Finance Committee
April 24, 2023

THE SPECIAL FINANCE/AUDIT COMMITTEE AGENDA
STARTS ON PAGE 3

THE SPECIAL JOINT MEETING OF THE FINANCE COMMITTEE

AND/OR CITY COUNCIL AGENDA
STARTS ON PAGE 612

AGENDA

FINANCE/AUDIT COMMITTEE

SPECIAL MEETING NOTICE
APRIL 24, 2023
PUBLIC MEETING 2:00 P.M.

Members
Victor M. Gordo, Mayor
Tyron Hampton, District 1
Felicia Williams, District 2
STAFF
Matthew Hawkesworth, Director of Finance
Theresa Fuentes, Assistant City Attorney
Gloria Acevedo, Recording Secretary

MISSION STATEMENT
The City of Pasadena is dedicated to delivering exemplary municipal services, responsive to our entire community and consistent
with our history, culture and unique character.

In compliance with the Americans with Disabilities Act of 1990, Assistive Listening Devices are available from the City Clerk’s Office with a 24-hour advance notice.

Please call (626) 744-4124 to request use of a listening device.

Language translation services are available for this meeting by calling (
626)744-4124 at least 24 hours in advance.

Habrá servicio de interpretación disponible para éstas juntas llamando al (626)744-4124 por lo menos con 24 horas de anticipación.

Meet
ings are broadcast live on cable Channel 3 and on the Internet at http://pasadena.granicus.com/mediaplayer.php?came ra_id=2&publish_id=9 and https://www.pasadenamedia.org/watch/ (Click on Video Streamlining on the right side of the screen).

I
tems on the agenda may not be called in order listed. Agendas and supporting documents are available on the Internet at
https://www.cityofpasadena.net/commissions/city-council-finance-committee/ Mat
erials related to an item on this Agenda submitted to the Finance/Audit Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda”

PUBLIC COMMENT AT THE FINANCE/AUDIT COMMITTEE MEETING FOR APRIL 24, 2023 AT 2:00 P.M. WILL BE ACCEPTED IN-PERSON AND BY VIDEOCONFERENCE/TELECONFERENCE.

Li
nk to City Meeting Policy:
cityofpasadena.net/CityCouncilMeetingPolicy
In order to facilitate public participation at meetings the City will accept public comment in the following manner:

1. Whether participating in-person or virtually at the meeting, members of the public may provide public comment by submitting a speaker card prior to the start of public comment on that item, at the following webpage:
www.cityofpasadena.net/commissions/public-comment/
If a public comment speaker wishes to speak on more than one agenda item, please indicate which items on the online form (multiple item speakers will be handled according to the process posted on the agenda and as specified in the City meeting policy). Public comments are limited to 3 minutes each, and the Chair and Committee may limit this time if reasonable under the circumstances.

2. In-person Meeting Participation: Complete an online speaker card at the following website: www.cityofpasadena.net/commissions/public-comment/ After submitting a public speaker card, members of the public may attend the meeting in-person by coming to the Pasadena City Council Chamber, Room S249 at City Hall at the date and start-time of the posted meeting.

Virtual Meeting Participation: For virtual participants, you may attend by connecting to the meeting using a computer, other electronic device, or by telephone. Please review the agenda to identify the published start time for the meeting and connect to the meeting just prior to, or at the start of the meeting.

To participate in public comment for an item and to be recognized to speak, it is required that the speaker login to the meeting using the same name or telephone number used on the Speaker Card form. This will allow City staff to locate and promote the speaker into the meeting when it is time for their public comment.

Participants’ phone calls to the Committee meeting will be recorded as part of the Committee meeting. By staying on the line and making public comment during the Committee meeting by phone, you are agreeing to have your phone call recorded. Following is the connectivity information for virtual participation:

Computer or electronic devices, join the meeting at: cityofpasadena.net/cczoom Telephone only dial-in: 1-669-900-6833, Meeting ID: 161 482 446

3. Speaker Card Help Line: If a public comment speaker needs assistance in completing a speaker card, please call the City Clerk’s Office at: (626) 744-4124.

Help line will open 30 minutes prior to the posted start time of the meeting.

4. Members of the public may submit correspondence of any length prior to the start of the meeting, at the following email address:
gac
[email protected]
C
orrespondence will be forwarded to the Committee prior to the start of the meeting, posted online, and made part of the legislative record for the item.

LIVESTREAM WITH CAPTIONING IS AVAILABLE AT WWW.PASADENAMEDIA.ORG, AND ALSO AT WWW.CITYOFPASADENA.NET/COMMISSIONS/AGENDAS, I

F YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT

TO THE AMERICANS WITH DISABILITIES ACT

BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE CITY CLERK’S OFFICE
AS SOON AS POSSIBLE AT (626) 744-4124 OR
[email protected].

SPECIAL MEETING
AGENDA

FINANCE/AUDIT COMMITTEE
AP
RIL 24, 2023
Public Meeting: 2:00 P.M.

Council Chamber, Pasadena City Hall
100 North Garfield Avenue, Room S249
PUBLIC MEETING - 2:00 P.M.

ROLL CALL
PUBLIC COMMENT – LIMITED TO ITEMS ON THIS SPECIAL MEETING

AGENDA AND WILL BE HEARD AT THE TIME THE ITEM IS

CONSIDERED

APPROVAL OF MINUTES
February 27, 2023 Special Meeting
March 13, 2023 Special Meeting

NEW BUSINESS

1. FISCAL YEAR JUNE 30, 2022 ANNUAL FINANCIAL REPORTS

2. AM
ENDMENTS TO FISCAL YEAR 2023 CAPITAL IMPROVEMENT

PROGRAM

INFORMATION ONLY

3. FY 2023 CAPITAL IMPROVEMENT PROGRAM - THIRD QUARTER

MONITORING REPORT

ADJOURN

APPRO

VAL OF MINUTES
 February 27, 2023 Special Meeting
 March 13, 2023 Special Meeting

01 2/27/2023

CITY OF PASADENA

FINANCE COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER S249
FEBRUARY 27, 2023

SPECIAL MEETING
OP
ENING Chair Gordo called the special meeting of the Finance Committee to order at 3:14 p.m.

ROLL CALL: Mayor Victor M. Gordo (Chair)
Councilmember Tyron Hampton
Vice Mayor Felicia Williams
S
taff: Miguel Márquez, City Manager
David Reyes, Acting Assistant City Manager
Theresa Fuentes, Assistant City Attorney
Matthew Hawkesworth, Director of Finance
Chad Augustin, Fire Chief
William Huang, Director of Housing
Jennifer O’Reilly-Jones, Program Coordinator III
Jim Wong, Senior Project Manager
Sidney Jackson, General Manger Water and Power
Jeremy Marquette, Acting Assistant General Manager
Gloria Acevedo, Recording Secretary
Gues
t: Rabbi Joshua Levine Grater, Friends in Deed
APP
ROVAL OF MINUTES It was moved by Vice Mayor Williams and seconded by Councilmember Hampton to approve the February 6, 2023
Special Meeting minutes and the cancellation notice of February 13, 2023 as submitted.

NEW

BUSINESS AUTHORIZATION TO ENTER INTO CONTRACT WITH
SOUTH COAST FIRE EQUIPMENT, INC. FOR THE
PURCHASE OF ONE FIREMATIC FORD F550 AIR-LIGHT
UNIT FOR A TOTAL OF $585,163
Chai
r Gordo introduced the item and Chad Augustin, Fire Chief, provided a PowerPoint presentation and responded to
questions.

Councilmember Hampton inquired if there were any fuel cell vehicle options and if when an electric option became available,

02 2/27/2023

the existing model could be transformed to electric. Chief Augustin indicated that there are no current fuel cell models, and that staff could certainly look at converting the unit that is being purchased this year to an electric model.

Chair Gordo asked for clarification on the funding source for this purchase. Mr. Hawkesworth responded that revenue from the Emergency Medical Services will be used to offset the cost.

Chief Augustin added that funds from the states ’ Ground Emergency Medical Transportation Services program will also be used for the accusation of the air-light unit.

Vice Mayor Williams requested clarification on how revenue from the new ambulance subscription program would affect the Fire Department’s budget. Chief Augustin stated that a portion of the Emergency Medical Services will be used, since conservatively, $50,000 is expected to be generated this year. In the future, this funding source could offset a portion of a new ambulance, staff can provide updates in the future.

Following a brief discussion, it was moved by Vice Mayor Williams seconded by, Councilmember Hampton, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None)

AMENDMENT TO THE HOUSING DEPARTMENT’S FISCAL
YEAR 2023 ADOPTED OPERATING BUDGET AND
AUTHORIZATION TO AMEND CONTRACT NO. 31830 WITH

THE FID GROUP DBA FRIENDS IN DEED WITH ADDITIONAL

FUNDING FOR THE PROVISION OF MOTEL VOUCHERS

Chair Gordo introduced the item and Bill Huang, Director of Housing, provided a brief outline and introduced Jennifer O’Reilly Jones, Program Coordinator, who provided a
PowerPoint presentation and responded to questions.

Chair Gordo thanked staff for their efforts and asked if the department tracks if individuals being served are current or past Pasadena residents. Ms. O’Reilly -Jones responded that in general most of the population served are current or past Pasadena residents. Chair Gordo suggested that staff look at opportunities to join forces with other agencies that could provide funding sources, including the state and county.

Vice Mayor Williams asked if the regional housing trust fund is available to fund the bad weather shelters and suggested staff look at all funding resources to provide continuity. Mr. Huang stated that the agreements to initiate the regional housing trust

03 2/27/2023

funds are expected to be executed in March; however,
mentioned that the funds would not be available for a few months since the eligibility criteria is under review.

Vice Mayor Williams inquired about the potential benefits to the City of Pasadena if a homelessness emergency is declared. Mr.

Huang responded that staff could review the idea and provide the findings in a future City Manager’s Newsletter.

Councilmember Hampton thanked staff for their efforts and requested staff put out a Request for Proposal when looking for organizations to support the bad weather she lters, so that all entities in Pasadena, that can provide services are aware.

Councilmember Hampton also asked Chair Gordo to consider working with the Pasadena Police Department to facilitate the availability of hotel vouchers to officers, as needed, to assist residents in the middle of the night.

City Manager, Miguel Márquez , added that the City will take a comprehensive view of the process to issue weather-activated motel vouchers for improvement opportunities.

Following a lengthy discussion, it was moved by Councilmember Hampton seconded by, Vice Mayor Williams, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None)

INFORMATION ONLY GENERAL FUND RESERVES AND POTENTIAL USE OF THE

OPERATING RESERVE

Chair Gordo introduced the item and Matthew Hawkesworth, Director of Finance, provided a PowerPoint presentation and responded to questions.

Chair Gordo asked for clarification on how the $5 million that will not be transferred to the General Fund from the Power Utility will be recovered. Mr. Hawkesworth indicated that the Power Fund will make a $13 million transfer in Fiscal Year (FY) 24 and by implementing a small rate increase, be in a position to make a $23 million transfer to the General Fund by FY 25. In a two-year period, it will transfer a total of $36 million, which equates to $18 million per year. Mr. Márquez stated the strategy will allow for the smoothing of future rate increases by the utility.

04 2/27/2023

Following a brief discussion, on the order of the Chair and consensus of the Committee, the item was received and filed.

ADJOURNMENT On the order of the Chair, the special meeting of the Finance Committee was adjourned at 4:08 p.m.

ATTEST: ______________________
Mayor Victor Gordo, Chair
Finance Committee

____________________
Gloria Acevedo
Recording Secretary

01 3/13/2023

CITY OF PASADENA

FINANCE COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER S249
MARCH 13, 2023

SPECIAL MEETING
OPE
NING Chair Gordo called the special meeting of the Finance Committee to order at 3:06 p.m.

ROLL CALL: Mayor Victor M. Gordo (Chair)
Councilmember Tyron Hampton
Vice Mayor Felicia Williams
Staff
: Miguel Márquez, City Manager
David Reyes, Acting Assistant City Manager
Lisa Hosey, Assistant City Attorney
Matthew Hawkesworth, Director of Finance
Vic Erganian, Deputy Director of Finance/City Treasurer William Huang, Director of Housing
Tim McDonald, Interim Director of Library and Information Services
Carla, Hegwood, Program Coordinator
Jim Wong, Senior Project Manager
Jennifer O’Reilly-Jones, Program Coordinator
Erika Estrada, Purchasing Administrator
Tim Park, Budget Administrator
Gloria Acevedo, Recording Secretary

NEW BUS
INESS AMENDMENT TO THE HOUSING DEPARTMENT’S FISCAL
YEAR 2023 OPERATING BUDGET AND APPROVAL OF KEY
TERMS OF AMENDMENT TO AGREEMENT NO. 23,651 WITH

HHP-FOOTHILL, LLC FOR DEVELOPMENT OF INTERIM
HOUSING PROJECT AT 2322 E. FOOTHILL BOULEVARD

FOR TRANSITION AGE YOUTH
Chair Gordo introduced the item and William Huang, Director of Housing, provided introductory comments and introduced Jim Wong, Senior Project Manager, who summarized the agenda report through a PowerPoint presentation and responded to questions.

Chair Gordo expressed content for the project remaining in the 300 thousand range and encouraged staff to continue searching

02 3/13/2023
for this type of acquisitions , as it’s the best way to acquire affordable housing.

Counci
lmember Hampton suggested putting out a request for
proposal on future projects, to ensure all local vendors are aware of the opportunity to bid. Mr. Huang committed to doing more outreach and informed the Committee that there is a small pool of vendors who bid on affordable housing, as these projects are not as profitable and come with many restrictions.

Counci
lmember Hampton requested staff compile a list of
eligible occupants who could benefit from onsite job training opportunities. Mr. Huang will reach out to Pasadena City College (PCC) for any interest, since the college is subsidizing the rent for their students, who will occupy this project.

Fol
lowing a brief discussion, it was moved by Vice Mayor
Williams seconded by Councilmember Hampton, to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None) AME
NDMENT TO THE HOUSING DEPARTMENT’S FISCAL
YEAR 2023 OPERATING BUDGET AND AUTHORIZATION
TO AMEND CONTRACT NO. 31830 WITH THE FID GROUP

DBA FRIENDS IN DEED WITH ADDITIONAL FUNDING FOR

THE PROVISION OF MOTEL VOUCHERS
Chai
r Gordo introduce the item and William Huang, Director of Housing, provided a brief outline and introduced Jenny O’Reilly Jones, Project Manager, who provided a PowerPoint
Presentation and answered to questions.

Counc
ilmember Hampton asked if staff had reached out to
motels to block out rooms , as a cost saving measure and suggested releasing a request for proposal in the future, so that all hotels/motels were aware of the opportunity to participate. Ms.

O’Reilly Jones indicated that some efforts were being made by some nonprofit organizations, to block out hotels during the cold weather season.

Counc
ilmember Hampton inquired about mobile health benefits
for recipients of the hotel vouchers and requested a breakdown of how much funding has been issued to the hotel voucher program, including the administration. The response should be included in a future City Manager Newsletter. City Manager, Miguel Márquez, added that an overall look will be taken of the

03 3/13/2023
program and all metrics will be provided in a future City Manager Newsletter. Ms. O’Reilly Jones added that some nonprofit organizations provide health benefits , as part of support programs already in place.

