Pacific Grove City Council
January 21, 2026

To the Honorable Mayor and the Members of the City Council of the City of Pacific Grove
Pacific Grove, California

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 accompanying combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining and individual nonmajor 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 other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
December 18, 2025
23 PGCC 1-21-26

24 PGCC 1-21-26

Management Discussion and Analysis (Unaudited)
This discussion and analysis (MD&A) includes
an overview of the City of Pacific Grove’s
(City’s) financial activities and performance for
the fiscal year ended June 30, 2025. This
discussion and analysis is intended to serve as
an introduction to the City’s basic financial
statements, which consists of three parts: (1)
Government-Wide Financial Statements, (2)
Fund Financial Statements, and (3) Notes to the
Basic Financial Statements.

This report also contains other supplementary information in addition to the basic financial statements themselves.

The financial statements presented herein include all of the activities of the City and its component units. Please read the MD&A in conjunction with the transmittal letter, the basic financial statements, and the accompanying notes to those financial statements in the Annual Comprehensive Annual Report (ACFR).

Government-Wide Financial Statements
These provide readers with a broad view of the City’s finances, using the economic resources measurement focus and accrual basis of accounting. These accounting methods are similar to those used by private-sector companies.

All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

Additionally, certain interfund receivables, payables, and interfund activity have been eliminated. An overview of the City’s functions associated with each classification is listed below.

Governmental Activities – All of the City's basic services are considered to be governmental activities. This includes general government, public safety, public works, recreation, library, museum, and community development. These services are supported by general City revenues such as taxes, and by specific program revenues such as development and recreation program fees.

Business-Type Activities – The City’s enterprise activities include cemetery, sewer, water reclamation and golf operations. Unlike governmental activities, these services are fully supported by charges paid by users based on the amount of services they use.

The Statement of Net Position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or declining.

The Statement of Activities shows how the net position changed during the recent fiscal year.

Fund Financial Statements
These provide readers with additional information about the City’s major funds, how services were financed in the short term, and fund balances available for financing future projects. Most of the City’s funds, excluding the City’s General Fund and Internal Service Funds, have significant restrictions, commitments, or other limitations, which affect the availability of their fund resources for future use.

Notes to the Financial Statements / Supplementary Information These provide additional information to give the reader a better understanding of the data provided in the Government-Wide Financial Statements and Fund Financial Statements. In addition to the basic financial statements and accompanying notes, this report also presents certain Required Supplementary Information concerning the City’s progress in funding its obligation to provide pension and retiree health benefits to its employees. The combining statements for non-major and internal service funds are presented immediately following the required supplementary information.
15,352
15,660
15,265
14,761
14,966
14,871
2016
2018
2020
2022
2024
2025
City Population
25 PGCC 1-21-26

Financial Highlights
Statement of Net Position
Net Position – Representing the difference between assets plus deferred outflows of resources less liabilities plus deferred inflows of resources is ↑ $1.5 million to $56.8 million, due to higher revenues from taxes and sewer fees.

Note that there was a prior period adjustment to the beginning Net Position of $1.2 million as discussed in Note 16.

Working Capital – Representing current assets less current liabilities was ↑ $ 4.9 million to $35.8 million, due to increased revenues from taxes and sewer fees.

Net Investment in Capital Assets – The City’s largest portion of net position reflects investments in net capital assets less any related debt that was used to acquire those assets. The ending balance was $66.5 million, reflecting the completion of capital projects during the fiscal year.

Unrestricted Net Position – The City had a deficit in unrestricted net position of $20.1 million at the end of the fiscal year. Many different items comprise the unrestricted net position, including the City’s net pension liability offset.

Statement of Activities
Change in Net Position - Was $2.6 million during the year, comprised of a net change from governmental activities of $0.7 million and from business type activities of $1.9 million.

Operating Revenues / Expenses – Operating revenues consisted of $10.9 million for Charges for Services, $1.6 million for Operating Grants and Contributions, $451K for Capital Grants and Contributions and $34.3 million for taxes and general revenues. Operating expenses consisted of $38.4 million for governmental activities and $6.2 million for business type activities.
$18.0
$19.6
$20.9
$22.6
$21.0
$21.0
$25.1
$27.5
$29.1
$30.4
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Governmental Tax Revenue by Year (In Millions)
26 PGCC 1-21-26

2025 2024 2025 2024 2025 2024
Assets
Current assets 32,815$ 31,319$ 13,211$ 12,591$ 46,026$ 43,910$ Capital assets 44,774 43,403 28,447 28,484 73,221 71,887$ Other assets 7,254 8,806 1,000 1,328 8,254 10,134
Total Assets 84,843$ 40,125$ 42,658$ 13,919$ 127,501$ 125,931$ Deferred Outflows Resources 15,323$ 20,365$ 335$ 356$ 15,658$ 20,721$ Liabilities
Current liabilities 9,335$ 12,197$ 928$ 1,956$ 10,263$ 14,153$ Noncurrent/other liabilities 62,702 63,260 7,113 7,302 69,815 70,562 Total Liabilities 72,037$ 75,457$ 8,041$ 9,258$ 80,078$ 84,715$ Deferred Inflows Resources 4,888$ 5,943$ 1,408$ 1,825$ 6,296$ 7,768$ Net Position
Net investment capital assets 44,104$ 42,671$ 22,386$ 21,252$ 66,490$ 63,923$ Restricted 10,396 9,526 10,396 9,526
Unrestricted (deficit) (31,260) (29,703) 11,158 10,425 (20,102) (19,278) Total Net Position 23,240$ 22,494$ 33,544$ 31,677$ 56,784$ 54,171$ Statement of Net Position
Summary of Net Position (In Thousands)
Governmental Activities Business-Type Activities Totals The increase in assets and net position in the Statement of Net Position is due to increased tax receipts and sewer revenues, as well as other revenue and expense variances noted elsewhere in this document. The deficit of Net Position is net of pension related liabilities, inflows and outflows.

Current and Other Assets
This includes unrestricted cash and investments and items such as receivables, inventory and prepaid items expected to be converted into cash within one year.

Capital Assets
Consisting of land, buildings, improvements, infrastructure, vehicles, equipment, and the right-to-use assets. These items are not available for future spending.

Deferred Outflows / Inflows Resources
A consumption / acquisition of net assets by the government that is applicable to a future reporting period.

Current and Other Liabilities
Represents liabilities expected to be paid with cash within one year.

Long Term Liabilities
Includes the outstanding obligations for the City, including pensions, OPEB, compensated absences, leases, subscription, and bonded debt.

Net Position
Net investment in capital assets represents capital assets net of accumulated depreciation and related debt. The restricted portion is subject to externally imposed restrictions for activities such as capital projects, debt service, and community development and is not available for general operations. The unrestricted portion is available for general operations. The deficit amount shown in Governmental Activities is due to pension obligations. 27 PGCC 1-21-26

Functions/Programs 2025 2024 2025 2024 2025 2024
Program Revenues
Charges for services $ 3,821$ 6,937$ 6,314$ 10,867 3,930 $ 10,135 $ Operating grants/contributions 1,627 858 - - 1,627 858
Capital grants/contributions 474 452 - - 452 474
Total Program Revenues 5,153 6,937 6,314 6,009 12,946 11,467 General Revenues - -
Taxes 28,931 30,369 - - 30,369 28,931
Investment earnings 1,444 1,102 511 1,562 460 1,955
Other revenues 1,151 2,320 2,320 1,151
Total General Revenues 31,526 33,791 511 460 34,251 32,037 Total Revenues 36,679 39,800 6,825 7,397 47,197 43,504
Expenses - -
General government 6,441 6,769 6,769 6,441
Public safety 15,217 17,848 17,848 15,217
Public works 5,230 5,715 5,715 5,230
Recreation 1,563 2,137 2,137 1,563
Library 1,248 1,550 1,550 1,248
Museum 360 416 416 360
Community development 3,574 3,667 3,574 3,667
Interest on fiscal charges 477 410 410 477
Cemetery operating 452 816 452 816
Sewer operating 1,224 1,484 1,224 1,484
Local water project 2,042 3,060 2,042 3,060
Golf course 469 805 469 805
Total Expenses 34,203 38,419 4,187 6,165 44,584 38,390
Excess/(Deficiency) before Transfers 1,381 2,476 1,232 2,638 2,613 5,114 Transfers (635) (188) 188 635 - -
Increase/(Decrease) in Net Position 2,288 746 1,867 2,826 2,613 5,114 Net Position, Beginning Year (restated) 22,494 20,206 31,677 28,851 54,171 49,057 Net Position, End of Year $ 22,494$ 33,544$ 31,677$ 56,784$ 54,171 23,240 $ Statement of Changes in Net Position
Summary of Statement of Changes in Net Position (In Thousands) Governmental Business-Type Totals
The Statement of Changes in Net Position reflects the fact that the City’s net position increased by approximately $2.6 million in the current fiscal year. The increase in net position is due to increases in tax and sewer fee revenues received.
$19.2
$22.0
$24.4
$23.4
$33.0
$35.3
2016
2018
2020
2022
2024
2025
General Fund Revenue by Year (In Millions)
28 PGCC 1-21-26

2024 2025 % of Total
Program Expenses
General government $ 6,440,878 $ 6,769,288 15.2%
Public safety 15,217,138 17,847,637 40.0%
Public works 5,230,431 5,714,615 12.8%
Recreation 1,562,919 2,136,618 4.8%
Library / Museum 1,608,628 1,965,667 4.4%
Community Development 3,666,942 3,574,254 8.0%
Interest and fiscal charges on long-term debt 476,107 410,376 0.9% Total governmental activities expenses 34,203,043 38,418,455 86.2% Cemetery 452,270 816,575 1.8%
Sewer 1,224,324 1,483,581 3.3%
Local Water Project 2,042,255 3,059,850 6.9%
Golf 468,767 805,394 1.8%
Total business-type activities expenses 4,187,616 6,165,400 13.8% Total primary government expenses $ 38,390,659 $ 44,583,855 100% Program Revenues
Charges for services:

General government $ 1,210,812 $ 1,268,917 9.8%
Public safety / Public Works 601,498 631,542 4.9%
Recreation 599,573 716,285 5.5%
Library / Museum 2,374 1,856 0.0%
Community Development 1,406,529 1,311,599 10.1%
Operating grants and contributions 858,172 1,626,687 12.6% Capital grants and contributions 474,137 451,865 3.5%
Total governmental activities program revenues 5,153,095 6,008,751 46.4% Charges for services:

Cemetery 716,931 614,897 4.7%
Local Water Project 1,026,820 1,328,142 10.3%
Sewer 3,825,616 4,115,081 31.8%
Golf 745,216 879,140 6.8%
Total business-type activities program revenues 6,314,583 6,937,260 53.6% Total primary government program revenues 12,416,782 12,946,011 100% Governmental activities (29,049,948) (32,409,704)
Business-type activities 2,126,967 771,860
Total primary government net (expense)/revenue $ (26,922,981) $ (31,637,844) Fiscal Year Ended June 30
Statement of Changes in Net Position (Continued)
Revenues - Include charges for services such as sewer charges, grants, and funding received from other organizations to finance the costs of special programs, and taxes, including property, sales, franchise, transient occupancy, and business license taxes. The City share of the 1% levy per Prop. 13 is 15.92%, net of the Educational Revenue Augmentation Fund (ERAF) share (3.69% of the 1%) that is deducted by the State.

Expenses - Include Administration, Police, Fire, Public Works, Community Development, Recreation, the City's golf course, Sewer collection system, Cemetery and the City's local water project. 29 PGCC 1-21-26

% of
2024 2025 Total
General Revenues and Other Changes in Net Assets
Governmental activities:

Taxes
Property taxes $ 10,001,561 $ 10,516,128 31.7%
Sales and use taxes 7,146,935 7,589,358 22.9%
Franchise taxes 1,682,562 1,589,922 4.8%
Transient occupancy taxes 7,375,869 7,556,230 22.8%
Utility users taxes 2,118,068 2,435,825 7.3%
Business license tax 427,918 501,858 1.5%
Property transfer tax 159,401 156,698 0.5%
Property taxes in lieu of motor vehicle fee 18,480 0.1% 23,616 Unrestricted Investment earnings 1,443,592 1,102,043 3.3% Miscellaneous or Other revenues 1,150,805 2,319,504 7.0% Transfers (187,500) (635,188) -1.9%
Total governmental activities 31,337,691 33,155,994 100% Business-type activities:

Unrestricted Investment earnings 511,470 459,953
Miscellaneous or Other revenues
Transfers 187,500 635,188
Total business-type activities 698,970 1,095,141
Total primary government $ 32,036,661 $ 34,251,135
Statement of Changes in Net Position (Continued)
Fiscal Year Ended June 30
Governmental Activities
The total cost of services for all governmental activities in FY 24-25 was $38.4 million, with program revenues covering $6.0 million resulting in a net cost of $32.4 million. The remaining portion of governmental activities was covered by taxes (some of which can only be used for certain programs) and other revenues, such as interest and other miscellaneous revenue. The cost of services went up driven by cost escalations and the impact of negotiated labor agreements and the most recent pension actuarial.

Business Activities
The total cost of all Business-Type activities this year was $6.2 million. As shown in the Statement of Activities, these were funded by charges for services totaling $6.9 million amounts paid by users of the systems, along with interest earned on invested cash balances. Net position increased by $1.9 million for business-type activities (including investment earnings and transfers) to $33.5 million. $6.2 $6.6 $6.9 $7.3 $7.6 $8.2 $8.6 $9.3 $10.0 $10.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Property Tax Revenues - In Millions
30 PGCC 1-21-26

CDBG Capital Other
General RSTP Grant Projects Govt.

Fund Fund Fund Fund Funds Total
Total Revenues $ 35.3 0.5$ 0.02$ $ 40.2 4.4 $
Total Expenditures 31.3 0.0 1.0 4.2 0.1 36.6
Revenues Over (Under) Expenditures 0.4 4.0 - (1.0) 0.2 3.6 Transfers in 0.1 3.0 0.3 3.4
Transfers out (4.0) (0.1) (4.1)
Proceeds from sale of assets -
Inception of subscription liabilities 0.4 0.4
Net change in fund balances (deficit) 0.4 0.1 - 2.0 0.8 3.3 Beginning Fund Balance (deficit) - restated (0.4) 17.4 1.3 0.3 8.2 26.8 End of year Fund Balance (deficit) $ 17.5 $ 1.3$ 2.3$ 9.0 - $ 30.1 $ Financial Analysis of the City's Governmental Funds
Summary of Changes in Fund Balance - Governmental Funds (In Thousands) Fund Name / Type
The Fund Financial Statements focus on individual parts of the City’s government, reporting operations in more detail than the Government-Wide Statements. The City’s governmental funds provide information on near-term inflows, outflows and balances of spendable resources. The City’s governmental funds reported a combined fund balance at June 30, 2025 of $30.1 million, an increase of $3.3 million over the end of the previous fiscal year. Major changes are noted below.

The General Fund is the chief operating fund of the City and reflects an increase of $0.1 million in fund balance.

Capital Projects fund balances increased $2.0 million due to the carryover of capital projects to Fiscal Year 25-26. $9.9 $11.6 $11.9 $11.5 $9.8 $10.0 $12.2
$15.0 $17.6 $17.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Available General Fund Reserves (In Millions)
$5.9 $6.4 $6.8
$9.2 $8.4 $7.6 $7.7
$10.0 $10.4
$12.6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Designated Reserves Other Govt Funds (In Millions)
31 PGCC 1-21-26

Budgetary Highlights - General Fund
Original Final
Functions/Programs Budget Budget Actual Variance
Revenues
Property taxes $ 10,296,000 $ 10,296,000 $ 10,516,128 $ 220,128 Sales and use taxes 6,194,000 6,194,000 6,360,487 166,487 Franchise and other taxes 1,659,000 1,659,000 1,547,278 (111,722) Transient occupancy taxes 7,012,000 7,012,000 6,960,718 (51,282) Utility user taxes 2,043,000 2,043,000 2,435,825 392,825 Business license tax 393,000 393,000 485,535 92,535
Other taxes 150,000 150,000 180,314 30,314
Total Taxes 27,747,000 27,747,000 28,486,285 739,285
Intergovernmental 51,000 51,000 150,704 99,704
Licenses, permits and impact fees 1,325,000 1,325,000 1,154,121 (170,879) Fines and Forfeitures 484,250 484,250 316,523 (167,727) Charges for services 1,882,590 1,882,590 1,940,548 57,958 Interest, rents and concessions 558,200 558,200 874,568 316,368 Other revenues 1,260,687 1,260,687 2,339,408 1,078,721
Total Revenues 33,308,727 33,308,727 35,262,157 1,953,430 Expenses
General government 5,684,861 5,902,161 5,253,961 648,200 Public Safety - Police 8,931,103 9,069,754 8,328,813 740,941 Public Safety - Fire 4,915,600 4,920,982 5,022,031 (101,049) Public works 5,144,860 5,712,860 4,619,697 1,093,163
Recreation 1,623,839 1,683,839 1,697,656 (13,817)
Library 1,212,017 1,242,394 1,223,426 18,968
Museum 384,300 384,300 382,112 2,188
Community development 2,983,158 3,391,158 2,995,511 395,647 Capital Outlay 505,100 305,342 173,561 131,781
Debt Service: -
Principal retirement 556,910 556,910 556,910 -
Interest 905,652 905,652 989,578 (83,926)
Total Expenses 32,847,400 34,075,352 31,243,256 2,832,096 Other Financing Uses (Net) (1,551,187) (3,718,220) (3,899,615) 181,395 Increase / (Decrease) in Net Position $ (1,089,860) $ (4,484,845) 119,286 $ (4,604,131) Net Position, Beginning of Year 17,364,795
Net Position, End of Year ` $ 17,484,081
General Fund Budget Actual (In Thousands)
Over the course of the year, the City Council revised the City’s budget with adjustments for various revenue and expenditure changes. After taking into account these adjustments, General Fund revenues were higher than the final budget by $2.0 million, which is attributable to higher tax collections and the receipt of one-time funds for various projects, and General Fund expenditures were under budget by $2.9 million, due to personnel cost savings resulting from vacancies in several of the City’s departments. Significant variances are shown below:
32 PGCC 1-21-26

Governmental
Activities
Local
Water Golf Internal
Cemetery Project Sewer Course Service
Fund Fund Fund Fund Total Funds
Total Operating Revenues $ 0.6 1.3$ 4.1$ 0.9$ 6.9$ $ 2.7 Total Operating Expenses 0.8 1.4 3.0 0.7 5.9 3.3
Revenues Over (Under) Expenses (0.2) (0.1) 1.1 0.2 1.0 (0.6) Transfers in 0.6 0.6
Investment Earnings 0.3 0.1 0.4
Interest Expense (0.1) (0.1)
Net change in Net Position (0.2) 0.5 1.4 0.2 1.9 (0.6)
Beginning of year Net Position 1.3 25.3 1.1 31.7 4.0 0.8 End of year Net Position 1.1 26.7 1.6 33.6 4.2 0.2
Ending Working Capital $ 1.0 $ 10.1$ - 1.0$ 12.1$ $ 1.3 Budgetary Highlights - Proprietary Funds
Summary of Changes in Net Position - Proprietary Funds (In Thousands) Business Type Activities
These funds provide the same type of information found in the Government-Wide Financial Statements but in more detail. Factors concerning these funds have previously been addressed in the discussion of business-type activities under the Government-Wide Statements.
$3.2
$3.3
$3.7
$3.5
$3.8
$4.5
2016
2018
2020
2022
2024
2025
Wastewater Revenues - In Millions
$1.4
$2.0
$2.0
$2.2
$1.5
$2.5
2016
2018
2020
2022
2024
2025
Wastewater Expenses - In Millions (excludes depreciation) 33 PGCC 1-21-26

2025 2024 2025 2024 2025 2024
Land $ 2,338 $ 2,338 $ 363 $ 2,701 363 $ $ 2,701
Construction in progress 1,665 5,525 1,107 2,772 983 6,508 Buildings and improvement 9,250 8,449 4,485 4,608 13,735 13,057 Infrastructure 30,162 25,910 22,142 22,136 52,304 48,046 Machinery and equipment 845 883 350 394 1,195 1,277
Subscriptions (SBITAs) 514 298 - 514 298
Total Capital Assets, Net $ 44,774 43,403$ 28,447$ 28,484$ 73,221$ $ 71,589 Capital Outlay Capital Projects
 IT Network Upgrade
 VMWARE Upgrade and Server Refresh
 Redundant Internet and Firewall
 Police Equipment
 Fire Equipment
 Street Rehabilitation
 Patrol Vehicle Purchase  Golf Cart Path Improvements  Golf Tee Expansion / Renovation
 Recreation Trail Improvements
 Pedestrian Safety - Central
 Pump Station 15.5
 Phone System Upgrades  Street Crack and Slurry Seal
Capital Assets
Summary of Capital Assets at Year End (In Thousands)
Governmental Activities Business-type Activities Totals The City of Pacific Grove’s investment in capital assets as of June 30, 2025 amounts to $73.2 million (net of accumulated depreciation and amortization). This includes net capital assets from governmental activities of $44.8 million and net capital assets from business type activities at $28.5 million. This investment in capital assets includes land, buildings and systems, improvements, machinery and equipment, park facilities, roads, and sewer systems. The table below summarizes the City’s capital assets net of depreciation:

Major capital projects and capital outlay during the fiscal year included the following:

Additional information on capital asset activity is described in Note 7 to the financial statements. $22.7
$27.3
$32.6
$39.8 $42.7 $44.1
2016 2018 2020 2022 2024 2025
Investment in Fixed Assets -
Governmental Activities (In Millions)
$12.5
$16.3 $17.5
$21.5 $21.3 $22.4
2016 2018 2020 2022 2024 2025
Investment in Fixed Assets - Proprietary
Activities (In Millions)
34 PGCC 1-21-26

2025 2024 % Change Maturity Interest
Pension Obligation Bonds 5,409 6,458 $ -16.2% 2029 5.67-6.12% PG&E Loan 19 31 -38.7% Varies Varies
SBITA Liability 402 201 100.0% Varies Varies
Total Debt - Governmental Activities 5,830 $ 6,690 $ -12.9% 2013 Wastewater Revenue Refunding Bonds 503 574 $ -12.4% 2031 3.35% Golf Course COP Refunding 1,318 1,526 -13.6% 2030 4.35% Clean Water State Revolving Fund Loan 4,223 4,386 -3.7% 2048 1% Total Debt - Business Type Activities 6,044 $ 6,486 $ -6.8% Long-Term Debt, Pension and Other Post Employment Benefit (OPEB) Obligations Summary of Outstanding Long-Term Debt at Fiscal Year End (In Thousands) Governmental Activities
The City’s net pension and net OPEB obligations as of June 30, 2025 were $54.7 million and $3.2 million respectively. As of June 30, 2024, the City’s net pension obligation was 78.1% funded. During the year, Long-Term Debt from
governmental activities decreased by $0.9 million, primarily due to regular debt service payments. Long-term debt
attributable to business type activities decreased by 13% million due to regular debt service payments on the
following bond issues:

Pension Obligation Bond
In 2006, the City issued Taxable Pension Obligation Bonds in the amount of $19.4 million as part of the California
Statewide Communities Development Authority Program.

Clean Water State Revolving Fund Loan
In 2015, the City secured State Water Resources Control Board ("SWRCB") funding for $5.3 million to construct a recycled water treatment plant, sewer diversion structure, waste pump station, and user connections.

Golf Course / Wastewater Revenue Refunding Bonds
The City entered into a $3.1 million Site Lease with Umpqua Bank to refund its 2014 Golf Course Certificate of
Participation, secured by the transfer of property rights to Umpqua Bank. The City also issued Wastewater Revenue
Refunding Bonds for $1.2 million, which refinances the
California State Community Development Authority Series 2001B Revenue Bonds.

City Bond Rating / GO Bonds - Standard and Poor’s Rating Services and Moody’s Investor Services Inc., assigned a rating of SP-1+ and MIG 1, respectively, to the City’s 2006 Pension Obligation Bonds. The City has not received any updates to this rating. The City does not have any General Obligation Bonds (GO). The California Government Code, Section 43605 caps GO debt at 15% of the assessed value of all real and personal property within the City. The legal debt margin for Fiscal Year 2024-25 is $749 million. Additional information is described in Note 8 to the financial statements.
$1.78
$2.39
$3.40
$4.33
$2.95
$3.24
15-16
17-18
19-20
21-22
23-24
24-25
Pension Contributions
(Millions)
29%
33%
42%
52%
31%
33%
15-16
17-18
19-20
21-22
23-24
24-25
Contributions as % of Covered
Payroll
35 PGCC 1-21-26

Economic Factors / Next Year's Budget
The City prepares an annual budget based on
council-set goals and priorities, which contains a
multi-year financial plan that focuses on long-term
financial viability and allows decision-makers to
understand the impact of their policy decisions.

Budget development is guided by a series of policies
adopted by the City Council, which guides long-term
planning, minimum reserve levels, employee
compensation, cash and debt management,
information technology, and utility rates. The budget
was based on these key assumptions:

Property Taxes
Proposition 13 set the Fiscal Year 75/76 assessed values as the base year for future annual inflationary assessed values, with a growth rate limited to 2% for any given year. The County Assessor also re-appraises each real property parcel when there are purchases, construction, or other statutorily defined, “changes in ownership”. Proposition 13 limits the property tax to 1% of each property’s full value, plus any additional percentages for specific voter approved indebtedness. The City receives approximately sixteen cents of every dollar of the property tax paid on properties assessed within the City, with the balance distributed to the Pacific Grove Unified School District, County of Monterey, and local special districts.

Sales Tax
In April 2022, approximately 60% of voters approved Measure A, a new 0.50% transaction and use tax. This increased the combined sales tax rate to 9.25% in October 2022. The General Fund portion of the City sales tax is comprised of a 1% Bradley-Burns statutory sales tax rate; and Measure U, a 1% transaction and use tax that was approved by voters in 2008. The tax rate increased to 1.5% when Measure A became effective.

Utility Users Tax
The City imposes a utility users’ tax to residents and businesses within the City that utilize water, gas, electricity, telephone, and cable services. This tax is assessed at a rate of 5% of the amount charged by the utility; and it is paid by the person consuming the service. The amount of revenues received is primarily influenced by updates to the underlying rate structures or new development projects.

Transient Occupancy Tax (TOT)
TOT Is a lodging tax that is collected on overnight rental accommodation stays of 30 consecutive days or less. In 2010, the City updated its municipal code and began collecting TOT on residential or short-term rental properties (STRS). In Fiscal Year 17/18, the City approved an ordinance to reduce the number of short-term rentals, with an effective date of April 30, 2019. At the beginning of Fiscal Year 19/20, there were approximately 200 properties, with an additional 12 home-sharing licenses. In November of 2018, 74.9% of voters approved Measure U, allowing the City to increase the TOT rate from 10% to 12%. This new rate became effective on July 1, 2019. This increased tax has been partially offset by Measure M, which eliminated STRS outside of the Coastal and Commercial zones, which became effective in May of 2020.
$2.7 $3.0
$3.6 $4.0
$4.7 $4.9
2016 2018 2020 2022 2024 2025
Assessed Value of Real Property
(In Billions)
36 PGCC 1-21-26

Capital Projects Capital Outlay
Street Rehabilitation Project Phone System Improvements Crack and Slurry Seal Police Door Access Upgrade
Chautauqua Hall Building Improvements Redundant Internet And Firewall Chinese Pavillion / Moon Gate City Hall Door Access
Fire Station Alerting System Police Equipment
Library Backup Power System Light Fixtures
Sewer Main Replacement - Arena Ave Equipping New Fire Engine Sewer Collection System City Council Chambers Equipment Economic Factors / Next Year's Budget
Personnel costs
These are based on approved staffing levels for Fiscal Year 25-26.

