partially vested in both plans. Eligibility requirements for the MMRP are the same as those for CalPERS.

Employee Covered by Benefit Terms
MMRP is a closed plan. As of the measu rement date, June 30, 2023, there are 33 individuals in the plan, 32 inactive receiving benefits and inactive not receiving be nefits, all of whom are no longer employed by the City or are currently participating in PERS. The City’s payroll for employees covered by the MMRP was zero for the measurement period July 1, 2022 to June 30, 2023.

Contributions
MMRP is a contributory plan deriving funds from employer contributions and earnings from investments.

Employer contributions we re based upon the actuarial methods and assumptions. For the current year, the City did not make contributions to the MMRP.

F. Net Pension Liability

Actuarial Methods and Assumptions Used to Determine Total Pension Liability

For the measurement period ended June 30, 2023, the total pension liability was determined by rolling forward the June 30, 2021 tota l pension liability to June 30, 2023, based on actual benefit payments.

Page 118 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

89 Note 10 – Defined Benefit Pension Plans (Continued)

Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued)

F. Net Pension Liability (Continued)

Actuarial Methods and Assumptions Used to Determine Total Pension Liability (Continued)

The total pension liability was based on the following actuarial methods and assumptions:

Contribution Policy
Actuarial Assumptions:

Discount Rate
Long-Term Expected Rate of Return on Assets
Municipal Bond Rate
General Inflation
Investment Rate of Return 7.65%
Mortality
Mortality Improvement
Cost of Living Adjustment/PPPA 2.00%
Asset Fair Market Value
City contributes full ADC

3.65% at June 30, 2023 based on the Bond Buyer 20-bond Index at 6/30/23

3.54% at June 30, 2022 based on the Bond Buyer 20-bond Index at 6/30/22

3.00% at June 30, 2023 (55% confidence level)

3.00% at June 30, 2022 (55% confidence level)

3.65% at June 30, 2023 (Bond Buyer 20 Index)
Fair value factor of 89.274% as of 6/30/2023 supplied by the City

2.50% annually
CalPERS 1997-2015 Experience Study

3.54% at June 30, 2022 (Bond Buyer 20 Index)
Mortality projected fully generational with Scale MP-2021

Long-term Expected Rate of Return

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

Asset Class
Target
Allocation
Expected Real
Rate of Return
Fixed Income 95.4%* 0.78%
Global Equity 0.90% 4.56%
REITs 0.10% 3.91%
Cash 3.60% -0.50%

4.60%
Assumed Long-Term Rate of Inflation: 2.5%
Expected Long-Term Net Rate of Return, Rounded:3.25%
Discount Rate used in the 6/30/2021 valuation 3.00%
(55% confidence level)
*Includes 1.4% “other invested assets” in Empower General Investment Account.

Page 119 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

90 Note 10 – Defined Benefit Pension Plans (Continued)

Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued)

G. Changes in the Net Pension Liability

The following table shows th e changes in net pension liability recognized over the measurement period.

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 4,361,041 $ 3,988,776 $ 372,265 $ Changes Recognized for the Measurement Period:

Service Cost - - - Interest on the total pension liability 147,660 - 147,660 Changes of benefit terms - - - Changes of assumptions (32,713) - (32,713) Difference between expected and actual experience - - - Plan to plan resource movement - - - Contributions from the employer - - - Contributions from employees - - - Net investment income - 66,372 (66,372) Benefit payments, including refunds of employee
contributions (379,706) (379,706) - Administrative expenses - (10,140) 10,140 Net Changes during July 1, 2022 to June 30, 2023 (264,759) (323,474) 58,715 Balance at June 30, 2023 (Measurement Date) 4,096,282$ 3,665,302$ 430,980$ Empower Plan
Increase (Decrease)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the Pl an as of the measurement date, calculated using the discount rate of 3.65%, as well as what the net pension lia bility would be if it were calculated using a discount rate that is 1 percentage point lower (2.65%) or 1 percentage point higher (4.65%) than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (2.65%) Rate (3.65%) + 1% (4.65%)
Net Pension Liablity 749,599$ 430,980 $ 156,655 $ Plan's Net Pension Liability/(Asset)

Page 120 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

91 Note 10 – Defined Benefit Pension Plans (Continued)

Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued)

H. Pension Expense and Deferred Outflows/Deferred Inflows of Resources Related to Pensions

For the measurement period ending June 30, 2023, the City incurred a pension expense/(income) of $163,995 for MMRP. As of measu rement date of June 30, 2023, 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 earning on
pension plan investments 631,200 $ - $
Empower plan

Amounts reported as deferred outflows and deferred inflows of resources relate d to pensions will be recognized in future pension expense as follows:

Measurement Deferred
Period Outflows/(Inflows)
Ending June 30 of Resources
2024 171,268 $
2025 216,268
2026 234,268
2027 9,396
2028 -
Thereafter -
631,200$

Note 11 – Defined Contribution Pension Plans - Monterey Park Part-Time Retirement Plan

During the 1991-1992 fiscal year, the City established the Monterey Park Part-Time Retirement Plan, a defined contribution retirement plan, for all non benefited, part - time employees in accordance with Internal Revenue Code Section 457, to conform to Section 3121(b)(7)(F) of th e Internal Revenue Code added by the Omnibus Budget Reconciliation Act of 1990. The plan is administered by Em power Inc. The plan was established by the authority of the City Council who retains the authority to amend the plan.