Foll
owing a brief discussion, it was moved by Vice Mayor
Williams seconded by Councilmember Hampton, to approve
staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None) RECOG

NIZE AND APPROPRIATE GRANT FUNDS IN THE
AMOUNT OF $42,981 FROM THE BLACK GOLD

COOPERATIVE LIBRARY SYSTEM TO THE DEPARTMENT
OF LIBRARIES AND INFORMATION SERVICES’ FISCAL
YEAR 2023 OPERATING BUDGET
Chair
Gordo introduced the item and Tim McDonald, Interim
Director of Library and Information Systems, introduced Carla Hegwood, Program Coordinator , who provided a PowerPoint presentation and responded to questions.

Chair
Gordo thanked staff for their efforts in obtaining the grant, as early childhood education is important to the City Council.

Counci
lmember Hampton inquired about support programs for
digital engagement as post pandemic, many families are home schooling their children, causing decreased enrollment at the Pasadena Unified School District (PUSD), as well as some private schools. Ms. Hegwood stated that the Library has a hybrid engagement program and is consistently engaging with all patrons to find their desired method of communication. She added that the library staff is currently working with PUSD to build a robust communication plan. Councilmember Hampton suggested for staff to include the l ibrary’s methods of digital communication in a future City Manger’s Newsletter or post on the City’s/Library’s social media pages.

Counci
lmember Hampton asked about partnership opportunities
with PUSD, to offer pre-school enrollment to families of multiple income levels. Ms. Hegwood stated that library staff is in talks with PUSD on the subject.

Foll
owing a brief discussion, it was moved by Councilmember Hampton seconded by Vice Mayor Williams , to approve staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None)

04 3/13/2023

QUARTE RLY INVESTMENT REPORT - QUARTER ENDING
DECEMBER 31, 2022
Chair Gordo introduced the item and Vic Erganian, Deputy Director of Finance/City Treasurer , provided a PowerPoint presentation and responded to questions.

Vice Mayor Williams inquired about staff’s projections on future inflation rates. Mr. Erganian provided a scenario where if inflation were to rise to six percent, that would most likely increase prices and cause the equity markets to decrease. He also reminded the Committee, that the consumer price index is tied nationally to inflation.

Councilmember Hampton asked for verification on whether claimants who were unemployed after six-months were counted in the release of unemployment rates. After some discussion, Matthew Hawkesworth, Director of Finance, will review the qualification numbers and provide a response to the Committee.

Following a brief discussion, it was moved by Vice Mayor Williams seconded by Councilmember Hampton, to receive and file staff’s recommendation and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: None)
INFO

RMATION ONLY CONSUMER PRICE INDEX (CPI) ON CURRENT

CONTRACTS
Chair Gordo introduced the item, Matthew Hawkesworth,
Director of Finance, introduced Erika Estrada Alvarez,
Purchasing Administrator , who provided a Pow erPoint
presentation and responded to questions.

Chair Gordo asked staff to break down the cost of the projects subject to a price increase by General Fund dollars and special funds and to prepare to factor in a 100% cost recovery model , that allows the City to continue to provide services. Chair Gordo suggested that staff should continue to pursue all opportunities to piggyback on government contracts
Vice Mayor Williams asked if staff could review the City’s current Capital Improvement Projects (CIP) and reprioritize projects, based on their cost. Chair Gordo requested for staff to analyze projects based on the need and to discuss the findings during the CIP budget discussions. Mr. Hawkesworth will share the request with the Public Works Department, who prepares the CIP budget. Ms. Estrada Alvarez shared that language has been

05 3/13/2023

ADJOURNM
ENT
ATTE
ST:
added to bids and contracts , requesting vendors to notify the City, when there is a price reduction.

Councilmember Hampton pointed out that the cost to do
business in Pasadena is much higher than other cities and that staff should strongly look at developing methods/programs to give local businesses a competitive advantage. Councilmember Hampton also expressed concern that in not doing so , local businesses will struggle to remain in Pasadena. Mr.

Hawkesworth responded that for contracts under $25,000, the City is obligated to give local vendors a preference; however, for larger contracts especially those tied to grant/government funds that have several rules/restrictions , it is far for challenging to grant any advantages . Mr. Hawkesworth reminded the
Committee that local vendors are encouraged to sign up to the City’s vendor portal to receive notifications when the City releases bids. Staff will continue to look for opportunities that support local business at Councilmember Hampton’s request.

Vice Mayor Williams pointed out that Los Angeles County pays invoices for small business in 15 days and asked if the City could do the same. Mr. Hawkesworth stated that the City already pays invoices as soon as feasible and committed to an internal discussion, on the feasibility of a net 15 option for small businesses.

Following a brief discussion, on the order of the Chair and consensus
of the Committee, the item was received and filed.

On the or der of t he Chair, t he special m eeting of t he Finance Committee was adjourned at 4:33 p.m.
______________________
Mayor Victor Gordo, Chair
Finance Committee
___________
_________
Gloria Acevedo
Recording Secretary

NEW BUSINESS
ITEM 1
FISCAL YEAR JUNE 30, 2022 ANNUAL FINANCIAL

REPORTS

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Agenda Report
TO:

April 24, 2023
Honorable Mayor and City Council/Successor to Pasadena
Community Development Commission
*
I
THROUGH: Finance/Audit Committee
FROM: Department of Finance
SUBJECT: FISCAL YEAR JUNE 30. 2022 ANNUAL FINANCIAL REPORTS RECOMMENDATION:

It is recommended that the following reports for the year ended June 30, 2022 be reviewed, discussed, and filed by the City Council and/orthe Successor Agency to the Pasadena Community Development Commission.

A. Annual Comprehensive Financial Report
B. Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards (This replaces what was called the "Management Letter.") C. Pasadena Center Operating Company Basic Financial Statements D. Rose Bowl Operating Company Basic Financial Statements E. Pasadena Community Access Corporation Basic Financial Statements F. Pasadena Fire and Police Retirement System Basic Financial Statements G. Air Quality Improvement Fund Financial Statements and Compliance Report
H. Pasadena Housing Successor Basic Financial Statements I. Foothill Workforce Development Board Basic Financial Statements J. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit (Gann Limit)
K. Independent Accountants' Report on Agreed-Upon Procedures Applied to Employee Deductions for the Internal Revenue Code Section 457 Deferred Compensation Program
L. The Auditors' Communications with the City's Finance/Audit Committee M. Single Audit Report
MEETING OF.AGENDA ITEM NO.

Fiscal Year June 30, 2022 Annual Financial Reports
April 24, 2023

EXECUTIVE SUMMARY:

This action is to receive and file the City's nine (9) annual financial statements and four (4) compliance-related reports for the fiscal year ended June 30, 2022. All financial statements received an unmodified (or clean) opinion. The Single Audit Report reiterates that there were no financial statement findings and reports two grant related findings. The findings were related to the timely filing of the consolidated annual performance and evaluation report and the missing verification of suspension and debarment of a vendor. There were three instances of deficiencies in internal controls identified in the Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters for the Rose Bowl Operating Company (RBOC) audit and the Pasadena Community Access Corporation (PCAC) audit. The audit for the RBOC identified two deficiencies in internal controls, one was a material weakness and one significant deficiency. The audit for the PCAC identified one material weakness in internal control. Management for the RBOC and PCAC have acknowledged the findings and incorporated processes to ensure these deficiencies are corrected. A presentation will be made by the City's Finance Department and external auditors, CliftonLarsonAllen LLP, at the April 24, 2023, Finance/Audit Committee and City Council meeting.

BACKGROUND:

This year's audit was the third annual audit performed by CliftonLarsonAllen LLP, who was awarded a three-year contract with two one-year optional extensions on June 1, 2020, to perform the City's audits. On June 1, 2020, City Council approved the contract with White Nelson Diehl Evans, LLP (WNDE) that required sampling be performed with samples from all funds. On November 1, 2020, WNDE merged with CliftonLarsonAllen LLP, a national firm. There was no change in the terms of the engagement or in partner and staff assigned to the City's audit and the audit progressed without interruption. The audit was conducted in a hybrid manner, that is performed on-site and in a remote setting. The remote audit was facilitated by the City's use ofTyler Munis and the electronic storage of documents.

All nine (9) financial statements received unmodified opinions from the external auditors. This is the highest or cleanest attestation report given by independent auditors and includes the phrase "the financial statements referred to above present fairly, in all material respects, the financial position..." The four (4) remaining reports present compliance information, specifically requested test work, and provide comment on internal controls, errors, lack of errors, or suggestions for future improvements.

Fiscal Year June 30, 2022 Annual Financial Reports
April 24, 2023

Annual Comprehensive Financial Report (ACFR) (Attachment A) Section 912 of the City Charter requires that an independent audit of the City's records, books, and inventories be conducted annually and a report issued thereon.

In the attached audited ACFR for the year ending June 30, 2022, the City received an unmodified opinion, which means that the statements are free of material misstatement and are presented in conformity with generally accepted accounting principles (GAAP).

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards (This replaces what was called the "Management Letter") (Attachment B) This report explains the auditors' audit of the City's financial reports in relation to their review of internal controls and reports no findings. The City's audit was performed in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States. Such audits utilize sampling of data, inquiries of staff and management, testing of procedures, confirmation with outside parties, spot-checking of internal files and documents, review of meeting minutes, specialized audit checklists, and numerous other techniques. The auditors considered the City's internal controls in determining what procedures to use and the size of samples to be selected. While audit procedures do not include review of 100 percent of transactions, the City contracted to have samples pulled from every fund, which is more than required under generally accepted audit procedures.

This report provides definitions of "deficiency in internal control," "material weakness," and "significant deficiency" involving the internal control structure. This year's financial statement audit identified no material weaknesses and no significant deficiencies.

Component Unit Financial Statements
Financial statements for the Pasadena Center Operating Company (Attachment C), Rose Bowl Operating Company (Attachment D), Pasadena Community Access Corporation (Attachment E), and Pasadena Fire and Police Retirement System (Attachment F) are included, as they are component units of the City. Component units are legally separate entities in substance, but are part of the government's operations. Each of the City's component units received an unmodified opinion.

The Pasadena Fire and Police Retirement System financial statements were audited by another firm, Macias Gini and O'Connell (MGO).

Fiscal Year June 30, 2022 Annual Financial Reports
April 24, 2023

Air Quality Improvement Fund Financial and Compliance Report (Attachment G)
Assembly Bill 2766 (AB2766) authorized the South Coast Air Quality Management District (SCAQMD) to impose an annual vehicle registration fee and to distribute a portion of those collected revenues to all local jurisdictions within the South Coast Air Basin. These revenues are to be used solely to reduce air pollution from motor vehicles by implementing new programs and studies necessary for the implementation of the California Clean Air Act. The City's Air Quality Improvement Fund accounts for the use of these funds received from SCAQMD. The Air Quality Improvement Fund Financial and Compliance Report received an unmodified opinion.

Pasadena Housing Successor Basic Financial Statements and Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters, Regarding the Low- and Moderate-lncome Housing Asset Fund (Attachment H)
Since fiscal year 2016, the Pasadena Housing Successor Fund has been presented as a major fund with the major governmental funds in the ACFR. This facilitates meeting the state's required reporting and auditing requirements for this fund. To meet the reporting requirements, the draft of the Housing Successor Financial Statements and the draft Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance were submitted to the California Department of Housing and Community Development on December 30, 2022. The final version of the Housing Successor Financial Statements, the Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters regarding the Low-and Moderate-lncome Housing Asset Fund, will be delivered to the Mayor and City Council members on April 24, 2023, and posted on the City's website. The final version of the reports will also be submitted to the California Department of Housing and Community Development as well as the Housing Successor governing body. The auditors opined that the Housing Successor has complied in all material respects with the compliance requirements they must report on and they did not identify any noncompliance with the California Health and Safety Code requirements.

Foothill Workforce Development Board Basic Financial Statements and Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters (Attachment I)
The City serves as the lead agency for this Joint Powers Authority. The Foothill Workforce Development Board Financial Statements, received an unmodified opinion. The auditors also opined that the Foothill Workforce Development Board has complied in all material respects with the compliance requirements they must report on.

Fiscal Year June 30, 2022 Annual Financial Reports
April 24, 2023

Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheet No. 6 (Attachment J)
Section 1.5 of Article XIIIB of the California Constitution requires that the City follow the procedures agreed upon by the State of California and the League of California Cities (as presented in the League publication entitled Article Xl I IB Appropriations Limitation Uniform Guidelines) to determine the annual appropriations limit. The auditors perform "Agreed-Upon Procedures" where they recalculate the Gann Limit.

They determined that the current year calculation is correct and found no exceptions.

Independent Accountants' Report on Agreed-Upon Procedures Applied to Employee Deductions for the Internal Revenue Code Section 457 Deferred Compensation Program (Attachment K)
At the request of the City, the auditors performed certain procedures as enumerated in the report to verify the accuracy and timely posting of contributions to the Deferred Compensation program provided by Great West Retirement Services. There were no exceptions noted as a result of the procedures.

The Auditors' Communications with the City's Audit and Finance Committees (Attachment L)
One auditing pronouncement, Statement of Auditing Standards (SAS) No. 114, requires defined and documented communications between the auditors and the City Audit Committee/Finance Committee. This letter provides an opportunity for the auditors to report on any difficulties or major concerns discovered during the audit and to further explain their role. They provide commentary on management's responsibilities for accounting policies and states that no significant difficulties were encountered in performing the audit and no disagreements occurred with management. They point out whether management has corrected or passed on correcting all known misstatements.

Single Audit Reports on Federal Awards (Attachment M)
The Single Audit Act establishes uniform audit requirements for local governments expending federal awards greater than $750,000 a year. The audit is on an "entity- wide" basis and imposes additional requirements in relation to testing of and reporting on, internal control and compliance with laws and regulations. The Single Audit Report for Fiscal Year ended 2022, contains two reports and three schedules.

The Single Audit Report reiterated that there were no financial statement findings; however, reported two grant related findings. The findings were related to the untimely filing of the consolidated annual performance and evaluation report and the missing verification of suspension and debarment of a vendor.

Fiscal Year June 30, 2022 Annual Financial Reports
April 24, 2023

COUNCIL POLICY CONSIDERATION:

The City Council's strategic planning goal of maintaining fiscal responsibility and stability will be advanced through the receipt and review of these reports.

FISCAL IMPACT:

There is no fiscal impact as a result of this action nor will it have any indirect or support cost requirements. There is no anticipated impact to other operational programs or capital projects as a result of this action.