Impacts of labor agreements effective July 1, 2022, through June 30, 2026, have been included and COLA adjustments are accounted for in outer years.

Health Costs
Based upon information provided by our health care providers, the City’s health costs are projected to increase significantly in FY 25-26 and beyond. The budget assumes sharing between the City and employees for any increases in health premiums for future fiscal years.

Pension Costs
Pension rates for FY 25-26 are based on information provided by CalPERS, which assumes that they meet their targeted net discount rate of 6.8%.

Internal Service Funds (ISF) Funding
Funding to the City’s ISFs has been adjusted in FY 25-26 to fund operational and reserve levels for general and worker’s compensation insurance claims. In past years, the City underfunded its ISF reserves to maintain the General Fund reserve levels at 25%, as mandated by Council Policy 400-6 on Budget and Financial Management.

Capital Projects
The City’s adopted capital improvement program (CIP) for FY 25-26 is $4.2 million and $0.5 million for capital outlay. The CIP is designed to meet community needs, with special emphasis on those projects that contribute to the City’s economic vitality and quality of life. Some of the projects and capital outlay funded for Fiscal Year 2025- 26 include the following:
110
110
116
95 99
102
2016
2018
2020
2022
2024
2025
City Employees (FT)
Request for Financial Information
This financial report is designed to provide a general overview of the City of Pacific Grove's finances for all of Pacific Grove's residents, taxpayers, customers, investors, and creditors. This financial report seeks to demonstrate the City's accountability for the money it receives. Questions regarding this report or requests for additional information should be addressed to the Department of Finance at 300 Forest Avenue, Pacific Grove, CA 93950, or visit the City of Pacific Grove webpage at www.cityofpacificgrove.org.

Additional information related to the City’s key revenues, expenditures, and major initiatives are included in the Transmittal Section of this document.
37 PGCC 1-21-26

38 PGCC 1-21-26

City of Pacific Grove, California
Basic Financial Statements
Rip Van Winkle Open Space
Hopkins Marine Station
39 PGCC 1-21-26

40 PGCC 1-21-26

City of Pacific Grove, California
Government Wide Financial Statements
Pacific Grove Museum of Natural History
Monarch Grove Sanctuary
41 PGCC 1-21-26

Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 28,606,138 $ 11,858,787 $ 40,464,925 $ Restricted cash and investments 70,237 - 70,237
Receivables:

Taxes 2,562,756 2,562,756 -
Accounts 1,405,783 1,009,529 2,415,312
Loans, due within one year - 35,413 35,413
Leases, due within one year 33,787 304,602 338,389
Interest 103,756 2,250 106,006
Prepaid items 32,836 - 32,836
Total current assets 32,815,293 13,210,581 46,025,874
Noncurrent assets:

Loans receivable, due in more than one year 1,089,703 - 1,089,703 Leases receivable, due in more than one year 1,530,821 1,000,342 2,531,163 Available for sale assets 4,633,074 4,633,074 -
Capital assets:

Nondepreciable/amortizable 4,003,565 1,469,723 5,473,288 Depreciable/amortizable, net 40,770,431 26,977,423 67,747,854 Total capital assets 44,773,996 28,447,146 73,221,142
Total noncurrent assets 52,027,594 29,447,488 81,475,082 Total assets 84,842,887 42,658,069 127,500,956

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 15,177,236 322,533 15,499,769
Related to OPEB 145,446 12,220 157,666
Total deferred outflows of resources 15,322,682 334,753 15,657,435 Primary Government
City of Pacific Grove
Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 42 PGCC 1-21-26

Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 1,499,024 350,072 1,849,096
Accrued payroll 358,869 24,194 383,063
Deposits and other liabilities 54,325 - 54,325
Interest payable 6,530 45,709 52,239
Unearned revenue 4,891,234 4,891,234 -
Claims payable - due within one year 427,678 - 427,678
Compensated absences - due within one year 355,588 43,464 399,052 Long-term debt - due within one year 1,605,248 452,853 2,058,101 Total OPEB liability - due within one year 136,181 11,441 147,622 Total current liabilities 9,334,677 927,733 10,262,410
Noncurrent liabilities:

Long-term debt - due in more than one year 4,224,601 5,592,203 9,816,804 Claims payable - due in more than one year 1,058,177 1,058,177 - Compensated absences - due in more than one year 1,066,762 130,391 1,197,153 Net pension liability 53,514,653 1,151,995 54,666,648
Total OPEB liability - due in more than one year 2,838,386 238,455 3,076,841 Total noncurrent liabilities 62,702,579 7,113,044 69,815,623 Total liabilities 72,037,256 8,040,777 80,078,033

DEFERRED INFLOWS OF RESOURCES
Related to leases 1,436,567 1,231,327 2,667,894
Related to pensions 1,904,432 46,632 1,951,064
Related to OPEB 1,547,422 130,000 1,677,422
Total deferred inflows of resources 4,888,421 1,407,959 6,296,380

NET POSITION
Net investment in capital assets 44,103,523 22,385,756 66,489,279 Restricted for:

Insurance 70,237 - 70,237
Social service programs 1,013,995 1,013,995 -
Public safety 578,565 - 578,565
Community development 6,350,896 6,350,896 -
Street improvements 2,382,661 2,382,661 -
Debt service - - -
Total restricted 10,396,354 10,396,354 -
Unrestricted (deficit) (31,259,985) 11,158,330 (20,101,655) Total net position $ 33,544,086 23,239,892 $ 56,783,978 $ Primary Government
City of Pacific Grove
Statement of Net Position (Continued)
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 43 PGCC 1-21-26

Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues Governmental activities:

General government $ 6,769,288 $ 1,268,917 $ 51,170 $ - 1,320,087 $ Public safety 17,847,637 629,908 1,364,325 - 1,994,233
Public works 5,714,615 1,634 36,977 451,865 490,476
Recreation 2,136,618 716,285 13,138 - 729,423
Library 1,550,383 1,856 83,879 - 85,735
Museum 415,284 - - - -
Community development 3,574,254 1,311,599 77,198 - 1,388,797 Interest 410,376 - - - -
Total governmental activities 38,418,455 3,930,199 1,626,687 451,865 6,008,751 Business-type Activities:

Cemetery 816,575 614,897 - - 614,897
Local Water Project 1,483,581 1,328,142 - - 1,328,142
Sewer 3,059,850 4,115,081 - - 4,115,081
Golf 805,394 879,140 - - 879,140
Total business-type activities 6,165,400 6,937,260 - - 6,937,260 Total primary government $ 10,867,459 44,583,855 $ 1,626,687 $ 451,865 $ 12,946,011 $ City of Pacific Grove
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
See accompanying Notes to the Basic Financial Statements. 44 PGCC 1-21-26

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

General government (5,449,201) $ - $ (5,449,201) $
Public safety (15,853,404) - (15,853,404)
Public works (5,224,139) - (5,224,139)
Recreation (1,407,195) - (1,407,195)
Library (1,464,648) - (1,464,648)
Museum (415,284) - (415,284)
Community development (2,185,457) - (2,185,457)
Interest (410,376) - (410,376)
Total governmental activities (32,409,704) - (32,409,704) Business-type Activities:

Cemetery - (201,678) (201,678)
Local Water Project - (155,439) (155,439)
Sewer - 1,055,231 1,055,231
Golf - 73,746 73,746
Total business-type activities - 771,860 771,860
Total primary government 771,860 (32,409,704) (31,637,844) General revenues and transfers:

General revenues:

Taxes:

Property taxes 10,516,128 - 10,516,128
Sales and use taxes 7,589,358 - 7,589,358
Franchise and other taxes 1,589,922 - 1,589,922
Transient occupancy taxes 7,556,230 - 7,556,230
Utility users taxes 2,435,825 - 2,435,825
Business license tax 501,858 - 501,858
Property transfer tax 156,698 - 156,698
Property taxes in lieu of motor vehicle fee 23,616 - 23,616 Total taxes 30,369,635 - 30,369,635
Investment income 1,102,043 459,953 1,561,996
Miscellaneous 2,319,504 - 2,319,504
Total general revenues 33,791,182 459,953 34,251,135
Transfers (635,188) 635,188 -
Changes in net position 746,290 1,867,001 2,613,291
Net position - beginning, as previously reported 23,656,123 31,680,661 55,336,784 Error correction (Note 16) (1,162,521) (3,576) (1,166,097) Net position - beginning, as restated (Note 16) 22,493,602 31,677,085 54,170,687 Net position - end of year $ 33,544,086 23,239,892 $ 56,783,978 $ Net (Expense) Revenue and
Changes in Net Position
City of Pacific Grove
Statement of Activities (Continued)
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 45 PGCC 1-21-26

46 PGCC 1-21-26

City of Pacific Grove, California
Fund Financial Statements
This section includes Governmental, Proprietary and Fiduciary Fund Financial Statements.

Pacific Grove Golf Links
Point Pinos Lighthouse
47 PGCC 1-21-26

48 PGCC 1-21-26

GOVERNMENTAL FUND

FINANCIAL STATEMENTS
General Fund - To account for and report all financial resources not accounted for and reported in another fund.

Capital Improvement Projects Fund - This Capital Improvement Projects Fund accounts for capital projects funded fully or in part by discretionary General Fund revenues. These projects are distinct from projects funded by the self- supporting Enterprise Funds or Special Revenue Funds.

Nonmajor Governmental Funds - To account for the aggregate of all the nonmajor governmental funds.

RSTP Fund - This fund receives federal and state transportation funding through the Transportation Agency for Monterey County (TAMC). TAMC allocates these funds to local agencies. Funds are used for variety of projects including bicycle and pedestrian projects, local roads, and transit.

Community Development Block Grant (CDBG) Fund - This special revenue fund was established to account for amounts received from Community Development Block Grants and for the loan and administrative activities of the City’s various CDBG grants. 49 PGCC 1-21-26

50 PGCC 1-21-26

Capital
CDBG Improvement Nonmajor Total
General RSTP Grant Projects Governmental Governmental
Fund Fund Fund Fund Funds Funds
ASSETS
Cash and investments 16,189,176 $ - $ $ 389,793 $ 8,303,968 2,430,896 $ $ 27,313,833 Receivables:

Accounts 214,667 101,730 190,000 453,036 - 959,433
Taxes 2,446,384 - - 116,372 - 2,562,756
Loans - 744,739 - 344,964 - 1,089,703
Leases 1,564,608 - - - - 1,564,608
Interest 103,756 - - - - 103,756
Prepaid items 32,836 - - - - 32,836
Due from other funds - - - 90,431 - 90,431
Total assets $ 20,551,427 $ 101,730 $ 2,430,896 1,324,532 $ 9,308,771 $ $ 33,717,356

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable $ 1,037,782 $ 5,828 $ 166,777 - $ $ 209,550 $ 1,419,937 Payroll-related liabilities 344,639 - - 12,023 - 356,662 Deposits and other liabilities 54,325 - - - - 54,325
Due to other funds - 90,431 - - - 90,431
Unearned revenue 194,033 - - 64,127 - 258,160
Total liabilities 1,630,779 96,259 166,777 - 285,700 2,179,515 Deferred inflows of resources:

Lease-related 1,436,567 - - - - 1,436,567
Total deferred inflows of resources 1,436,567 - - - - 1,436,567 Fund balances:

Nonspendable:

Prepaid items 32,836 - - - - 32,836
Permanent funds - - - 3,694,644 - 3,694,644
Restricted:

Social service programs - - - 1,035,481 - 1,035,481
Public safety - - - 578,565 - 578,565
Community development - 1,324,532 - 1,331,720 - 2,656,252 Street improvements - - - 2,382,661 - 2,382,661
Committed 12,033,000 - - - - 12,033,000
Assigned:

Capital projects - 5,471 2,264,119 - - 2,269,590
Unassigned 5,418,245 - - - - 5,418,245
Total fund balances 17,484,081 1,324,532 5,471 2,264,119 9,023,071 30,101,274 Total liabilities, deferred inflows of
resources, and fund balances $ 20,551,427 $ 101,730 $ 2,430,896 1,324,532 $ 9,308,771 $ $ 33,717,356 Major Funds
City of Pacific Grove
Balance Sheet
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 51 PGCC 1-21-26

Total Fund Balances - Total Governmental Funds $ 30,101,274 Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, not being depreciated 4,003,565
Capital assets, depreciable/amortizable 73,171,549
Less accumulated depreciation/amortization (32,401,118) (6,530)
(1,605,248)
(4,224,601)
(354,554)
(1,063,326)
15,161,953
(53,460,066)
(1,902,222)
144,862
(2,962,636)
(1,541,216)
178,206
Net position of governmental activities $ 23,239,892
Internal service funds are used by management to charge the costs of stores, vehicle maintenance, and various insurance costs to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Government-Wide Statement of Net Position.

Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds' Balance Sheet.

Net pension liability 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 other postemployment benefits liability 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:

Long-term debt - due in more than one year
Aggregate net OPEB liabilities, net of ($11,931) reported in the internal service funds OPEB related deferred inflows of resources, net of ($6,206) reported in the internal service funds Pension related deferred outflows of resources, net of $15,283 reported in the internal service funds Aggregate net pension liabilities, net of ($54,587) reported in the internal service funds Pension related deferred inflows of resources, net of ($2,210) reported in the internal service funds OPEB related deferred outflows of resources, net of $584 reported in the internal service funds Compensated absences - due within one year, net of $1,034 reported in the internal service funds Compensated absences - due in more than one year, net of $3,436 reported in the internal service funds City of Pacific Grove
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
Long-term debt - due within one year
Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. The capital assets were adjusted as follows:

Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the Governmental Funds Balance Sheet.

See accompanying Notes to the Basic Financial Statements. 52 PGCC 1-21-26

Capital
CDBG Improvement Nonmajor Total
General RSTP Grant Projects Governmental Governmental
Fund Fund Fund Fund Funds Funds
REVENUES:

Taxes:

Property taxes $ 10,516,128 $ - $ - $ - $ - $ 10,516,128 Sales and use taxes 6,360,487 - - 1,228,871 - 7,589,358 Franchise and other taxes 1,547,278 - - 42,644 - 1,589,922 Transient occupancy taxes 6,960,718 - - 595,512 - 7,556,230 Utility users taxes 2,435,825 - - - - 2,435,825
Business license tax 485,535 - - 16,323 - 501,858
Other taxes 180,314 - - - - 180,314
Intergovernmental 150,704 456,517 - 1,786,092 - 2,393,313 Licenses, permits, and impact fees 1,154,121 - - - 1,154,941 820 Fines and forfeitures 316,523 - - - - 316,523
Charges for services 1,940,548 - - 178,175 - 2,118,723
Interest, rents, and concessions 874,568 - 22,040 29,755 452,649 1,379,012 Other revenues 2,339,408 - - 104,196 - 2,443,604
Total revenues 35,262,157 456,517 22,040 29,755 4,405,282 40,175,751 EXPENDITURES:

Current:

General government 5,253,961 - - 4,451 643,879 5,902,291 Public safety:

Police 8,328,813 - - 544,122 - 8,872,935
Fire 5,022,031 - - 27,669 - 5,049,700
Public works 4,619,697 - - 356,364 - 4,976,061
Recreation 1,697,656 - - 169,101 - 1,866,757
Library - 1,223,426 - 69,217 - 1,292,643
Museum - 382,112 - - - 382,112
Community development 2,995,511 - 22,491 120,429 - 3,138,431 Capital outlay 173,561 101,730 - 1,014,839 2,191,571 3,481,701 Debt service:

Principal retirement 556,910 - - 107,357 - 664,267
Interest 989,578 - - - 628 990,206
Total expenditures 101,730 31,243,256 22,491 1,019,290 4,230,337 36,617,104

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 354,787 4,018,901 (451) (989,535) 174,945 3,558,647 OTHER FINANCING SOURCES (USES):

Transfers in 88,458 - - 3,017,033 343,247 3,448,738
Transfers out (3,988,073) - - (95,853) - (4,083,926)
Inception of subscription liabilities - - - 388,368 - 388,368 Total other financing sources (uses) - (3,899,615) - 3,017,033 635,762 (246,820)

NET CHANGES IN
FUND BALANCES 119,286 354,787 (451) 2,027,498 810,707 3,311,827 FUND BALANCES (DEFICIT):

Beginning of year, previously reported 17,581,788 (349,316) 1,324,983 360,196 9 27 ,034,317 ,951,968 Error correction (Note 16) (216,993) - - (123,575) (821,953) (1,162,521) Beginning of year, as restated (Note 16) 17,364,795 (349,316) 236 1,324,983 8 ,621 26 ,212,364 ,789,447 End of year $ 5 17,484,081 $ 1 ,471 $ 2 ,324,532 $ 9 ,264,119 $ 30 ,023,071 $ ,101,274 Major Funds
City of Pacific Grove
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 53 PGCC 1-21-26

Net change in fund balances - total governmental funds: $ 3,311,827 Amounts reported for governmental activities in the Statement of Activities are different because:
3,519,635
(2,148,943)
981,675
(219,160)
82,625
(3,627,830)
Principal repayments of long-term debt $ 664,267
Accreted interest accrued in pension obligation bond (401,141) Issuance of subscription liabilities (125,242) (388,368) (613,509)
(414,788)
Change in net position of governmental activities $ 746,290 Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The net revenue of the internal service funds was reported with governmental activities.

Unavailable revenue is not recognized as revenue in the governmental funds since the revenue is not available to fund expenditures of the current year.

The fund financial statements record interest expenditures on the current financial resources measurement focus whereas the Government-Wide financial statements recognize interest expense on the accrual basis.

The reconciling amount was the change in accrued interest from the prior year.

Proceeds from long-term debt provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal was an expenditure in the governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Depreciation and amortization expenses on capital and lease assets were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, depreciation and amortization expenses were not reported as an expenditure in the governmental funds.

Long-term compensated absences expense was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the change in long-term compensated absences was not reported as an expenditure in the governmental funds.

Other postemployment benefits and pension expenses were reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the increase in other postemployment benefits liability and net pension liabilities were not reported as an expenditure in the governmental funds.

OPEB expense net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as OPEB expenditures in the governmental fund.

Pension expense net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as pension expenditures in the governmental funds.

Capital outlay ($37,934) of capital outlay expenditures were for current public works expenditures for repairs and maintenance and therefore, were not capitalized).

City of Pacific Grove
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of For the Year Ended June 30, 2025
Acquisition of capital assets was reported as expenditures in the governmental funds. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over the estimated useful lives as depreciation expense. The following was the amount of capital assets recorded in the current period:

Activities and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 54 PGCC 1-21-26

PROPRIETARY FUND

FINANCIAL STATEMENTS
Cemetery Fund - accounts for revenue from cemetery site sales and the Little Chapel lease. The City operates and maintains the El Carmelo Cemetery. Expenses reflect staffing, operations and maintenance costs.

Local Water Project Fund - accounts for revenues and expenses related to the reclamation plant’s operation, treatment, and sale of recycled water.

Sewer Fund - accounts for revenues and expenses of the City's sewer operations.

Golf Course Fund - accounts for revenues related to concessionaire leases for the golf course driving range, club house, pro shop, and restaurant; and operations, maintenance and interest costs on outstanding debt. 55 PGCC 1-21-26

Governmental
Local Activities
Cemetery Water Sewer Golf Course Internal
Fund Project Fund Fund Fund Total Service Funds
ASSETS
Current assets:

Cash and investments $ 2,855 1,048,511 $ 9,813,932 $ $ 993,489 $ 1,292,305 11,858,787 $ Restricted cash and investments - - - - 70,237 -
Accounts receivable, net - 332,329 662,402 14,798 1,009,529 446,350 Interest receivable - - 2,250 - 2,250 -
Loans receivable, due within one year - - 35,413 - 35,413 - Leases receivable, due within one year - - 304,602 - 304,602 - Total current assets 1,048,511 335,184 10,511,747 1,315,139 13,210,581 1,808,892 Noncurrent assets:

Leases receivable, due in more than one year - - 1,000,342 - 1,000,342 - Capital assets
Capital assets, not depreciated 20 1,106,750 362,953 1,469,723 - - Capital assets, depreciated, net 383,378 5,587,355 16,887,170 4,119,520 26,977,423 - Total capital assets 383,398 5,587,355 17,993,920 4,482,473 28,447,146 - Total noncurrent assets 383,398 5,587,355 17,993,920 5,482,815 29,447,488 - Total assets 1,431,909 5,922,539 28,505,667 6,797,954 42,658,069 1,808,892

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 73,970 248,563 - - 322,533 15,283
Related to OPEB 3,343 8,877 - - 12,220 584
Total deferred outflows of resources 77,313 257,440 - - 334,753 15,867 (Continued)
City of Pacific Grove
Statement of Net Position
Proprietary Funds
June 30, 2025
Business-Type Activities
See accompanying Notes to the Basic Financial Statements. 56 PGCC 1-21-26

Governmental
Local Activities
Cemetery Water Sewer Golf Course Internal
Fund Project Fund Fund Fund Total Service Funds

LIABILITIES
Current liabilities:

Accounts payable 7,998 98,646 215,722 27,706 350,072 79,087 Payroll and related liabilities 6,908 17,286 - 24,194 - 2,207 Interest payable 17,596 - 4,218 23,895 45,709 -
Claims payable, due within one year - - - - 427,678 -
Compensated absences, due within one year 6,852 36,612 - 43,464 - 1,034 Long-term debt, due within one year 164,218 - 71,550 217,085 452,853 - Total OPEB liability, due within one year 3,130 8,311 - - 11,441 547 Total current liabilities 24,888 280,460 353,699 268,686 927,733 510,553 Noncurrent liabilities:

Claims payable, due in more than one year - - - - - 1,058,177 Compensated absences, due in more than one year 20,556 109,835 - - 130,391 3,436 Long-term debt, due in more than one year - 4,058,851 432,110 1,101,242 5,592,203 - Total OPEB liability, due in more than one year 65,229 173,226 - - 238,455 11,384 Net pension liability 264,198 887,797 - 1,151,995 - 54,587 Total noncurrent liabilities 349,983 4,058,851 1,602,968 1,101,242 7,113,044 1,127,584 Total liabilities 374,871 4,339,311 1,956,667 1,369,928 8,040,777 1,638,137

DEFERRED INFLOWS OF RESOURCES
Related to leases - - 1,231,327 - 1,231,327 -
Related to pensions 10,695 35,937 - - 46,632 2,210
Related to OPEB 35,561 94,439 - - 130,000 6,206
Total deferred inflows of resources 46,256 130,376 - 1,231,327 1,407,959 8,416

NET POSITION
Net investment in capital assets 383,398 1,364,286 17,473,926 3,164,146 22,385,756 - Restricted:

Debt service - - - - - -
Insurance reserve - - - - 70,237 -
Unrestricted 704,697 218,942 9,202,138 1,032,553 11,158,330 107,969 Total net position $ 1,583,228 1,088,095 $ 26,676,064 $ 4,196,699 $ 33,544,086 $ 178,206 $ (Concluded)
Business-Type Activities
June 30, 2025
City of Pacific Grove
Statement of Net Position (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 57 PGCC 1-21-26

58 PGCC 1-21-26

Governmental
Local Activities
Cemetery Water Sewer Golf Course Internal
Fund Project Fund Fund Fund Total Service Funds
OPERATING REVENUES:

Charges for services $ 614,897 $ 1,328,142 $ 4,115,081 $ 879,140 $ 6,937,260 $ 2,837,529 Total operating revenues 614,897 1,328,142 4,115,081 879,140 6,937,260 2,837,529 OPERATING EXPENSES:

Contractual services and utilities 387,860 1,098,528 1,246,850 485,303 3,218,541 3,049,582 Personnel 362,582 - 1,172,572 1,535,154 - 439,572
Supplies and materials 45,860 31,465 62,844 91,939 232,108 150 Depreciation 20,273 310,409 559,526 167,858 1,058,066 - Total operating expenses 816,575 1,440,402 3,041,792 745,100 6,043,869 3,489,304 OPERATING INCOME (LOSS) (201,678) (112,260) 1,073,289 134,040 893,391 (651,775) NONOPERATING REVENUES (EXPENSES):

Investment earnings 44,157 1,350 341,069 73,377 459,953 38,970 Interest expense - (43,179) (18,058) (60,294) (121,531) (704) Total nonoperating revenues (expenses) 44,157 (41,829) 323,011 13,083 338,422 38,266 INCOME (LOSS) BEFORE TRANSFERS (157,521) (154,089) 1,396,300 147,123 1,231,813 (613,509) TRANSFERS:

Transfers in - 635,188 - 635,188 - -
Total transfers - 635,188 - 635,188 - -
CHANGES IN NET POSITION (157,521) 481,099 1,396,300 147,123 1,867,001 (613,509) NET POSITION:

Beginning of year, previously reported 1,245,616 1,102,129 25,279,764 4,053,152 31,680,661 791,715 Error correction (Note 16) - - - (3,576) (3,576) -
Beginning of year, as restated (Note 16) 1,245,616 1,102,129 25,279,764 4,049,576 31,677,085 791,715 End of year $ 1,583,228 1,088,095 $ $ 26,676,064 $ 33,544,086 4,196,699 $ 178,206 $ Business-Type Activities
City of Pacific Grove
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 59 PGCC 1-21-26

Governmental
Local Activities
Cemetery Water Sewer Golf Course Internal
Fund Project Fund Fund Fund Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 614,897 $ 1,302,201 $ 4,757,278 945,049$ $ 7,619,425 $ 2,405,258 Payments to suppliers (430,797) (1,351,332) (2,151,287) (562,106) (4,495,522) (1,766,732) Payments to employees (267,916) (1,004,619) - - (1,272,535) (554,476) Cash paid for insurance claims - - - - - (271,576)
Net cash provided by (used in)
operating activities (83,816) (49,131) 1,601,372 382,943 1,851,368 (187,526)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from other funds 257,085 - 350,000 - 607,085 - Net cash provided by
noncapital financing activities 257,085 - 350,000 - 607,085 -

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (17,523) (986,769) - (16,850) (1,021,142) - Principal payments on long-term debt (162,592) - (70,044) (207,941) (440,577) - Interest paid on long-term debt (43,857) - (18,645) (64,063) (126,565) - Net cash used in capital
and related financing activities (17,523) (206,449) (1,075,458) (288,854) (1,588,284) - CASH FLOWS FROM INVESTING ACTIVITIES:

Payment on bank fees - - - - - (704)
Investment income received 44,157 1,350 341,069 73,377 459,953 38,970 Net cash provided by investing activities 44,157 1,350 341,069 73,377 459,953 38,266 Net change in cash and investments (57,182) 2,855 1,216,983 167,466 1,330,122 (149,260) CASH AND INVESTMENTS:

Beginning of year 1,105,693 8,596,949 - 826,023 10,528,665 1,511,802 End of year $ 2,855 1,048,511 $ $ 9,813,932 $ 993,489 $ 11,858,787 $ 1,362,542 CASH AND CASH EQUIVALENTS:

Cash and investments $ 2,855 1,048,511 $ $ 9,813,932 $ 993,489 $ 11,858,787 $ 1,292,305 Restricted cash and investments - - - - - 70,237
Total cash and cash equivalents $ 2,855 1,048,511 $ $ 9,813,932 $ 993,489 $ 11,858,787 $ 1,362,542 (Continued)
Proprietary Funds
City of Pacific Grove
Statement of Cash Flows
Business-Type Activities
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 60 PGCC 1-21-26

Governmental
Local Activities
Cemetery Water Sewer Golf Course Internal
Fund Project Fund Fund Fund Total Service Funds

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (201,678) $ (112,260) $ 1,073,289 $ 134,040 $ 893,391 $ (651,775) Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Depreciation and amortization expenses 20,273 310,409 559,526 167,858 1,058,066 - Change in operating assets, liabilities, and deferred items:

Accounts receivable (25,941) - 637,097 64,757 675,913 (432,271) Prepaid items - - - - - -
Loan receivable - - 5,100 - 5,100 -
Leases receivable - - - 385,362 385,362 96,086
Pension deferred outflows (11,778) 20,865 - 9,087 - 1,157 OPEB deferred outflows 3,794 8,705 - - 12,499 60,813
Accounts payable 2,923 (221,339) (841,593) 15,136 (1,044,873) 2,207 Payroll and related liabilities (6,499) 12,815 - 6,316 - 1,011,424 Claim payable - - - - - (251,388)
Net pension liability 93,331 147,570 - - 240,901 (4,727) Total OPEB liability 55 13,276 - - 13,331 4,137
Compensated absences 23,546 (10,272) - - 13,274 -
Lease deferred inflows - - (384,210) - (384,210) (19,122) Pension deferred inflows (1,217) (15,669) - - (16,886) (4,067) OPEB deferred inflows (6,566) (9,337) - - (15,903) -
Total adjustments 117,862 63,129 528,083 248,903 957,977 464,249 Net cash provided by (used in)
operating activities $ (83,816) $ (49,131) $ 1,601,372 382,943$ $ 1,851,368 $ (187,526) (Concluded)
Proprietary Funds
Business-Type Activities
For the Year Ended June 30, 2025
City of Pacific Grove
Statement of Cash Flows (Continued)
See accompanying Notes to the Basic Financial Statements. 61 PGCC 1-21-26

62 PGCC 1-21-26

City of Pacific Grove, California
Notes to the Basic Financial Statements
63 PGCC 1-21-26

64 PGCC 1-21-26

City of Pacific Grove
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
Page
Note 1 – Summary of Significant Accounting Policies ······································································ 67 Note 2 – Cash and Investments ·································································································· 77 Note 3 – Loans Receivable ········································································································ 81 Note 4 – Leases Receivable and Lease-Related Deferred Inflows of Resources ········································ 81 Note 5 – Interfund Transactions ································································································· 83 Note 6 – Available For Sale Assets ······························································································ 84 Note 7 – Capital Assets ············································································································· 85 Note 8 – Long-Term Debt ········································································································· 87 Note 9 – Compensated Absences ································································································· 90 Note 10 – Risk Management ······································································································ 90 Note 11 – Defined Benefit Pension Plan ························································································ 92 Note 12 – Other Post-Employment Benefits (OPEB) ········································································ 97 Note 13 – Commitments and Contingencies ·················································································· 100 Note 14 – Stewardship, Compliance and Accountability ·································································· 101 Note 15 – Net Investment in Capital Assets ·················································································· 102 Note 16 – Restatements and Prior Period Adjustments of Beginning Net Position and Fund Balance ·········· 102 65 PGCC 1-21-26

66 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The basic financial statements of the City of Pacific Grove, California, (the “City”) have been prepared in accordance 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 reporting principles. The following is a summary of the significant policies:

The City is primarily a residential community located at the tip of the Monterey Peninsula on the Central California coast. The community was founded as a Methodist Church summer retreat, and was incorporated as a city on July 16, 1889. It was granted a charter by the State on April 22, 1927. The City operates under a council-manager form of government. The seven-member City Council appoints a City manager, who is the administrative head of the municipal government. City amenities include a library, natural history museum, a community center, a youth center, a senior center, a golf course, a cemetery, sewer services, a monarch butterfly sanctuary and habitat preserve and general administration services.