A defined contribution pension plan provides pension benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual’s account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on th e amount contributed to the participant’s account and the returns earned on investments of the contributions. Part-tim e, non benefited, nonpersable employees of the City must participate in the plan. During the year ended June 30, 2 023, 108 part-time employees part icipated in the plan. All contributions to the plan vest immediately. An empl oyee who leaves the City is entitled to all contributions, including contributions made by the City, and earnings a pplied to the individual’s account through the date of separation, less legally required income tax withholding. Participants that become full-time employees and enter the CalPERS retirement plan will have the amount in their individual accounts transf erred from this plan into a Section 457, Deferred Compensation Plan, subject to all the rules governing Section 457 plans, including substantial penalties for withdrawal prior to the age of normal retirem ent. Contribution levels into the deferred compensation plan were established by City Council resolution at 4% and 3.5% for th e City and non benefited, nonpersable part- time employees, respectively. During the year, the City contributed $31,818 to the plan.

Page 121 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

92 Note 12 – Other Postemployment Healthcare Plan

A. Plan Description

In addition to the pension benefits, the City provides pos tretirement medical insurance benefits, through an agent multiple-employer OPEB plan in accordance with c ontractual provisions of the various Memoranda of Understanding with the City’s recognized employee orga nizations, to all vested employees who retire with CalPERS pension benefits immediately upon termination of employment from the City. The City has established a California Retiree Benefit Trust (CERBT), an agent-mu ltiple employer trust which CalPERS serves as trustee.

Eligible retirees and dependents may elect lifetime coverage through the City’s healthcare plans. The City makes contributions towards the retiree’s premium up to speci fied caps that vary depending on bargaining unit and whether the participant has more or less than 20 years of service. Retirees pay the portion of premium not paid by the City. In addition to the direct City paid contribution, retirees also receive pre-65 benefits that are subsidized as they are eligible to receive coverage based on blende d (active and retiree) premium rates instead of normally higher retiree rates (implied subsidy). For those retirees who are eligible for Medicare, the City contributes toward Medicare supplemental insuran ce coverage. Upon retirement, vested full-time employees may, at their own cost, convert group life insurance coverage to indi vidual life insurance coverage. Post-employment benefits for employees that separate for reasons other than retiremen t are limited to those required under the provisions of COBRA and require no contribution by the City.

Members are eligible for the following benefits:

General Management Safety
Benefit Types Provided Medical Only Medical Only Medical Only Duration of Benefits Lifetime Lifetime Lifetime
Minimum Age 50 50 50
Dependent Coverage Yes Yes Yes
Required Years of Service 5 Years 5 Years 5 Years
City Contribution % 100% 100% 100%
City Cap:

Calendar Year 2021 $340-$435 per mon
t $355-$1,375 $346-$650
Calendar Year 2022 $340-$435 per mon t $355-$1,375 $346-$650

Employees Covered

At the measurement date of June 30, 2022, the foll owing current and former em ployees were covered by the benefit terms under the plan:

Active plan members 236
Inactivies entitled to but not yet receiving benefits 60 Retirees 236
Total 532

Page 122 of 576 ends

City of Monterey Park
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

93 Note 12 – Other Postemployment Healthcare Plan (Continued)

A. Plan Description (Continued)

Contributions

The contribution requirements are establis hed and amended by the City. Employer contributions are determined through an annual act uarial 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. For the current year, the City’s contributions to the plan included $1,000,000 to the irrevocable CERBT, an implied subsidy of $304,000, $17,344 in administrative expenses, and $1,286,464 in cash be nefit payments, resulting in total contributions of $2,607,808. The contributions to the OPEB plan are generally made from the general fund.

B. Total OPEB Liability

For the measurement period ended June 30, 2022, the City’s total OPEB liability was determined in a
June 30, 2021 actuarial accounting valuation. A summary of the principal assumptions and methods used to determine the net OPEB liability is shown below.

Actuarial Assumptions

The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Valuation Date June 30, 2021
Contribution Policy Pre-funded through CERBT with the Strategy 1 asset allocation Discount Rate and Long-Term Expected
Rate of Return on Assets

6.25% at June 30, 2022 and June 30, 2021
Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust
Inflation 2.5% annually
Salary Increase Aggregate - 2.75% annua lly, Merit - CalPERS 2000-2019 Experience Study
Mortality, Retirement, Termination, and
Disability
CalPERS 2000-2019 Experience Study
Mortality Improvement Scale Mortality projected fully generational with Scale MP-2021 Medical Trend Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076
Medicare (Non-Kaiser) - 5.65% for 2023, decreasing to an ultimate rate of

3.75% in 2076
Medicare (Kaiser) - 4.60% for 2023, decreasing to an ultimate rate of

3.75% in 2076
PEMHCA Minimum Increases 4.00% annually
Cap Increases All except Executive Management, CM and Elected Officials: 0% until the end of current MOU, 5% every 3 years thereafter
Executive Management, CM and Elected Officials: 5% per year Participation at Retirement Tier 1: 90%
PEMHCA Minimum Only: 80%

Page 123 of 576 ends

Monterey Park City CouncilFebruary 21, 2024

Monterey Park City Council
February 21, 2024