Respectfully submitted,
\y'^.-k
lATTl-IEW^.}% MATT1-IEW ^. VfAWKESWORTH
Director of Finance
Approved by:
|A^-^J ^s—

MIGUECMARQUEZ
City Manager
Attachments: (13)
A. Annual Comprehensive Financial Report
B. Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
C. Pasadena Center Operating Company Basic Financial Statements D. Rose Bowl Operating Company Basic Financial Statements E. Pasadena Community Access Corporation Basic Financial Statements F. Pasadena Fire and Police Retirement System Basic Financial Statements G. Air Quality Improvement Fund Financial Statements and Compliance Report hi. Pasadena hlousing Successor Basic Financial Statements I. Foothill Workforce Development Board Basic Financial Statements and Compliance Report
J. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheets
K. Independent Accountants' Report on Agreed-Upon Procedures Applied to Employee Deductions for the Internal Revenue Code Section 457 Deferred Compensation Program L. The Auditors' Communications with the City's Finance/Audit Committee M. Single Audit

C A LIF O R N I A

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Attachment A
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OPENING

PASADENA

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CITY OF PASADENA, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
Year Ended June 30, 2022
CYNTHIA J. KURTZ, INTERIM CITY MANAGER
MATTHEW E. HAWKESWORTH, DIRECTOR OF FINANCE

PREPARED BY THE DEPARTMENT OF FINANCE, CITY OF PASADENA Victor M. Gordo
Mayor
Tyron Hampton
Councilmember
District 1
Felicia Williams
Councilmember
District 2
John J. Kennedy
Councilmember
District 3

IN MEMORIAM
Gene Masuda
Councilmember
District 4
Jessica C. Rivas
Councilmember
District 5
Steve Madison
Councilmember
District 6
Andy Wilson
Vice Mayor
District 7

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CITY OF PASADENA TABLE OF CONTENTS
Annual Comprehensive Financial Report | June 30, 2022 i

INTRODUCTORY SECTION
Letter of Transmittal .................................................................................................................................................................. vii Principal City Officials ................................................................................................................................................................xiv Organizational Chart .................................................................................................................................................................. xv GFOA Certificate of Achievement for Excellence in Financial Reporting ...................................................................................xvi

FINANCIAL SECTION
Independent Auditors’ Report ..................................................................................................................................................... 1

Management’s Discussion and Analysis (Required Supplementary Information) ....................................................................... 5

Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position .................................................................................................................................................. 20 Statement of Activities ...................................................................................................... ................................................. 22

Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet ................................................................................................................ .............................................. 24 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ........................................................................................... .............................. 25 Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................ ........... 26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities ..................................................................................................... .................................... 27

Proprietary Fund Financial Statements
Statement of Net Position .................................................................................................... ....................................... 28 Statement of Revenues, Expenditures and Changes in Net Position .............................................................. ............ 30 Statement of Cash Flows ...................................................................................................... ....................................... 32

Fiduciary Fund Financial Statements
Statement of Net Position .................................................................................................... ....................................... 36 Statement of Changes in Net Position ......................................................................................... ................................ 37

Discretely Presented Component Units
Combining Statement of Net Position .......................................................................................... ............................... 38 Combining Statement of Revenues, Expe nditures and Changes in Net Position ........................................................ 39

Notes to the Basic Financial Statements ...................................................................................... .......................................... 43

TABLE OF CONTENTS CITY OF PASADENA
ii Annual Comprehensive Financial Report | June 30, 2022 FINANCIAL SECTION (Continued)
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – General Fund ............................................................................................................... ........................................... 123 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – Housing Successor Fund ..................................................................................................... .................................... 124 Notes to Required Supplementary Information ............................................................................................................... 125 Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan ................................................. 126 Schedule of Plan Contributions – Miscellaneous Plan ...................................................................................................... 128 Schedule of Changes in Net Pension Liability and Related Ratios – Safety Plan .............................................................. 130 Schedule of Plan Contributions – Safety Plan ................................................................................................................... 132 Schedule of Changes in Net Pension Liability and Related Ratios – Fire and Police Retirement System............................................................................................. ............................... 134 Schedule of Plan Contributions - Fire and Police Retirement System .............................................................................. 136 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................................................. 137 Schedule of OPEB Plan Contributions ............................................................................................................................... 138 Schedule of OPEB Plan Investment Return ....................................................................................................................... 139

Supplementary Information
Non-Major Governmental Funds
Combining Balance Sheet ...................................................................................................... .................................... 142 Combining Statement of Revenues, Expe nditures and Changes in Net Position ...................................................... 143

Special Revenue Funds
Combining Balance Sheet ...................................................................................................... .................................... 148 Combining Statement of Revenues, Expe nditures and Changes in Net Position ...................................................... 150

Budgetary Comparison Schedules
Public Safety Fund .......................................................................................................... .................................... 152 Health Fund ................................................................................................................. ....................................... 153 Building Services Fund ....................................................................................................... ................................. 154 Sewer Construction and Maintenance Fund…………………………………………………………………………………………………..155 Underground Utilities Fund ................................................................................................... ............................. 156 Transportation Fund .......................................................................................................... ................................. 157 Library Services Fund ....................................................................................................... ................................... 158 Parking Fund ................................................................................................................. ...................................... 159 Air Quality Improvement Fund ................................................................................................ ........................... 160 Housing and Community Development Fund ...................................................................................... .............. 161 Donated Fund ................................................................................................................ ..................................... 162

Capital Projects Funds
Combining Balance Sheet ...................................................................................................... .................................... 166 Combining Statement of Revenues, Expendi tures and Changes in Fund Balances ................................................... 168

CITY OF PASADENA TABLE OF CONTENTS
Annual Comprehensive Financial Report | June 30, 2022 iii FINANCIAL SECTION (Continued)
Permanent Funds
Combining Balance Sheet .......................................................................................................................................... 174 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................... 176 Non-Major Enterprise Funds
Combining Statement of Net
Position ....................................................................................................................... 182 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................ 183 Combining Statement of Cash Flows ......................................................................................................................... 184 Internal Service Funds
Combining Statement of Net
Position ....................................................................................................................... 190 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................ 192 Combining Statement of Cash Flows ......................................................................................................................... 194 Fiduciary Funds
Combining Statement of Net Position – Employee Benefit Trust Funds .................................................................. 202 Combining Statement of Changes in Net Position – Employee Benefit Trust Funds ................................................ 203 Combining Statement of Net Position – Custodial Funds ......................................................................................... 204 Combining Statement of Changes in Assets and Liabilities – Custodial Funds .......................................................... 205 Combined Successor Agency Funds
Combining Statement of Net Position – Private Purpose Trust Funds ..................................................................... 210 Combining Statement of Changes in Net Position – Private Purpose Trust Funds ................................................... 212 Discretely Presented Componen t Unit
Rose Bowl Operating Company
Combining Statement of Net Position ....................................................................................................................... 218 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................ 219

STATISTICAL SECTION
Net Position by Component ............................................................................................................................................. 224 Changes in
Net Position ................................................................................................................................................... 226 Fund Balances of Governmental Funds ............................................................................................................................ 230 Changes in Fund Balances of Governmental Funds .......................................................................................................... 232 Assessed Value and Actual Value of Taxable Property ..................................................................................................... 235 Direct and Overlapping Property Tax Rates ..................................................................................................................... 236 Principal Property Taxpayers ............................................................................................................................................ 238 Property Tax Levies and Collections ................................................................................................................................. 239 Taxable Sales by Category……………………………………………………………………………………………………………………………………………240 Electricity Sold by Type of Customer ................................................................................................................................ 242 Electricity Rates ............................................................................................................ .................................................... 244 Electricity Customers ........................................................................................................ ................................................ 245 Ratios of Outstanding Debt by Type ................................................................................................................................. 246 Ratios of General Bonded Debt Outstanding ................................................................................................................... 250

TABLE OF CONTENTS CITY OF PASADENA
iv Annual Comprehensive Financial Report | June 30, 2022 STATISTICAL SECTION (Continued)
Direct and Overlapping Debt……………………
………………………………………………………………………………………………………………….253
Legal Debt Margin Information ........................................................................................................................................ 254 Pledged-Revenue Coverage – Governmental Activity Debt ............................................................................................. 256 Pledged-Revenue Coverage –Business-Type Activity Debt .............................................................................................. 258 Demographic and Economic Information ......................................................................................................................... 259 Principal Employers ......................................................................................................................................................... 261 Full-time and Part-time City Employees by Function ....................................................................................................... 262 Operating Indicators by Function ..................................................................................................................................... 264 Capital Asset Statistics by Function .................................................................................................................................. 266

ANNUAL COMPREHENSIVE FINANCIAL REPORT | JUNE 30, 2022

INTRODUCTORY

SECTION

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LETTER OF TRANSMITTAL CITY OF PASADENA
vi Annual Comprehensive Financial Report | June 30, 2022 Ma
rch 17, 2023
To the Honorable Mayor, Members of the City Council
and the Citizens of the City of Pasadena, California:

The Annual Comprehensive Financial Report (ACFR) of the City of Pasadena, California (City) for the fiscal year ended June 30, 2022 (FY 2022) is hereby submitted in compliance with Section 907.5 of the City Charter. Management assumes full responsibility for the completeness and reliabilit y of the information contained in this report, based upon a comprehensive internal control framework it established for this purpose. Becaus e, the cost of internal controls should not exceed anticipated benefits, the obje ctive is to provide reasonable assurance, rather than absolute assurance, that the financial statements are free of any material misstatement.

This report was prepared in accordance with Generally A ccepted Accounting Principles (GAAP) as set forth in the pronouncements of the Governmental Accounting Standards Board (GASB). GASB has the primary responsibility for determining accounting and financial reporting standards for state and local government entities. It is believed that the data, as presented, is accurate in all material respects and presented in a manner designed to fairly set forth the financial position and results of operations of the City and its component units, as measured by the financial activity of the various funds. The financial statements include all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs and evaluate its financial condition.

The City Charter requires an audit of the financial statements of all accounts of the City by an independent certified public accountant. This year's audit was undertaken by CliftonLarsonAllen, LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Pasadena for the year ended FY 2022 fairly state the City’s financial position. The independent audit involved examining evidence, on a test basis, that supports the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded based upon the audit, that there was a reasonable basis for rendering an unmodified opinion on the City of Pasadena’s financial statements for FY 2022 and that these financial statements are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. Under the current auditor contract, the City required the auditor to include sampling from every fund.

The independent audit of the financial statements of the City was part of a broader, federally mandated Single Audit designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report, not only on the fair presentation of the financial statements, but also on internal controls and complianc e with legal requirements, with emphasis on those involving the administration of federal awards. The auditor’s report on internal controls and comp liance will be available in the City’s separately issued Single Audit Report.

GASB requires that management provide a narrative intro duction, an overview, and an analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Pasadena’s MD&A can be found immediately following the report of the independent auditor.

LETTER OF TRANSMITTAL CITY OF PASADENA
viii Annual Comprehensive Financial Report | June 30, 2022

GOVERNMENTAL STRUCTURE
The City was incorporated in 1886 and became a Charter City in 1901. The City operates under the powers granted by the City Charter, which dictates the responsibilities of the City Council and the City Manager. There are seven City Council members who are nominated and elected by district for overlapping, four-year terms. In addition, there is a Citywide elected Mayor who also serves a four-year term.

The City Council is responsible for, among other things, setting policies, passing ordina nces, adopting the budget, appointing committees, and hiring the Ci ty's Manager, City Attorney/City Pros ecutor, and the City Clerk. The City Manager is responsible for carrying out policies and ordinances of the City Council, appointing the heads of the City's departments, preparing and managing the budget, and overseeing the day-to-day operations of the City.

The City covers an area of 23 squa re miles in the northwestern portion of the San Gabriel Valley and has a 2022 population of 138,310, according to the California State Department of Finance. The City is bounded on the west by the cities of Los Angeles, Glendale, and La Cañada Flintridge; south by South Pasadena and San Marino; east by Arcadia and Sierra Madre; and north by the unincorporated community of Altadena.

REPORTING ENTITY AND ITS SERVICES
This report includes all funds of the City, as well as a ll its component units. Componen t units are legally separate entities for which the City is financ ially accountable. Blended component units , although legally separate entities, are, in substance, part of the City's operations and are included in this ACFR as part of the City. Accordingly, the Pasadena Public Financing Authority, Pasadena Parking Authority, the Pasadena Civic Improvement Corporation (PCIC), and the Pasadena Fire and Police Retirement System (FPRS) are reported as part of the City. The Successor Agency to the Pasadena Community Development Commissio n is shown as a Private-Purpose Trust Fund reported in the Fiduciary Funds Section. Discre tely presented component units are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the City and to differentiate their financial position, results of operations, and cash flows from those of the City. The Rose Bowl Operating Company (RBOC), the Pasadena Center Operating Company (PCOC), and the Pasadena Community Access Corporation (PCAC) are discretely presented component units. Separate financia l statements are also available for all three discretely presented component units. The City is a party to, and desig nated administrator for, two Joint Powers Authorities, the Foothill Air Support Team (FAST) and the Foothill Workforce Development Board. These entities are accounted for in the City books, ACFR, and audited as part of the City’s audit.

The City provides a full range of municipal services includin g public safety (police and fire), street construction and maintenance, refuse collection, water, power, sewer collection utilities, libraries, parks and recreation, planning and zoning, code enforcement, public health, affordable ho using, career services and job training, and general administrative and support services.

BUDGETARY CONTROLS
The City adopts a comprehensive budget detailed by department and fund prior to the beginning of each fiscal year, July 1. From the effective date of the budget, funds become appropriated to the departments and component units for the objects and purposes identified. At any public meeting after the adoption of the budget, the City Council may amend or supplement the budget by a motion adopted by th e affirmative vote of at least five-members of the City Council. The accounts of the City are ma intained by line-item, detail, or object of expenditure. The legal level of budgetary control (the level at which management may not reassign resources or overspend appropriations) is at the departmental level within each fund. Revenues are estimated annually and monitored on an ongoing basis to ensure there are adequate resources to cover expenditures.

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2022 ix

FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements, is perhaps best understood when considered from the broader perspective of the current environment in which the City of Pasadena operates. It is important to consider various and volatile shifts in the glob al economy, exacerbated by the ripple effects of the CO VID-19 pandemic still being felt throughout FY 2022 and beyond.

THE CURRENT ECONOMIC CLIMATE
The national and global economies are facing inflationary pressures not seen for several decades, caused by a variety of factors, including ongoing supply chain shortages, and the war in Ukraine. Upward price pressures on energy, raw materials, and finished good s translate to inflation and an increase to the Consumer Price Index (CPI) across all sectors of the economy. The year-over-year CPI rose 9.1% in June of 2022.

In an effort to control inflation, as predicted, the Federal Reserve triggered several rate hikes in calendar year 2022, increasing the Federal Funds Rate from 0.25% to 4.50%. While rising interest rates will positively affect our investment income long-term, it will also deter future business expansion due to the cost of financing.

General Fund revenues have shown stability in FY 2022, as property tax, sales tax, utility users’ tax, and transient occupancy tax continue to show resilience and recovery.

The City of Pasadena received $52.2 million in direct support through the American Rescue Plan Act (ARPA). The City adopted to use the $26.3 million in FY 2022, of which approximately $12.8 million was recognized as revenue.

Looking Forward
The travel and tourism industry has shown significant improvement from a year ago; however, a full recovery to 2019 levels is not expected until 2024. International travel, especially related to business, is still down significantly and a recovery in the sectors will provide additional benefit to Pasadena’s economy. Locally, while business closures, including many restaurants, may take years to recover, new business openings and activity in the City’s various business districts have improved from a year ago.

Fortunately, the City benefited from the upside of the recovery. Sales tax categories, such as automobile sales and online purchases, have continued to be robust, property tax has remained stable, and development activity for new residential and commercial space contin ues. Additionally, both the RBOC a nd PCOC have strong event calendars booked for the upcoming year.

The City’s General Fund funded $9.3 million of the $11.8 million annual debt service obligation associated with the Rose Bowl, with the RBOC making up the $2.5 million balance.

LETTER OF TRANSMITTAL CITY OF PASADENA
x Annual Comprehensive Financial Report | June 30, 2022 General Fund Five-Year Forecast
It was anticipated that the RBOC would need ongoing financial assistance to co ver a portion of their debt service.

Fortunately, due to better-than-expected actuals in both FY 2021 and 2022, the receipt of a $10 million Shuttered Venue grant, and a slightly better future forecast, the RBOC does not require an annual contribution in FY 2023.

Additionally, the expected assistance in future years has also decreased and is reflected in the General Fund Five- Year Forecast.