As required by U.S. GAAP, these basic financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The City Council acts as the governing board. In addition, the City staff performs all administrative and accounting functions for these entities and these entities provide their services entirely to the City. Blended component units, although legally separate entities are, in substance, part of the City's operations and data from these units are combined with data of the City. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize their legal separateness from the City. The City had no component units as of June 30, 2025.

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

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

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 67 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government–Wide Financial Statements (Continued)
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 the total primary government column. However, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
• Due to/from other funds
• Transfers in/out
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences 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. Descriptions of these major funds are included as part of the Governmental Fund Financial Statements
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.

Revenues are recognized as soon as they are both “measurable” and “available”. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 68 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses and Change in Net Position, and a Statement of Cash Flows for all proprietary funds.

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 in 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 recognized in the period in which the liability is incurred.

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

Description of these major proprietary funds are included as part of the Proprietary Fund Financial Statement.

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.

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 best estimate of what market participants would use in pricing the assets and liabilities at the measurement date.

A statement of cash flows is presented for proprietary fund types. For purposes of reporting cash flows, the City considers all highly liquid investments with maturities of three months or less when purchased and cash and investments maintained in the City’s pool to be cash equivalents.

Disclosures for deposits and investment risks, as required and applicable, have been provided in Note 2:
 Interest Rate Risk
 Credit Risk
- Overall
- Custodial Credit Risk
- Concentration of Credit Risk
69 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) D. Receivables
Billed, but unpaid, services provided to individuals or non-governmental entities are recorded as accounts receivable. The sewer customers are billed every other month by a separate government agency which forwards the collections to the City. Revenues earned but not collected by year-end are accrued. No allowance for uncollectible accounts receivable has been provided as management has determined that uncollectible accounts have historically been immaterial and the direct write-off method does not result in a material difference from the allowance method.

E. Loans Receivable
Under the City’s housing assistance program, loans are made to qualified individuals and businesses within prescribed project areas for the purpose of housing acquisition, housing rehabilitation and/or economic development. The majority of these loans are on a deferred payback program. Repayments of the outstanding loans will be deducted from the loan receivable balance in the applicable funds. The City also offers sewer lateral replacement loans to homeowners. The disbursement of loans are recorded as addition of the loan receivable balance at the time of a loan and the repayment of principal will be added into loan receivable balance.

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

G. Leases Receivable
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. Subsequently, 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 commencement 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 Local Agency Investment Fund (“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 circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
70 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) H. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available.

Donated assets are valued at acquisition value on the date donated. City policy has set the capitalization threshold for reporting capital assets at $5,000 and at $50,000 for capital projects. Depreciation/amortization is recorded on a straight-line basis over estimated useful lives of the assets as follows:

Buildings and other improvements 100 years
Machinery and equipment 5 years
Infrastructure 10-50 years
In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34 which requires the inclusion of infrastructure capital assets in local governments’ basic financial statements. In accordance with GASB Statement No. 34, the City has included all infrastructure into the current Basic Financial Statements.

The City defines infrastructure as the basic physical assets that allow the City to function. The assets include streets, storm drains, and park equipment. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

For all infrastructure systems, the City has elected to use the basic approach for infrastructure reporting.

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 subscription liabilities with an initial, individual value of $50,000 or more with a subscription term greater than one 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 are recognized as outflows of resources (expenses) in the period the obligation for those payments is incurred.

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

Subscription assets are recorded at the amount of the initial 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 capitalizable 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. 71 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) I. Subscription-Based Information Technology Arrangements (SBITAs) (Continued) 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 present 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.
 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. Compensated Absences
Compensated absences comprise vested accumulated vacation and sick leave. The City's liability for compensated absences is recorded in governmental or business-type activities as appropriate. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be "permanently liquidated," such as what is due to be paid because of a realized employment action, are recorded as fund liabilities; the longterm portion is recorded in the Statement of Net Position.

The liability for compensated absences is recognized as leave is earned, based on the employee’s pay rate in effect at the financial statement date, including any applicable salary-related costs. The liability includes only leave attributable to services already rendered and that is more likely than not to be paid.

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

The following timeframes are used for pension reporting:

CalPERS
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and inflows of sources related to pensions and are to be recognized in further pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized 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. 72 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) L. Other Postemployment Benefits Liability (OPEB)
For purposes of measuring the OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expense, information about the City's OPEB plan have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.

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

OPEB
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
M. Deferred Outflows/Inflows of Resources
The statement of financial net position and balance sheet-governmental funds reports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent outflows of resources represent a consumption of net assets that applies to future periods, therefore, will not be recognized as an expense until that time. The City reports pension contributions after the measurement date and deferred losses related to pensions and OPEB in this category.

Deferred Inflows of Resources represent inflows of resources represent an acquisition of net assets that applies to future periods, and that, therefore, are not recognized as revenue until that time. The City reports lease related inflows, unavailable revenues and deferred gains related to pensions and OPEB in this category.

N. Long-Term Obligations
In the Government-Wide Financial Statements, the long-term obligations are reported as liabilities in the appropriate funds. The Fund Financial Statements do not present long-term debt but are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

O. Net Position
In governmental-wide and proprietary fund financial statements, net positions are categorized as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation/amortization, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets and retention payable.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

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

When expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first, then unrestricted net position as they are needed. 73 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) P. Fund Balance
In the Fund Financial Statements, fund balances are in classifications that comprise a hierarchy based primarily on the extent to which government is bound to observe constraints imposed upon the use of resources reported in the governmental funds. Fund balances are classified in the following categories:

Nonspendable – Items that cannot be spent because they are not in spendable form, such as prepaid items, inventories, and loans receivable, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

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

Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body through resolutions and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City.

Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has by resolution authorized the City Manager to assign fund balance. The City Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriation in the subsequent year’s appropriated budget.

Unassigned – This amount is for any portion of the fund balances that do not fall into one of the above categories.

The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental fund other than General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balance first. Further, when the components of unrestricted fund balance can be used for the same purpose, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned. The description of each fund balance category is listed in the City’s adopted Governmental Fund Balance Policy.

Q. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
74 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) R. Property Taxes
County tax assessments include secured and unsecured property taxes and special assessments. "Unsecured" refers to taxes on personal property. These tax assessments are secured by liens on the property being taxed.

Monterey County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property taxes are levied in equal installments on November 1 and February 1. They become delinquent on December 10 and April 10, respectively. The lien date is January 1 of each year.

Property taxes are accounted for in the General Fund. Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after year end. Property tax on the unsecured roll are due on the January 1 lien date and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year end accrual.

The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum base tax of $1.00 per $100 of full cash value.

S. Budgetary Information
In accordance with applicable sections of the California Government Code and the Pacific Grove Municipal Code, the City prepares and legally adopts an annual balanced budget on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund, specific Special Revenue Funds, and specific Capital Projects Funds.

Budget plans are adopted for Proprietary Funds. A proposed budget is presented to the City Council during May of each year for review. The Council holds public hearings and may add to, subtract from, or change appropriations within the revenues and reserves estimated as available. Expenditures may not legally exceed budgeted appropriations at the fund level. Supplementary appropriations which alter the total expenditures of any fund, or expenditures in excess of total budgeted fund appropriations, must be approved by the City Council.

All annual appropriations lapse at fiscal year end to the extent they have not been expended or encumbered.

T. Encumbrances
Under encumbrance accounting, purchase orders, contract and other commitments for expenditures are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration in all funds. All appropriations and encumbrances lapse at year end, valid outstanding encumbrances (those for which performance under the executory contract is expected in the next year) are reappropriated and become part of the subsequent year’s budget pursuant to state regulations.

U. Unearned Revenue
Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are recorded as deferred inflows from unearned revenue. In the governmental fund financial statements, receivables associated with non-exchange transactions that will not be collected within the availability period have been recorded as deferred inflows from unavailable revenue. 75 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) V. Interfund Balances
Advances to and advances from other funds represent interfund loans in the fund financial statements. Advances between funds are offset by a fund balance reservation or by unearned revenue in the applicable governmental funds to indicate that they are not available financial resources. Any unpaid interest due to lack of funds in the borrowing fund increases the principal owed and is reported in the lending fund as unearned revenue. All other outstanding balances between funds are reported as due to and due from other funds. These are generally repaid within the following fiscal year. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” W. Deferred Compensation Plan
City employees may defer a portion of their compensation under a City sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, and death or in an emergency as defined by the Plan. The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries.

Since the assets held under these plans are not the City's property and are not subject to City control, they have been excluded from these financial statements.

X. Implementation of New GASB Pronouncements
GASB Statement No. 101 - In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.

Implementation of this Statement had a moderate effect on the City’s financial statements for the fiscal year ended June 30, 2025.

GASB Statement No. 102 – In December 2023, GASB issued Statement 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2025.

Y. New GASB Pronouncements
The City is currently evaluating its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:
• In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability.

Application of this statement is effective for the City’s fiscal year ending June 30, 2026. 76 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 1 – Summary of Significant Accounting Policies (Continued) Y. New GASB Pronouncements (Continued)
• In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized in accordance with Statement No. 87, Leases, and intangible rightto-use assets recognized in accordance with Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital assets note disclosures. Subscription assets recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements, also should be separately disclosed. In addition, this Statement requires intangible assets other than those three types to be disclosed separately by major class.

Application of this statement is effective for the City’s fiscal year ending June 30, 2026.

Note 2 – Cash and Investments
Cash and investments as of June 30, 2025 were classified in the accompanying financial statements as follows:

Governmental Business-Type
Activities Activities Total
Cash and investments $ 28,606,138 $ 11,858,787 $ 40,464,925 Restricted cash and investments 70,237 - 70,237
Total cash and investments $ 28,676,375 $ 11,858,787 $ 40,535,162 Government-Wide Financial Statement
Cash and investments as of June 30, 2025, consist of the following:

Cash:

Petty cash $ 1,045
Demand deposits 2,991,745
Total cash and cash equivalents 2,992,790
Investments:

U.S. Treasury Notes 490,153
U.S. Government Bonds 5,768,642
Certificates of Deposit 8,621,856
Money Market Mutual Funds 10,678,502
Local Agency Investment Fund 9,957,907
Investment with Fiscal Agent:

Money Market Mutual Funds 2,025,312
Total investments 37,542,372
Total cash and investments $ 40,535,162
77 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 – Cash and Investments (Continued)
A. Deposits
At June 30, 2025, the carrying amount of the City’s deposits was $2,991,745 and the bank balance was $3,136,228.

The total bank balance was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name.

All pooled certificates of deposit and bank balances are entirely insured or collateralized. The California Government Code requires California banks and savings and loan associations to secure an agency’s deposits by pledging government securities as collateral. The fair value of the pledged securities must equal at least 110% of an agency’s deposits. California law also allows financial institutions to secure local agency deposits by pledging first trust deed mortgage notes having a value of 150% of a local agency’s deposits. The City may waive collateral requirements for deposits which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).

B. Authorized Investments
Under the provisions of the City's investment policy, and in accordance with California Government Code, the following investments are authorized:
• Certificates of Deposit - Non-Negotiable Certificates of Deposits will be made only in FDIC or FSLIC insured accounts. For deposits in excess of the insured maximum of $250,000, approved collateral shall be required in accordance with Government Code 53652 and/or 53651 (m) (1). Investment in these instruments shall be limited to financial institutions that in the Treasurer’s judgment are of high quality, and shall not have a term exceeding five years from the date of purchase.
• Securities of the U.S. Government or its Agencies - Includes obligations issued by Federal Home Loan Banks, Government National Mortgage Association, Farm Credit System, the Federal Home Loan Bank, Federal Home Loan Mortgage Association, Federal National Mortgage Association, or obligations or other instruments of or issued by a federal agency or a United States Government sponsored enterprise. Investment in these instruments shall not have a term exceeding five years from the date of purchase. • Treasury Bills and Notes - U.S. Treasury Bills, Notes, Bonds, or Certificates of Indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest. The term of such securities shall not exceed five years from the date of purchase. • Local Agency Investment Fund (LAIF) - Investment of funds in the California LAIF which allows the State Treasurer to invest through the Pooled Money Investment Account (PMIA). Maximum investment is subject to state regulation. LAIF investments are available for City use. • Repurchase Agreements - A purchase of securities by the City pursuant to an agreement by which the seller will repurchase such securities on or before a specified date, or on demand of either party, and for a specified amount.

Investments in repurchase agreements will be used solely as short-term investments not to exceed 30 days. • Other - Other investments that are, or may become, legal investments through the State of California Government Code, only with prior approval of the City Council. 78 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 – Cash and Investments (Continued)
C. Investments Authorized by Debt Agreement
Investments held by bond fiscal agents (trustees) are governed by the provisions of the underlying indenture agreements rather than the general provisions of the City’s investment policy or California Government Code.

The indenture agreements do identify the following permitted investments:

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Type Maturity of Portfolio * One Issuer U.S. Treasury Obligations 5 year None None
U.S. Agency Securities 5 year None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts None None None
Certificates of Deposits 5 year None None
Repurchase Agreements 30 days None None
Local Agency Investment Fund N/A None None
Municipal Bonds None None None
N/A - Not Applicable
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, 2025, the City had $9,957,907 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 fair value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

E. Risks Disclosures
Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy provides that final maturities of securities cannot exceed five years. Specific maturities of investments depend on liquidity needs. At June 30, 2025, the City’s investments had the following maturities:

Investment Type Total Less Than 1 Year 1 to 2 Years 2 to 5 Years Investment:

U.S. Treasury Notes $ 490,153 $ 490,153 $ - $ -
U.S. Government Bonds 5,768,642 353,562 937,964 4,477,116 Certificates of Deposit 8,621,856 3,641,040 4,980,816 - Money Market Mutual Funds 10,678,502 10,678,502 - -
Local Agency Investment Fund 9,957,907 9,957,907 - -
Investment with Fiscal Agent:

Money Market Mutual Funds 2,025,312 2,025,312 - -
Total $ 37,542,372 $ 27,146,476 $ 5,918,780 $ 4,477,116 Investment Maturities (in Years)
79 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 2 – Cash and Investments (Continued)
E. Risks Disclosures (Continued)
Credit Risk: Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, the City's investment policy, or debt agreements, and the actual Moody’s rating as of year-end for each investment type.

Minimum
Investment Type Total Legal Rating
Investment:

U.S. Treasury Notes 490,153 $ AA/AAA
U.S. Government Bonds 5,768,642 AA/AAA
Certificates of Deposit 8,621,856 Not Rated
Money Market Mutual Funds 10,678,502 Not Rated
Local Agency Investment Fund 9,957,907 Not Rated
Investment with Fiscal Agent:

Money Market Mutual Funds 2,025,312
Total $ 37,542,372
Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).

F. Investment Valuation
At June 30, 2025, investments are reported at fair value. 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, 2025:

Investment Type Level 1 Level 2(1) Uncategorized Total
Investment:

U.S. Treasury Notes 490,153 $ - $ - $ 490,153 $
U.S. Government Bonds - 5,768,642 - 5,768,642
Certificates of Deposit 8,621,856 - 8,621,856 -
Money Market Mutual Funds 10,678,502 - 10,678,502
Local Agency Investment Fund - - 9,957,907 9,957,907
Investment with Fiscal Agent:

Money Market Mutual Funds - 2,025,312 - 2,025,312
Total $ 490,153 $ 14,390,498 $ 22,661,721 $ 37,542,372
(1) Institutional Bond Quotes - evaluations based on various market and industry inputs.

Measurement Input
Federal Agency Securities and corporate bonds categorized as Level 2 are valued based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data.
80 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 3 – Loans Receivable
Housing Assistance Loans
The City engages in programs designed to encourage construction or improvement in low-to-moderate income housing.

Under these programs, loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City's terms. Terms include interest rates of three to five percent and deferral of principal and interest payment until the property changes hands. All loans are secured by a deed of trust on the property. The balance of the loans receivable arising from these programs was $1,089,703 as of June 30, 2025.

Sewer Lateral Replacement Loans
The City has a Sewer Lateral Repair/Replacement Loan Program to improve sewer lateral lines connected to homeowners' residences. These loans carry an interest rate of three percent per annum. Repayment on loan principal and interest are deferred until the property is sold. All loans are secured by a deed of trust on the property. The balance of these loans receivables from this program was $35,413 as of June 30, 2025.

Note 4 – Leases Receivable and Lease-Related Deferred Inflows of Resources The City leases various types of property including land and 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 27 years. The interest rates used calculated the net present value of the lease receivable ranged is from 1.844% to 3%.

For the fiscal year ended June 30, 2025, the City recognized $465,281 in lease revenue and $89,896 in interest revenue, and the outstanding net present value of the lease receivable amounts are $1,564,608 and $1,304,944 for governmental and business-type activities, respectively.

A. Governmental Activities
At June 30, 2025, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2026 $ 33,787 $ 39,774 $ 73,561
2027 35,546 38,809 74,355
2028 37,387 37,802 75,189
2029 41,326 36,722 78,048
2030 43,405 35,561 78,966
2031 - 2035 242,408 158,559 400,967
2036 - 2040 237,691 128,327 366,018
2041 - 2045 322,622 94,022 416,644
2046 - 2050 425,284 48,795 474,079
2051 - 2053 145,152 6,811 151,963
Total $ 1,564,608 $ 625,182 $ 2,189,790
81 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 4 – Leases Receivable and Lease-Related Deferred Inflows of Resources (Continued) A. Governmental Activities (Continued)
At June 30, 2025, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2026 $ 64,160
2027 64,160
2028 64,160
2029 64,160
2030 64,160
2031-2035 307,730
2036-2040 242,116
2041-2045 242,116
2046-2050 239,842
2051-2053 83,964
Total $ 1,436,567
B. Business-Type Activities
At June 30, 2025, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2026 $ 304,602 $ 39,148 $ 343,750
2027 318,740 30,010 348,750
2028 333,302 20,448 353,750
2029 348,300 10,449 358,749
Total $ 1,304,944 $ 100,055 $ 1,404,999
At June 30, 2025, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows:

Year Ending
June 30, Amount
2026 289,724 $
2027 289,724
2028 289,724
2029 289,724
2030 72,431
Total $ 1,231,327
82 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 5 – Interfund Transactions
A. Due From and To Other Funds
At June 30, 2025, the City has the following due from and to other funds:

Due From Other Funds
Due To Other Funds Nonmajor
Governmental Funds
Governmental Funds:

RSTP Fund $ 90,431
These interfund balances represent routine short-term cash flow assistance.

B. Transfers In and Out
During the year ended June 30, 2025, the City had the following transfers in and transfers out:

Enterprise Funds
Capital Local Water
General Improvements Nonmajor Project
Transfers Out Fund Fund Governmental Fund Total
Governmental Funds:

General Fund $ 5,852 $ 3,017,033 $ 330,000 $ 635,188 $ 3,988,073 Nonmajor Governmental Funds 82,606 13,247 - - 95,853
Total $ 88,458 $ 3,017,033 $ 343,247 $ 635,188 $ 4,083,926 Transfers In
Governmental Funds
The significant transfers are as follows:

The $3,107,033 transfer from the General Fund to Capital Improvement Fund was for approved capital projects and funding for future projects.

The $635,188 transfers from the General fund to Local Water Project Fund was to support interfund debt repayment.

The $330,000 transfers from the General fund to Nonmajor Governmental Fund was to support 911 services paid to Monterey County.
83 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 6 – Available For Sale Assets
The Pacific Grove Local Water Project (PGLWP) began producing recycled water in January 2018. The PGLWP treats wastewater from surrounding homes and businesses; and produces non-potable water to primarily irrigate the City's golf course and cemetery. This new, alternative water source reduced the City's demand for potable water from the California American Water Company (Cal-Am). On January 27, 2016, the Monterey Peninsula Water Management District (MPWMD) approved Ordinance No. 168 to establish the City's water entitlement of 47.88 acre/ft based on the potable water saved by the project. On May 15, 2019, the City adopted Resolution 19-014 to direct the City Manager to sell the 47.88 AF of water entitlements; and reserve 11.5 AF of the entitlement amount for affordable housing. This resolution also authorized a 30% discount to the water entitlement price shown on the City's Master Fee Schedule through June 30, 2025.

The water entitlements were shown on the fee schedule at $250,000 per AF or $25,000 for 0.10 AF. This rate was established based on a local market comparison. When the 30% discount is applied to the stated fee, the amount is reduced to $175,000 an acre foot or $17,500 for 0.10 AF. The total value of these assets at the 30% discount was $8,380,400; and was recorded as an intangible asset in the Governmental Activities section of the Statement of Net Position. In Fiscal Year 2020, the City sold approximately 1.26 AF of water entitlements at a value of $221,201. In Fiscal Year 2021, the City sold approximately 1.78 AF of water entitlements at a value of $312,798. In Fiscal Year 2022, the City sold approximately 3.29 AF of water entitlements at a value of $577,840. In Fiscal Year 2023, the City sold approximately 2.53 AF of water entitlements at a value of $443,475. In Fiscal Year 2024, the City sold approximately

3.31 AF of water entitlements at a value of $579,659. In Fiscal year 2025, the City sold approximately 9.21 AF of water entitlements at a value of $1,612,353 which was reported in the General Fund as other revenue. The remaining value of the water entitlements reported in the government-wide statement of net position as available for sale assets at June 30, 2025 was $4,633,074. These assets are not used to provide services and therefore are not capital in nature. 84 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 – Capital Assets
Summary of changes of capital assets for governmental activities for the year ended June 30, 2025 is as follows:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Capital assets, not being depreciated:

Land $ 2,338,270 $ - $ - $ 2,338,270 - $
Construction in progress 5,524,639 400,142 (4,259,486) - 1,665,295 Total capital assets, not being depreciated 7,862,909 400,142 (4,259,486) - 4,003,565 Capital assets, being depreciated:

Buildings/structures and improvements 18,324,924 244,977 1,074,678 - 19,644,579 Infrastructure: 41,694,495 2,301,718 3,184,808 - 47,181,021 Machinery and equipment 5,317,904 184,431 - 5,502,335 - Total capital assets, being depreciated 65,337,323 2,731,126 4,259,486 - 72,327,935 Less accumulated depreciation:

Buildings/structures and improvements (9,876,459) (518,620) - (10,395,079) - Infrastructure: (15,784,194) (1,235,144) - (17,019,338) - Machinery and equipment (4,434,411) (222,259) - (4,656,670) - Total accumulated depreciation (30,095,064) (1,976,023) - (32,071,087) - Total capital assets, being depreciated, net 35,242,259 755,103 4,259,486 - 40,256,848 Subscription assets, being amortized 525,750 388,367 (70,503) 843,614 - Less: accumulated amortization (227,614) (172,920) 70,503 (330,031) - Total subscription assets, net 298,136 215,447 - 513,583 - Governmental activities capital assets, net $ 43,403,304 $ 1,370,692 $ - $ 44,773,996 - $ Depreciation/amortization expense was charged to the various governmental activities as follows:

Depreciation Amortization
General government $ 322,092 $ 28,186
Public safety 956,396 83,693
Public works 296,403 25,938
Recreation 106,705 9,338
Library 79,041 6,917
Museum 23,712 2,075
Community development 191,674 16,773
Total depreciation/amortization expense $ 1,976,023 $ 172,920 85 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 7 – Capital Assets (Continued)
Summary of changes of capital assets for business-type activities for the year ended June 30, 2025 is as follows:

Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Capital assets, not being depreciated:

Land $ 362,973 $ - $ - $ 362,973 - $
Construction in progress 983,414 157,113 (33,777) - 1,106,750 Total capital assets, not being depreciated 1,346,387 157,113 (33,777) - 1,469,723 Capital assets, being depreciated:

Buildings and improvements 10,160,437 16,851 33,777 - 10,211,065 Infrastructure/sewer 29,706,823 829,655 - 30,536,478 -
Machinery and equipment 1,477,671 17,523 - 1,495,194 -
Total capital assets, being depreciated 41,344,931 864,029 33,777 - 42,242,737 Less accumulated depreciation:

Buildings and improvements (5,552,145) (174,054) - (5,726,199) - Infrastructure/sewer (7,571,630) (822,086) - (8,393,716) - Machinery and equipment (1,083,473) (61,926) - (1,145,399) - Total accumulated depreciation (14,207,248) (1,058,066) - (15,265,314) - Total capital assets, being depreciated, net 27,137,683 (194,037) 33,777 - 26,977,423 Total capital assets, being depreciated, net 27,137,683 (194,037) 33,777 - 26,977,423 Business-type activities capital assets, net $ 28,484,070 $ (36,924) $ - $ 28,447,146 - $ Depreciation expense was charged to the business-type activities as follows:

Depreciation
Cemetary 20,273 $
Local Water Project 310,409
Sewer 559,526
Golf Course 167,858
Total depreciation expense $ 1,058,066
86 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 8 – Long-Term Debt
A. Governmental Activities
A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2025 is as follows:

Balance Balance Due within Due in more
July 1, 2024 Additions Deletions June 30, 2025 One Year than One Year Publicly Offered:

Taxable Pension Obligation Bonds 2,193,089 $ $ (464,276) - $ $ 1,728,813 $ 451,350 $ 1,277,463 Accreted Interest 4,265,102 401,141 (985,725) 3,680,518 1,048,650 2,631,868 Subtotal 6,458,191 401,141 (1,450,001) 5,409,331 1,500,000 3,909,331 Direct Borrowing:

PG&E Loan 31,403 (12,562) - 18,841 12,562 6,279
SBITA Liability 200,738 388,368 (187,429) 401,677 92,686 308,991 Total $ 6,690,332 $ 789,509 $ (1,649,992) $ 5,829,849 $ 1,605,248 $ 4,224,601 Taxable Pension Obligation Bonds
On June 1, 2006, the City issued Taxable Pension Obligation Bonds in the principal amount of $19,365,355. The bonds were part of the California Statewide Communities Development Authority Taxable Pension Obligation Bonds Program. The purpose of the bonds are to provide monies to meet the unfunded accrued actuarial liability ("UAAL") to the California Public Employee's Retirement System ("PERS"). Semi-annual payments are due on June 1 and December 1. Interest on the bonds ranges from 5.67% to 6.12% and will mature on June 1, 2029.

The annual debt service requirements are as follows for the Pension Obligation Bonds:

Fiscal Year Principal Interest Total
2026 $ 451,350 $ 1,048,650 $ 1,500,000
2027 437,699 1,107,301 1,545,000
2028 425,418 1,169,582 1,595,000
2029 414,346 1,235,652 1,649,998
Total $ 4,561,185 1,728,813 $ 6,289,998 $
PG&E Loan
The City benefited from the on-bill financing program offered by PG&E, which is a non-interest bearing, reimbursement basis loan to install energy-efficient equipment. Individual PG & E loans have been issued for various City locations. All loans mature beginning on February 15, 2022 and conclude on December 15, 2026.

The original loan was $152,900 with future debt service payments as follows:

Fiscal Year Principal Total
2026 12,562 $ 12,562 $
2027 6,279 6,279
Total $ 18,841 18,841 $
87 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 8 – Long-Term Debt (Continued)
A. Governmental Activities(Continued)
Subscription Payable
The City entered into subscription agreements with various vendors for software. The terms of the agreements are ranging from 24 months to 130 months. The calculated interest rates range from 1.85% to 3.38%. As of June 30, 2025, the capitalized right-to-use assets related to SBITAs were $513,583, net of $330,030 of accumulated amortizaiton and the total subscription liability was $401,677, of which $92,686 is reported as a current liability representing the amount due within the next fiscal year.

The future subscription payments are as follows:

Fiscal Year Principal Interest Total
2026 $ 92,686 $ 9,540 $ 102,226
2027 87,814 7,255 95,069
2028 89,939 5,130 95,069
2029 92,115 2,954 95,069
2030 12,802 724 13,526
2031-2032 26,321 733 27,054
Total $ 26,336 401,677 $ 428,013 $
B. Business-Type Activities
A summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2025 is as follows:

Balance Balance Due within Due in more
July 1, 2024 Additions Deletions June 30, 2025 One Year than One Year Publicly Offered:
2013 Wastewater Revenue
Refunding Bond $ 573,704 $ (70,044) - $ $ 503,660 $ 71,550 $ 432,110 Direct Borrowing:

Clean Water Revolving Fund Loan 4,385,661 (162,592) - 4,223,069 164,218 4,058,851 2014 Golf Course Site Lease 1,526,268 (207,941) - 1,318,327 217,085 1,101,242 Total $ 6,485,633 $ (440,577) - $ $ 6,045,056 $ 452,853 $ 5,592,203 2013 Wastewater Revenue Refunding Bond
On May 6, 2013, the City issued the 2013 Wastewater Revenue Refunding Bonds in the principal amount of $1,220,588. The purpose of the bond is to refinance the California State Community Development Authority Series 2001B Revenue Bonds. Semi-annual interest payments are due on April 1 and October Repayments are secured by future sewer service revenues. Interest on the bonds is 3.35% and matures on October 1, 2031. 88 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 8 – Long-Term Debt (Continued)
B. Business-Type Activities (Continued)
2013 Wastewater Revenue Refunding Bond (Continued)
The annual debt service requirements are as follows for the 2013 Wastewater Revenue Refunding Bond:

Fiscal Year Principal Interest Total
2026 $ 71,550 $ 16,264 $ 87,814
2027 72,937 13,876 86,813
2028 76,789 11,400 88,189
2029 78,018 8,795 86,813
2030 79,120 6,193 85,313
2031-2032 125,246 4,225 129,471
Total $ 503,660 $ 60,753 $ 564,413
Clean Water State Revolving Fund Loan
In November 2015, the City secured State Water Resources Control Board ("SWRCB") funding for the construction of a recycled water treatment plant, sewer diversion structure, waste pump and force main station, user connections and site retrofits. The SWRCB reimbursed the City for project-related expenditures, as incurred, totaling $5,328,076. The loan will be repaid with interest at 1% per annum. The loan matures on February 1, 2048.

The annual debt service requirements are as follows for the Clean Water State Revolving Fund Loan:

Fiscal Year Principal Interest Total
2026 $ 164,218 $ 42,231 $ 206,449
2027 165,860 40,589 206,449
2028 167,518 38,930 206,448
2029 169,194 37,255 206,449
2030 170,885 37,255 208,140
2031-2035 880,405 160,554 1,040,959
2036-2040 925,314 116,089 1,041,403
2041-2045 972,514 69,356 1,041,870
2046-2048 607,161 20,239 627,400
Total $ 562,498 4,223,069 $ 4,785,567 $
2014 Golf Course Site Lease
The City entered into a $3,130,505 Site Lease dated September 1, 2014 with Umpqua Bank to Refund the 2014 Golf Course Certificate of Participation. The lease bears interest at 4.35% with debt service payments due on February 1st and August 1st through 2030. The lease is secured by the transfer of property rights to Umpqua Bank. 89 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 8 – Long-Term Debt (Continued)
B. Business-Type Activities (Continued)
2014 Golf Course Site Lease (Continued)
The annual debt service requirements are as follows for the 2014 Golf Course Site Lease:

Fiscal Year Principal Interest Total
2026 $ 217,085 $ 55,012 $ 272,097
2027 226,631 45,466 272,097
2028 236,597 35,500 272,097
2029 247,000 25,096 272,096
2030 257,862 14,235 272,097
2031 133,152 2,896 136,048
Total $ 178,205 1,318,327 $ 1,496,532 $
Note 9 – Compensated Absences
The changes in compensated absences of governmental and business-type activities for the year ended June 30, 2025 are as follows:

Balance Balance Due Within Due in More
July 1, 2024 Net Changes June 30, 2025 One Year Than One Year Governmental activities 1,199,053 $ $ 223,297 $ 1,422,350 $ 355,588 $ 1,066,762 Business-type activities 160,581 13,274 173,855 43,464 130,391 Classification
Note 10 – Risk Management
Risk Pool Membership
The City is a member of the California Joint Powers Insurance Authority (the “Authority”). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The Authority arranges and administers programs for the pooling of self-insured losses, purchases excess insurance and reinsurance, and arranges for group purchased insurance for property and other lines of coverage.

The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Authority’s Board of Directors. The Board operates through a nine-member Executive Committee.

Excess Liability Program
Liability coverage includes auto liability, employment practices liability, public officials’ errors and omissions, bodily injury, personal injury, third party property damage, advertising injury, and employee benefit administration liability.

The City has a retained limit of $150,000 per occurrence. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. The coverage structure is composed of a combination of pooled selfinsurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools. 90 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 10 – Risk Management (Continued)
Excess Workers’ Compensation Program
The City has a retained limit of $150,000 per occurrence for workers’ compensation claims. The Authority’s pooled retention is $1 million per occurrence with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

Estimated reserves for all claims are recorded in internal service funds. No claim settlement has exceeded the coverage amounts in place for any of the years shown. The amount of claims due in one year from June 30, 2025, is estimated to total $339,695.

Purchased Insurance
The City also participates in the following coverage programs provided by the Authority:

All-Risk Property Protection Program. This insurance protection is underwritten by several insurance companies. The City’s property is currently insured according to a schedule of covered property submitted by the City to the Authority.

The total insured value of scheduled City property is $87,706,300. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.

Pollution Legal Liability Insurance Program. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Crime Insurance Program. Formerly called Blanket Fidelity Bond, this policy covers faithful performance, depositor’s forgery, theft of money and securities, and computer fraud related to the transfer of money. The policy limit is $1,000,000, and the deductible is $2,500.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage during the fiscal year ended June 30, 2025.

Changes in the balances of the City’s claims liabilities during the years ended June 30, 2025, 2024, and 2023 were as follows:

Expenses and
Beginning Changes in Claims Ending Due within Due in more Balance Estimates Payments Balance One Year than One Year 2022-2023 709,811 $ 378,974 $ (250,511) $ 838,274 $ 267,243 $ 681,769 $ 2023-2024 838,274 198,076 (561,919) 474,431 156,505 317,926 2024-2025 474,431 1,959,956 (948,532) 1,485,855 427,678 1,058,177 91 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous and Safety Employee Pension Plans (the Plans); cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS’ audited financial statements are publicly available reports that can be obtained at the CalPERS website under Forms and Publications.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. The cost-of-living adjustments for the Plans are applied as specified by the Public Employees’ Retirement Law.

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

Tier 1 PEPRA Tier 1 PEPRA
Hire date Before 1/1/2013 1/1/2013 Before 1/1/2013 1/1/2013 Benefit formula 2% @ 55 2% @ 62 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 Years 5 Years 5 Years 5 Years Benefit payments Monthly for life Monthly for life Monthly for life Monthly for life Retirement age 55 62 50 50
Benefit per year of service, as a percentage of salary 2.0% to 2.5% 2.0% 3.0% 2.0% to 2.7% Employer Contribution Rate 12.52% 7.87% 27.32% 13.76%
Employee Contribution Rate 7.00% 7.75% 9.00% 13.75%
Miscellaneous Safety
Employees Covered
As of the June 30, 2024, the measurement date, the following employees were covered by the benefit terms for the Plan:

Miscellaneous Safety Total
Active employees 71 20 91
Transferred and terminated employees 115 33 148
Retired Employees and Beneficiaries 156 119 275
Total 342 172 514
Plans
92 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rates are the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2025, the employer contributions for the miscellaneous plan and the safety plan, were in amounts of $2,258,473 and $3,241,553, respectively.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions The City’s net pension liability for the Plans is measured as the proportionate share of the net pension liability. The net pension liability of the Plans are measured as of June 30, 2024, and the total pension liability for the Plans used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plans as of June 30, 2024 and 2023 was as follows:

Miscellaneous Plan Safety Plan Total
June 30, 2023 0.175349% 0.265691% 0.441040%
June 30, 2024 0.241610% 0.225730% 0.467340%
Change - Increase (Decrease) 0.066261% -0.039961% 0.026300% Actuarial Methods and Assumption Used to Determine Total Pension Liability The June 30, 2023 valuation was rolled forward to determine the June 30, 2024, measurement date total pension liability, based on following actuarial methods and assumptions:

Actuarial Cost Method
Amortization method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality
Post-retirement benefit increase Contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies
Entry Age Normal

6.90%

2.30%
Varies by Entry Age and Service
Derived using CalPERS’ Membership Data for all Funds. The mortality table was developed based on CalPERS-specific data.

The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website
Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing.
93 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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

Asset Class
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 2021-22 Asset Liability Management study. 94 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability
Proportionate Share of Net Pension Liability and Pension Expense The following table shows the City’s Miscellaneous and Safety Plan’s proportionate share of the risk pool collective net pension liability over the measure period.

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (Valuation Date) $ 66,781,879 $ 44,906,337 $ 21,875,542 Balance at June 30, 2024 (Measurement Date) 68,323,404 46,488,851 21,834,553 Net Changes during 2023-2024 1,541,525 1,582,514 (40,989) Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability (asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 (Valuation Date) $ 85,890,366 $ 52,744,213 $ 33,146,153 Balance at June 30, 2024 (Measurement Date) 86,899,482 54,067,387 32,832,095 Net Changes during 2023-2024 1,009,116 1,323,174 (314,058) Safety Plan
Increase (Decrease)
Increase (Decrease)
Miscellaneous Plan
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool.
(1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2023). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2024). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2024 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2023-2024).
(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plan’s share of the actuarial accrued liability. FNP is allocated based on the rate plan’s share of market value assets.
(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively. (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5). 95 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan (Continued)
C. Changes in the Net Pension Liability (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the plans as of the measurement date, calculated using the discount rate of 6.90%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.9%) Rate (6.9%) (7.9%)
Miscellaneous Plan 31,054,140 $ 21,834,553 $ 14,245,476 $ Safety Plan 44,702,480 $ 32,832,095 $ 23,123,788 $
Plan's Net Pension Liability (asset)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports at calpers.ca.gov.

D. Pension Expenses and Deferred Outflows and Inflows of Resources Related to Pensions For the year ended June 30, 2025, the City recognized pension expense of $3,425,308 and $5,761,226, for the Miscellaneous and Safety plans, respectively. At June 30, 2025, the City reported deferred 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
Pension contribution made after measurement date 2,258,473 $ - $ Changes of assumptions 561,193 -
Difference between expected and actual experience 1,887,798 (73,661) Net difference between projected and actual earning on
pension plan investments 1,256,989 -
Adjustment due to differences in proportions - (710,589) Difference between City contributions and
proportionate share of contributions 148,737 (99,595)
Total $ 6,113,190 $ (883,845)
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contribution made after measurement date $ 3,241,553 $ - Changes of assumptions 808,915 -
Difference between expected and actual experience 2,679,391 (87,119) Difference between projected and actual earnings on
pension plan investments 1,586,954 -
Adjustment due to differences in proportions - (817,637) Difference between City contributions and
proportionate share of contributions 1,069,766 (162,463) Total $ 9,386,579 $ (1,067,219)
Miscellaneous Plan
Safety Plan
96 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 11 – Defined Benefit Pension Plan (Continued)
D. Pension Expenses and Deferred Outflows and Inflows of Resources Related to Pensions (Continued) 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 and the safety risk pool for the 2023-24 measurement period is 3.8 years, which was obtained by dividing the total service years of 600,538 (the sum of remaining service lifetimes of the active employees) by 160,073 (the total number of participants: active, inactive, and retired).

The City reported $2,258,473 and 3,241,553 for the Miscellaneous and Safety Plans, respectively, reported as deferred outflows of resources related to contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Deferred Outflows/ Deferred Outflows/
Year (Inflows) of Resources (Inflows) of Resources
Ended June 30 Miscellaneous Plan Safety Plan
2026 885,410 $ $ 1,712,996
2027 2,596,498 3,857,327
2028 (80,282) 50,469
2029 (430,754) (542,985)
2030 - -
Thereafter - -
$ 2,970,872 $ 5,077,807
Note 12 – Other Post-Employment Benefits (OPEB)
A. General Information about the OPEB Plan
Plan Description
The City of Pacific Grove Retiree Healthcare Plan (Plan) is a single employer defined benefit healthcare plan administered by the City. The City contributes the minimum amount provided under Government Code Section 22825 of the Public Employees Medical and Hospital Care Act (PEMHCA) for medical benefits. All employees become eligible for postretirement medical benefits after five years of employment, meet qualifications for CalPERS retirement, and reach the age of 50. This lifetime benefit is available to all employees and their surviving spouses who elect to buy insurance through any of the available CalPERS medical plans. Retirees must contribute any premium amounts in excess of the City contribution amounts.

The City’s previous employee agreements contained a provision to also pay an additional $150 per month for the first five years after retirement, or until age 65 or date of death, whichever was sooner. Police officers were required to have 20 years of service to receive the five-year benefit. The additional $150 monthly retirement benefit was terminated for all employees, with the exception of miscellaneous employees who retired prior to January 1, 2017; and Safety employees who retired prior to July 1, 2018.

The City does not currently contribute to an OPEB Trust. 97 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 12 – Other Post-Employment Benefits (OPEB) (Continued) A. General Information about the OPEB Plan (Continued)
Employees Covered
At June 30, 2023 (the valuation date), the most recent valuation date, the following current and former employees were covered by the benefit terms under the Plan:

Inactives currently receiving benefits 58
Inactives entitled to benefit payments 74
Active employees 65
Total 197
Contributions
The City makes contributions based on a pay-as-you go basis as approved by the authority of the City’s Board.

Total benefit payments included in the measurement period were $154,907, while actual contributions for the fiscal year were $154,907. Employees are not required to contribute to the plan. There have been no assets accumulated in a trust to provide for the benefits of this plan.

B. Total OPEB Liability
Significant Actuarial Assumptions Used for Total OPEB Liability (Asset) The following summarized the actuarial assumptions for the OPEB plan included in this fiscal year:

Actuarial Cost Method
Amortization Period: 20 years
Asset Valuation Method:

Actuarial Assumptions:

Actuarial Valuation Date June 30, 2023
Discount Rate 3.93%
Inflation
Salary Increases
Medical Trend
PEMHCA Minimum Increase
Healthcare Participation at Retirement
Notes:

Discount rate increased from 3.65% to 3.93%.

2.75%
Actives - 60%
Retirees - 100% if covered, 0% if waived

3.50% annually
Non-Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076.

Medicare (Non-Kaiser) - 7.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076 Medicare (Kaiser) - 6.25% for 2025, decreasing to an ultimate rate of 3.45% in 2076 Entry-Age Level Percent of Pay

2.50%
Level percentage of payroll, closed
Discount Rate
The discount rate was based on the Bond Buyer 20-bond General Obligation Index.

Change of Assumptions
Discount rate was updated based on municipal bond rate as of the measurement date. The medical trend, and PEMHCA minimum trend were updated.
98 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 12 – Other Post-Employment Benefits (OPEB) (Continued) B. Total OPEB Liability (Continued)
Total OPEB Liability
The City's total OPEB liability was measured as of June 30, 2024 (measurement date) and was determined by an actuarial valuation as of June 30, 2023 (valuation date) for the fiscal year ended June 30, 2025 (reporting date).

Changes in the Total OPEB Liability
The following summarizes the changes in the total OPEB liability during the year ended June 30, 2025:

Total OPEB
Liability
Balance at June 30, 2024 $ 3,190,287
Changes recognized for the measurement period:

Service Cost 181,296
Interest on the total pension liability 120,235
Differences between expected and actual experience -
Changes in assumptions (112,448)
Benefits payments (154,907)
Net changes during July 1, 2023 to June 30, 2024 34,176 Balance at June 30, 2025 $ 3,224,463
The City’s plan is nonfunded, meaning there have not been assets placed into an irrevocable trust, therefore the plan fiduciary net position is zero.

Sensitivity to Changes in the Discount Rate
The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher, is as follows:

Discount Rate - 1% Current Discount Discount Rate + 1%
(2.93%) Rate (3.93%) (4.93%)
$ 3,656,198 $ 3,224,463 $ 2,868,324
Plan's Net OPEB Liability
Sensitivity to Changes in the Healthcare Cost Trend Rates The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than current healthcare cost trend rates, is as follows:
1% Decrease Current Trend 1% Increase
$ 2,801,209 $ 3,224,463 $ 3,750,340
Plan's Net OPEB Liability
99 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 12 – Other Post-Employment Benefits (OPEB) (Continued) C. Deferred Inflows and Outflows of Resources
At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience $ 352 $ (848,023) Changes in assumptions 8,239 (829,399)
Employer contributions made subsequent to
the measurement date 149,075 -
Total $ 157,666 $ (1,677,422)
For the year ended June 30, 2025, the City recognized OPEB expense of $68,741. Of the total amount reported as deferred outflows of resources related to OPEB, $149,075 resulting from City contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the net OPEB liability in the year ended June 30, 2026.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Fiscal Year Deferred Outflows/
Ended June 30 (Inflows) of Resources
2026 $ (394,058)
2027 (402,649)
2028 (385,122)
2029 (303,168)
2030 (169,168)
Thereafter (14,666)
$ (1,668,831)
Note 13 – Commitments and Contingencies
A. Lawsuits
City management believes, based upon consultation with the City Attorney, that litigation, in the aggregate, are not expected to result in a material adverse financial impact on the City and that insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

B. Federal and State Grant Programs
The City participates in Federal and State grant programs that are audited by the City's independent accountants if required by and in accordance with the provisions of the Uniform Guidance and applicable State requirements. For Federal programs, the City did not reach the level of qualifying expenditures during the current fiscal year that would require a single audit. Expenditures which may be disallowed, if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 100 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 13 – Commitments and Contingencies (Continued)
C. Capital Commitments
The City had the following capital commitments outstanding as of June 30, 2025:

Capital Commitments
Outstanding
Amount
Street Improvements 53,167 $
Facility Improvements 5,065
Sewer Improvements 12,822
$ 71,054
Note 14 – Stewardship, Compliance and Accountability
A. Fund Balance/Net Position Deficits
The City’s governmental activities had an unrestricted net position (deficit) of $(31,005,216) as of June 30, 2025.

This is mainly due to reporting of net pension liability of $53,514,653 as required under GASB Statement No. 68 (Note 11) and reporting of Total OPEB liability of $2,974,569 as required under GASB Statement No. 75 (Note 12).

At June 30, 2025, the following fund had net position (deficit):

Fund Fund Type Deficit
Workers' Compensation Fund Internal Service Fund $ (275,786) Internal Service Fund
A net deficit exists in the Workers' Compensation Fund. The fund deficit is a result of additional claims expense incurred. This net deficit should be eliminated during the upcoming fiscal year.

B. Expenditures Exceeding Appropriations
The following funds contained excess of expenditures over final appropriations for the year ended June 30, 2025:

Excess of
Final Expenditures over
Fund Appropriations Expenditures Appropriations
Nonmajor Governmental Funds:

CDBG Grant Special Revenue Fund $ 20,000 $ 22,491 $ (2,491) American Rescue Plan Act Special Revenue Fund 828,872 833,241 (4,369) Public Safety Augmentation Special Revenue Fund 494,651 494,985 (334) Supplemental Law Enforcement Special Revenue Fund 281,646 545,490 (263,844) Operating Grant Special Revenue Fund - 20,756 (20,756)
101 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 15 – Net Investment in Capital Assets
Net Investment in Capital Assets at June 30, 2025 consisted of the following:

Governmental Business-Type
Activities Activities
Net investment in capital assets:

Capital assets, nondepreciable 4,003,565 $ 1,469,723 $
Capital assets, depreciable/amortizable, net 40,770,431 26,977,423 Account payable related to construction (210,400) (16,334) Retention payable (39,555) -
Long-term debt:

PG&E Loan (18,841) -
2013 Wastewater Revenue
Refunding Bond - (503,660)
Clean Water State Loan - (4,223,069)
2004 Golf Course Project - (1,318,327)
Subscription Payable (401,677) -
Total net investment in capital assets 44,103,523 $ 22,385,756 $ Note 16 ‒ Restatements and Prior Period Adjustments of Beginning Net Position and Fund Balance During fiscal year 2025, restatements and prior period adjustments of beginning net position and fund balances are as follows:

June 30, 2024
As Previously Error June 30, 2024
Reported Correction As Restated
Government-Wide
Governmental Activities 23,656,123 $ (1,162,521) $ 22,493,602 $ Business-Type Activities 31,680,661 (3,576) 31,677,085
Total primary government 55,336,784 $ (1,166,097) $ 54,170,687 $ Governmental Funds:

Major Funds:

General Fund 17,581,788 $ (216,993) $ 17,364,795 $
Capital Improvement Projects Fund 360,196 (123,575) 236,621 Nonmajor Funds:

American Rescue Plan Act (ARPA) Fund 895,169 (821,953) 73,216 Total Governmental Funds 18,837,153 $ (1,162,521) $ 17,674,632 $ Enterprise Fund:

Golf Course Fund 4,053,152 $ (3,576) $ 4,049,576 $
102 PGCC 1-21-26

City of Pacific Grove
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025
Note 16 ‒ Restatements and Prior Period Adjustments of Beginning Net Position and Fund Balance (Continued) Error Correction
Governmental activities and business-type activities were restated in the amount of $1,162,521 and $3,576, perspective, due to the following reasons:

1. The correction of recording unearned revenue in the ARPA fund and Capital Improvement Project funds in amount of $821,953 and $123,575.

2. The revenue correction was made in amount of $216,993 in the general fund.

3. The lease contracts were adjusted in last fiscal year. The related lease receivable and deferred inflow lease related were adjusted in amount of $98,062 and $94,486, respectively.

Change with financial reporting entity (non-major fund classification) The Library Building & Equipment Fund, Library Book Fund, and Poetry Promotion Fund are all combined into Library Fund as nonmajor governmental fund.
103 PGCC 1-21-26

104 PGCC 1-21-26

City of Pacific Grove, California
Required Supplementary Information
Note that the schedules in this section are unaudited
El Carmelo Cemetery
Chautaqua Hall
105 PGCC 1-21-26

106 PGCC 1-21-26

Note 1 – Budgetary Control and Accounting Policy
All governmental, enterprise, and internal service funds are appropriated annually. The governmental funds include General, special revenue, capital project and permanent funds.

Additional information on the City’s budget and encumbrance accounting can be found in Note 1S-Budgetary Information and Note 1T-Encumbrances.

The City’s budgetary records are maintained on a modified accrual basis. Revenues are recorded when measurable and available; and expenditures are recorded when goods and services are received or the liability incurred. The City produces an annual budget, which serves as the foundation for the City’s financial planning and control. Based on the City Budget’s Policy 400-6 Budget and Financial Management Policy, the City is required to maintain a balanced operating budgeted; along with using one-time revenues to fund nonrecurring expenditures. In the budget development process, the City Council and staff reference Council’s adopted Community Goals and Work Plan Focused Priority Areas, while also establishing annual Department Operational Goals.

In accordance with the City’s Budget and Financial Management Policy, the City Manager recommends the budget to the City Council in May. After public input and discussion is received, the City Council may request modifications to the budget or introduce an ordinance adopting the budget. Expenditures authorized in the final budget ordinance are appropriated at the Fund level, and in the case of the General Fund, at the department or program level. The Council may adopt an ordinance to amend the budget during the year to reflect changing Council priorities or staff recommendations. The City Manager has the authority to transfer funds within a given fund and between department appropriations to ensure that programmatic budgets may adapt throughout the year to evolving circumstances.