FISCAL YEAR 2022 ACCOMPLISHMENTS
While it is critically important that th e City maintain strong fiscal health and address its multiple infrastructure- related issues, it must also take time to acknowledge positive improvements. Examples of FY 2022 accomplishments include:
• Adoption of a balanced budget for the tenth consecutive year, consistent with the City Co uncil’s goal to maintain fiscal responsibility and stability;
• Received $25.6 million in local sales tax revenue from Measure I and prov ided $8.5 million (Measure J) to the Pasadena Unified School District to protect and strengthen public schools; • Completed Redistricting Process and adopted recommended Redistricting Plan; • To minimize the impact of COVID-19 on City revenues, continued to work in conjunction with Federal, State, and other local agencies and businesses to support people in need, meet medical requirements, maintain public health and safety, and implement strategies to curtail the spread of Coronavirus/COVID- 19 in the community;

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2022 xi • Managed the development, approval, and/or implementation of City Council policy initiatives and directives such as affordable housing, accessory dwelling units, violence prevention programs, cannabis business regulations, and the Caltrans 710 stub relinquishment;
• Provided support for the P EDAL team (Pasadena El derly and Dependent Adult Liaison Team) with the mission to improve the quality of life for elders and de pendent adults residing in long-term care facilities through education, community outreach, code enforcement, and prosecution; • Assisted with administration of the State of Ca lifornia Great Plates Program and coor dinated the participation of 22 Pasadena restaurants in the program; • Maintained a current General Obligation Bond rating of AAA, the highest rating given by Standard and Poor’s and AA+ by Fitch rating agencies;
• Successfully refunded the Water Fund’s 2011A Revenue Bonds, providing a net present value savings to the Water Fund of approximately $1.9 million;
• Maintained ISO Class 1 Public Protection Certification rating, the highest rating given nationally; • Completed the outfitting of Power Load systems for all front line and reserve ambulances. These mechanical ambulance gurneys and lifting systems help reduce the risk of injury to employees; • A total of 244 affordable units were permitted, under construction, or completed; • Updated and enhanced the Public Health COVID-19 dashboard with vital statistics; • Opened six-library branches for in-p erson service in May and two-branch es solely dedicated to curbsi de service. By late summer, curbside service concluded, and the nine-library branches were fully open providing in-person service to the public;
• Since the inception of the Pasadena First Buy Local Program, over 480 construction related jobs have been filled by P asadena residents. This resulted in over $2.2 million in wa ges earned on private development projects, which comprised approximately 26 percent of the total payroll of private projects subject to the Local Hiring ordinance. Additionally, over $3.6 million in wages have been earned on public projects and a total of over $18 million in subcontracting and procurement has gone to Pasadena businesses; • In response to food insecurity issues for Pasadena residents caused by the pandemic, the City acted to:
o Provide up to $1.2 million of Community Development Block Grant funding to local non-profit food pantries to address food insecurity in Pasadena,
o Responded to a need for prepared meals by d istributing 75-125 meals weekly at the Wednesda y Hot Meals Program at the Jackie Robinson Community Center, • Performed over 21,000 building inspections for commercial and residential construction; • Issued over 8,100 construction related building permits; • Investigated more than 16,900 confirmed COVID-19 cases, over 730 pr obable COVID-19 cases, more than 400 outbreaks, and over 500 different worksites;
• Distributed ov er 11,500 COVID-19 antigen tests to long-term care fac ilities, schools, childcare centers, and community agencies;

LETTER OF TRANSMITTAL CITY OF PASADENA
xii Annual Comprehensive Financial Report | June 30, 2022 (This page intentionally left blank)

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2022 xiii • The Citizen Service Center answered over 46,000 ca lls, of which 50 percent were answered within 30 seconds;
• Resurfaced approximately ten miles of local streets and repaired over 47,000 square feet of sidewalks; • Awarded Tree City USA designee and Tree City Growth award for the 32nd and 22nd year respectively; • Completion of Gas Turbine (“GT”)-2 refurbishment, which restored approximately 22 megawatts of local generation to improve system reliability, which has been out of service since 2012 due to a power turbine blade failure. The project included control system retrofits for both units GT-1 and GT-2; • Ensured City employee workplace safety, continued provision of exemplary municipal services to which the public is accustomed, supported local businesses wi th a moratorium on commercial and residential evictions, and maintained conversion of sidewalks and streets to support outdoor dining in accordance with health orders; and
• The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Pasadena for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2021. This was the 23 rd consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Annua l Comprehensive Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid fo r a period of one-year. The City believes that its current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

The 26 accomplishments listed above are just a sample of the hundreds of FY 2022 accomplishments, which are listed by department in the FY 2023 Adopted Operating Budget.

CONCLUSION
Under the leadership of the Mayor and City Council and with prudent financial management, the City of Pasadena has successfully addressed the unique challenges it faced since the beginning of the pandemic with no reduction in the quality of services provided to the community. The FY 2022 Annual Comp rehensive Financial Report illustrates the City’s mission to deliver exemplary municipal service and responsiveness to the community, consistent with its history, culture, and unique character.

Respectfully submitted,
________________________
Matthew E. Hawkesworth
Director of Finance

CITY OF PASADENA
City Officials

CITY COUNCIL
Mayor Victor M. Gordo
Vice Mayor (District 7) Andy Wilson
Councilmember (District 1) Tyron A. L. Hampton
Councilmember (District 2) Felicia Williams
Councilmember (District 3) John J. Kennedy
Councilmember (District 4) Gene Masuda
Councilmember (District 5) Jessica C. Rivas
Councilmember (District 6) Steve Madison

APPOINTED OFFICIALS
City Manager (Interim) Cynthia J. Kurtz
City Attorney Michele Beal Bagneris
City Clerk Mark Jomsky

EXECUTIVE LEADERSHIP TEAM
Assistant City Manager Nicholas Rodriguez
Assistant City Manager (Acting) David Reyes
Director of Finance Matthew E. Hawkesworth
Director of Housing William K. Huang
Director of Human Resources
and Career Services (Acting) Tiffany Jacobs-Quinn
Director of Parks, Recreation &
Community Services Brenda Harvey-Williams
Director of Libraries & Information
Services (Acting) Tim McDonald
Chief Information Officer Phillip Leclair
Director of Planning and Community
Development (Acting) Jennifer Paige
Chief of Police (Interim) Jason Clawson
Director of Public Health Ying Ying Goh
Director of Public Works Tony Olmos
Director of Transportation Laura Cornejo
General Manager of Water and Power (Acting) Jeffrey Kightlinger Public Information Officer Lisa Derderian
Fire Chief Chad Augustin

OPERATING COMPANY EXECUTIVES
Chief Executive Officer, Pasadena Center
Operating Company Michael Ross
General Manager, Rose Bowl Operating
Company Darryl Dunn
Executive Director/Chief Executive Officer,
Pasadena Community Access Corporation George Falardeau

xxvi

CITY OF PASADENA
Organization Chart
June 30, 2022
Transportation

LAURA CORNEJO
Water & Power

JEFFREY KIGHTLINGER
Police

JASON CLAWSON
(Interim)
Housing
WILLIAM K. HUANG
Human Resources

TIFFANY JACOBS-
QUINN
(Acting)
Parks, Recreation &
Community Services
BRENDA HARVEY‐

WILLIAMS
Public Health

YING YING GOH
Fire

CHAD AUGUSTIN
Public Works

TONY OLMOS
Finance
MATTHEW E.

HAWKESWORTH
City Attorney/
City Prosecutor

MICHELE BEAL

BAGNERIS
Rose Bowl
Operating Company

DARRYL DUNN
Assistant
City Manager

DAVID REYES
(Acting)
Pasadena Center
Operating Company

MICHAEL ROSS
Pasadena Community
Access Corporation

GEORGE FALARDEAU
Assistant
City Manager
Information
Technology

PHILLIP LECLAIR
City Clerk

MARK JOMSKY
Citizens
of Pasadena
Mayor &
City Council
City Manager
CYNTHIA J. KURTZ
(Interim)
Planning & Community
Development

JENNIFER PAIGE
(Acting)
Libraries &
Information Services
TIM McDONALD
(Acting)
NICHOLAS G.

RODRIGUEZ
(Acting)

CITY OF PASADENA
Annual Comprehensive Financial Report
Year Ended June 30, 2022
The Government Finance Officers
Association o f the United State
s and
Canada (GFOA) awarded a Cer
tificate
of Achievement for the Excellence in
Financial Reporting to the City o f

Pasadena for our Annual Comprehensive
Financial Report for the fiscal year
ended June 30, 2021.

In order to be awarded a Certificate
of Achievement, a government
must publish an easily readable
and efficiently organized Annual
Comprehensive Financial Report. This
report must satisfy both generally
accepted accounting principles and
applicable leg
al requirements.

A Certificate o f Achievement is
valid for a period o f one year only.

We believe our current Annual
Comprehensive Financial Report
continues to meet
the Certificate o f
Achievement
Program requirements,
and we are submitting it to GF OA to
determine its e
ligibility for another
certificate.
xvi Annual Comprehensive Financial Report | June 30, 2022 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pasadena
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO

FINANCIAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT | JUNE 30, 2022

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INDEPENDENT AUDITORS’ REPORT
To the Honorable City Council
of the City of Pasadena
Pasadena, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Pasadena, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Pasadena, California, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of the Pasadena Fire and Police Retirement System, a Fiduciary Pension Trust Fund of the City of Pasadena, which represent 16.48 percent, 24.11 percent, and 4.3 percent, respectively, of the assets, fund balance/net position, and revenues/additions of the aggregate remaining fund information opinion unit. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Pasadena Fire and Police Retirement System, a Fiduciary Pension Trust Fund of the City of Pasadena is based solely on the report of the other auditors.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
1

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
2

City Council
City of Pasadena, California
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, the Budgetar y Comparison Schedules - General and Major Special Revenue Funds, the schedules of changes in net pension liability and related ratios and the schedules of plan contributions for the City’s pens ion plans, the schedule of changes in the net other post-employment benefit (OPEB) liability and relat ed ratios, the schedule of OPEB plan contributions, and the schedule of OPEB plan investment returns, identified as Required Supplementary Information (RSI) in the accompanying table of contents be presented to supplement the basic financial statements.

Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The individual fund schedules and combining 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 proc edures, 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 individual fund schedules and combining financial statements funds 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 auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the 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. 3

City Council
City of Pasadena, California
Other Reporting Required by Government Auditing Standards In accordan
ce with Government Auditing Standards, we have also issued our report dated March 17, 2023, 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 City of Pasadena, California’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP
Irvine, California
March 17, 2023
4

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 5 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of
Pasadena (City), we offer this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2022 (FY 2022). We en courage readers to consider the information presented here in conjunction with additional information that has been furnished in the letter of transmittal, which can be found on pages vii- xiii of this report.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: (1) government-wide fi nancial statements, (2) fund financial statements, and (3) notes to the basic financial statements. This report also contains other required supplementary information.

Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows 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 deteriorating.

The statement of activities presents the most recent fiscal year changes in the City’s net position. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.

Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, e.g., uncollected taxes and earned but unused vacation leave.

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges ( business-type activities). The governmental activities of the City include general government, public safety, transportation, utility, sanitation, health, culture and leisure, and community development. The business-type activities of the City include electric, water, refuse, parking, and telecommunication operations.

The basic government-wide financial statements can be found on pages 20-23 of this report.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objective. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of spendable resources , as well as on balances of spendable
resources available at the end of the fiscal year. Such informatio n may be useful in evaluating a government’s near-term financing requirements.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
6 Annual Comprehensive Financial Report | June 30, 2022 Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statem ents. By doing so, readers may better u nderstand the long-term impact of the government’s near-term financing decisions. Both the gove rnmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains 30 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds stat ement of revenues, expenditures, and chan ges in fund balances for the General Fund, the Project Management Capital Project Fund, the General Debt Service Fund, and the Housing Successor Fund, all four of which are considered to be major funds. Data from the other 26 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for its General Fund and Special Revenue Funds. Budgetary comparison statements have been provided for the General Fund and Special Revenue Funds to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 24-27 of this report.

Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financia l statements. The City uses enterprise funds to account for its electric, water, refuse, parking, and telecommunication operations. Internal service funds are an accounting device used to accumulate and allocate costs in ternally among the City’s various functions. The City uses internal service funds to account for its computing and communication, build ing maintenance, fleet maintenance, fleet replacement, benefits, workers’ compensation, general liability, and 311 call center services. Because each of these services predominantly benefits governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as th e government-wide financial stat ements, only in more detail.

The proprietary fund financial statements provide separate information for the Light and Po wer, Water, and Off-Street Parking Funds, each of which are considered to be major funds of the City. Conversely, each of the internal service funds are combined into a single, aggregated presen tation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Data from the other two proprietary funds are combined into a single, aggregated pr esentation. Individual fund data for each of these non-major proprietary funds is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 28-35 of this report.

Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefits of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement, because the resources of those funds are not available to support the City’s own programs. The activities of the Successor Agency to the Pasadena Community Development Commission are also reported with the City’s fiduciary funds as a private purpose trust fund. Individual fund data for each of these fiduciary funds is provided in the form of combining statements elsewhere in this report. The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary fu
nd financial statements can be found on pages 36-37 of this report.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 7 Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 43-119 of this report.

Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information (RSI) concerning budgetary practices and budget-to-actual comparisons for the general fund and the major special revenue funds. Additional RSI includes pension and Other Postemployment Benefits (OPEB) information on net pension and OPEB liabilities and plan contributions. RSI can be found on pages 122-139 of this report.

The combining statements referred to earlier in connection with non-major governmental funds and internal service funds presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 142-219 of this report.

FINANCIAL HIGHLIGHTS
New Significant Accounting Standards Implemented
In FY 2022, the City adopted one new statement of financial accounting standards issued by the Government Accounting Standards Board (GASB), Statement No. 87, Leases (GASB 87).

GASB 87 requires long-term leases recorded on the financial statements. The objective of this statement is to better meet information needs of financial statement users by improving accounting and financial reporting for leases by governments and other public agencies subject to GASB. It establishes a single model for lease accounting based on the foundational
principle that leases are financings of the right-to-use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivabl e and a deferred inflow of resources, ther eby enhancing the relevance and consistency of information about public agency lease activities.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
8 Annual Comprehensive Financial Report | June 30, 2022

GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows exce eded liabilities and deferred inflows by $1, 028.7 million at the close of the most recent fiscal year.
$971.5 million of the City’s net position reflect its investment in capital assets (e.g., la nd, buildings, machinery, and equipment), less any related outstanding debts used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Alth ough the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

City of Pasadena’s Net Position (in millions)
The restricted portion of
the City’s net position, $191.0 million or 18.6% of the total net position represents resources subject to externally imposed limitations for specific purposes. The remaining balance is a deficit in unrestricted net position of, $133.7 million, or 13.0% of the total net position is for unrestricted uses in accordance with finance-related legal requirements. This deficit reflects liabilities and deferred inflows that exceed assets and deferred outflows, with a significant portion of the deficit attributable to the implementation of GASB 68, Accounting and Financial Reporting for Pensions, i.e., $83.2 million, and GASB 75, Other Postretirement Employment Benefits (OPEB), i.e., $16.0 million, upon the recognition of actuarial estimated future costs related to pension retirement and post-employment medical benefits.

During FY 2022, the primary government’s net position increased by $14.7 million, where approximately $10.5 million relates to the decrease in governmental activities, and $25.2 million to the increase in the City’s business-type activities. The decrease in the governmental activities reflects increases in spending, in comparison to a smaller increase in revenues. The increase in business-type activities is the continuance of strong trend in revenues in addition to this year’s modest decrease in expenses.