City of Pacific Grove
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2025
107 PGCC 1-21-26

108 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Property taxes $ 10,296,000 $ 10,296,000 $ 10,516,128 $ 220,128 Sales and use taxes 6,194,000 6,194,000 6,360,487 166,487 Franchise and other taxes 1,659,000 1,659,000 1,547,278 (111,722) Transient occupancy taxes 7,012,000 7,012,000 6,960,718 (51,282) Utility users taxes 2,043,000 2,043,000 2,435,825 392,825 Business license tax 393,000 393,000 485,535 92,535
Other taxes 150,000 150,000 180,314 30,314
Intergovernmental 51,000 51,000 150,704 99,704
Licenses, permits, and impact fees 1,325,000 1,325,000 1,154,121 (170,879) Fines and forfeitures 484,250 484,250 316,523 (167,727) Charges for services 1,882,590 1,882,590 1,940,548 57,958 Interest, rents, and concessions 558,200 558,200 874,568 316,368 Other revenues 1,260,687 1,260,687 2,339,408 1,078,721
Total revenues 33,308,727 33,308,727 35,262,157 1,953,430 EXPENDITURES:

Current:

General government 5,684,861 5,902,161 5,253,961 648,200 Public safety:

Police 8,931,103 9,069,754 8,328,813 740,941
Fire 4,915,600 4,920,982 5,022,031 (101,049)
Public works 5,144,860 5,712,860 4,619,697 1,093,163
Recreation 1,623,839 1,683,839 1,697,656 (13,817)
Library 1,212,017 1,242,394 1,223,426 18,968
Museum 384,300 384,300 382,112 2,188
Community development 2,983,158 3,391,158 2,995,511 395,647 Capital outlay 505,100 305,342 173,561 131,781
Debt service:

Principal retirement 1,462,562 1,462,562 556,910 905,652 Interest and fiscal charges - - 989,578 (989,578)
Total expenditures 32,847,400 34,075,352 31,243,256 2,832,096

EXCESS OF REVENUES OVER
EXPENDITURES 461,327 (766,625) 4,018,901 4,785,526
OTHER FINANCING SOURCES (USES):

Transfers in - - 88,458 88,458
Transfers out (1,555,187) (3,722,220) (3,988,073) (265,853) Proceeds from sale of assets 4,000 4,000 - (4,000)
Total other financing sources (uses) (1,551,187) (3,718,220) (3,899,615) (181,395) NET CHANGE IN FUND BALANCE $ (1,089,860) $ (4,484,845) 119,286 $ 4,604,131 FUND BALANCE:

Beginning of year, previously reported 17,581,788
Error correction (Note 16) (216,993)
Beginning of year, as restated (Note 16) 17,364,795
End of year $ 17,484,081
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund
For the Year Ended June 30, 2025
109 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Other taxes $ - $ - $ 456,517 $ 456,517
Total revenues - - 456,517 456,517
EXPENDITURES:

Current:

Community development - - 101,730 (101,730)
Capital outlay - 650,856 - 650,856
Total expenditures - 650,856 101,730 549,126
NET CHANGE IN FUND BALANCE $ - $ (650,856) 354,787 $ 1,005,643 FUND BALANCE (DEFICIT):

Beginning of year (349,316)
End of year $ 5,471
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual RSTP Special Revenue Fund
For the Year Ended June 30, 2025
110 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 10,000 $ 10,000 $ 22,040 $ 12,040 Total revenues 10,000 10,000 22,040 12,040
EXPENDITURES:

Current:

Community development 20,000 20,000 22,491 (2,491)
Total expenditures 20,000 20,000 22,491 (2,491)
NET CHANGE IN FUND BALANCE $ (10,000) $ (10,000) (451) $ 9,549 FUND BALANCE:

Beginning of year 1,324,983
End of year $ 1,324,532
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CDBG Grant Special Revenue Fund
For the Year Ended June 30, 2025
111 PGCC 1-21-26

2015-16 2016-17 2017-18 2018-19 2019-2020
Proportion of Net Pension Liability 0.3824% 0.3994% 0.3977% 0.4118% 0.4169% Proportionate Share of Net Pension Liability $ 26,535,640 $ 34,564,209 $ 39,440,944 $ 39,679,281 $ 42,724,135 Covered payroll $ 6,248,635 5,714,952 $ 5,873,761 $ 7,328,064 $ 8,029,195 $ Net Pension Liability
as a % of Covered Payroll 464.32% 553.15% 671.48% 541.47% 532.11% Plan's Fiduciary Net Position
as a % of the TPL 78.40% 74.06% 73.31% 75.26% 75.26%
Last Ten Fiscal Years
City of Pacific Grove
Required Supplementary Information (Unaudited)
Schedule of Proportionate Share of Net Pension Liability For the Year Ended June 30, 2025
112 PGCC 1-21-26

2020-2021 2021-2022 2022-2023 2023-2024 2024-2025
Proportion of Net Pension Liability 0.4226% 0.6037% 0.4527% 0.4410% 0.4508% Proportionate Share of Net Pension Liability $ 45,982,402 $ 32,650,197 $ 52,295,194 $ 55,021,695 $ 54,666,648 Covered payroll $ 7,539,260 8,120,599 $ 8,361,384 $ 8,989,993 $ 9,367,731 $ Net Pension Liability
as a % of Covered Payroll 566.24% 433.07% 625.44% 612.03% 583.56% Plan's Fiduciary Net Position
as a % of the TPL 75.10% 88.29% 76.68% 76.21% 78.08%
Last Ten Fiscal Years
City of Pacific Grove
Required Supplementary Information (Unaudited)
Schedule of Proportionate Share of Net Pension Liability (Continued) For the Year Ended June 30, 2025
113 PGCC 1-21-26

2015-16 2016-17 2017-18 2018-19 2019-20
Actuarially determined contribution $ 1,784,443 $ 1,995,457 $ 2,392,372 $ 2,857,889 $ 3,404,853 Contributions in relation to
the actuarially determined contribution1 (1,995,457) (1,784,443) (2,392,372) (2,857,889) (3,404,566) Contribution deficiency (excess) $ - $ - $ - $ - $ 287
Covered payroll $ 6,248,635 $ 5,873,761 $ 7,328,064 $ 8,029,195 $ 8,120,599 Contributions as a percentage of covered payroll 28.56% 33.97% 32.65% 35.59% 41.93% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal Cost Method
Amortization method
Remaining Amortization PeriodsDiffers by employer rate plan Asset valuation method Fair Value of Assets. For details, see June 30, 2021, funding valuation report.

Inflation 2.30%
Salary increases Varies by category, entry age, and service Discount Rate 6.80% (net of investment and administrative expenses) Mortality
City of Pacific Grove
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2025
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2023-24 were derived from the June 30, 2021 funding valuation report..

Last Ten Fiscal Years
1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

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

For details, see June 30, 2021, funding valuation report. 114 PGCC 1-21-26

2020-21 2021-22 2022-23 2023-24 2024-25
Actuarially determined contribution $ 3,760,395 $ 4,332,824 $ 4,811,828 $ 4,883,025 $ 5,500,026 Contributions in relation to
the actuarially determined contribution1 (4,332,824) (3,760,395) (4,811,828) (4,883,025) (5,500,026) Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll $ 7,539,260 $ 8,361,384 $ 8,989,993 $ 9,367,731 $ 9,693,009 Contributions as a percentage of covered payroll 49.88% 51.82% 53.52% 52.13% 56.74% City of Pacific Grove
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - Pensions (Continued)
For the Year Ended June 30, 2025
Last Ten Fiscal Years
115 PGCC 1-21-26

Fiscal year 2017-181 2018-19 2019-20 2020-21 2021-22
Total OPEB liability
Service cost 194,311 $ 168,509 $ 162,418 $ 227,721 $ 312,533 $ Interest 119,338 139,246 150,001 149,231 118,772
Changes of benefit terms - - (10,980) - -
Changes of assumptions (415,636) (152,945) 172,969 814,841 (188,228) Differences between expected and actual experience - - 7,390 - (203,234) Benefit payments, including refunds (171,120) (168,800) (156,858) (162,898) (169,211) Administrative expense - - 1,112 - -
Net change in total OPEB liability (273,107) (13,990) 326,052 1,028,895 (129,368) Total OPEB liability - beginning of the year 4,078,542 3,805,435 3,791,445 4,117,497 5,146,392 Total OPEB liability - end of the year (a) $ 3,791,445 3,805,435 $ 4,117,497 $ 5,146,392 $ 5,017,024 $ Covered-employee payroll $ 7,915,595 7,678,127 $ 8,673,911 $ 8,151,351 $ 9,186,311 $ Plan total OPEB liability as a percentage of
covered-employee payroll 49.56% 47.90% 47.47% 63.14% 54.61% Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2025.

There are no assets in the accumulated trust.

Changes of assumptions: discount rates decreased from 3.87% to 3.5% in 2019, then to 2.21% in 2020, 2.16% in 2021, 3.54% in 2022, 3.65% in 2023, and increase to 3.93% at June 30, 2024.
1 Historical information is presented for measurement periods after GASB 75 implementation in 2017-18. Additional years' information will be displayed as it becomes available.

City of Pacific Grove
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios For the Year Ended June 30, 2025
Last Ten Fiscal Years
Retiree Healthcare Plan
116 PGCC 1-21-26

Fiscal year 2022-23 2023-24 2024-25
Total OPEB liability
Service cost $ 215,865 288,848 $ 181,296 $
Interest 156,724 112,491 120,235
Changes of benefit terms - - -
Changes of assumptions (916,826) (214,044) (112,448)
Differences between expected and actual experience (1,085,337) - - Benefit payments, including refunds (195,915) (188,543) (154,907) Administrative expense - - -
Net change in total OPEB liability (711,402) (1,115,335) 34,176 Total OPEB liability - beginning of the year 5,146,392 4,305,622 3,190,287 Total OPEB liability - end of the year (a) $ 3,190,287 4,434,990 $ 3,224,463 $ Covered-employee payroll $ 10,192,805 9,226,324 $ 10,675,869 $ Plan total OPEB liability as a percentage of
covered-employee payroll 48.07% 31.30% 30.20%
Retiree Healthcare Plan
City of Pacific Grove
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2025
Last Ten Fiscal Years
117 PGCC 1-21-26

118 PGCC 1-21-26

City of Pacific Grove, California
Supplementary Information
Ed Ricketts Lab
Asilomar Conference Grounds
119 PGCC 1-21-26

120 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ - $ - $ 29,755 $ 29,755 Contributions 67,500 67,500 - (67,500)
Total revenues 67,500 67,500 29,755 (37,745)
EXPENDITURES:

Current:

General government - - 4,451 (4,451)
Capital outlay 770,000 2,050,135 1,014,839 1,035,296
Total expenditures 770,000 2,050,135 1,019,290 1,030,845

EXCESS OF REVENUES OVER
EXPENDITURES (702,500) (1,982,635) (989,535) 993,100
OTHER FINANCING SOURCES:

Transfers in 850,000 3,017,033 3,017,033 -
Total other financing sources 850,000 3,017,033 3,017,033 - NET CHANGE IN FUND BALANCE $ 147,500 $ 1,034,398 2,027,498 $ 993,100 FUND BALANCE:

Beginning of year, previously reported 360,196
Error correction (Note 16) (123,575)
Beginning of year, as restated (Note 16) 236,621
End of year $ 2,264,119
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Capital Improvement Projects Fund
For the Year Ended June 30, 2025
121 PGCC 1-21-26

122 PGCC 1-21-26

City of Pacific Grove, California
Nonmajor Governmental Funds

SPECIAL REVENUE FUNDS
These funds account for revenue sources that are restricted for specific purposes (other than those resources to be expended solely for the construction of major capital facilities).

Carillion Fund - The Carillon Fund accounts for donations designated for the maintenance of the tower clock and chimes system at City Hall.

Environmental Enhancement Fund - Accounts for revenues associated with Coastal Area Planning grants, coastal area land use, and Environmental Impact Report deposit funds.

State Franchise PEG Fund - Receives funding from the City's cable franchisee to support Public, Educational and Governmental (PEG) programming on local Public Access television. The fund supports equipment expenditures to aid in broadcasting based on the terms of the Digital Infrastructure and Video Competition Act of 2006.

Library Fund - Accounts for donations designated for improvements and equipment for the City Library and for donations and contributions for purchasing books for the City Library.

Museum Improvement Fund - Accounts for donations designated for improvements to the Museum of Natural History.

Downtown Business District Fund - Provides for the collection of self-assessed fees from businesses within the Business Improvement District and the payment of those fees to the Pacific Grove Chamber of Commerce. Businesses within the BID remit these fees to the City upon the annual renewal of their business licenses.

Hospitality Improvement District Fund - Records the collection and distribution of self-assessed fees by the hotels. Half of the collected funds are remitted to the Pacific Grove Chamber of Commerce, while the other half, Monterey County Tourism Improvement District (MCTID) is remitted to the Monterey County Convention and Visitor's Bureau.

Fire Emergency Equipment Fund - The Fire Emergency Equipment Fund accounts for grants, fees, and donations in support of Fire Department safety programs.

American Rescue Plan Act Fund (ARPA) Fund - Receives funds from the American Rescue Plan Act and records expenditures that are applied against the granted funds.

Local Streets and Roads Fund - Monterey County voters approved Measure X, which authorized the Transportation Agency of Monterey County (TAMC) to impose and administer a three-eighths cent transaction and use tax. This fund receives tax proceeds to pay for pedestrian and vehicular transportation projects and programs.

Gas Tax Fund - The Gas Tax Fund accounts for State shared gasoline tax revenues that are utilized for street-related operating and capital project costs.

Chautauqua Hall Fund - Chautauqua Hall was built in 1881 and was designated a State Historical Landmark. The Chautauqua Hall Fund accounts for funds from the Chautauqua Hall Preserve that are used to support building repairs and maintenance.

Lighthouse Maintenance & Improvement Fund - Receipts admission fees, gift shop sales, and donations to support operations at the Point Pinos Lighthouse visitor's center and gift shop. Expenditures include staffing, maintenance, supplies, and improvements.

Senior Housing Fund - The Senior Housing Fund accounts for donations and other revenues to develop and maintain senior housing opportunities.

CalHOME Reuse Fund - Funding from the California Department of Housing and Community Development that is administered by the City. Funds provide loans to low and very low-income households for down payment assistance and home rehabilitation. The loans are payable on sale or transfer of homes or when they cease to be owner occupied, or at maturity. 123 PGCC 1-21-26

City of Pacific Grove, California
Nonmajor Governmental Funds (Continued)
SPECIAL REVENUE FUNDS (Continued)
General Plan Maintenance Fee Fund - The General Plan Maintenance Fund accounts for fees collected to maintain the City’s General Plan. These fees will be expended to maintain and monitor the General Plan.

Yount Income Fund - The Yount Income Fund accounts for the expendable portion of the Yount Trust Fund which is to be used for beautification of the city and for minor improvements to educational and/or recreational facilities.

Public Safety Augmentation Fund - The Public Safety Augmentation Fund accounts for revenue from Proposition 172 public safety sales tax and interfund transfers to pay for a contract with Monterey County Emergency Communications for 911 emergency dispatch services.

Supplemental Law Enforcement Fund - Receives Supplemental Law Enforcement Services Funds (SLESF) to partially fund the costs of a police officer and related training expenses, supplies and equipment.

Vehicle Abandonment Fund - The City receives a $1 tax on vehicle registrations and is reimbursed based on each abandoned vehicle marked, ticketed, and/or towed. Funds are used in the Police Department's abatement program for training, supplies, and equipment.

Strong Disbursements Fund - Accounts for expenditures of income received from the Bertha Strong private foundation held for the benefit of the City Pacific Grove for civic improvements. Revenue is the greater of net income or the required minimum distribution from the corpus of the foundation as governed by the IRS.

Housing Fund - The Housing Fund accounts for the administration of housing loan activities.

Coastal Conservancy Grant Fund - Grant proceeds from the Coastal Conservancy to fund coastal conservancy related projects and plans that maintain and improve beaches and coastal parks.

Operating Grants Fund - The Operating Donations Fund accounts for grants from federal, state and local agencies to support a variety of public services including police, fire, community development, parks, recreation, and museum facilities.

RMRA Fund - Receipts funding from the Road Repair and Accountability Act of 2017, which includes increased gas tax, diesel excise and sales tax; and a zero-emission vehicle registration fee for local transportation projects. Funding allocations are project specific and require a maintenance of effort (MOE) requirement.

McIndoo Donation Fund - The McIndoo Donation Fund accounts for the receipt of a donation from the Jeanette J. Mclndoo Trust for beautification and enhancement of public facilities and grounds.

ASBS Fund - This fund accounts for grants from the State Water Resources Control Board and expenditures related to discharge prohibition in and around the ocean.

Storm Water Fund -accounts for charges imposed by the City to fund the management and treatment of stormwater runoff.

PERMANENT FUNDS
Library Endowment Trust Fund - Retains donations and bequeaths for the benefit of Library materials and collections.

Cemetery Endowment Trust Fund - Accounts for revenues paid for the El Carmelo Cemetery endowment care, perpetual expenses; and the general preservation of burial sites, grounds, walking paths, roadways, boundaries, and structures.

Yount Trust Fund - Receives interest income from non-expendable trust fund. The actual interest earned is transferred to the Yount Income Fund to support beautification of the City and minor improvements to education or recreational facilities. 124 PGCC 1-21-26

State
Environmental Franchise
Carillion Enhancement PEG Library
Fund Fund Fund Fund
ASSETS
Cash and investments $ 10,861 $ 124,733 $ 125,229 $ 330,561 Receivables:

Accounts - - - -
Taxes - - 9,686 -
Loans - - - -
Due from other funds - - - -
Total assets $ 10,861 $ 124,733 $ 134,915 $ 330,561
Liabilities:

Accounts payable $ - $ - $ 26,000 $ 12,440
Payroll-related liabilities - - - -
Unearned revenue - - - -
Total liabilities - - 26,000 12,440
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - - - -
Public safety - - - -
Community development 10,861 124,733 108,915 318,121
Street improvements - - - -
Total fund balances 10,861 124,733 108,915 318,121
Total liabilities and fund balances $ 10,861 $ 124,733 $ 134,915 $ 330,561 (Continued)
Special Revenue Funds
City of Pacific Grove
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025

RESOURCES AND FUND BALANCES

LIABILITIES, DEFERRED INFLOWS OF
125 PGCC 1-21-26

Downtown Hospitality Fire
Museum Business Improvement Emergency
Improvement District District Equipment
Fund Fund Fund Fund
ASSETS
Cash and investments $ 298,383 $ 15,876 $ 149,231 $ 213,471 Receivables:

Accounts - - - -
Taxes - - - -
Loans - - - -
Due from other funds - - - -
Total assets $ 298,383 $ 15,876 $ 149,231 $ 213,471
Liabilities:

Accounts payable $ - $ - $ 93,521 $ 17,491
Payroll-related liabilities - - - -
Unearned revenue - 12,782 - -
Total liabilities - 12,782 93,521 17,491
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - - - -
Public safety - - - 195,980
Community development 298,383 3,094 55,710 -
Street improvements - - - -
Total fund balances 298,383 3,094 55,710 195,980
Total liabilities and fund balances $ 298,383 $ 15,876 $ 149,231 $ 213,471 (Continued)
Special Revenue Funds
City of Pacific Grove
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
126 PGCC 1-21-26

American Local
Rescue Plan Streets and Gas Chautauqua
Act (ARPA) Roads Tax Hall
Fund Fund Fund Fund
ASSETS
Cash and investments $ - $ 842,182 $ 301,283 $ 16,699
Receivables:

Accounts 404,350 - - -
Taxes - - 34,658 -
Loans - - - -
Due from other funds - 90,431 - -
Total assets $ 1,336,963 - $ $ 335,941 $ 16,699
Liabilities:

Accounts payable $ - $ 43,623 $ 8,857 $ -
Payroll-related liabilities - - 2,115 -
Unearned revenue - - - -
Total liabilities - 43,623 10,972 -
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - - - -
Public safety - - - -
Community development - - - 16,699
Street improvements - 1,293,340 324,969 -
Total fund balances 1,293,340 - 324,969 16,699
Total liabilities and fund balances $ 1,336,963 - $ $ 335,941 $ 16,699 (Continued)
Special Revenue Funds
City of Pacific Grove
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
127 PGCC 1-21-26

Lighthouse General Plan
Maintenance & Senior CalHOME Maintenance
Improvement Housing Reuse Fee
Fund Fund Fund Fund
ASSETS
Cash and investments $ 229,022 $ 11,667 $ 278,770 $ 14,715 Receivables:

Accounts 306 - - -
Taxes - - - -
Loans - - 242,888 -
Due from other funds - - - -
Total assets $ 229,328 $ 11,667 $ 521,658 $ 14,715
Liabilities:

Accounts payable $ 3,281 $ - $ - $ -
Payroll-related liabilities 1,875 - - -
Unearned revenue - - - -
Total liabilities 5,156 - - -
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - 11,667 521,658 -
Public safety - - - -
Community development 224,172 - - 14,715
Street improvements - - - -
Total fund balances 224,172 11,667 521,658 14,715
Total liabilities and fund balances $ 229,328 $ 11,667 $ 521,658 $ 14,715 (Continued)
Special Revenue Funds
City of Pacific Grove
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
128 PGCC 1-21-26

Public Supplemental
Yount Safety Law Vehicle
Income Augmentation Enforcement Abandonment
Fund Fund Fund Fund
ASSETS
Cash and investments $ 30,649 $ 45,864 $ 242,398 $ 54,242 Receivables:

Accounts - 28,872 16,667 2,841
Taxes - - - -
Loans - - - -
Due from other funds - - - -
Total assets $ 30,649 $ 74,736 $ 259,065 $ 57,083
Liabilities:

Accounts payable $ - $ 3,009 $ - $ -
Payroll-related liabilities - - 5,290 -
Unearned revenue - - - -
Total liabilities - 3,009 5,290 -
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - - - -
Public safety - 71,727 253,775 57,083
Community development 30,649 - - -
Street improvements - - - -
Total fund balances 30,649 71,727 253,775 57,083
Total liabilities and fund balances $ 30,649 $ 74,736 $ 259,065 $ 57,083 (Continued)
City of Pacific Grove
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
Special Revenue Funds

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
129 PGCC 1-21-26

Coastal
Strong Conservancy Operating
Disbursements Housing Grant Grants
Fund Fund Fund Fund
ASSETS
Cash and investments $ 9,337 $ 377,194 $ 93,263 $ 51,345 Receivables:

Accounts - - - -
Taxes - - - -
Loans - 102,076 - -
Due from other funds - - - -
Total assets $ 9,337 $ 479,270 $ 93,263 $ 51,345
Liabilities:

Accounts payable $ - $ 1,328 $ - $ -
Payroll-related liabilities - 2,743 - -
Unearned revenue - - - 51,345
Total liabilities - 4,071 - 51,345
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - 475,199 - -
Public safety - - - -
Community development 9,337 - 93,263 -
Street improvements - - - -
Total fund balances 9,337 475,199 93,263 -
Total liabilities and fund balances $ 9,337 $ 479,270 $ 93,263 $ 51,345 (Continued)
City of Pacific Grove
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2025
Special Revenue Funds

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
130 PGCC 1-21-26

McIndoo ASBS Storm
RMRA Donation Grant Water
Fund Fund Fund Fund
ASSETS
Cash and investments $ 692,324 $ 23,068 $ 26,137 $ 820
Receivables:

Accounts - - - -
Taxes 72,028 - - -
Loans - - - -
Due from other funds - - - -
Total assets $ 764,352 $ 23,068 $ 26,137 $ 820
Liabilities:

Accounts payable $ - $ - $ - $ -
Payroll-related liabilities - - - -
Unearned revenue - - - -
Total liabilities - - - -
Fund Balances:

Nonspendable:

Permanent funds - - - -
Restricted:

Social service programs - - 26,137 820
Public safety - - - -
Community development - 23,068 - -
Street improvements 764,352 - - -
Total fund balances 764,352 23,068 26,137 820
Total liabilities and fund balances $ 764,352 $ 23,068 $ 26,137 $ 820 (Continued)
Special Revenue Funds
June 30, 2025
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
City of Pacific Grove

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
131 PGCC 1-21-26

Library Cemetery Total
Endowment Endowment Yount Nonmajor
Trust Trust Trust Governmental
Fund Fund Fund Funds
ASSETS
Cash and investments $ 597,479 $ 2,290,157 $ 807,008 $ 8,303,968 Receivables:

Accounts - - - 453,036
Taxes - - - 116,372
Loans - - - 344,964
Due from other funds - - - 90,431
Total assets $ 597,479 $ 2,290,157 $ 807,008 $ 9,308,771 Liabilities:

Accounts payable $ - $ - $ - 209,550 $
Payroll-related liabilities - - - 12,023
Unearned revenue - - - 64,127
Total liabilities - - - 285,700
Fund Balances:

Nonspendable:

Permanent funds 597,479 2,290,157 807,008 3,694,644
Restricted:

Social service programs - - - 1,035,481
Public safety - - - 578,565
Community development - - - 1,331,720
Street improvements - - - 2,382,661
Total fund balances 597,479 2,290,157 807,008 9,023,071 Total liabilities and fund balances $ 597,479 $ 2,290,157 $ 807,008 $ 9,308,771 (Concluded)
June 30, 2025
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
City of Pacific Grove
Permanent Funds

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
132 PGCC 1-21-26

State
Environmental Franchise
Carillion Enhancement PEG Library
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ - $ -
Franchise and other taxes - - 42,644 -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental - - - -
Licenses, permits, and impact fees - - - -
Charges for services - - - -
Interest, rents, and concessions 440 5,057 4,694 55,766 Other revenues - - - 73,121
Total revenues 440 5,057 47,338 128,887
EXPENDITURES:

Current:

General government - - 54,600 -
Public safety:

Police - - - -
Fire - - - -
Public works - - - -
Recreation - - - 1,800
Library - - - 69,217
Community development - - - -
Capital outlay - - - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures - - 54,600 71,017

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 440 5,057 (7,262) 57,870
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out - - - -
Inception of subscription liability - - - -
Total other financing sources (uses) - - - -
NET CHANGES IN FUND BALANCES 440 5,057 (7,262) 57,870
FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 10,421 119,676 116,177 - Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - 260,251 Beginning of year, as restated (Note 16) 119,676 10,421 116,177 260,251 End of year $ 124,733 10,861 $ 108,915 $ 318,121 $
(Continued)
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2025
133 PGCC 1-21-26

Downtown Hospitality Fire
Museum Business Improvement Emergency
Improvement District District Equipment
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - 595,512 -
Business license tax - 16,323 - -
Intergovernmental - - - -
Licenses, permits, and impact fees - - - -
Charges for services - - - -
Interest, rents, and concessions 12,369 - - 8,661
Other revenues - - - 19,355
Total revenues 12,369 16,323 595,512 28,016
EXPENDITURES:

Current:

General government - 29,889 539,803 -
Public safety:

Police - - - -
Fire - - - 27,669
Public works - - - -
Recreation - - - -
Library - - - -
Community development - - - -
Capital outlay 58,809 - - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures 29,889 58,809 539,803 27,669

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (13,566) (46,440) 55,709 347
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out - (13,425) (1,385) -
Inception of subscription liability - - - -
Total other financing sources (uses) - (13,425) (1,385) - NET CHANGES IN FUND BALANCES (46,440) (26,991) 54,324 347 FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 344,823 30,085 1,386 195,633 Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 30,085 344,823 1,386 195,633 End of year $ 3,094 298,383 $ 55,710 $ 195,980 $
(Continued)
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
134 PGCC 1-21-26

American Local
Rescue Plan Streets and Gas Chautauqua
Act (ARPA) Roads Tax Hall
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ 820,135 - $ $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental 821,953 408,101 - -
Licenses, permits, and impact fees - - - -
Charges for services - - - -
Interest, rents, and concessions 11,288 35,920 12,111 677 Other revenues - - - -
Total revenues 833,241 856,055 420,212 677
EXPENDITURES:

Current:

General government 19,566 - - -
Public safety:

Police - - - -
Fire - - - -
Public works - - 356,364 -
Recreation - - - -
Library - - - -
Community development - - - -
Capital outlay 813,675 599,605 - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures 599,605 833,241 356,364 -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 256,450 - 63,848 677
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out (73,216) - - -
Inception of subscription liability - - - -
Total other financing sources (uses) - (73,216) - -
NET CHANGES IN FUND BALANCES (73,216) 256,450 63,848 677 FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 895,169 1,036,890 261,121 16,022 Error correction (Note 16) - (821,953) - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 1,036,890 73,216 261,121 16,022 End of year $ 1,293,340 - $ 324,969 $ 16,699 $
(Continued)
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
135 PGCC 1-21-26

Lighthouse General Plan
Maintenance & Senior CalHOME Maintenance
Improvement Housing Reuse Fee
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental - - - -
Licenses, permits, and impact fees - - - -
Charges for services 119,275 - - 5,993
Interest, rents, and concessions 9,504 473 11,300 492
Other revenues 3,138 - - -
Total revenues 131,917 473 11,300 6,485
EXPENDITURES:

Current:

General government - - - -
Public safety:

Police - - - -
Fire - - - -
Public works - - - -
Recreation 125,930 - - -
Library - - - -
Community development - - - -
Capital outlay 5,785 - - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures - 131,715 - -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 202 473 11,300 6,485
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out - - - -
Inception of subscription liability - - - -
Total other financing sources (uses) - - - -
NET CHANGES IN FUND BALANCES 202 473 11,300 6,485
FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 223,970 11,194 510,358 8,230 Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 11,194 223,970 510,358 8,230 End of year $ 11,667 224,172 $ 521,658 $ 14,715 $
(Continued)
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
136 PGCC 1-21-26

Public Supplemental
Yount Safety Law Vehicle
Income Augmentation Enforcement Abandonment
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental 162,986 - 357,395 15,389
Licenses, permits, and impact fees - - - -
Charges for services - - - -
Interest, rents, and concessions 994 - 4,588 1,903
Other revenues - - - -
Total revenues 994 162,986 361,983 17,292
EXPENDITURES:

Current:

General government - - - -
Public safety:

Police - 494,985 49,137 -
Fire - - - -
Public works - - - -
Recreation - - - -
Library - - - -
Community development - - - -
Capital outlay - - 388,368 -
Debt service:

Principal retirement - - 107,357 -
Interest - - 628 -
Total expenditures 494,985 - 545,490 -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 994 (331,999) (183,507) 17,292
OTHER FINANCING SOURCES (USES):

Transfers in 13,247 330,000 - -
Transfers out - - - -
Inception of subscription liability - - 388,368 -
Total other financing sources (uses) 330,000 13,247 388,368 - NET CHANGES IN FUND BALANCES 14,241 (1,999) 204,861 17,292 FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 16,408 73,726 48,914 39,791 Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 73,726 16,408 48,914 39,791 End of year $ 71,727 30,649 $ 253,775 $ 57,083 $
(Continued)
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) 137 PGCC 1-21-26

Coastal
Strong Conservancy Operating
Disbursements Housing Grant Grants
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental - - - 20,268
Licenses, permits, and impact fees - - - -
Charges for services - - - -
Interest, rents, and concessions 42,574 48,369 3,780 2,139 Other revenues - 951 - -
Total revenues 42,574 49,320 3,780 22,407
EXPENDITURES:

Current:

General government - - - -
Public safety:

Police - - - -
Fire - - - -
Public works - - - -
Recreation 41,371 - - -
Library - - - -
Community development - 99,673 - 20,756
Capital outlay 6,812 - - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures 99,673 48,183 - 20,756

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (5,609) (50,353) 3,780 1,651
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out - - - -
Inception of subscription liability - - - -
Total other financing sources (uses) - - - -
NET CHANGES IN FUND BALANCES (5,609) (50,353) 3,780 1,651 FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 14,946 525,552 89,483 (1,651) Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 525,552 14,946 89,483 (1,651) End of year $ 475,199 9,337 $ 93,263 $ - $
(Continued)
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
Special Revenue Funds
138 PGCC 1-21-26

McIndoo ASBS Storm
RMRA Donation Grant Water
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ 408,736 $ - $ - $ -
Franchise and other taxes - - - -
Transient occupancy taxes - - - -
Business license tax - - - -
Intergovernmental - - - -
Licenses, permits, and impact fees - - - 820
Charges for services - - - -
Interest, rents, and concessions 28,923 935 - -
Other revenues - - - -
Total revenues 437,659 935 - 820
EXPENDITURES:

Current:

General government - - - -
Public safety:

Police - - - -
Fire - - - -
Public works - - - -
Recreation - - - -
Library - - - -
Community development - - - -
Capital outlay 318,517 - - -
Debt service:

Principal retirement - - - -
Interest - - - -
Total expenditures - 318,517 - -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 935 119,142 - 820
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out - - - -
Inception of subscription liability - - - -
Total other financing sources (uses) - - - -
NET CHANGES IN FUND BALANCES 119,142 935 - 820
FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 645,210 22,133 26,137 - Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - - Beginning of year, as restated (Note 16) 22,133 645,210 26,137 - End of year $ 23,068 764,352 $ 26,137 $ 820 $
(Continued)
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
Special Revenue Funds
For the Year Ended June 30, 2025
139 PGCC 1-21-26

Special
Revenue Funds
Library Cemetery Library
Endowment Endowment Yount Building &
Trust Trust Trust Equipment
Fund Fund Fund Fund
REVENUES:

Taxes:

Sales and use taxes $ - $ - $ -
Franchise and other taxes - - -
Transient occupancy taxes - - -
Business license tax - - -
Intergovernmental - - -
Licenses, permits, and impact fees - - -
Charges for services - 52,907 -
Interest, rents, and concessions 24,211 91,996 33,485
Other revenues 7,631 - -
Total revenues 31,842 144,903 33,485
EXPENDITURES:

Current:

General government - - 21
Public safety:

Police - - -
Fire - - -
Public works - - -
Recreation - - -
Library - - -
Community development - - -
Capital outlay - - -
Debt service:

Principal retirement - - -
Interest - - -
Total expenditures - - 21

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 144,903 31,842 33,464
OTHER FINANCING SOURCES (USES):

Transfers in - - -
Transfers out - - (7,827)
Inception of subscription liability - - -
Total other financing sources (uses) - - (7,827)
NET CHANGES IN FUND BALANCES 31,842 144,903 25,637
FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 565,637 2,145,254 781,371 72,346 Error correction (Note 16) - - - -
Change with financial reporting entity
(major and non-major fund classification) (Note 16) - - - (72,346) Beginning of year, as restated (Note 16) 2,145,254 565,637 781,371 - End of year $ 2,290,157 597,479 $ 807,008 $ - $
(Continued)
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
Permanent Funds
140 PGCC 1-21-26

Total
Library Poetry Nonmajor
Book Promotion Governmental
Fund Fund Funds
REVENUES:

Taxes:

Sales and use taxes $ 1,228,871
Franchise and other taxes 42,644
Transient occupancy taxes 595,512
Business license tax 16,323
Intergovernmental 1,786,092
Licenses, permits, and impact fees 820
Charges for services 178,175
Interest, rents, and concessions 452,649
Other revenues 104,196
Total revenues 4,405,282
EXPENDITURES:

Current:

General government 643,879
Public safety:

Police 544,122
Fire 27,669
Public works 356,364
Recreation 169,101
Library 69,217
Community development 120,429
Capital outlay 2,191,571
Debt service:

Principal retirement 107,357
Interest 628
Total expenditures 4,230,337

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 174,945
OTHER FINANCING SOURCES (USES):

Transfers in 343,247
Transfers out (95,853)
Inception of subscription liability 388,368
Total other financing sources (uses) 635,762
NET CHANGES IN FUND BALANCES 810,707
FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 39,309 148,596 9,034,317 Error correction (Note 16) - - (821,953)
Change with financial reporting entity
(non-major fund classification) (Note 16) (148,596) (39,309) - Beginning of year, as restated (Note 16) - - 8,212,364
End of year $ - $ - 9,023,071 $
(Concluded)
Special Revenue Funds
City of Pacific Grove
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2025
141 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 150 $ 150 $ 440 $ 290 Total revenues 150 150 440 290
NET CHANGE IN FUND BALANCE $ 150 $ 150 440 $ 290
FUND BALANCE:

Beginning of year 10,421
End of year $ 10,861
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Carillion Special Revenue Fund
For the Year Ended June 30, 2025
142 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 1,000 $ 1,000 $ 5,057 $ 4,057 Total revenues 1,000 1,000 5,057 4,057
NET CHANGE IN FUND BALANCE $ 1,000 $ 1,000 5,057 $ 4,057 FUND BALANCE:

Beginning of year 119,676
End of year $ 124,733
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Environmental Enhancement Special Revenue Fund
For the Year Ended June 30, 2025
143 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Franchise and other taxes $ 47,000 $ 47,000 $ 42,644 $ (4,356) Interest, rents, and concessions 1,000 1,000 4,694 3,694 Total revenues 48,000 48,000 47,338 (662)
EXPENDITURES:

Current:

General government 81,000 81,000 54,600 26,400
Total expenditures 81,000 81,000 54,600 26,400
NET CHANGE IN FUND BALANCE $ (33,000) $ (33,000) (7,262) $ 25,738 FUND BALANCE:

Beginning of year 116,177
End of year $ 108,915
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual State Franchise PEG Special Revenue Fund
For the Year Ended June 30, 2025
144 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 39,220 $ 39,220 $ 55,766 $ 16,546 Other revenues 55,492 58,063 73,121 15,058
Total revenues 94,712 97,283 128,887 31,604
EXPENDITURES:

Current:

Recreation - - 1,800 (1,800)
Library 98,000 100,571 69,217 31,354
Total expenditures 98,000 100,571 71,017 29,554
NET CHANGE IN FUND BALANCE $ (3,288) $ (3,288) 57,870 $ 61,158 FUND BALANCE:

Beginning of year (restated) 260,251
End of year $ 318,121
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Library Special Revenue Fund
For the Year Ended June 30, 2025
145 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 4,000 $ 4,000 $ 12,369 $ 8,369 Total revenues 4,000 4,000 12,369 8,369
EXPENDITURES:

Capital outlay 52,000 165,800 58,809 106,991
Total expenditures 52,000 165,800 58,809 106,991
NET CHANGE IN FUND BALANCE $ (48,000) $ (161,800) (46,440) $ 115,360 FUND BALANCE:

Beginning of year 344,823
End of year $ 298,383
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Museum Improvement Special Revenue Fund
For the Year Ended June 30, 2025
146 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Business license tax $ 31,000 $ 31,000 $ 16,323 $ (14,677) Interest, rents, and concessions 750 750 - (750)
Total revenues 31,750 31,750 16,323 (15,427)
EXPENDITURES:

Current:

General government 31,000 31,000 29,889 1,111
Total expenditures 31,000 31,000 29,889 1,111

EXCESS OF REVENUES OVER
EXPENDITURES 750 750 (13,566) (14,316)
OTHER FINANCING USES:

Transfers out - - (13,425) (13,425)
Total other financing uses - - (13,425) (13,425)
NET CHANGE IN FUND BALANCE $ 750 $ 750 (26,991) $ (27,741) FUND BALANCE:

Beginning of year 30,085
End of year $ 3,094
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Downtown Business District Special Revenue Fund
For the Year Ended June 30, 2025
147 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Transient occupancy taxes $ 662,000 $ 662,000 $ 595,512 $ (66,488) Interest, rents, and concessions 1,900 1,900 - (1,900)
Total revenues 663,900 663,900 595,512 (68,388)
EXPENDITURES:

Current:

General government 601,400 601,400 539,803 61,597
Total expenditures 601,400 601,400 539,803 61,597

EXCESS OF REVENUES OVER
EXPENDITURES 62,500 62,500 55,709 (6,791)
OTHER FINANCING USES:

Transfers out - - (1,385) (1,385)
Total other financing uses - - (1,385) (1,385)
NET CHANGE IN FUND BALANCE $ 62,500 $ 62,500 54,324 $ (8,176) FUND BALANCE:

Beginning of year 1,386
End of year $ 55,710
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Hospitality Improvement District Special Revenue Fund
For the Year Ended June 30, 2025
148 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 6,200 $ 6,200 $ 8,661 $ 2,461 Other revenues 21,000 21,000 19,355 (1,645)
Total revenues 27,200 27,200 28,016 816
EXPENDITURES:

Current:

Public safety:

Fire 46,080 46,080 27,669 18,411
Total expenditures 46,080 46,080 27,669 18,411
NET CHANGE IN FUND BALANCE $ (18,880) $ (18,880) 347 $ 19,227 FUND BALANCE:

Beginning of year 195,633
End of year $ 195,980
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Fire Emergency Equipment Special Revenue Fund
For the Year Ended June 30, 2025
149 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - $ - $ 821,953 $ 821,953
Interest, rents, and concessions 15,000 15,000 11,288 (3,712) Total revenues 15,000 15,000 833,241 818,241
EXPENDITURES:

Current:

General government - - 19,566 (19,566)
Capital outlay 22,000 828,872 813,675 15,197
Total expenditures 22,000 828,872 833,241 (4,369)

EXCESS OF REVENUES OVER
EXPENDITURES (7,000) (813,872) - 813,872
OTHER FINANCING USES:

Transfers out - - (73,216) (73,216)
Total other financing uses - - (73,216) (73,216)
NET CHANGE IN FUND BALANCE $ (7,000) $ (813,872) (73,216) $ 740,656 FUND BALANCE:

Beginning of year, as previously reported 895,169
Error correction (Note 16) (821,953)
Beginning of year, as restated (Note 16) 73,216
End of year $ -
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual American Rescue Plan Act Special Revenue Fund
For the Year Ended June 30, 2025
150 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Sales and use taxes $ 828,000 $ 828,000 $ 820,135 $ (7,865) Interest, rents, and concessions 12,000 12,000 35,920 23,920 Total revenues 840,000 840,000 856,055 16,055
EXPENDITURES:

Capital outlay 930,000 1,757,037 599,605 1,157,432
Total expenditures 930,000 1,757,037 599,605 1,157,432
NET CHANGE IN FUND BALANCE $ (90,000) $ (917,037) 256,450 $ 1,173,487 FUND BALANCE:

Beginning of year 1,036,890
End of year $ 1,293,340
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Local Streets and Roads Special Revenue Fund
For the Year Ended June 30, 2025
151 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 379,000 $ 379,000 $ 408,101 $ 29,101 Interest, rents, and concessions 3,000 3,000 12,111 9,111 Total revenues 382,000 382,000 420,212 38,212
EXPENDITURES:

Current:

Public works 474,834 474,834 356,364 118,470
Total expenditures 474,834 474,834 356,364 118,470
NET CHANGE IN FUND BALANCE $ (92,834) $ (92,834) 63,848 $ 156,682 FUND BALANCE:

Beginning of year 261,121
End of year $ 324,969
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2025
152 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ - $ - $ 677 $ 677
Total revenues - - 677 677
NET CHANGE IN FUND BALANCE $ - $ - 677 $ 677
FUND BALANCE:

Beginning of year 16,022
End of year $ 16,699
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Chautauqua Hall Special Revenue Fund
For the Year Ended June 30, 2025
153 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Charges for services $ 85,000 $ 85,000 $ 119,275 $ 34,275 Interest, rents, and concessions 2,500 2,500 9,504 7,004 Other revenues 2,500 2,500 3,138 638
Total revenues 90,000 90,000 131,917 41,917
EXPENDITURES:

Current:

Recreation 121,500 121,500 125,930 (4,430)
Capital outlay 20,000 77,950 5,785 72,165
Total expenditures 141,500 199,450 131,715 67,735
NET CHANGE IN FUND BALANCE $ (51,500) $ (109,450) 202 $ 109,652 FUND BALANCE:

Beginning of year 223,970
End of year $ 224,172
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Lighthouse Maintenance & Improvement Special Revenue Fund For the Year Ended June 30, 2025
154 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ - $ - $ 473 $ 473
Total revenues - - 473 473
NET CHANGE IN FUND BALANCE $ - $ - 473 $ 473
FUND BALANCE:

Beginning of year 11,194
End of year $ 11,667
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Senior Housing Special Revenue Fund
For the Year Ended June 30, 2025
155 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 4,000 $ 4,000 $ 11,300 $ 7,300 Contributions - - - -
Other revenues - - - -
Total revenues 4,000 4,000 11,300 7,300
EXPENDITURES:

Community development 24,000 24,000 - 24,000
Total expenditures 24,000 24,000 - 24,000
NET CHANGE IN FUND BALANCE $ (20,000) $ (20,000) 11,300 $ 31,300 FUND BALANCE:

Beginning of year 510,358
End of year $ 521,658
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CalHOME Reuse Special Revenue Fund
For the Year Ended June 30, 2025
156 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Charges for services $ 10,000 $ 10,000 $ 5,993 $ (4,007) Interest, rents, and concessions 200 200 492 292
Total revenues 10,200 10,200 6,485 (3,715)
NET CHANGE IN FUND BALANCE $ 10,200 $ 10,200 6,485 $ (3,715) FUND BALANCE:

Beginning of year 8,230
End of year $ 14,715
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Plan Maintenance Fee Special Revenue Fund
For the Year Ended June 30, 2025
157 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 500 $ 500 $ 994 $ 494 Total revenues 500 500 994 494

EXCESS OF REVENUES OVER
EXPENDITURES 500 500 994 494
OTHER FINANCING SOURCES:

Transfers in 8,000 8,000 13,247 5,247
Total other financing sources 8,000 8,000 13,247 5,247
NET CHANGE IN FUND BALANCE $ 8,500 $ 8,500 14,241 $ 5,741 FUND BALANCE:

Beginning of year 16,408
End of year $ 30,649
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Yount Income Special Revenue Fund
For the Year Ended June 30, 2025
158 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 166,025 $ 166,025 $ 162,986 $ (3,039) Total revenues 166,025 166,025 162,986 (3,039)
EXPENDITURES:

Current:

Public safety:

Police 494,651 494,651 494,985 (334)
Total expenditures 494,651 494,651 494,985 (334)

EXCESS OF REVENUES OVER
EXPENDITURES (328,626) (328,626) (331,999) (3,373)
OTHER FINANCING SOURCES:

Transfers in 330,000 330,000 330,000 -
Total other financing sources 330,000 330,000 330,000 - NET CHANGE IN FUND BALANCE $ 1,374 $ 1,374 (1,999) $ (3,373) FUND BALANCE:

Beginning of year 73,726
End of year $ 71,727
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Safety Augmentation Special Revenue Fund
For the Year Ended June 30, 2025
159 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 275,000 $ 275,000 $ 357,395 $ 82,395 Interest, rents, and concessions 2,000 2,000 4,588 2,588 Total revenues 277,000 277,000 361,983 84,983
EXPENDITURES:

Current:

Public safety:

Police 281,646 281,646 49,137 232,509
Capital outlay - - 388,368 (388,368)
Debt service:

Principal retirement - - 107,357 (107,357)
Interest and fiscal charges - - 628 (628)
Total expenditures 281,646 281,646 545,490 (263,844)

EXCESS OF REVENUES OVER
EXPENDITURES (4,646) (4,646) (183,507) (178,861)
OTHER FINANCING SOURCES:

Inception of subscription liabilities - - 388,368 388,368 Total other financing sources - - 388,368 388,368
NET CHANGE IN FUND BALANCE $ (4,646) $ (4,646) 204,861 $ 209,507 FUND BALANCE:

Beginning of year 48,914
End of year $ 253,775
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2025
160 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - $ - $ 15,389 $ 15,389
Interest, rents, and concessions - - 1,903 1,903
Total revenues - - 17,292 17,292
NET CHANGE IN FUND BALANCE $ - $ - 17,292 $ 17,292
FUND BALANCE:

Beginning of year 39,791
End of year $ 57,083
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Vehicle Abandonment Special Revenue Fund
For the Year Ended June 30, 2025
161 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 500 $ 500 $ 42,574 $ 42,074 Other revenues 40,000 40,000 - (40,000)
Total revenues 40,500 40,500 42,574 2,074
EXPENDITURES:

Current:

Recreation 20,000 45,000 41,371 3,629
Capital outlay 45,000 20,000 6,812 13,188
Total expenditures 65,000 65,000 48,183 16,817
NET CHANGE IN FUND BALANCE $ (24,500) $ (24,500) (5,609) $ 18,891 FUND BALANCE:

Beginning of year 14,946
End of year $ 9,337
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Strong Disbursements Special Revenue Fund
For the Year Ended June 30, 2025
162 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 7,000 $ 7,000 $ 48,369 $ 41,369 Other revenues 20,000 20,000 951 (19,049)
Total revenues 27,000 27,000 49,320 22,320
EXPENDITURES:

Current:

Community development 273,718 273,718 99,673 174,045
Total expenditures 273,718 273,718 99,673 174,045
NET CHANGE IN FUND BALANCE $ (246,718) $ (246,718) (50,353) $ 196,365 FUND BALANCE:

Beginning of year 525,552
End of year $ 475,199
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Special Revenue Fund
For the Year Ended June 30, 2025
163 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ - $ - $ 3,780 $ 3,780 Total revenues - - 3,780 3,780
NET CHANGE IN FUND BALANCE $ - $ - 3,780 $ 3,780
FUND BALANCE:

Beginning of year 89,483
End of year $ 93,263
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Coastal Conservancy Grant Special Revenue Fund
For the Year Ended June 30, 2025
164 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ - $ - $ 20,268 $ 20,268
Interest, rents, and concessions - - 2,139 2,139
Total revenues - - 22,407 22,407
EXPENDITURES:

Current:

Community development - - 20,756 (20,756)
Total expenditures - - 20,756 (20,756)
NET CHANGE IN FUND BALANCE $ - $ - 1,651 $ 1,651
FUND BALANCE (DEFICIT):

Beginning of year (1,651)
End of year $ -
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Operating Grant Special Revenue Fund
For the Year Ended June 30, 2025
165 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes
Sales and use taxes $ 369,839 $ 369,839 $ 408,736 $ 38,897 Interest, rents, and concessions 5,000 5,000 28,923 23,923 Total revenues 374,839 374,839 437,659 62,820
EXPENDITURES:

Capital outlay 386,065 891,114 318,517 572,597
Total expenditures 386,065 891,114 318,517 572,597
NET CHANGE IN FUND BALANCE $ (11,226) $ (516,275) 119,142 $ 635,417 FUND BALANCE:

Beginning of year 645,210
End of year $ 764,352
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual RMRA Special Revenue Fund
For the Year Ended June 30, 2025
166 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 500 $ 500 $ 935 $ 435 Total revenues 500 500 935 435
NET CHANGE IN FUND BALANCE $ 500 $ 500 935 $ 435
FUND BALANCE:

Beginning of year 22,133
End of year $ 23,068
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual McIndoo Donation Special Revenue Fund
For the Year Ended June 30, 2025
167 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
NET CHANGE IN FUND BALANCE $ - $ - - $ -
FUND BALANCE:

Beginning of year 26,137
End of year $ 26,137
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual ASBS Grant Special Revenue Fund
For the Year Ended June 30, 2025
168 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Fines and forfeitures $ - $ - $ 820 $ 820
Total revenues - - 820 820
NET CHANGE IN FUND BALANCE $ - $ - 820 $ 820
FUND BALANCE:

Beginning of year -
End of year $ 820
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Storm Water Special Revenue Fund
For the Year Ended June 30, 2025
169 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 12,000 $ 12,000 $ 24,211 $ 12,211 Other revenues 10,000 10,000 7,631 (2,369)
Total revenues 22,000 22,000 31,842 9,842
NET CHANGE IN FUND BALANCE $ 22,000 $ 22,000 31,842 $ 9,842 FUND BALANCE:

Beginning of year 565,637
End of year $ 597,479
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Library Endowment Trust Permanent Fund
For the Year Ended June 30, 2025
170 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Charges for services $ 76,000 $ 76,000 $ 52,907 $ (23,093) Interest, rents, and concessions 37,000 37,000 91,996 54,996 Total revenues 113,000 113,000 144,903 31,903
NET CHANGE IN FUND BALANCE $ 113,000 $ 113,000 144,903 $ 31,903 FUND BALANCE:

Beginning of year 2,145,254
End of year $ 2,290,157
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Cemetery Endowment Trust Permanent Fund
For the Year Ended June 30, 2025
171 PGCC 1-21-26

Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Interest, rents, and concessions $ 8,000 $ 8,000 $ 33,485 $ 25,485 Total revenues 8,000 8,000 33,485 25,485

EXCESS OF REVENUES OVER
EXPENDITURES 8,000 8,000 33,464 25,464
OTHER FINANCING USES:

Transfers out (8,000) (8,000) (7,827) 173
Total other financing uses (8,000) (8,000) (7,827) 173
NET CHANGE IN FUND BALANCE $ - $ - 25,637 $ 25,637
FUND BALANCE:

Beginning of year 781,371
End of year $ 807,008
City of Pacific Grove
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Yount Trust Permanent Fund
For the Year Ended June 30, 2025
172 PGCC 1-21-26

City of Pacific Grove, California
Internal Service Funds
The Internal Service Fund accounts for financing of goods and services provided by one department to other departments of the City on a cost-reimbursement basis.

Internal Service Funds include:

Employee Benefit Fund - Accumulates contributions from departmental payroll processes and internal service charge transfers to fund and pay for a variety of employee benefit costs such as retiree health, dental, unemployment insurance, life/disability insurance, and temporary employee social security replacement costs.

Workers' Compensation Fund - Gathers workers compensation rates from employee payroll records, along with claim reimbursements. Any annual excess or deficiencies are charged through a separate internal service charge. This fund supports workers comp. program administration costs, insurance premiums, claims expense, IIPP costs.

Liability Insurance Fund - Accounts for contributions from departmental budgets to cover the cost of general liability claims, related legal costs, and annual insurance premiums.