Governmental Activities Business-type Activities Total Primary Government 2022 2021 2022 2021 2022 2021 $ Change % Change
Other a s s ets 372.6$ 368.9$ 602.1$ 491.5$ 974.7$ 860.4$ (114.3)$ -13.3% Capi tal a s s ets 519.5 516.0 716.4 809.3 1,235.9 1,325.3 89.4 6.7% Total Assets 892.1 884.9 1,318.5 1,300.8 2,210.6 2,185.7 (24.9) -1.1% Deferred Outflows 96.9 109.5 14.8 17.7 111.8 127.2 15.4 12.1% Long-term debt outstanding 289.0 294.7 305.0 310.3 593.9 605.0 11.0 1.8% Net pension liability 25 2. 0 422.1 50.3 91.3 302.3 513.4 211.1 41.1% Other liabilities 14 1. 6 97.8 61.3 60.4 202.9 158.2 (44.7) -28.3% Total Liabilities 682.6 814.6 416.6 462.0 1,099.1 1,276.6 177.4 13.9% Deferred Inflows 156.9 19.8 37.5 2.4 194.5 22.2 (172.3) -776.1% Net Position:

Inv ested in c apital assets,
net of debt 471.8 468.0 499.7 486.9 971.5 954.9 (16.5) -1.7% Restricted 81.5 82.1 109.5 126.7 191.0 208.8 17.8 8.5% Unres tri cted (403.7) (390.1) 270.0 240.5 (133.7) (149.7) (16.0) 10.7% Total Net Position 149.6$ 160.0 $ 879.2 $ 854.1 $ 1,028.8$ 1,014.0 $ (14.7)$ -1.4%

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 9 City of Pasadena’s Changes in Net Position (in millions) Governmental
Activities
Governmental activities net position decreased by $10.4 million or 6.5%. Key elements of this decrease are a combination of factors as follows:

The revenue components of governmental activities increased by $44.5 million or 12.5% from prior year revenues. The following categories illustrates the changes: charges for services increased by $1.8 million, operating grants and contributions increased by $19.9 million, property taxes increased by $2.5 million, sales taxes increased by $12.1 million, utility users’ tax increased by $3.1 million, other taxes incr eased by $19.1 million and misc ellaneous revenues by $1.6 million. Capital grants and contributions increased by $0.8 million and other revenues decreased by $16.4 million. • Charges for services increase of $1.8 million include changes in the following categories:
o $3.4 million increase in public safety due to police outside event revenues related to increased business activities resuming from the pandemic and increased emergency medical services. o $2.7 million increase in community development;
o The increase is offset by the $4.2 million decr ease in transportation, $0.5 million in general government, and $0.4 million in culture and leisure activities. • Operating grants and contributions increased by $20.0 million, primarily due to the recognition of approximately $12.7 million in ARPA revenue during the current fiscal year. • Property taxes increased by $2.5 million due to appreciation of property value in Pasadena.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
10 Annual Comprehensive Financial Report | June 30, 2022 • Sales taxes increased by $12.1 million. Regular sales tax increased by $6.4 million and Measure I sales tax increased by $5.5 million due to increased spending activity within city jurisdiction during the current fiscal year. • Other taxes increased by $19.1 million mainly due to the following categories:
o $8.4 million increase in transient occupancy taxes, as the hospitality industry rebounded when shelter- in-place orders were lifted;
o $10.6 million increase in other taxes such as a $2.0 million increase in the underground utility surtax and $6.4 million for streetlight and traffic signal taxes, previously presented under charges for services. • Other revenues decreased by $16.4 million due, primarily due to unfavorable invest ment performance during the current fiscal year. The breakdown is as follows:
o $14.1 million decrease in net change in investment fair value; and o $2.3 million decrease in intergovernmental revenues.
• Miscellaneous revenue increased by $1.6 million, where $1.5 million relates to having a Rose Parade and Tournament of Roses for New Year’s Day 2022, when this event had been cancelled in 2021 due to the pandemic.

The expense components of governmental activities increased by $19.5 million or 4.8%. The changes in expenses were general government increased by $13.2 m illion, public safety increased by $2.7 million, transpor tation decreased by $6.0 million, and community development increased by $5.3 million. The other categories have a net increase of $4.3 million. • General government expenses increased by $13.2 million or 18.1%. There was a $12.4 million increase in general liability insurance and a $5.6 million increase in the City ’s GASB 68 pension expenses. There was a $0.4 million decrease in the City’s GASB 75 OP EB expenses, $1.6 million decrease in benefit expens es, and $2.2 million decrease in non-capitalized infrastructure improvement expenditures. • Other expenses decreased by $1.2 m illion, including $0.5 million decrease in utility expenses, $1.3 million decrease in sanitation expe nses, and $0.4 million decrease in health expenses. In sanitation expenses, capital outlay decreased by $1.7 million and general operatin g increased by $0.5 million, and internal service fund allocation increased by $0.2 million.
• Public safety expenses increased by $2.7 million or 1.8% mainly due to increased police and fire personnel costs. • Community development expenses increased by $5.3 millio n or 9.2% mainly due to increased loans to other entities for affordable housing for $9.7 million. There was an increase in emergenc y shelter services by $1.0 million, decrease in capital investment by $1.8 million, GASB 68 expense by $2.5 million, and other operating cost decreased by $1.1 million.
• Transportation expenses decreased by $6 million or 12.3%. There was a $4.2 million increase in general liability insurance. There was a $3.3 million decrease in the City’s GASB 68 pension expense $0.9 million decrease in the City’s GASB 75 OPEB expenses, $0.5 million decrease in benefit expe nses and a $6.3 million decrease in non- capitalized infrastructure improvement expenditures.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2022 11 Governmental Activities (Continued)

$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
Program Revenues and Expenses - Governmental Activities Program Revenue
Expenses

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
12 Annual Comprehensive Financial Report | June 30, 2022 Business-type Activities
Business-type activities increased the City’s net position by $25.2 million. Key elements of this year’s increase are as follows:
• Net income of the Light and Power, Water, Off-Street Parking, and Non-Major Enterprise Funds were $10.8 million, $7.3 million, $1.4 million, and $5.7 million, respectively. • Electric charges for services increased $4.2 million or 1.9% from the prior fiscal year. Majority of the increase was due to an increase in cap & trade retail revenue.
• Electric expenses increased by $0.50 million or 0.2% from the prior year. The increase in Fuel expense was offset by a decrease in administrative and general expenses.
• Water charges for services decreased by $1.9 million or 2.7% over the prior year mainly due to a decrease in water sales and lease to other agencies.
• Water expenses decreased by $2.4 million or 3.8% from the prior year mostly due to decrease in administrative and transmission and distributions costs.
• Off-Street Parking operating revenues increased by $3.2 million or 40.1%, and expe nses decreased $1.0 million or

8.5% mostly due to administering parking enforcement post suspension of enforcement due to the pandemic. • Off-Street Parking net gain of $1.4 millio n was primarily the result of recoveri es. As the public resumed activities, the city experienced increased parkin g activity as well as increased revenues in previously suspended parking enforcement.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Program Revenues and Expenses - Business-type Activities Program Revenues
Expenses

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 13 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

City of Pasadena’s Governmental Funds
Summary Statement of Revenues, Expenditures and
Changes in Fund Balances (in millions)

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
14 Annual Comprehensive Financial Report | June 30, 2022 Governmental Funds
The focus of the City’s governmental funds is to provide information on near-ter m inflows, outflows, and balances of spendable resources. Such information is useful in assessin g the City financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

Governmental Funds report the differenc e between their assets and liabilities as fund balance, which is divided into nonspendable, restricted, committed, assigned, and unassigned portions. City Council may commit a portion of the fund balance by formal action, per the current policy of increasing the commitment up to 20% of the General Fund annual appropriations. The 20% is comprised of 15% General Fund Emergency Contingency and 5% General Fund Operating Reserve.

On September 12, 2022, the City Council committed the full 15% or $43,003,950 for the FY 2022 Emergency Contingency Reserve and up to 5% or $14,334,650 for Operating Reserve.

At the end of FY 2022, the City’s governmental funds reported combined ending fund balances of $268.2 million, a decrease of $7.9 million in comparison with the prior year. The nonspendable fund balance of $15.3 million represents assets generated by prepayments, permanent trust fund balances and receivables in funds, net of allowances. The restricted fund balance of $76.9 million represents resources that are subject to externally enforceable legal restrictions, such as the restrictions on the use of Special Revenue funding and Capital Improvement contracts. The committed fund balance of $159.6 million represents the use of resources constrained by limitations the City imposes upon itself through decisions made by the City Council. The assigned fund balance of $25.9 million designates the portion of fund balance that reflects the City’s intended use of resources. The unassigned fund balance of ($9.5) million represents the deficit amount of th at nonspendable, restricted, committed, and assigned in excess of total fund balance.

The General Fund is the chief op erating fund of the City. At the end of FY 2022, total fund balance equaled $106.2 million, versus $99.1 million in the prior year. The fund balance increased by $7.1 million or 7.2%, during FY 2022. Key factors for this change are as follows:

Total revenues increased by $38.7 million due to increases in three categories of revenue and decrease in two categories, as explained below:

Taxes increased by net $33.5 million primarily due to an increase of $2.6 in property taxes. Sales tax increases by $11.9 million, utility user’s tax increased by $3.2 million and transient occupancy tax revenue in creased by $8.4 million.

St Light & Traffic
Signal Tax of $6.4 million was reclassified from Charges for service to Tax. The other taxes had a net increase of $1.0 million.

Intergovernmental revenues increased by $11.4 million, primarily due to $12.4 million received in American Rescue Plan Act funding and an increase of $0.8 million in motor vehicle in-lieu tax. No more CARES Act grant of $1.8 million.

Miscellaneous revenues increased by $1.8 million primarily due to Filming Revenue incr ease of $0.3 million, Tournament of Roses revenue increase of $1.1 million and increase of other revenues such as claim settlements and collection of interest.

Charges for service decreased by $2.8 million, primarily due to a reclassification of St Light & Traffic Signal Tax of $6.4 million and increase of $1.5 million in EMS Cost Recovery, increase of Billable Police service of $1.9 million.

The decrease was due to loss of investment earnings down by $6.5 million.

Total expenditures increased by $25.9 million or 6.7%. These ex penditure categories increased: public safety $8.7 million, culture and leisure $4.4 million, community development $7.7 million and capital outlay $13.3 million. These expenditure categories decreased: general government $2 million and transportation $6.3 million. Th e other categories have a net decrease of $1.4 million. In addition, due to the implementati on of GASB 87, lease financin g will be presen ted under debt service. Prior to 2022 these expenditures were presented within the governmental funds’ function. • General government expenditures decreased by $2 million mainly due to a $2.2 million decrease in non-capitalized infrastructure improvement expenditures net of an increa se of $0.2 million in overall non-improvement related costs.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 15 • Public safety expenditures increased by $10.5 million due to several factors. Expenses related to other contract services, such as additional law enforcement services, supplemental traffic control services for the New Year’s parade in 2022 in comparison to 2021, as the parade was not held in 2021. An overall increase in personnel, services and supplies costs contributed to the overall increase. For fiscal year 2022, the city recogn ized $2.6 million in additional capital outlay expenditures due to the fist-year implementation of GASB 87. • Transportation expenditures decreased by $6.3 million ma inly due to a decrease of $6.7 in non-capitalized infrastructure improvement expenditures net of an increa se of $0.3 million in overall non-improvement related costs.
• Culture and leisure expense increased by $5.2 million mainly due to the rebound of the hospitality industry in the current fiscal year, thereby the increase in the transient occupancy taxes during FY 2022 and the portion allocation to the Pasadena Center Operating Company.

In FY 2022, the net General Fund transfer-out increased by $7.1 million due to the following one-time transfers made in the current year: (1) $3.4 million to the Project Management Fund, (2) $18.9 million to the Non-major Governmental Funds, and (3) $7.1 million to the General Debt Service Fund. There was also an $18.0 million transfer-in from the Light & Power Fund to the General Fund
The Housing Successor Fund has a fund ba lance of $1.9 million, which is a decrease of $5.0 million from the prior year. The key factors contributing to this decrease are as follows:
• Total revenue increased to $0.3 million, mainly from loan repayments. • Total expenditures increased to $5.3 million, primarily due to the Bridge Housing affordable housing project.

Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net position of the Light an d Power Fund at the end of the year amo unted to $214.3 million and those for the Water, Off-Street Parking Fund, and Non-Major Enterprise Fu nds amounted to $38.9 million, $2.8 million, and $14 million respectively. The total net income/(loss) for each fund was $10.8 million, $7 .3 million, $1.4 millio n, and $5.7 million respectively.

Light and Power operating revenues increased by $4.2 million from prior year. Total retail electric energy sold increased by 28,324 megawatt hours, a 3.0% increase compared to the prior fiscal year. Total operating expenses increased by $1.3 million to $189 million.

Water Fund operating revenues decreased $1.9 million from prior year primarily due to reduction in usage, reduction in sales of water rights and leases to other agencies. Total retail wate r sales decreased by $0.5 million or 3.8% billing units in retail water sales. Operating expenses decreased by $2.3 million or 3.7% primarily due to $1.7 million decrease in transmission and distribution expenses and $0.5 million decrease in production expenses.

The Off-Street Parking Fund had a net gain of $1.4 million in FY 2022, as compared to $2.7 million net loss in FY 2021. Primarily due to the increase of parking revenues from all parking structures and resuming parking enforcement and citations.

Implementation of GASB 68 has resulted in showing a Net Pension Liability in the Proprietary Fund s. At June 30, 2022, the
Net Pension Liability is $34.6 million, $11.0 million, $0.5 million, and $4.2 million fo r Light and Power, Water, Off-Street Parking, and Non-Major Enterprise funds respectively.

Implementation of GASB 75 has resulted in showing a Net OPEB Liability in the Proprietary Funds. At June 30, 2022, the Net OPEB Liability is $8.3 million, $4.1 million, $0.07 million, and $2.1 million for Light and Power, Water, Off-Street Parking, and Non-Major Enterprise funds, respectively.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
16 Annual Comprehensive Financial Report | June 30, 2022

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City of Pasadena’s investment in capital assets for its go vernmental and business-type activities as of June 30, 2022 amounts to $1,331 million, net of accumulated depreciation/amort ization. This investment in capital assets includes land, buildings, improvements, equipment, infrastructure, construction-in-progress, and intangible assets. Infrastructure assets are items that are normally immovable such as roads, bridges, drainage systems, and other similar assets. The net increase in the City of Pasadena’s investment in capi tal assets for the current fiscal year was $18 million, a $4.6 million increase for governmental activities and $13.4 million increase for business-type activities. There is a restatement for the beginning balance of capital asset due to the retrospective application required for prior years under GASB 87 by restating financial statements for all periods presented.