Berwick Park and Whale Statue
173 PGCC 1-21-26

174 PGCC 1-21-26

Employee Workers' Liability
Benefit Compensation Insurance
Fund Fund Fund Total
ASSETS
Current assets:

Cash and investments 69,448 $ 331,007 $ 891,850 $ 1,292,305 $ Restricted cash and investments - 55,151 15,086 70,237
Accounts receivable, net - 446,350 - 446,350
Total current assets 69,448 832,508 906,936 1,808,892
Total assets 69,448 832,508 906,936 1,808,892

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions - 4,891 10,392 15,283
Related to OPEB - 158 426 584
Total deferred outflows of resources - 5,049 10,818 15,867

LIABILITIES
Current liabilities:

Accounts payable 7,386 66,603 5,098 79,087
Payroll and related liabilities - 1,592 615 2,207
Claims payable, due within one year - 339,695 87,983 427,678 Compensated absences, due within one year - 663 371 1,034 Total OPEB liability, due within one year - 148 399 547 Total current liabilities 7,386 408,701 94,466 510,553
Noncurrent liabilities:

Claims payable, due in more than one year - 679,389 378,788 1,058,177 Compensated absences, due in more than one year - 2,324 1,112 3,436 Total OPEB liability, due in more than one year - 3,077 8,307 11,384 Net pension liability - 17,468 37,119 54,587
Total noncurrent liabilities - 702,258 425,326 1,127,584 Total liabilities 7,386 1,110,959 519,792 1,638,137

DEFERRED INFLOWS OF RESOURCES
Related to pensions - 707 1,503 2,210
Related to OPEB - 1,677 4,529 6,206
Total deferred inflows of resources - 2,384 6,032 8,416

NET POSITION
Restricted:

Insurance reserve - 55,151 15,086 70,237
Unrestricted 62,062 (330,937) 376,844 107,969
Total net position $ (275,786) 62,062 $ 391,930 $ 178,206 $ City of Pacific Grove
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
175 PGCC 1-21-26

176 PGCC 1-21-26

Employee Workers' Liability
Benefit Compensation Insurance
Fund Fund Fund Total
OPERATING REVENUES:

Charges for services 269,335 $ 1,346,556 $ 1,221,638 $ 2,837,529 $ Total operating revenues 1,346,556 269,335 1,221,638 2,837,529 OPERATING EXPENSES:

Contractual services and utilities - 1,813,926 1,235,656 3,049,582 Personnel 369,285 26,664 43,623 439,572
Supplies and materials - - 150 150
Total operating expenses 369,285 1,840,590 1,279,429 3,489,304 OPERATING INCOME (LOSS) (99,950) (494,034) (57,791) (651,775) NONOPERATING REVENUES (EXPENSES):

Investment earnings (loss) 3,196 14,505 21,269 38,970
Interest expense and bank charges (704) - - (704)
Total nonoperating revenues (expenses) 2,492 14,505 21,269 38,266 CHANGES IN NET POSITION (97,458) (479,529) (36,522) (613,509) NET POSITION (DEFICIT):

Beginning of year 159,520 203,743 428,452 791,715
End of year $ 62,062 $ (275,786) $ 391,930 $ 178,206
City of Pacific Grove
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2025
177 PGCC 1-21-26

Employee Workers' Liability
Benefit Compensation Insurance
Fund Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users $ 914,285 269,335 $ 1,221,638 $ 2,405,258 $ Payments to suppliers - (1,158,926) (607,806) (1,766,732) Payments to employees (374,515) (40,765) (139,196) (554,476) Cash paid for insurance claims - (74,397) (197,179) (271,576) Net cash provided by (used in) operating activities (105,180) (359,803) 277,457 (187,526) CASH FLOWS FROM INVESTING ACTIVITIES:

Receipts from (payments on) loans receivable
Payment on the bank fees (704) - - (704)
Investment income received 3,196 14,505 21,269 38,970
Net cash provided by (used in) investing activities 2,492 14,505 21,269 38,266 Net change in cash and investments (102,688) (345,298) 298,726 (149,260) CASH AND CASH INVESTMENTS:

Beginning of year 172,136 731,456 608,210 1,511,802
End of year $ 69,448 $ 386,158 $ 906,936 $ 1,362,542

RECONCILIATION OF OPERATING LOSS

TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating loss $ (99,950) $ (494,034) $ (57,791) $ (651,775) Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Change in operating assets, liabilities, and deferred items:

Accounts receivable - (432,271) - (432,271)
Pension deferred outflows - 40,085 56,001 96,086
OPEB deferred outflows - 886 271 1,157
Accounts payable (5,230) 65,945 98 60,813
Payroll and related liabilities - 1,592 615 2,207
Claims payable - 580,603 430,821 1,011,424
Net pension liability - (106,098) (145,290) (251,388)
Total OPEB liability - (6,770) 2,043 (4,727)
Compensated absences - 2,654 1,483 4,137
Pension deferred inflows - (7,908) (11,214) (19,122)
OPEB deferred inflows - (4,487) 420 (4,067)
Total adjustments (5,230) 134,231 335,248 464,249
Net cash provided by (used in) operating activities $ (359,803) (105,180) $ 277,457 $ (187,526) $ City of Pacific Grove
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2025
178 PGCC 1-21-26

Contents Pages
Financial Trends
180-189
Revenue Capacity
190-195
Debt Capacity
196-203
Demographic and Economic Information
204-206
Operating Information
207-208
City of Pacific Grove, California
These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

These tables contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

Sources:

Statistical Section
This part of the City of Pacific Grove's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. In contrast to the Financial Section, the Statistical Section is not subject to independent audit.

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

Unless otherwise noted, the information in these tables is derived from the annual comprehensive financial reports for the relevant year.

These schedules contain information to help the reader assess the City's most significant local revenue sources, including property, sales and transient occupancy taxes.

These tables present information to help the reader assess the affordability of the city's current levels of outstanding debt and the city's ability to issue additional debt in the future. 179
PGCC 1-21-26

City of Pacific Grove
Net Position By Component
Last Ten Fiscal Years
2016 2017 2018 2019 2020
Governmental activities:

Net investment in capital assets 22,741,849 $ $ 25,668,607 $ 27,258,794 $ 27,964,295 $ 32,572,615 Restricted 6,193,527 6,430,258 6,880,621 9,308,564 8,377,320 Unrestricted (deficit) (36,999,457) (35,892,155) (37,782,965) (37,369,113) (41,445,942) Total governmental activities net position $ (8,064,081) $ (3,793,290) $ (3,643,550) $ (96,254) $ (496,007) Business-type activities:

Net investment in capital assets $ 12,525,066 $ 13,220,660 $ 16,268,992 $ 16,984,023 $ 17,471,699 Restricted
Unrestricted 5,640,007 6,398,946 6,431,417 6,797,238 7,042,890 Total business-type activities net position $ 18,165,073 $ 19,619,606 $ 22,700,409 $ 23,781,261 $ 24,514,589 Primary government:

Net investment in capital assets $ 35,266,915 $ 38,889,267 $ 43,527,786 $ 44,948,318 $ 50,044,314 Restricted 6,193,527 6,430,258 6,880,621 9,308,564 8,377,320 Unrestricted (deficit) (31,359,450) (29,493,209) (31,351,548) (30,571,875) (34,403,052) Total primary government net position $ 10,100,992 $ 15,826,316 $ 19,056,859 $ 23,685,007 $ 24,018,582 Notes:

Source: City of Pacific Grove Finance Department
Fiscal Year Ended June 30
The Unrestricted net position is net of the City's pension obligation, which has grown steadily over the years. $23 $26 $27 $28
$33
$38 $40 $42 $43 $44
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Investment in Capital Assets - Governmental Activities (In Millions) 180 PGCC 1-21-26

City of Pacific Grove
Net Position By Component (Continued)
Last Ten Fiscal Years
2021 2022 2023 2024 2025
Governmental activities:

Net investment in capital assets 37,925,984 $ $ 39,813,126 $ 42,333,875 $ 42,670,667 $ 44,103,523 Restricted 7,628,868 7,759,547 10,055,437 9,525,995 10,396,354 Unrestricted (deficit) (42,610,612) (48,074,964) (32,183,453) (29,703,060) (31,259,985) Total governmental activities net position $ 2,944,240 $ (502,291) $ 20,205,859 $ 22,493,602 $ 23,239,892 Business-type activities:

Net investment in capital assets $ 21,623,880 $ 21,515,536 $ 21,619,974 $ 21,252,446 $ 22,385,756 Restricted
Unrestricted 4,130,797 5,595,177 7,231,174 10,424,639 11,158,330 Total business-type activities net position $ 25,754,677 $ 27,110,713 $ 28,851,148 $ 31,680,661 $ 33,544,086 Primary government:

Net investment in capital assets $ 59,549,864 $ 61,328,662 $ 63,953,849 $ 63,923,113 $ 66,489,279 Restricted 7,628,868 7,759,547 10,055,437 9,525,995 10,396,354 Unrestricted (deficit) (38,479,815) (42,479,787) (24,952,279) (19,278,421) (20,101,655) Total primary government net position $ 28,698,917 $ 26,608,422 $ 49,057,007 $ 54,170,687 $ 56,783,978 Fiscal Year Ended June 30
$13 $13
$16 $17 $17
$22 $22 $22 $21 $22
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Investment in Capital Assets - Proprietary Activities (In Millions) 181 PGCC 1-21-26

City of Pacific Grove
Changes in Net Position
Last Ten Fiscal Years
2016 2017 2018 2019 2020
Expenses
Governmental activities:

General government $ 2,768,729 $ 2,738,294 $ 3,025,245 $ 3,580,752 $ 4,128,554 Public safety 10,117,543 8,675,956 10,133,896 10,713,679 12,447,605 Public works 4,057,715 4,136,425 4,110,946 4,246,913 5,105,747 Recreation 586,436 684,848 737,279 924,517 894,381
Library 988,284 844,521 920,946 1,166,226 1,496,673
Museum 258,591 277,538 255,915 319,386 340,375
Community Development 3,512,657 3,086,903 2,897,897 2,834,404 3,150,193 Interest and fiscal charges on long-term debt 1,209,972 1,068,271 963,134 854,804 726,958 Total governmental activities expenses 21,914,577 23,098,106 23,045,258 24,640,681 28,290,486 Business-type activities:

Cemetery 293,068 295,388 370,747 436,338 533,247
Sewer 1,703,290 1,751,842 2,367,950 2,080,696 2,474,580 Local Water Project - - 190,977 425,525 957,886
Golf 420,788 349,811 371,646 894,206 286,074
Total business-type activities expenses 2,419,466 2,394,721 3,301,320 3,836,765 4,251,787 Total primary government expenses $ 24,334,043 $ 25,492,827 $ 26,346,578 $ 28,477,446 $ 32,542,273 Program Revenues
Governmental activities:

Charges for services:

General government $ 1,398,707 $ 1,338,655 $ 1,596,481 $ 1,505,113 $ 1,435,262 Public safety 11,222 10,405 33,363 37,570 31,040
Public works 45,792 32,993 43,434 17,860 323
Recreation 295,341 377,778 403,889 417,437 337,926
Library 19,925 17,601 16,364 13,177 18,506
Community Development 578,575 664,133 544,275 745,737 660,429 Operating grants and contributions 2,354,025 4,105,908 856,196 824,805 891,298 Capital grants and contributions 36,050 96,383 424,950 347,095 1,976,852 Total governmental activities program revenues 4,736,496 6,646,997 3,918,952 3,908,794 5,351,636 Business-type activities:

Charges for services:

Cemetery 288,712 191,497 452,283 459,761 481,915
Local Water Project - - 192,787 484,603 524,040
Sewer 2,967,074 3,139,222 3,244,931 3,317,734 3,407,708 Golf 386,916 354,093 333,534 426,839 287,603
Operating grants and contributions - - - - -
Capital grants and contributions 152,830 - 2,353,823 - - Total business-type activities program revenues 3,698,317 3,782,027 6,577,358 4,688,937 4,701,266 Total primary government program revenues 8,434,813 10,429,024 10,496,310 8,597,731 10,052,902 Net (expense)/revenue:

Governmental activities (17,178,081) (16,451,109) (19,126,306) (20,731,887) (22,938,850) Business-type activities 1,278,851 1,387,306 3,276,038 852,172 449,479 Total primary government net (expense)/revenue (15,899,230) $ $ (15,063,803) $ (15,850,268) $ (19,879,715) $ (22,489,371) Source: City of Pacific Grove Finance Department
Fiscal Year Ended June 30
182 PGCC 1-21-26

City of Pacific Grove
Changes in Net Position (Continued)
Last Ten Fiscal Years
2021 2022 2023 2024 2025
Expenses
Governmental activities:

General government $ 3,957,697 $ 5,800,659 $ 3,241,604 $ 6,440,878 $ 6,769,288 Public safety 12,345,886 16,706,460 7,895,196 15,217,138 17,847,638 Public works 4,916,879 6,611,056 2,809,143 5,230,431 5,714,615 Recreation 765,613 1,117,468 554,042 1,562,919 2,136,618 Library 1,437,706 864,956 741,061 1,248,197 1,550,383
Museum 262,137 431,708 223,551 360,431 415,283
Community Development 3,340,137 4,075,001 1,426,245 3,666,942 3,574,254 Interest and fiscal charges on long-term debt 676,055 580,350 470,144 476,107 410,376 Total governmental activities expenses 27,129,360 36,760,408 17,360,986 34,203,043 38,418,455 Business-type activities:

Cemetery 610,773 498,927 469,815 452,270 816,575
Sewer 2,178,853 2,842,577 1,045,865 1,224,324 1,483,581 Local Water Project 881,378 1,048,075 2,136,404 2,042,255 3,059,850 Golf 342,872 281,320 282,177 468,767 805,394
Total business-type activities expenses 3,902,030 4,782,745 3,934,261 4,187,616 6,165,400 Total primary government expenses $ 31,031,390 $ 41,543,153 $ 21,295,247 $ 38,390,659 $ 44,583,855 Program Revenues
Governmental activities:

Charges for services:

General government $ 1,474,806 $ 1,720,294 $ 1,439,808 $ 1,210,812 $ 1,268,917 Public safety 31,244 25,410 593,308 599,859 629,908
Public works 1,649 2,646 21,550 1,639 1,634
Recreation 295,233 390,314 452,660 599,573 716,285
Library 34,443 34,477 2,132 2,374 1,856
Community Development 939,297 882,556 1,134,102 1,406,529 1,311,599 Operating grants and contributions 1,200,286 2,526,917 2,689,705 858,172 1,626,687 Capital grants and contributions 4,715,110 2,248,708 1,109,485 474,137 451,865 Total governmental activities program revenues 8,686,268 7,837,122 9,958,525 5,153,095 6,008,751 Business-type activities:

Charges for services:

Cemetery 800,923 634,039 773,195 716,931 614,897
Local Water Project 597,835 598,195 597,011 1,026,820 1,328,142 Sewer 3,501,697 3,565,896 3,693,156 3,825,616 4,115,081 Golf 361,704 611,397 791,881 745,216 879,140
Operating grants and contributions 9,800 - - - -
Capital grants and contributions - - - - -
Total business-type activities program revenues 5,105,075 5,576,411 5,855,243 6,314,583 6,937,260 Total primary government program revenues 13,791,343 13,413,533 13,297,993 12,416,782 12,946,011 Net (expense)/revenue:

Governmental activities (18,443,092) (28,923,286) (9,918,236) (29,049,948) (32,409,704) Business-type activities 1,203,045 793,666 1,920,982 2,126,967 771,860 Total primary government net (expense)/revenue (17,240,047) $ $ (28,129,620) $ (7,997,254) $ (26,922,981) $ (31,637,844) Fiscal Year Ended June 30
183 PGCC 1-21-26

City of Pacific Grove
Changes in Net Position (Continued)
Last Ten Fiscal Years
2016 2017 2018 2019 2020
General Revenues and Other Changes in Net Assets
Governmental activities:

Taxes
Property taxes $ 6,226,267 $ 6,557,824 $ 6,851,928 $ 7,306,184 $ 7,632,399 Sales and use taxes 3,325,809 4,159,401 4,075,744 5,139,045 4,765,472 Franchise taxes 1,041,653 915,094 1,082,574 1,226,524 1,176,215 Transient occupancy taxes 5,364,317 5,829,610 6,656,849 6,796,087 5,310,063 Utility users taxes 1,594,143 1,593,887 1,688,876 1,641,172 1,643,614 Business license tax 341,071 402,881 381,810 370,655 396,533 Other taxes 146,945 125,487 121,192 110,554 110,823
Unrestricted Investment earnings 253,846 74,222 142,104 628,116 555,482 Miscellaneous or Other revenues 947,392 984,164 552,320 1,060,846 942,680 Transfers 5,301 356,016 - (18,676) -
Total governmental activities 19,246,744 20,642,570 21,909,413 24,279,183 22,514,605 Business-type activities:

Unrestricted Investment earnings 67,318 9,754 42,764 206,178 259,560 Miscellaneous or Other revenues 113,560 57,473 118,017 22,502 5,613 Transfers (5,301) - (356,016) - 18,676
Total business-type activities 175,577 67,227 (195,235) 228,680 283,849 Total primary government $ 19,422,321 $ 20,709,797 $ 21,714,178 $ 24,507,863 $ 22,798,454 Change in Net Position
Governmental activities 2,068,663 $ 4,191,461 $ 2,783,107 $ 3,547,296 $ (424,245) $ Business-type activities 1,454,428 1,454,533 3,080,803 1,080,852 733,328 Total primary government $ 3,523,091 $ 5,645,994 $ 5,863,910 $ 4,628,148 $ 309,083 Source: City of Pacific Grove Finance Department
Fiscal Year Ended June 30
$6.2 $6.6 $6.9 $7.3 $7.6 $8.2 $8.6 $9.3 $10.0 $10.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Property Tax Revenues - In Millions
184 PGCC 1-21-26

City of Pacific Grove
Changes in Net Position (Continued)
Last Ten Fiscal Years
2021 2022 2023 2024 2025
General Revenues and Other Changes in Net Assets
Governmental activities:

Taxes
Property taxes $ 8,191,673 $ 8,573,969 $ 9,330,981 $ 10,001,561 $ 10,516,128 Sales and use taxes 5,000,873 5,630,320 6,734,940 7,146,935 7,589,358 Franchise taxes 1,392,700 1,489,888 1,620,136 1,682,562 1,589,922 Transient occupancy taxes 3,978,577 6,821,183 7,105,256 7,375,869 7,556,230 Utility users taxes 1,858,652 1,940,677 2,097,934 2,118,068 2,435,825 Business license tax 361,674 371,310 425,691 427,918 501,858 Other taxes 222,242 231,389 165,613 177,881 180,314
Unrestricted Investment earnings 22,612 (402,304) 345,550 1,443,592 1,102,043 Miscellaneous or Other revenues 854,336 1,400,243 1,143,687 1,150,805 2,319,504 Transfers - (162,500) - (187,500) (635,188)
Total governmental activities 21,883,339 26,056,675 28,807,288 31,337,691 33,155,994 Business-type activities:

Unrestricted Investment earnings 4,852 (18,409) 151,223 511,470 459,953 Miscellaneous or Other revenues 32,191 - - - -
Transfers - 162,500 - 187,500 635,188
Total business-type activities 37,043 (18,409) 147,810 698,970 1,095,141 Total primary government $ 21,920,382 $ 26,038,266 $ 28,955,098 $ 32,036,661 $ 34,251,135 Change in Net Position
Governmental activities 3,440,247 $ (2,866,611) $ 19,736,527 $ 2,287,743 $ 746,290 $ Business-type activities 1,240,088 775,257 2,068,792 2,825,937 1,867,001 Total primary government $ 4,680,335 $ (2,091,354) $ 21,805,319 $ 5,113,680 $ 2,613,291 Fiscal Year Ended June 30
$5.4 $5.8 $6.7 $6.8
$5.3
$4.0
$6.8 $7.1 $7.4 $7.6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Transient Occupancy Tax Revenues - In Millions
185 PGCC 1-21-26

City of Pacific Grove
Fund Balances of Governmental Funds
Last Ten Fiscal Years
2016 2017 2018 2019 2020
General Fund
Nonspendable
Prepaid assets $ 27,904 $ - $ 210,824 $ 31,373 $ -
Leases Receivable / Permanent Funds - - - - -
Assigned / Committed 261,771 279,660 286,638 268,962 100,398 Unassigned 9,632,848 11,352,442 11,365,650 11,230,241 9,713,336 Total General Fund $ 9,922,523 $ 11,632,102 $ 11,863,112 $ 11,530,576 $ 9,813,734 All other governmental funds
Unreserved, undesignated, reported in:

Nonspendable
Prepaid assets - $ $ - $ - $ - $ -
Leases Receivable - - - - -
Loans Receivable - - - - -
Permanent funds 2,761,263 2,855,521 2,899,737 3,029,024 3,129,132 Restricted
Social service programs 622,022 549,372 704,968 832,061 723,787 Public safety 772,241 482,400 908,239 842,518 808,626
Community development 1,786,526 2,057,868 2,120,819 3,414,820 2,424,125 Lost revenue recovery - - - - -
Street improvements 570 104,510 223,651 1,190,141 1,291,650 Debt service 90,746 90,746 23,207 - -
Assigned
Capital projects - - - - -
Unassigned 157,765 19,306 (57,994) (86,180) (9,020)
Total all other governmental funds $ 5,901,292 $ 6,449,564 $ 6,822,627 $ 9,222,384 $ 8,368,300 Source: City of Pacific Grove Finance Department
Fiscal Year Ended June 30
$9.9 $11.6 $11.9 $11.5 $9.8 $10.0
$12.2
$15.0
$17.4 $17.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Available General Fund Reserves (In Millions)
186 PGCC 1-21-26

City of Pacific Grove
Fund Balances of Governmental Funds
Last Ten Fiscal Years (Continued)
2021 2022 2023 2024 2025
General Fund
Nonspendable
Prepaid assets $ - $ 18,486 - $ $ 17,099 $ 32,836
Leases Receivable / Permanent Funds 19,762 - - - -
Assigned / Committed 97,042 85,816 12,033,000 - 12,033,000 Unassigned 9,910,606 12,129,809 15,006,867 5,314,696 5,418,245 Total General Fund $ 10,007,648 $ 12,235,387 $ 15,025,353 $ 17,364,795 $ 17,484,081 All other governmental funds
Unreserved, undesignated, reported in:

Nonspendable
Prepaid assets - $ 26,300 $ - $ - $ - $
Leases Receivable - 792 - - -
Loans Receivable - - 1,313,168 - -
Permanent funds 3,190,775 3,166,699 3,262,465 3,492,262 3,694,644 Restricted
Social service programs 748,183 610,617 732,292 1,261,146 1,035,481 Public safety 418,637 764,767 355,266 358,064 578,565
Community development 1,632,662 1,630,814 1,586,315 1,589,136 2,656,252 Lost revenue recovery 293,369 - 1,074,164 895,169 -
Street improvements 1,292,481 1,604,411 1,676,616 1,943,221 2,382,661 Debt service - - - - -
Assigned
Capital projects - 22,626 - 236,621 2,269,590
Unassigned (8,349) (22,553) (40,122) (350,967) -
Total all other governmental funds $ 7,620,519 $ 7,729,086 $ 9,982,790 $ 9,424,652 $ 12,617,193 Fiscal Year Ended June 30
$5.9 $6.4 $6.8
$9.2 $8.4 $7.6 $7.7
$10.0 $9.4
$12.6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Designated Reserves Other Govt Funds (In Millions)
187 PGCC 1-21-26

City of Pacific Grove
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
2016 2017 2018 2019 2020
Revenues
Taxes $ 18,040,205 $ 19,584,184 $ 20,858,973 $ 22,590,221 $ 21,035,119 Intergovernmental revenues 2,129,066 1,191,898 4,109,269 1,049,471 1,111,037 Licenses, permits, and impact fees 481,304 521,403 576,779 547,193 576,735 Fines and forfeitures 127,740 282,841 110,665 169,534 179,797 Charges for services 1,454,936 1,734,163 1,689,714 1,854,406 1,609,729 Interest, rents, and concessions 467,624 371,272 297,620 852,787 781,062 Contributions - - - 1,728,705 -
Other revenues 1,181,216 803,453 943,496 1,073,162 799,307 Total revenues 23,882,091 27,171,684 25,904,046 28,136,774 27,821,491 Expenditures
General government 2,522,818 2,964,942 2,453,176 3,442,825 3,518,628 Public safety
Police 5,345,441 6,599,789 6,097,399 6,955,766 7,098,044 Fire 2,647,804 3,354,865 2,998,969 3,345,523 3,512,675
Public works 3,298,160 3,521,686 3,294,064 3,463,725 3,731,449 Recreation 516,486 678,454 594,636 837,231 707,073
Library 781,275 916,031 895,836 1,138,981 1,268,508
Museum 229,053 241,227 251,422 308,156 290,661
Community development 3,258,093 2,882,752 2,798,269 2,763,667 2,721,348 Capital Outlay 1,148,160 3,525,129 2,426,177 1,985,711 5,876,584 Debt Service
Principal 1,250,399 1,170,427 1,097,822 960,277 951,114 Interest and fiscal charges 834,601 962,049 924,034 1,014,752 1,052,927 Total expenditures 21,832,290 24,993,166 25,655,989 26,216,614 30,729,011 Excess of revenues over (under) expenditures 2,049,801 2,178,518 248,057 1,920,160 (2,907,520) Other financing sources (uses)
Loans Received - - 147,061 - -
Transfers in 906,787 621,455 989,603 2,423,254 2,787,200 Transfers out (901,486) (621,455) (633,587) (2,423,254) (2,475,098) Proceeds from sale of assets - - - - -
Inception of subscription liabilities - - - - -
Total other financing sources (uses) 5,301 356,016 - 147,061 312,102 Net change in fund balances $ 2,178,518 2,055,102 $ $ 604,073 $ 2,067,221 $ (2,595,418) Total Expenditures $ 21,832,290 $ 24,993,166 $ 25,655,989 $ 26,216,614 $ 30,729,011 Capitalized Portion of Capital Outlay 1,006,089 3,525,129 2,350,159 1,984,274 5,873,015 Total Non-Capitalized Expenditures $ 20,826,201 $ 21,468,037 $ 23,305,830 $ 24,232,340 $ 24,855,996 Debt Service: Principal & Interest $ 2,085,000 $ 2,094,461 $ 2,059,871 $ 1,975,029 $ 2,004,041 Debt service as a % of noncapital expenditures 10% 10% 9% 8% 8% Source: City of Pacific Grove Finance Department
Fiscal Year Ended June 30
188 PGCC 1-21-26

City of Pacific Grove
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years (Continued)
2021 2022 2023 2024 2025
Revenues
Taxes $ 21,006,391 $ 25,058,736 $ 27,480,551 $ 28,930,794 $ 30,369,635 Intergovernmental revenues 5,320,214 4,419,951 3,228,593 795,421 2,393,313 Licenses, permits, and impact fees 873,727 913,160 1,083,985 1,322,285 1,154,941 Fines and forfeitures 36,984 37,397 460,058 314,242 316,523 Charges for services 1,617,182 1,964,792 1,825,889 1,913,938 2,118,723 Interest, rents, and concessions 260,008 (125,810) 602,777 1,671,084 1,379,012 Contributions 333,646 271,527 - - -
Other revenues 1,267,634 1,614,435 2,571,845 1,269,651 2,443,604 Total revenues 30,715,786 34,154,188 37,253,698 36,217,415 40,175,751 Expenditures
General government 3,452,693 4,162,716 4,882,900 5,924,240 5,902,291 Public safety
Police 6,959,934 7,999,969 8,350,094 8,625,874 8,872,935 Fire 3,823,118 3,979,967 4,392,833 4,514,064 5,049,700
Public works 3,511,330 4,047,910 4,420,912 4,728,417 4,976,061 Recreation 596,413 738,660 857,570 1,323,571 1,866,757
Library 1,044,945 766,742 1,166,219 1,206,247 1,292,643 Museum 227,862 309,764 336,814 346,494 382,112
Community development 2,967,534 2,959,804 2,494,641 3,452,141 3,138,431 Capital Outlay 6,863,582 3,616,520 4,579,757 2,586,257 3,481,701 Debt Service
Principal 924,776 900,041 1,046,576 636,543 664,267
Interest and fiscal charges 1,175,669 1,270,374 1,394,056 932,409 990,206 Total expenditures 31,269,653 31,030,670 33,922,372 34,276,257 36,617,104 Excess of revenues over (under) expenditures (553,867) 3,123,518 3,331,326 1,941,158 3,558,647 Other financing sources (uses)
Loans Received - - - - -
Transfers in 899,862 2,255,675 1,624,700 1,075,359 3,448,738 Transfers out (899,862) (3,043,587) (1,787,200) (1,262,859) (4,083,926) Proceeds from sale of assets - - 391 6,800 -
Inception of subscription liabilities - 491,285 - 20,846 388,368 Total other financing sources (uses) (787,912) - 329,176 (159,854) (246,820) Net change in fund balances $ 2,335,606 (553,867) $ $ 3,660,502 $ 1,781,304 $ 3,311,827 Total Expenditures $ 31,269,653 $ 31,030,670 $ 33,922,372 $ 34,276,257 $ 36,617,104 Capitalized Portion of Capital Outlay 6,901,135 3,563,999 4,594,854 2,586,257 3,519,635 Total Non-Capitalized Expenditures $ 24,368,518 $ 27,466,671 $ 29,327,518 $ 31,690,000 $ 33,097,469 Debt Service: Principal & Interest $ 2,100,445 $ 2,170,415 $ 2,440,632 $ 1,568,952 $ 1,654,473 9% 8% 8% 5% 5%
Fiscal Year Ended June 30
Debt service as a % of noncapital expenditures
189 PGCC 1-21-26