City of Pasadena’s Capital Assets
(Net of Depreciation/Amortization, in millions)
Major capital asset-related events during FY 2022 included the following:
• A variety of street maintenance and construction, technology, traffic control, parks and landscape projects continue city-wide. The city spent $37 million on capital projects in governmental activities. Costs for projects not yet completed are shown as construction-in-progress (CIP). Gove rnmental activities CIP as of June 30, 2022 is $31.4 million and $82 million for business-type activities.
• In the area of technology upgrade projects, the city spent $3.2 m illion towards new and replacement computer equipment. Of this amount, $1,914 million is for computer-aided dispatch records management system, $0.4 million toward land management system, $0.8 million for fleet a sset management system web software upgrade, and $0.1 million for safety aviation radio system.
• Public Works acquired a severe-duty truck and four Ford trucks for refuse serv ices for $0.5 million. Fire spent $0.7 million on two ambulance trucks EMS.
• Housing invested $0.6 million for two condos for affordable housing. • Improvement of city-owned facilities continues. Nearly $3.1 million was spent in city buildings for preventive maintenance and repair, $4 million in parks and landscape projects, and $0.7 million for street improvements. • Major capital improvements for Transp ortation includes: $3.9 m illion to Intelligent Transp ortation Systems which utilize technology to improve transportation safety, capacity, travel times, service quality; and $0.9 million for traffic safety and control program improvements.
• As of June 30, 2022, the busin ess-type activities net assets amounted to $813 million, an increase of $13.4 million over the prior year.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2022 17 • Pasadena Water and Power (PWP) utility plant net assets amounted to $766 million, an increase of $15 million. During the fiscal year, the City spent $82 million on various water and power proj ects and moved $5 7.3 million into completed projects.
• PWP partnered with Red Clay Consulting and spent $23.8 million to implement Oracle Field Service, a cloud-base field service management solution, Oracle Utilities Customer to Meter(C2M) and Oracle Fiel d Service (OFS) with bill printing, bill payment and a customer po rtal. The new C2M and OFS system is helping PWP understand at a glance what is happening in the field at any time. It enables PWP’s field workers to instantly communicate and collaborate, connecting them seamlessly to assets and back-office logistics. • Some of the major water projects are: $1.3 million on installing water iron pipe in Altadena Drive from Woodlyn Road to Paloma Street and $1.0 million on small water meter upgrades. • Some of the major power projects are: $1.4 million on Over head electric services and $0.8 million on developing a master plan for the Power Delivery System.

Additional information on the City’s capital assets can be found in Note 7 on pages 64-67 of this report.

Long-Term Liabilities
At year-end, the City has a number of debt issues outstanding. These include $132.8 million of taxable pension bonds, $301.3 million of revenue bonds, $50.9 million of certificates of pa rticipation and $4.6 m illion of notes payable. Long-term debt decreased by a net amount of $9.9 million as a result of normal scheduled principal maturities and refunding of debt. Other liabilities decreased by a net amount of $194.9 million primarily due to an increase of $34.2 in insurance claims payable offset by a decrease of $211.1 million in net pension liability and a decrease of $21.2 million in net OPEB liability. The City was assigned an AAA issuer rating by Standard and Poor’s and AA+ rating by Fitch Rating Agency.

City of Pasadena’s Outstanding Long-Term Liabilities (in millions) Governmental Activities Business-type Activities Total Primary Government 2022 2021 2022 2011 2022 2021
Long-term debt:

Notes payable 4.6$ 5.0$ - $ -$ 4.6$ 5.0$ Bonds payable 132.8 134.9 301.3 306.5 434.1 441.3 Certificates of participation 50.9 53.2 - - 50.9 53.2 Loan payable 4.9 5.9 1.9 2.4 6.9 8.3
Total long-term debt 193.3 198.9 303.2 308.8 496.5 507.8 Other:

Net pension liability 252.0 422.1 50.3 91.3 302.3 513.4 Net OPEB liability 57.9 74.2 14.5 19.4 72.4 93.6 Compensated absences 12.2 13.0 - - 12.2 13.0 Insurance claims payable 76.2 42.0 - - 76.2 42.0 Lease liability 4.0 - 1.4 - 5.4 -
Total other liabilities 402.3 551.4 66.2 110.6 468.5 662.0 Total long-term liabilities 595.6 $ 750.3 $ 369.4 $ 419.5 $ 965.0 $ 1,169.8 $ Addition
al information on the City’s long-term debt can be found in Note 10 on pages 73-85 of this report. Information on self-insurance claims payable can be foun d in Note 18 on pages 99-100, net pensio n liability in Note 20 on pages 101-112, and OPEB can be found in Note 21 on pages 113-117.

The City reports two items of significant economic importance in its subsequent event Note 23 on page 119.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

18 Annual Comprehensive Financial Report | June 30, 2022

REQUEST FOR INFORMATION

This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the info rmation provided in this report or requests for additional financial information should be addressed to the office of th e Director of Finance, 100 North Garfield Avenue, Room S348, Pasadena, California, 91101.

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FINANCIAL SECTION CITY OF PASADENA
20 Annual Comprehensive Financial Report | June 30, 2022 Statement of Net Position
June 30, 2022
Total Aggregate
Governmental Business-type Primary Component
Activities Activities Government Units Total
Assets:

Current assets:

Cash and investments 279,829,214$ 341,333,365$ 621,162,579$ 47,045,282$ 668,207,861$ Accounts recei va bl e
, net 53,469,007 44,045,855 97,514,862 6,905,188 104,420,050 Notes receivable , net 13,505,395 1,366,250 14,871,645 - 14,871,645 Internal balances (1,573,031) 1,573,031 - - - Inventories 508,207 27,135,879 27,644,086 122,897 27,766,983 Lease receivable 717,748 413,890 1,131,638 7,495 1,139,133 Prepa i ds a nd other a s s ets 1,907,250 2,092,963 4,000,213 487,177 4,487,390 Due from com ponent units 1,524,852 9,000 1,533,852 - 1,533,852 Due from City - - - 2,095,167 2,095,167
Due from other governments 60,981 - 60,981 - 60,981
Pro perty hel d for res a l e 560,996 - 560,996 - 560,996 Total current assets 350,510,619 417,970,233 768,480,852 56,663,206 825,144,058 Noncurrent restricted assets:

Rest r ic t ed asset s - c ash and inv est ment s 22,131,375 78,155,837 100,287,212 20,407,211 120,694,423 Restricted assets - others - 74,167 74,167 - 74,167
Total noncurrent restricted assets 22,131,375 78,230,004 100,361,379 20,407,211 120,768,590 Other noncurrent assets:

Long-term prepaid and other assets - 8,328,192 8,328,192 438,830 8,767,022 Lease receivable - noncurrent 1,719,749 885,701 2,605,450 479,042 3,084,492 La nd 87,321,596 14,684,665 102,006,261 - 102,006,261 Construction in progres s 31,408,653 81,995,624 113,404,277 2,475,272 115,879,549 Other ca pit al asset s , net 399,078,107 716,397,467 1,115,475,574 274,829,904 1,390,305,478 Total other noncurrent assets 519,528,105 822,291,649 1,341,819,754 278,223,048 1,620,042,802 Total noncurrent assets 541,659,480 900,521,653 1,442,181,133 298,630,259 1,740,811,392 Total assets 892,170,099 1,318,491,886 2,210,661,985 355,293,465 2,565,955,450 Deferred outflow of resources
Accumulated decrease in fair value of
hedging derivatives - - - 10,763,362 10,763,362 Bond refunding related 21,171,911 976,712 22,148,623 2,688,063 24,836,686 Pension related 66
,649,228 11 ,556,887 78,206,115 888 ,259 79,094,374 OPEB related 9 ,122,615 2 ,287,079 11,409,694 - 11,409,694 Total deferred outflow of resources 96,943,754 14,820,678 111,764,432 14,339,684 126,104,116 Liabilities:

Current liabilities
Accounts payable and ac c r ued liabilities 38,121,752 28,855,124 66,976,876 11,475,996 78,452,872 De posits 5,552,498 6,169,882 11,722,380 1,776,671 13,499,051 Due to com ponent units 2,143 1,095 3,238 - 3,238 Due to pri ma ry gov ernment - - - 1,532,654 1,532,654 Lon g-term adv ances - - - 100,000 100,000
Unearned revenue 43,351,060 12,134,497 55,485,557 4,298,319 59,783,876 Com pensated absences due within one year 11,355,797 - 11,355,797 30,259 11,386,056 Insurance claims payable within one year 34,307,683 - 34,307,683 - 34,307,683 Lon g-term obli gations due within one year 5,821,831 11,314,017 17,135,848 10,696,101 27,831,949 L ease liabilit y due within one year 951,875 964,062 1,915,937 192,673 2,108,610 Total current liabilities 139,464,639 59,438,677 198,903,316 30,102,673 229,005,989 Noncurrent liabilities:

Der iv ativ e instr ument liabilit y - - - 10,763,362 10,763,362 Lon g-term adv ances from pri ma ry government - - - 500,000 500,000 Net pension liabilit y 252,049,067 50,274,603 302,323,670 1,390,048 303,713,718 Net OP EB liabilit y 57,913,379 14,519,130 72,432,509 - 72,432,509 Compensated absences due in more than one year 831,254 - 831,254 146,626 977,880 Insurance claims payable due in more than one yea r 41,844,950 - 41,844,950 - 41,844,950 Lon g-term obli gations due in more than one year 187,452,549 291,900,498 479,353,047 334,050,323 813,403,370 L ease liabilit y due in more than one year 3,072,008 412,421 3,484,429 28,403 3,512,832 Total noncurrent liabilities 543,163,207 357,106,652 900,269,859 346,878,762 1,247,148,621 Total liabilities 682,627,846 416,545,329 1,099,173,175 376,981,435 1,476,154,610 Primary Government
The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 21 Statement of Net Position
June 30, 2022
Total Aggregate
Governmental Business-type Primary Component
Activities Activities Government Units Total
Primary Government
Deferred inflow of resources
De ri va ti ve i ns trume nts - - - 4,166,486 4,166,486 Bond refundin g rel a ted - 2,046,138 2,046,138 - 2,046,138 Serv ice concession a greement - - - 193,519 193,519 Lease related 2,383,085 1,287,812 3,670,897 702,061 4,372,958 P ension r elated 132,659,324 28,723,156 161,382,480 1,213,439 162,595,919 OPEB related 21,890,988 5,488,164 27,379,152 - 27,379,152 Total deferred inflow of resources 156,933,397 37,545,270 194,478,667 6,275,505 200,754,172 Net Position:

Net investment in ca pital assets 471,778,310 499,718,823 971,497,133 (13,486,937) 958,010,196 Restricted:

Nonexpendable 1,434,131 - 1,434,131 - 1,434,131
Ex pendable:

Communi ty develo pment 15,516,715 - 15,516,715 - 15,516,715 P ublic safet y 4,975,255 - 4,975,255 - 4,975,255
Capital projects 2,488,871 - 2,488,871 - 2,488,871
Debt service 7,084,563 36,484,028 43,568,591 11,663,709 55,232,300 Stranded investments - 43,780,340 43,780,340 - 43,780,340 Trans porta tion 33,718,365 - 33,718,365 - 33,718,365 Contribution to Genera l Fund - 19,544,138 19,544,138 - 19,544,138 C ultur e and lit er acy 3,021,242 - 3,021,242 - 3,021,242 Other purposes 994,715 9,665,198 10,659,913 870,240 11,530,153 Air qualit y im provement 159,964 - 159,964 - 159,964 Trust and loans 12,101,050 - 12,101,050 - 12,101,050 Unrestricted (403,720,571) 270,029,438 (133,691,133) (12,670,803) (146,361,936) Total net position 149,552,610$ 879,221,965$ 1,028,774,575$ (13,623,791)$ 1,015,150,784$

FINANCIAL SECTION CITY OF PASADENA
22 Annual Comprehensive Financial Report | June 30, 2022 Statement of Activities
For the Fiscal Year Ended June 30, 2022
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Primary government:

Governmental activities:

Genera l government 86,104,284$ 12,983,685$ 11,091,008$ -$ Publi c s a fety 151,004,670 13,736,003 5,141,054 - Tra ns porta ti on 44,751,810 16,606,508 20,131,913 8,584,061 Uti l ity 124,195 - - -
Sa nita ti on 6,091,235 7,301,252 - -
Hea l th 17,061,844 2,167,887 9,588,112 -
Culture a nd leis ure 48,528,681 1,095,671 5,102,059 1,600,000 Communi ty development 62,726,513 14,470,174 29,693,094 - Interes t a nd other fis ca l cha rges 6,364,229 - - - Total governmental activities 422,757,461 68,361,180 80,747,240 10,184,061 Business-type activities:

El ectric 196,717,783 226,509,255 4,007,119 4,026,308 Wa ter 61,517,911 69,359,266 1,919,178 532,373
Refus e 18,817,986 11,863,585 261,541 -
Pa rki ng 10,900,735 11,065,878 - -
Telecommuni ca ti ons 162,655 775,861 - -
Total business-type activities 288,117,070 319,573,845 6,187,838 4,558,681 Total primary government 710,874,531 387,935,025 86,935,078 14,742,742 Aggregate Component Units 76,111,366$ 48,372,793$ 31,560,902$ 76,055$ General revenues:

Taxes:

Property taxes, levied for general purpose
Sales taxes
Ut
ility user s' t ax es
Transient occupancy taxes
Construction taxes
Business lic ense tax es
Franchise taxes
Other taxes
Other intergovernmental, unres tricted
M ot or v ehic le in-lieu, unr estr ic t ed
Use of money - investment earnings
Use of property - lease activ ity
Net c hange in fair v alue of inv estments
Gain (loss) on sale of c apit al assets
M isc ellaneous r ev enues
Total general revenues
Transfers
Total general revenues and transfers
Changes in net position
Net position - beginning of year
Net position - end of year
Pro
gram Revenues
The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 23

Total Aggregate
Governmental Business-t ypeP r i m a r y Component
Activities Activities Government Units Total
(62,029,591)$ - $ (62,029,591)$ - $ (62,029,591)$ (132,127,613) - (132,127,613) - (132,127,613) 570,672 - 570,672 - 570,672 (124,195) - (124,195) - (124,195) 1,210,017 - 1,210,017 - 1,210,017 (5,305,845) - (5,305,845) - (5,305,845) (40,730,951) - (40,730,951) - (40,730,951) (18,563,245) - (18,563,245) - (18,563,245) (6,364,229) - (6,364,229) - (6,364,229) (263,464,980) - (263,464,980) - (263,464,980) - 37,824,899 37,824,899 - 37,824,899 - 10,292,906 10,292,906 - 10,292,906 - (6,692,860) (6,692,860) - (6,692,860) - 165,143 165,143 - 165,143 - 613,206 613,206 - 613,206 - 42,203,294 42,203,294 - 42,203,294 (263,464,980) 42,203,294 (221,261,686) - (221,261,686)$ 3,898,384 3,898,384
79,143,553 - 79,143,553 - 79,143,553 74,365,959 - 74,365,959 - 74,365,959 30,123,514 - 30,123,514 - 30,123,514 14,711,398 - 14,711,398 - 14,711,398 2,625,544 - 2,625,544 - 2,625,544 5,889,914 - 5,889,914 - 5,889,914 2,730,218 6,161,960 8,892,178 - 8,892,178 16,308,638 - 16,308,638 3,189,250 19,497,888 1,235,060 - 1,235,060 65,872 1,300,932 22,562,229 - 22,562,229 - 22,562,229 2,238,519 2,792,508 5,031,027 (6,483,996) (1,452,969) 731,368 394,643 1,126,011 1,126,011 (15,261,512) (25,439,219) (40,700,731) - (40,700,731) - (166,537) (166,537) - (166,537) 4,663,555 10,571,083 15,234,638 5,318,837 20,553,475 242,067,957 (5,685,562) 236,382,395 2,089,963 238,472,358 10,954,124 (11,362,386) (408,262) - (408,262) 253,022,081 (17,047,948) 235,974,133 2,089,963 238,064,096 (10,442,899) 25,155,346 14,712,447 5,988,347 20,700,794 159,995,509 854,066,619 1,014,062,128 (19,612,138) 994,449,990 149,552,610$ 879,221,965$ 1,028,774,575$ (13,623,791)$ 1,015,150,784$ Net (Expenses) Revenues and
Changes in Net Position
Primary Government