City of Pacific Grove
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
Sales Transient Utility Business Other
Property and Use Franchise Occupancy Users License Taxes Total $ 6,226,267 $ 3,325,809 $ 1,041,653 $ 5,364,317 $ 1,594,143 $ 341,071 $ 146,945 $ 18,040,205 6,557,824 4,159,401 915,094 5,829,610 1,593,887 402,881 125,487 19,584,184 6,851,928 4,075,744 1,082,574 6,656,849 1,688,876 381,810 121,192 20,858,973 7,306,184 5,139,045 1,226,524 6,796,087 1,641,172 370,655 110,554 22,590,221 7,632,399 4,765,472 1,176,215 5,310,063 1,643,614 396,533 110,823 21,035,119 8,191,673 5,000,873 1,392,700 3,978,577 1,858,652 361,674 222,242 21,006,391 8,573,969 5,630,320 1,489,888 6,821,183 1,940,677 371,310 231,389 25,058,736 9,330,981 6,734,940 1,620,136 7,105,256 2,097,934 425,691 165,613 27,480,551 10,001,561 7,146,935 1,682,562 7,375,869 2,118,068 427,918 177,881 28,930,794 10,516,128 7,589,358 1,589,922 7,556,230 2,435,825 501,858 180,314 30,369,635 Notes/Analysis:

Source: City of Pacific Grove Finance Department
2016
Fiscal Year
Ended
June 30
2023
2024
2017
2018
2019
2020
2021
2022
2025
The City's property tax revenues have increased at a steady pace over the past ten years primarily related to changes in ownership and annual increases allow under the State's Proposition 13 which governs growth in property taxes. $18.0
$19.6
$20.9
$22.6
$21.0
$21.0
$25.1
$27.5
$28.9
$30.4
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Governmental Tax Revenue by Year (In Millions)
190 PGCC 1-21-26

City of Pacific Grove
General Fund Revenues by Source
Last Ten Fiscal Years
Fiscal Year
Ended June
30 Taxes
Intergovernmental
Licenses
Permits &
Impact Fees
Fines and
Forfeitures
Charges for
Services
Interest, Rents
& Concessions
Other
Revenues Total
2016 $ 17,358,914 $ 229,671 $ 481,304 $ 127,740 $ 1,367,494 $ 355,293 $ 893,646 $ 19,192,237 2017 18,805,809 111,092 576,779 110,665 1,545,556 265,903 20,814,062 561,992 2018 19,754,218 87,478 521,403 282,841 1,643,238 259,883 21,977,796 370,158 2019 21,018,950 92,206 547,193 169,534 1,585,098 553,032 22,919,219 398,817 2020 19,741,066 171,317 576,735 179,797 1,456,261 523,280 24,364,830 708,420 2021 19,679,908 116,159 873,727 36,984 1,538,638 213,705 23,356,876 909,176 2022 23,412,682 150,517 913,160 37,397 1,877,203 1,215,986 (1,805) 23,368,297 2023 25,799,639 146,946 1,083,985 460,058 1,678,855 390,656 1,949,182 27,605,140 2024 27,119,528 278,308 1,322,285 314,242 1,737,498 1,125,585 1,135,321 33,032,767 2025 28,486,285 150,704 1,154,121 316,523 1,940,548 874,568 2,339,408 35,262,157 Source: City of Pacific Grove Finance Department
e
$19.2
$20.8
$22.0
$22.9
$24.4
$23.4
$23.4
$27.6
$33.0
$35.3
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Fund Revenue by Year (In Millions)
191 PGCC 1-21-26

City of Pacific Grove
Net Assessed Value of Taxable Property
Last Ten Fiscal Years
Total Total
Personal Assessed Direct Tax
Residential Commercial Other Total Property Value Rate

$ 2,582,410,785 $ 238,447,123 $ 33,362,264 $ 2,703,808,916 $ 40,617,474 $ 16.2% 2,744,426,390 2,747,369,747 246,883,728 36,894,923 2,854,220,172 41,950,516 2,896,170,688 15.9% 2,918,531,066 265,910,702 30,645,309 3,031,148,398 42,996,800 3,074,145,198 15.9% 3,112,639,411 265,486,441 48,587,979 3,426,713,831 42,749,505 3,469,463,336 15.9% 3,307,434,783 274,948,202 53,236,808 3,635,619,793 46,292,980 3,681,912,773 15.9% 3,484,607,327 279,870,522 58,693,772 3,823,171,621 46,589,365 3,869,760,986 15.9% 3,670,449,106 281,994,698 58,996,880 4,011,440,684 43,436,617 4,054,877,301 15.9% 3,981,692,067 318,373,164 65,800,233 4,365,865,464 45,441,570 4,411,307,034 15.9% 4,254,675,761 322,149,604 137,205,601 4,714,030,966 43,183,029 4,757,213,995 15.9% 4,514,148,109 326,935,217 103,915,820 4,944,999,146 50,191,231 4,995,190,377 16.1% Notes / Analysis:

Rates are based on a $100 of taxable value. Exempt values are not included in Total.

Source: Monterey County Assessor Combined Tax Rolls, HdL Companies, Coren & Cone 2016
2017
2018
2019
2020
With the passage of a constitutional amendment (Proposition 13) and subsequently enacted State legislation, property is assessed according to a base year rather than on a % of market value. Accordingly, a reliable estimate of actual value of taxable property within the City is not possible.
2021
2022
2023
2024
2025
Fiscal Year
Ended Real Property
June 30
$2.7 $2.9 $3.0
$3.4 $3.6 $3.8 $4.0
$4.4
$4.7 $4.9
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Assessed Value of Real Property (In Billions)
192 PGCC 1-21-26

City of Pacific Grove
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Direct Rates:
$ 0.0035 0.0040 $ $ -$ -$ -$ - - $ -$ -$ - $
Total Direct Rate 0.0040 0.0035 - - - - - - - -
Overlapping Rates 1:

County 2 1.000 1.000 1.000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Monterey Peninsula College 0.0223 0.0217 0.0230 0.0212 0.0205 0.0202 0.0320 0.0303 0.0289 0.0219 Pacific Grove Unified 0.0855 0.0651 0.0829 0.0619 0.0634 0.0776 0.0769 0.0624 0.0647 0.0417 Total Overlapping Rate 1.1078 1.1059 1.0831 1.0868 1.0839 1.0978 1.1089 1.0927 1.0936 1.0636 Total Direct / Overlapping Rate 1.1099 $ 1.1113$ 1.0868$ 1.0831$ 1.0839$ 1.0978 $ 1.1089 $ 1.0927$ 1.0936 $ 1.0636 $ City Share of 1% Levy
per Prop. 13 (3) $ 0.1607$ 0.1607$ 0.1607$ 0.1607$ 0.1607 0.1607 $ 0.1607 $ 0.1607$ 0.1607 $ 0.1607 $ Voter Approved City Debt Rate 0.0040 $ 0.0035 $ $ -$ -$ -$ - - $ -$ -$ - $ Total Direct Rate 0.1624 $ 0.1620$ 0.1586$ 0.1588$ 0.1588$ 0.1589 $ 0.1590 $ 0.1591$ 0.1591 $ 0.1592 $ Notes/Analysis:
1 2
3 Source: Monterey County Assessors Tax Tables, HdL Companies, Coren & Cone The gross City Share of the 1% levy per Prop. 13 is $0.1976. This amount included the Educational Revenue Augmentation Fund (ERAF) share of the Pacific Grove General Fund property taxes that is deducted by the State. This amount was approximately $0.0369.

For Fiscal Year Ended June 30
General Obligation Bonds
School Districts
Overlapping rates are those of entities that apply to property owners within the City of Pacific Grove. Not all overlapping rates apply to all property owners (e.g., the rates for school districts apply only to the proportion of the city's property owners whose property is located within the geographic boundaries of the school district).

The passage of a constitutional amendment (Proposition 13) in June 1978 limits the property tax rate to a base of $1.00 per $100. The $1.00 rate is levied by the County and apportioned to local agencies according to a formula prescribed by the California legislature. $1.11 $1.11
$1.09 $1.08 $1.08
$1.10
$1.11
$1.09 $1.09
$1.06
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Direct and Overlapping Tax Rate (Per $100 of Tax Value) 193 PGCC 1-21-26

City of Pacific Grove
Principal Property Tax Owners
Current Year and Nine Years Ago
Percentage Percentage
of Total of Total
Assessed Assessed Assessed Assessed
Tax Owner Valuation Rank Valuation Valuation Rank Valuation Monarch Pines HOA $ 35,037,720 1 0.70% $ 13,368,851 5 0.46% Waterloo Associates LLC 31,128,891 2 0.62%
B10 Mountain LP 28,014,988 3 0.56%
Rutherford 17 Mile LP 24,344,958 4 0.49%
PG Home Sweet Home LLC 22,993,557 5 0.46%
PG Senior Living LLC 20,180,342 6 0.40%
Aramark Sports Entertainment 19,315,497 7 0.39% 14,537,127 4 0.50% WGA Grove Acres LP 17,606,165 8 0.35% 14,920,249 3 0.52% Foursome Development Co. 13,357,423 9 0.27% 11,338,215 6 0.39% Pacifica Lighthouse LLP 12,138,462 10 0.24% 10,187,014 7 0.35% ROIC California LLC 23,776,087 1 0.82%
Green Valley Corporation 8 0.34% 9,785,957
Sequoia Equities - Pacific Grove 20,119,263 2 0.70%
Villa Del Mar Apts Partnership 8,820,925 9 0.30%
Dana Dornsife Living Trust 8,650,000 10 0.30%
Totals $ 4.49% 135,503,688 224,118,003 $ 4.68%
Total assessed value $ 2,742,566,744 4,995,190,377 $
Notes/Analysis:

Tax owners and values presented in this table reflect the County's Assessment Roll Reports.

Total Taxable Value includes State Unitary
Source: Monterey County Assessor data, HDL, Coren and Cone 2025 2016
$35.0
$31.1
$28.0
$23.0
$20.2
$19.3
$17.6
$13.4
$12.1
Monarch Pines HOA
Waterloo Associates LLC
B10 Mountain LP
PG Home Sweet Home LLC
PG Senior Living LLC
Aramark Sports Entertainment
WGA Grove Acres LP
Foursome Development Co.

Pacifica Lighthouse LLP
Top Ten Property Owner Valuations - In Millions
194 PGCC 1-21-26

City of Pacific Grove
Property Tax Levies and Collections
Last Ten Fiscal Years
Percent Supplemental Delinquent
Total Tax Current Tax of Levy Tax Tax Total
Levy
1 Collections 2 Collected Collections Collections 3 Collections $ 4,817,299 $ 97.4% 100,936 4,691,501 $ $ 74,690 $ 4,867,127 4,954,066 5,087,208 97.4% 70,203 93,055 5,117,324
5,155,609 5,279,399 97.7% 64,907 106,153 5,326,669
5,412,231 5,509,161 98.2% 80,007 125,259 5,617,497
5,688,427 5,847,982 97.3% 58,108 101,049 5,847,584
6,100,480 6,148,663 99.2% 80,338 131,177 6,311,994
6,396,517 6,446,038 99.2% 75,837 158,152 6,630,506
6,983,282 7,017,507 99.5% 52,430 180,974 7,216,686
7,427,063 7,644,843 97.2% 117,025 172,887 7,716,975
8,027,271 7,899,368 98.4% 120,323 77,166 8,096,857
Notes/Analysis:
1 2
3 Source: County of Monterey Auditor-Controller's Office City of Pacific Grove Finance Department
Fiscal Collected within the Fiscal Year of Levy
Year
Ended
June 30
The amounts listed in this column represent prior year secured, prior year secured, unsecured, and unitary taxes. 2016
2017
2018
2019
2020
2021
2022
2023
2024
The Monterey County Auditor-Controller's Office does not list the total assessed value. This amount is calculated referencing the assessed values of properties and the total direct tax rate and general obligation rate for the City.

Monterey County reports collections as current period, regardless of original level year. 2025
$4.9 $5.1 $5.3 $5.6 $5.8
$6.3 $6.6
$7.2
$7.7 $8.1
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Property Tax Collections (In Millions)
195 PGCC 1-21-26

City of Pacific Grove
Ratios of Outstanding Debt By Type
Last Ten Fiscal Years
2016 2017 2018 2019 2020
Governmental Activities:

General obligation bonds $ 175,057 $ 89,194 $ - $ - $ - Pension obligation bonds 16,625,139 15,712,560 14,680,804 13,522,530 12,228,861 Capital leases 82,534 16,787 - - -
PG & E Loan - - - 145,110 121,696
SBITA Liability - - - - -
Total Governmental Activities 16,882,730 15,818,541 14,680,804 13,667,640 12,350,557 Business-type Activities:

Revenue bonds - Wastewater refunding bonds 1,052,184 999,045 943,812 886,575 827,487 Site Lease - Golf course 2,903,599 2,756,223 2,602,366 2,441,744 2,274,059 Loan- Local water project, State loan 960,522 6,308,658 5,328,076 5,174,788 5,020,088 Loan - PG & E Loan - - - 7,791 4,869
Total Business-type Activities 10,063,926 4,916,305 8,874,254 8,510,898 8,126,503 Total Primary Government $ 21,799,035 $ 25,882,467 $ 23,555,058 $ 22,178,538 $ 20,477,060 Personal income1 $ 740,117,000 717,389,000 $ 766,209,000 $ 759,116,000 $ 776,384,000 $ Debt as percentage of personal income 3.04% 3.50% 3.07% 2.92% 2.64% Population2, A 15,498 15,352 15,660 15,883 15,265
Debt per capita 1,420 1,670 1,504 1,396 1,341
Assessed value3 3,073,098,914 3,073,098,914 3,258,083,877 3,469,463,336 3,681,912,773 Debt as percentage of assessed value 0.71% 0.84% 0.72% 0.64% 0.56% Sources: 1
US Department of Commerce, Bureau of Economic Analysis (refer to Table 16). 2 California Department of Finance 3 HdL Companies and Avenu Insights and Analytics City of Pacific Grove Finance Department
Fiscal Year Ended June 30
$16.6 $15.7 $14.7 $13.5 $12.2 $10.8 $9.2 $7.4 $6.5 $5.4 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Pension Obligation Bonds Outstanding (In Millions)
196 PGCC 1-21-26

City of Pacific Grove
Ratios of Outstanding Debt By Type (Continued)
Last Ten Fiscal Years
2021 2022 2023 2024 2025
Governmental Activities:

General obligation bonds $ - $ - $ - $ - $ -
Pension obligation bonds 10,785,885 9,179,235 7,403,565 6,458,191 5,409,331 Capital leases - - - - -
PG & E Loan 98,281 74,866 51,451 31,403 18,841
SBITA Liability - - 317,788 200,738 401,677
Total Governmental Activities 9,254,101 10,884,166 7,772,804 6,690,332 5,829,849 Business-type Activities:

Revenue bonds - Wastewater refunding bonds 766,573 703,945 639,629 573,704 503,660 Site Lease - Golf course 2,099,001 1,916,244 1,725,451 1,526,268 1,318,327 Loan- Local water project, State loan 4,863,840 4,706,030 4,546,643 4,385,661 4,223,069 Loan - PG & E Loan 1,947 - - - -
Total Business-type Activities 7,731,361 7,326,219 6,911,723 6,485,633 6,045,056 Total Primary Government $ 18,615,527 $ 16,580,320 $ 14,684,527 $ 13,175,965 $ 11,874,905 Personal income1 $ 816,648,000 795,868,000 $ 832,496,000 $ 971,497,000 $ 1,001,953,000 $ Debt as percentage of personal income 2.34% 2.03% 1.76% 1.36% 1.19% Population2, A 14,761 15,536 14,741 14,966 14,871
Debt per capita 1,198 1,123 996 880 799
Assessed value3 4,054,877,301 3,869,760,986 4,411,307,034 4,757,213,995 4,995,190,377 Debt as percentage of assessed value 0.48% 0.41% 0.33% 0.28% 0.24% Notes:

A Decrease in 2022 population due to change in Census 2020 benchmark.

Fiscal Year Ended June 30
$5.2
$10.2 $8.9 $8.7 $8.2 $7.8 $7.4 $7.3 $6.7 $6.5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Other Outstanding Debt - Excluding Pensions (In Millions) 197 PGCC 1-21-26

City of Pacific Grove
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Less: Amount
Year General Available Percentage Debt
Ended Obligation in Debt of Assessed Per Assessed
June 30 Bonds Service Fund Total Value Capita Value1 Population2, A 2016 $ 175,057 $ 90,746 $ 84,311 0.00% 5 $ 2,894,837,646 15,352 2017 89,194 89,194 - 0.00% - 3,073,098,914 15,498
2018 - - - 0.00% - 3,258,083,877 15,660
2019 - - - 0.00% - 3,469,463,336 15,883
2020 - - - 0.00% - 3,681,912,773 15,265
2021 - - - 0.00% - 3,869,760,986 15,536
2022 - - - 0.00% - 4,054,877,301 14,761
2023 - - - 0.00% - 4,411,307,034 14,741
2024 - - - 0.00% - 4,757,213,995 14,966
2025 - - - 0.00% - 4,995,190,377 14,871
Notes: A Decrease in 2022 population due to change in Census 2020 benchmark.

Source: 1 CHdL Companies and Avenu Insights and Analytics 2 California Department of Finance City of Pacific Grove Finance Department
15,352
15,498
15,660
15,883
15,265
15,536
14,761
14,741
14,966
14,871
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
City Population
198 PGCC 1-21-26

City of Pacific Grove
Computation of Direct and Overlapping Debt
June 30, 2025
Total Percentage Amount
Debt Applicable Applicable
Outstanding to City (1) to City
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:

Monterey County Water Resources Agency Zone 2C $ 16,990,000 5.398% $ 917,120 Monterey Peninsula Community College District 170,860,629 9.661% 16,506,845 Pacific Grove Unified School District 47,112,000 62.927% 29,646,168 Total Direct and Overlapping Tax and Assessment Debt $ 234,962,629 $ 47,070,134 DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Monterey County General Fund Obligations 100,145,000 5.301% 5,308,686 Monterey County Board of Education Certificates of Participation 36,301,000 5.301% 1,924,316 City of Pacific Grove Pension Obligation Bonds 5,409,331 100% 5,409,331 City of Pacific Grove (PG) Pacific Gas and Electric (PG & E) Loan 18,841 100% 18,841 PG Subscription Based Information Technology Agreements (SBITA) 401,677 100% 401,677 Total Gross Direct and Overlapping General Fund Debt $ 142,275,849 13,062,851 Total Net Direct and Overlapping General Fund Debt $ 60,132,985 2024-2025 ASSESSED VALUATION $ 4,995,190,377
Notes / Analysis:
(1)
Ratios to Assessed Valuation:

Total Direct and Overlapping Tax and Assessment Debt 0.94% Total Direct Debt ($2,723,241) 0.03%
Gross Combined Total Debt 1.12%
Source: California Municipal Statistics
The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total taxable assessed value. $136
$6
$171
$47
Debt by Entity (In Millions)
Monterey County
City of Pacific Grove
Monterey Peninsula Community College District
Pacific Grove Unified School District
199 PGCC 1-21-26

200 PGCC 1-21-26

City of Pacific Grove
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year Ended
June 30 Debt limit
Total net debt applicable
to the limit Legal debt margin
Total net debt applicable
to the limit
2016 $ 434,225,647 $ 84,311 $ 434,141,336 0.02%
2017 460,964,837 - 460,964,837 0.00%
2018 488,712,582 - 488,712,582 0.00%
2019 520,419,500 - 520,419,500 0.00%
2020 552,286,916 - 552,286,916 0.00%
2021 580,464,148 - 580,464,148 0.00%
2022 608,231,595 - 608,231,595 0.00%
2023 661,696,055 - 661,696,055 0.00%
2024 713,582,099 - 713,582,099 0.00%
2025 749,278,557 - 749,278,557 0.00%
Legal Debt Margin Calculation:

Total assessed value $ 4,995,190,377
Debt limit (15% of total assessed value) 749,278,557
Debt applicable to limit:

General obligation bonds (reported at accreted value) - Less: Amount available in debt service fund
for repayment of bonds -
Total net debt applicable to limit -
Legal debt margin $ 749,278,557
Notes:

State Code, Section 43605, sets the debt limit at 15% of the total assessed valuation of all real personal property within the City.

Source: County of Monterey Auditor-Controller's Office, HDL, Coren and Cone City of Pacific Grove Finance Department
$434 $461 $489 $520 $552 $580 $608 $662 $714 $749
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Legal Debt Margin (In Millions)
201 PGCC 1-21-26

City of Pacific Grove
Pledged-Revenue Coverage
Last Ten Fiscal Years
2016 2017 2018 2019 2020
Wastewater Revenue Bonds:

Wastewater charges and other $ 3,208,150 $ 3,151,928 $ 3,304,277 $ 3,536,772 $ 3,659,651 Less: operating expenses 1,371,609 1,388,706 1,985,232 1,679,991 2,043,805 Net available revenue 1,836,541 1,763,222 1,319,045 1,856,781 1,615,846 Debt service:

Principal 50,062 53,138 55,233 57,238 59,088
Interest 36,117 34,353 33,021 31,132 29,220
Total 86,179 87,491 88,254 88,370 88,308
Coverage 21 20 15 21 18
Source:

City of Pacific Grove Finance Department
Fiscal Year Ended June 30
$3.2
$3.2
$3.3
$3.5
$3.7
$3.5
$3.5
$3.8
$3.8
$4.5
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Wastewater Revenues - In Millions
202 PGCC 1-21-26

City of Pacific Grove
Pledged-Revenue Coverage (Continued)
Last Ten Fiscal Years
2021 2022 2023 2024 2025
Wastewater Revenue Bonds:

Wastewater charges and other $ 3,477,534 3,533,090 $ 3,759,102 $ 3,825,616 $ 4,456,150 $ Less: operating expenses 2,181,430 1,748,013 1,640,102 1,506,019 2,482,266 Net available revenue 1,785,077 1,296,104 2,119,000 2,319,597 1,973,884 Debt service:

Principal 60,914 62,628 64,316 65,925 70,044
Interest 27,203 25,168 23,035 20,349 18,058
Total 88,117 87,796 87,351 86,274 88,102
Coverage 20 15 24 27 22
Notes / Analysis:

Refunded 2001B Wastewater Bonds with Series 2013 Refunding Wastewater Revenue Loan Fiscal Year Ended June 30
Details regarding the city's outstanding debt can be found in the notes to the financial statements.

Operating expenses do not include interest or depreciation. $1.4
$1.4
$2.0
$1.7
$2.0
$1.7
$2.2
$1.6
$1.5
$2.5
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Wastewater Expenses - In Millions
203 PGCC 1-21-26

City of Pacific Grove
Demographic and Economic Statistics
Last Ten Fiscal Years
Total Personal Per Capita % of Population % of Population Unemployment Income Personal Median 25+ with High 25+ with Population Rate (In thousands) Income Age School Diploma Bachelor's Degree 2016 15,352 5.1% 717,389 $ $ 46,729 49.3 95% 50%
2017 15,498 4.7% 740,117 47,756 48.8 96% 52%
2018 15,660 4.9% 766,209 48,928 49.0 96% 53%
2019 15,883 4.6% 759,116 47,794 49.0 96% 51%
2020 15,265 5.1% 776,384 50,860 48.5 96% 53%
2021 15,536 8.6% 795,868 51,227 48.9 97% 54%
2022 14,761 9.1% 816,648 55,325 48.3 96% 55%
2023 14,741 5.9% 832,496 56,475 48.0 96% 55%
2024 14,966 7.0% 971,497 64,914 49.2 96% 57%
2025 14,871 7.7% 1,001,953 67,376 50.3 97% 59%
Sources:

California Department of Finance and HdL Companies U.S. Department of Commerce, Bureau of Economic Analysis California Employment Development Department California Board of Equalization City of Pacific Grove Finance Department
Analysis: The City's population has decreased over the past ten years, and it's unemployment rate has increased over the past ten years.

Fiscal Year
Ended
June 30

5.1% 4.7%

4.9%

4.6%

5.1%

8.6% 9.1%

5.9%

7.0%

7.7%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
County Unemployment Rate
204 PGCC 1-21-26

City of Pacific Grove
Employees by Industry
Last Ten Fiscal Years
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
68 69 69 71 38 72 68 74 74 75
12 12 13 13 12 7 13 20 12 12
27 26 27 26 25 25 25 26 26 25
5 5 5 5 5 5 5 5 5 5
13 14 14 15 13 16 14 16 15 14
Educational & Health Services 19 19 20 21 19 20 21 23 24 25 25 25 25 28 20 23 24 27 26 27
33 32 35 36 32 33 36 36 34 35
14 14 11 5 4 9 4 6 6 6
Totals 216 216 219 220 168 210 210 233 222 224
Analysis: Employment in the agriculture and leisure/hospitality areas have grown over the ten year period, except for 2020 due to the impacts of COVID.

Source: Employment Development Department, Labor Market Information (LMI) Salinas MSA Note: GASB Statement No. 44 allows for employment by industry in lieu of Principal Employers For Fiscal Year Ended June 30
Other
Agriculture
Construction, Mining, Manufacturing
Trade, Transportation & Utilities
Information & Financial Activities
Professional & Business Services
Industry
Leisure & Hospitality
Government
216
216
219
220
168
210
210
233
222
224
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Employees in County (In Thousands)
205 PGCC 1-21-26

City of Pacific Grove
Number of City Employees by Department (1)
Last Ten Fiscal Years
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Departments:

General Government (2) 14 17 16 17 17 17 18 14 18 18
Public Safety 37 34 34 34 33 34 34 34 34 34
Public Works 20 20 21 23 23 23 20 20 20 20
Recreation (3) 14 14 14 14 14 3 5 7 7 6
Library (3) 12 12 12 11 12 5 8 8 8 9
Community Development 8 8 8 10 9 8 8 8 8 8
Business-type Activities:

Cemetery 1 2 2 2 2 2 2 2 2 1
Sewer 4 5 5 5 5 5 5 5 5 5
Total 107 110 110 112 116 115 95 99 99 102
Analysis/Notes: 1 Reflects the authorized positions in each budget year. This number includes both regular and part-time staff. 2 Includes 3.5 FTE's for Council Members and Mayor 3 Source: City of Pacific Grove Budget Document
The counts for Recreation and Library Departments exclude part-time, on-call and seasonal staff.

Note that the Museum and Golf Course are operated on a contract basis without City employees.

For Fiscal Year Ended June 30
110
107
110
112
116
115
95 99
99 102
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Total Number of City Employees (FT)
206 PGCC 1-21-26

City of Pacific Grove
Operating Indicators By Function
Last Ten Fiscal Years
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function:

Police
Calls for service 21,521 15,359 20,350 18,032 18,902 15,875 19,266 12,284 13,214 13,316 Fire
Calls for service 1,764 1,604 1,877 1,694 1,740 1,772 2,033 2,257 1,948 2,042 Recreation
Special events 16 18 18 18 24 - 21 26 3 26
Public Works
Work orders completed 1,620 1,594 1,606 1,630 1,216 1,198 1,681 1,579 1,803 1,327 Library
Materials circulated (thousands) (1) 291 288 289 328 188 84 180 223 283 238 Community Development
Building Permits 576 429 429 520 1095 1,203 1,278 1,040 1,054 1,234 Source: City of Pacific Grove Finance Department
For Fiscal Year Ended June 30
1,594 1,620 1,630 1,606
1,216 1,198
1,681 1,579
1,803
1,327
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Work Orders Completed
576
429 429 520
1095 1,203 1,278
1,040 1,054
1,234
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Building Permits
207 PGCC 1-21-26