FINANCIAL SECTION CITY OF PASADENA
24 Annual Comprehensive Financial Report | June 30, 2022 Balance Sheet
Governmental Funds
June 30, 2022
Non-Major
Project General Housin g Governmental
General Mana gement Debt Service Successor Funds Total
Assets:

P ooled c ash and inv est ment s 71,628,929$ 8,295,771$ - $ 2 ,712,441$ 155,375,824$ 238,012,965$ Accounts recei va bl e, net 33,972,308 958,689 - 6,374 18,222,006 53,159,377 Lease r eceiv able 6 2 8,297 - - - 976,340 1,604,637 Notes r eceiv able 18,350,000 - - 26 ,318,280 58,023,672 102,691,952 Allowance for unc ollec tible notes
recei va bl e (4,844,605) - - (26,318,280) (58,023,672) (89,186,557) Due from other funds 38,662,450 - - - - 38 ,662,450 Due from com ponent uni ts 1,503,287 - - - - 1,503,287 Due from other governments 60,981 - - - - 60,981 Prepaids and other assets 1 9 1,694 - - - 148,066 339,760 Restricted assets:

Cash and investments 11,696,726 - - - 10 ,430,296 22,127,022 Cash with fiscal a gent - - 813 - 3,540 4,353 Property hel d for res a l e - - - - 560,996 560,996 Total assets 171,850,067 9,254,460 813 2,718,815 185,717,068 369,541,223 Liabilities:

Accounts payable and acc r ued liabilities 17 ,895,173 4,936,612 - 825,988 4,919,285 28,577,058 De posits 3,990,568 - - - 1,561,930 5,552,498 Due to other funds - - - - 9,938,684 9,938,684 Due to com ponent units 2,143 - - - - 2,143 Unea rne d revenue 40,738,287 - - - 2,612,773 43,351,060 Advances from other funds 110,000 - - - - 110,000 Total liabilities 62,736,171 4,936,612 - 825,988 19,032,672 87,531,443 Deferred inflow of resources:

Unav ailable r ev enues 2,286,400 931,321 - - 9,067,520 12,285,241 Lea s e rel a ted 611,783 - - - 960,333 1,572,116 Total deferred inflow of resources 2,898,183 931,321 - - 10,027,853 13,857,357 Fund balances:

Nons pendable 13,697,089 - - - 1,582,197 15,279,286 Restricted 12,101,050 611,197 813 1,892,827 62,341,228 76,947,115 Committed 57,338,600 - - - 102 ,213,003 159,551,603 Assi gned 23,078,974 2,775,330 - - - 25 ,854,304 Unassi gned - - - - (9,479,885) (9,479,885) Tot
al fund balances 106,215,713 3,386,527 813 1,892,827 156,656,543 268,152,423 Total liabilities, deferred inflow of resources
and fund balances 171,850,067$ 9,254,460 $ 813 $ 2,718,815$ 185,717,068 $ 369,541,223 $ The acco
mpanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 25 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
For the Fiscal Year Ended June 30, 2022
Amounts re ported for gov ernmental activ ities in the Statement of Net Position are different because:

Total fund balances - governmental funds 268,152,423$
C apit al asset s 809,628,522
Accumula ted depreci a ti on (310,903,100)
Right-to-us e l ea s e a s s ets 5,139,591
Accumula ted a morti za ti on (1,182,517) 50 2,682,496 Other lon g-term assets and deferred outflows of resources are not available to pay for current period ex penditures and , therefore , are either deferred or not re ported in the funds.

Una va il a bl e revenues 12,285,241
Deferred outflows - pens ion rela ted 51,163,193
Deferred outflows - OPEB rel a ted 8,290,014 71,738,448 Long-term liabilities and deferred inflows of resources are not due and payable in the current period , and therefore , ar e not r eported in the funds.

Notes payable (4,638,830)
Pension bonds payable (132,880,000)
Ce r
ti fi ca te s of par tic ipat ion (46,765,000)
Una
mortized premi um (discount ) (4,053,840)
Ac
crued interest payable on lon g-term debt (1,621,280)
Loa
n payable (4,936,710)
L e
ase liabilit y (4,023,883)
Ne
t OP EB liabilit y (52,627,763)
Net
pension liabilit y (195,484,103)
De
ferred i nfl ows - pens ion rela ted (97,314,708)
Deferred i nfl ows - OPEB rela ted (19,893,049) (564,239,166) The
substance of an advanced refundin g is r eported as deferrin g the difference and amortizin g it ov er fut ur e periods. 21,171,911
Internal service funds are used b y mana gement to char ge the costs of certain activ ities , suc h as equi pment mana gement and self-insurance , to individual funds. The assets , deferred outflows of of resources , liabilities , and deferred inflows of resources of the internal service funds are included in gov ernmental activ ities in the statement of net position. (149,953,502) Net
position of governmental activities 149,552,610$
Capital assets used in governmental activities are not current financial resources and are therefore not reported in the governmental funds.

The acc
ompanying notes are an integral part of these financial statements.

FINANCIAL SECTION CITY OF PASADENA 26 Annual Comprehensive Financial Report | June 30, 2022 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Fiscal Year Ended June 30, 2022

Non-Major
Project General Housing Governmental
General Mana gement Debt Service Successo r Funds Total Revenues:

Ta xes 214 ,739,973$ - $ - $ - $ 11 ,158,765$ 225 ,898,738$ Licens es and per mits 3,940,945 - - - 11 ,342,539 15 ,283,484 Inter gov ernmental rev enues 35,880,294 4 ,518,028 - - 65 ,826,329 106 ,224,651 Cha rges for serv ices 32,950,457 50 ,479 - 55 ,362 10 ,491,702 43 ,548,000 Fines and forfeits 4 ,189,673 - - - - 4 ,189,673 Inv estment earnin gs9 08,360 - 253 6 ,508 1 ,254,814 2 ,169,935 Net chan ge in fair v alue of inv estments (5,492,911) - - - (9,351,353) (14,844,264) Lease rev enues 974 ,320 296 ,483 - 61 ,741 3 ,179,161 4 ,511,705 Interest - leases (as lessor ) 2,971 - - - 5 ,635 8 ,606 M isc ellaneous r ev enues 4 ,261,946 - - 220 ,971 3 ,743,851 8 ,226,768 Contributions 27 ,620 745 ,152 - - 2 ,316,223 3 ,088,995 Total revenues 292,383,648 5 ,610,142 253 344 ,582 99 ,967,666 398 ,306,291 Expenditures:

Current:

General government 63,478,360 221 ,140 6 ,400 - 103 ,817 63 ,809,717 Publ i c s a fe ty 144,019,978 911 ,105 - - 2 ,628,949 147 ,560,032 Trans portation 22,028,024 3 ,960,184 - - 14 ,806,908 40 ,795,116 Ut ility - - - - 124 ,195 124 ,195 Sa ni ta ti on - 1 ,211,157 - - 4 ,825,470 6 ,036,627 Health - - - - 16 ,505,189 16 ,505,189 C ultur e and leisur e 3 2 ,454,156 79 ,679 - - 13 ,341,727 45 ,875,562 Communi ty develo pment 8,432,414 42 ,796 - 5 ,335,625 41 ,883,327 55 ,694,162 Capit al outla y 37,658 24 ,963,110 - - 19 ,079 25 ,019,847 Debt service:

Pri ncipa l reti rement - - 3,025,836 - 2 ,390,000 5 ,415,836 Interest - - 4 ,057,541 - 2 ,336,898 6 ,394,439 Interest - leases (as lessee ) 26,306 112 - - 5 ,730 32 ,148 Lea s e payments 592,259 11 ,939 - - 511 ,437 1 ,115,635 Total expenditures 271,069,155 31,401,222 7,089,777 5,335,625 99,482,726 414,378,505 Excess (deficiency) of revenues over
(under) expenditures 21,314,493 (25,791,080) (7,089,524) (4,991,043) 484,940 (16,072,214) Other financing sources (uses):

Tr ansfer s in 2 0 ,288,374 27 ,042,903 7 ,089,743 - 19 ,073,943 73 ,494,963 Tr ansfer s out (34,079,764) (484,456) - - (30,458,585) (65,022,805) Transfer to com ponent unit (408,262) - - - - (408,262) Leases issued 37 ,583 53 ,726 - - 19 ,079 110 ,388 Total other financing sources (uses) (14,162,069) 26,612,173 7 ,089,743 - (11,365,563) 8,174,284 Net change in fund balances 7,152,424 821 ,093 219 (4,991,043) (10,880,623) (7,897,930) Fund ba l a nces a t begi nni ng of yea r 99,063,289 2,565,434 594 6,883,870 167,537,166 276,050,353 Fund balances at end of year 106,215,713$ 3,386,527$ 813$ 1,892,827$ 156,656,543$ 268,152,423$

The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 27 Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2022
Amounts reported for governmenta l activities in the s tatement of a ctivities are different beca us e:

Net change in fund balances - total governmental funds (7,897,930)$ Gov er nmental funds report capital outlay s as ex penditures. Howev er, in the statement of activ ities, the cos t of thes e a ss ets is a lloca ted over their es tima ted us eful lives a nd reported a s deprecia tion/ amor tization expense. This is the amount by which depreciation/amortization expense exceeded capital outlay tha t wa s ca pita lized in the current period.

Capital as s ets 24,038,483$
Depr ec iation/amor t izat ion ex pense (1 8 ,4 2 8 ,6 4 6 ) 5,609,837 The net effec t of v ar ious misc ellaneous t r ansac t ions inv olv ing c apital assets (i.e., sales, tr ade-ins, and donations) is to decrease net position.

L oss on sale of asset s (370,004)
Revenues in the s tatement of a ctivities tha t do not provide current fina ncia l resources a re not reported as revenues in the funds. 3
,128,451
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond and other debt principal is an ex penditur e in the gov er nmental funds, but r epay ment r educ es long-ter m liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is fir st issued, whereas these amounts are deferred and amortized in the statement of activ ities.

Principal paid on notes 316
,493
Principal paid on pension bonds 2,070,000
P r inc ipal paid on c er tific ates of par tic ipation 2,090,000 Principal paid on leases 1,115,710
Principal paid on loan 939,341 6,531,544
Bond deferred charges and similar items are recorded as expenditures in governmental funds when debt is first issued, whereas these pay ments ar e defer red and amortized in the statement of activ ities.

This amount is the net offset of the difference.
(1,113,394)
In
t er nal ser v ic e funds ar e used by management t o c har ge t he c ost s of c er t ain ac t iv it ies, suc h as c omput ing and communication, building maintenance, fleet maintenance, fleet replacement, benefits, workers' compensa ti on, genera l l i abi l ity, and 311 ca l l center, to i ndi vi dua l funds . The net revenue (expense) of certa i n a cti vi ti es of i nterna l s ervi ce funds i s reported wi th governmenta l a cti vi ti es . (37,255,307)
So
me expenses reported in the statement of activ ities do not r equire the use of cur rent financial resources and, ther efore, are not reported as ex penditures in the gov ernmental funds.

Accrued interest on long-term debt 62,358
Amortization of bond premiums and discounts and deferred amounts of refunding 246,420 Net c hange in defer r ed (inflows) and out flows of r esour c es r elating to pension liabilit y 23,855,608 Net c hange in defer r ed (inflows) and out flows of r esour c es r elating to OP EB liabilit y (3,240,482) 20,923,904 Change in net position of governmental activities (10,442,899)$ The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION CITY OF PASADENA
28 Annual Comprehensive Financial Report | June 30, 2022 Light Off-Street
and Power Water Parking
Assets:

Current assets:

C ash and inv estment s 262,953,842$ 49,763,890$ 2,554,036$ Accounts recei va ble , net 29,011,594 11,566,050 907,611 Notes receivable , res tri cted 1,366,250 - -
Due from other funds 1,463,031 - -
Due from com ponent units - - -
Inv entories 18,962,825 8,173,054 -
Lease r ec eiv able - 8,810 352,580
Prepaids and other assets 1,322,361 512,001 234,601 Total current assets 315,079,903 70,023,805 4,048,828 Noncurrent restricted assets:

C ash and inv est ment s 14,571,142 15,694,760 - C ash and inv est ment s - st r anded inv est ment s r eser v e 4 1,665,801 - - C ash wit h fisc al a gent 36,336 4,310,938 1,876,860 Notes r ec eiv able 74,167 - -
Total noncurrent restricted assets 56,347,446 20,005,698 1,876,860 Other noncurrent assets:

Advances to other funds 110,000 - -
De posit with Inde pendent S ystem O perator (ISO ) 200,000 - - Prepaid lon g-t er m asset s 8,128,192 - -
Lease r eceiv able - 12,166 818,963
Ca pi ta l a s s ets , net of a ccumula ted
depreci ati on/amortiza ti on 536,499,394 229,797,739 41,731,964 Total other noncurrent assets 544,937,586 229,809,905 42,550,927 Total noncurrent assets 601,285,032 249,815,603 44,427,787 Total assets 916,364,935 319,839,408 48,476,615
Deferred outflow of resources:

Bond refunding related 910,550 66,162 -
P ension r elated 7,434,262 2,834,243 202,658 OPEB related 1,299,104 653,907 10,279
Total deferred outflow of resources 9,643,916 3,554,312 212,937 Liabilities:

Current liabilities:

Accounts payable and ac c r ued liabilities 1 8,615,739 8,307,010 942,997 De posits 1,254,197 378,281 249,038
Insurance claims payable - - -
Due to other funds - - -
Due to com ponent units 712 383 -
Unea rne d re venues 8,192,860 2,744,554 - C ompensat ed absenc es - - -
Revenue bonds 7,225,000 2,725,000 900,000
Loan payable - - 464,017
Lease liabilit y 529,291 425,421 9,350
Total current liabilities 35,817,799 14,580,649 2,565,402 Noncurrent liabilities:

Insurance claims pay able - - -
C ompensat ed absenc es - - -
Net pension liabilit y 34,636,782 10,972,536 503,819 Net OP EB liability 8,345,600 4,052,758 65,255 Revenue bonds 194,636,294 76,295,970 19,500,000
Loan payable - - 1,468,234
Lease liability 232,470 179,171 780
Total noncurrent liabilities 237,851,146 91,500,435 21,538,088 Total liabilities 273,668,945 106,081,084 24,103,490 Deferred inflows of resources:

Bond refundin g re l a ted 416,890 1,629,248 - Leas e rela ted - 20,793 1,150,050
P ension r elated 18,476,900 7,044,147 503,681 OPEB related 3,137,385 1,549,137 24,666
Total deferred inflows of resources 22,031,175 10,243,325 1,678,397 Net position:

Net inv estment in ca pit al assets 3 2 9,930,063 146,617,537 18,239,533 Restricted:

Debt service 14,601,470 20,005,698 1,876,860
Contribution to General Fund 18,000,000 1,544,138 - Stranded investments 43,780,340 - -
Other purposes 9,665,198 - -
Unre s tri cte d 214,331,660 38,901,938 2,791,272 Total net position 630,308,731$ 207,069,311$ 22,907,665$ Statement of Net Position
Proprietary Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 29 Governmental
Activities -
Non-Major Total Internal
Enterprise Enterprise Service
Funds Funds Funds Total
26,061,597$ 341,333,365$ 41,816,249$ 383,149,614$ 2,560,600 44,045,855 309,630 44,355,485
- 1,366,250 - 1,366,250
- 1,463,031 - 1,463,031
9,000 9,000 21,565 30,565
- 27,135,879 508,207 27,644,086
52,500 413,890 260,841 674,731
24,000 2,092,963 1,567,490 3,660,453
28,707,697 417,860,233 44,483,982 462,344,215
- 30,265,902 - 30,265,902
- 41,665,801 - 41,665,801
- 6,224,134 - 6,224,134
- 74,167 - 74,167
- 78,230,004 - 78,230,004
- 110,000 - 110,000
- 200,000 - 200,000
- 8,128,192 - 8,128,192
54,572 885,701 572,019 1,457,720
5,048,659 813,077,756 15,125,860 828,203,616
5,103,231 822,401,649 15,697,879 838,099,528
5,103,231 900,631,653 15,697,879 916,329,532
33,810,928 1,318,491,886 60,181,861 1,378,673,747
- 976,712 - 976,712
1,085,724 11,556,887 15,486,035 27,042,922
323,789 2,287,079 832,601 3,119,680
1,409,513 14,820,678 16,318,636 31,139,314
989,378 28,855,124 7,923,414 36,778,538
4,288,366 6,169,882 - 6,169,882
- - 34,307,683 34,307,683
- - 30,186,797 30,186,797
- 1,095 - 1,095
1,197,083 12,134,497 - 12,134,497
- - 11,355,797 11,355,797
- 10,850,000 - 10,850,000
- 464,017 - 464,017
- 964,062 - 964,062
6,474,827 59,438,677 83,773,691 143,212,368
- - 41,844,950 41,844,950
- - 831,254 831,254
4,161,466 50,274,603 56,564,964 106,839,567
2,055,517 14,519,130 5,285,616 19,804,746
- 290,432,264 - 290,432,264
- 1,468,234 - 1,468,234
- 412,421 - 412,421
6,216,983 357,106,652 104,526,784 461,633,436
12,691,810 416,545,329 188,300,475 604,845,804
- 2,046,138 - 2,046,138
116,969 1,287,812 810,969 2,098,781
2,698,428 28,723,156 35,344,616 64,067,772
776,976 5,488,164 1,997,939 7,486,103
3,592,373 37,545,270 38,153,524 75,698,794
4,931,690 499,718,823 14,314,891 514,033,714
- 36,484,028 - 36,484,028
- 19,544,138 - 19,544,138
- 43,780,340 - 43,780,340
- 9,665,198 - 9,665,198
14,004,568 270,029,438 (164,268,393) 10 5,761,045
18,936,258$ 879,221,965$ (149,953,502)$ 729,268,463$

FINANCIAL SECTION CITY OF PASADENA
30 Annual Comprehensive Financial Report | June 30, 2022 Statement of Revenues, Expenditures and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2022
Light Off-Street
and Power Water Parking
Operating revenues:

Utilities 226,509,255$ 69,359,266 $ - $ Off-street parking - - 11,065,878
Refuse c ollec tion - - -
Tel ecommuni ca ti on - - -
Computing and communication services - - -
Building maintenanc e - - -
Fleet maintenance - - -
Employee benefits - - -
Insurance - - -
311 Ca l l Center - - -
Total operating revenues 226,509,255 69,359,266 11,065,878 Operating expenses:

Utility pr oduc tion 109,812,044 32,508,513 -
Utility tr ansmission and distr ibution 1 6 ,6 4 5 ,7 3 4 5,449,127 - Utility c ommer c ial and gener al 2 8 ,5 8 2 ,6 3 1 11,139,895 - Off-street parking - - 8,689,538
Refuse c ollec tion - - -
Tel ecommuni ca ti ons - - -
Computing and communication services - - -
Building maintenanc e - - -
Fleet maintenance - - -
Benefits - - -
Insurance - - -
311 Ca l l Center - - -
Depreci a ti on/a morti za ti on 33,980,866 9,863,811 1,935,148 Total operating expenses 189,021,275 58,961, 346 10,624,686 Operating income (loss) 37,487,980 10,397,920 441,192
Nonoperating revenues (expenses):

Taxes - - -
Intergovernmenta l revenues 4,007,119 1,919,178 -
Inves tment ea rni ngs 2,092,656 481,011 14,559
Net cha nge in fa i r va l ue of i nves tments (21,039,163) (2,971,858) (85,425) Lease rev enues - 8,975 341,951
Int er est - leases (as lessor ) - 158 6,116
Noncompliance forfeitures - - -
Other 1,756,962 1,645,576 9,553
Interes t expens e (7,696,508) (2,556,565) (276,049)
Interes t - l eas es (a s l es s ee) (2,286) (1,564) (22) Ga i n (l os s ) on s a l e of a s s ets (169,589) 7,732 - Total nonoperating revenues (expenses) (21,050,809) (1,467,357) 10,683 Income (loss) before transfers and contributions 16,437,171 8,930,563 451,875 Capital contributions 4,026,308 532,373 -
Tra ns fers i n 8,288,302 - 1,000,000
Tra ns fers out (18,000,000) (2,144,138) (83,000)
Changes in net position 10,751,781 7,318,798 1,368,875 Net pos i ti on (defi ci t) a t begi nni ng of yea r 619,556,950 199,750,513 21,538,790 Net position (deficit) at end of year 630,308,731$ 207,069,311$ 22,907,665$ The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 31 Governmental
Activities -
Non-Major Total Internal
Enterprise Enterprise Service
Funds Funds Funds Total
-$ 295,868,521$ -$ 295,868,521$
- 11,065,878 - 11,065,878
11,863,585 11,863,585 - 11,863,585
775,861 775,861 - 775,861
- - 18,147,130 18,147,130
- - 13,484,944 13,484,944
- - 13,908,698 13,908,698
- - 32,924,362 32,924,362
- - 20,587,688 20,587,688
- - 956,162 956,162
12,639,446 319,573,845 100,008,984 419,582,829 - 142,320,557 - 142,320,557
- 22,094,861 - 22,094,861
- 39,722,526 - 39,722,526
- 8,689,538 - 8,689,538
18,175,712 18,175,712 - 18,175,712
(6,614) (6,614) - (6,614)
- - 15,842,370 15,842,370
- - 12,200,762 12,200,762
- - 10,229,520 10,229,520
- - 3
6,504,936 36,504,936
- - 62,107,416 62,107,416
- - 704,865 704,865
811,543 46,591,368 2,550,477 49,141,845 18,980,641 277,587,948 140,140,346 417,728,294 (6,341,195) 41,985,897 (40,131,362) 1,854,535 6,161,960 6,161,960 - 6,161,960
261,541 6,187,838 - 6,187,838
204,282 2,792,508 68,609 2,861,117 (1,342,773) (25,439,219) (417,249) (25,856,468) 40,685 391,611 270,323 661,934
630 6,904 3,938 10,842
7,100,291 7,100,291 - 7,100,291
58,701 3,470,792 - 3,470,792
- (10,529,122) - (10,529,122)
- (3,872) - (3,872)
(4,680) (166,537) 60,206 (106,331)
12,480,637 (10,026,846) (14,173) (10,041,019) 6,139,442 31,959,051 (40,145,535) (8,186,484) - 4,558,681 - 4,558,681
266,764 9,555,066 4 ,565,533 14,120,599
(690,314) (20,917,452) (1,675,305) (22,592,757) 5,715,892 25,155,346 (37,255,307) (12,099,961) 13,220,366 854,066,619 (112,698,195) 741,368,424 18,936,258$ 879,221,965$ (149,953,502)$ 729,268,463$

FINANCIAL SECTION CITY OF PASADENA
32 Annual Comprehensive Financial Report | June 30, 2022 Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2022
Light Off-Street
and Power Water Parking
Cash Flows from Operating Activities:

Ca s h recei ved from cus tomers 223,863,626$ 67,518,802$ 10,795,664$ Cash payments to suppliers for goods and services (116,326,160) (35,933,817) (7,654,753) Ca s h pa yments to empl oyees for s ervi ces (32,161,075) (11,842,976) (1,079,689) Cash payments to other funds for services (6,749,927) (3,886,436) - Mi s cel l a neous revenue 1,756,962 1,645,576 -
Nonoperating miscellaneous revenue - - 9,553
Net cash provided by (used for) operating activities 70,383,426 17,501,149 2,070,775 Cash Flows from Noncapital Financing Activities:

Ca s h tra ns fers i n 6,825,271 - 1,000,000
Ca s h tra ns fers out (18,000,000) (2,144,138) (83,000) Advances from other funds 110,000 - -
Taxes received - - -
Intergovernmenta l revenues 4,007,119 1,919,178 - Net cash provided by (used for) noncapital financing activities (7,057,610) (224,960) 917,000 Cash Flows from Capital and Related Financing Activities:
(40,378,162) (18,406,479) (19,080)
- 22,480,000 -
14,014 73,345 -
- 9,134 -
(914,323) (397,080) (115,168)
3,395,981 2,181,826 -
- 6,256,610 -
- 1,629,248 -
- (298,163) -
(13,930,000) (17,508,658) (800,000)
Acquisition and construction of capital as sets
Proceeds from long-term de bt
Proceeds from s ale of capital assets
Proceeds from lease activities
Payme nts on lease s
Capital contributions
Bond premium received from de bt is suance
Bond premiums r eceive d from bond refunding Cost
of issuance of bonds
Principal paid on debt and finance obligation
Interest paid on debt and finance obligation (9,149,469) (2,491,969) (276,071) Net cash used for capital and related financing activities (60,961,959) (6,472,186) (1,210,319) Cash Flows from Investing Activities:

Proceeds from s al e of i nves tments 15,005,585 244,866 - Purcha s e of i nves tments (11,000,000) - -
Inves tment ea rni ngs 2,043,750 453,905 14,559
Net cha nge i n fa i r va l ue of i nves tments (21,039,163) (2,971,858) (85,425) P ay ments r ec eiv ed fr om loans made to supplier s 6 ,6 0 6, 25 0 - - Net cash provided by (used for) investing activities (8,383,578) (2,273,087) (70,866) Net increase (decrease) in cash and cash equivalents (6,019,721) 8,530,916 1,706,590 Cash and cash equivalents at beginning of year 277,750,119 57,830,713 2,724,306 Cash and cash equivalents at end of year 271,730,398 66,361,629 4,430,896 Reconciliation of cash and cash equivalents to amounts
reported on the Statement of Net Position:

Ca s h a nd i nves tments 262,953,842 49,763,890 2,554,036 Restricted:

Cash and stranded investments reserve 41,665,801 - - Ca s h a nd i nves tments 14,571,142 15,694,760 -
C ash with fisc al agent 3 6, 3 36 4,310,938 1,876,860 Less non-cash equivalents (47,496,723) (3,407,959) - Cash and cash equivalents at end of year 271,730,398$ 66,361,629$ 4,430,896$ The accompanying notes ar
e an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 33 Governmental
Activities -
Non-Major Total Internal
Enterprise Enterprise Service
Funds Funds Funds Total
14,210,267$ 316,388,359$ 100,243,730$ 416,632,089$ (10,565,251) (170,479,981) (38,040,331) (208,520,312) (7,189,806) (52,273,546) (61,614,717) (113,888,263) - (10,636,363) - (10,636,363)
58,701 3,461,239 - 3,461,239
- 9,553 - 9,553
(3,486,089) 86,469,261 588,682 87,057,943
266,764 8,092,035 4,565,533 12,657,568
(690,314) (20,917,452) (1,675,305) (22,592,757) - 110,000 - 110,000
6,161,960 6,161,960 - 6,161,960
261,541 6,187,838 - 6,187,838
5,999,951 (365,619) 2,890,228 2,524,609
(750,475) (59,554,196) (1,851,124) (61,405,320) - 22,480,000 - 22,480,000
(4,680) 82,679 64,468 147,147
51,212 60,346 252,370 312,716
- (1,426,571) - (1,426,571)
- 5,577,807 - 5,577,807
- 6,256,610 - 6, 256,610
- 1,629,248 - 1,629,248
- (298,163) - (298,163)
- (32,238,658) - (32,238,658)
- (11,917,509) - (11,917,509)
(703,943) (69,348,407) (1,534,286) (70,882,693) - 15,250,451 - 15,250,451
- (11,000,000) - (11,000,000)
204,282 2,716,496 68,609 2,785,105
(1,342,773) (25,439,219) (417,249) (25,856,468)
- 6,606,250 - 6,606,250
(1,138,491) (11,866,022) (348,640) (12,214,662) 671,428 4,889,213.00 1,595,984 6,485,197
25,390,169 363,695,307 40,220,265 403,915,572
26,061,597 368,584,520 41,816,249 410,400,769
26,061,597 341,333,365 41,816,249 383,149,614
- 41,665,801 - 41,665,801
- 30,265,902 - 30,265,902
- 6,224,134 - 6,224,134
- (50,904,682) - (50,904,682)
26,061,597$ 368,584,520$ 41,816,249$ 410,400,76 9$

FINANCIAL SECTION CITY OF PASADENA
34 Annual Comprehensive Financial Report | June 30, 2022 Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2022
Light Off-Street
and Power Water Parking
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities: 37,487,980$ 10,397,920$ 441,192$ Oper ating inc ome (loss)
Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciati on and amortiza tion 33,980,866 9,863,811 1,935,148 Mi s cella neous and other revenue (los s ) 1,756,962 1,645,576 9,553 (Increa s e) decrea s e i n a ccounts recei vabl e (4,305,390) (1,854,134) (247,729) Increas e (decreas e) in a llowance for uncoll ectible accounts 785,761 13,670 - Increase (decrease) in due to other funds - - -
(Increa s e) decrea s e in inventories (2,168,233) (119,037) - (Increa s e) decrea s e in prepai ds a nd other a s s ets 330,241 (92,729) (22,485) Increase (decrease) in accounts payable and other
a ccrued lia bil ities 7,159,901 (721,588) 148,714
Increas e (decreas e) i n unearned revenue (45,044) - (1,130) Increase (decrease) in insurance claims pay able - - - Increase (decrease) in compensated absences - - -
Increas e (decreas e) in depos its paya bl e 472,035 211,928 - Increas e (decreas e) i n deferred i nfl ows - non-l ea s e rel a ted 14,738,888 5,627,181 502,548 (Increa s e) decrea s e in deferred outflows 1,513,923 838,019 33,528 Inc r ease (dec r ease) in net OP EB liability (1,985,223) (1,012,837) (704,753) Inc r ease (dec r ease) in net pension liability (1 9,339,241) (7,296,631) (23,811) Total adjustments 32,895,446 7,103,229 1,629,583
Net cash provided by (used for) operating activities 70,383,426$ 17,501,149$ 2,070,775$ Non-Cash Investing, Capital and Financing Activities
Gai n (los s ) on dis pos ition of capita l a s s ets (169,589)$ 7,732 - Amortization of deferred cha rges (38,171) (77,657) - Amortization of premiums (dis counts ) 651,293 536,254 - Ca pital contributi ons (4,026,308) (532,373) -

The acc
ompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 35 Governmental
Activities -
Non-Major Total Internal
Enterprise Enterprise Service
Funds Funds Funds Total
(6,341,195)$ 41,985,897$ (40,131,362)$ 1,854,535$ 811,543 46,591,368 2,550,477 49,141,845
7,158,992 10,571,083 - 10,571,083
(326,797) (6,734,050) 256,311 (6,477,739)
- 799,431 (21,565) 777,866
- - 17,893,542 17,893,542
- (2,287,270) (67,370) (2,354,640)
(24,000) 191,027 (569,978) (378,951)
261,626 6,848,653 (976,952) 5,871,701
1,197,083 1,150,909 - 1,150,909
- - 34,108,440 34,108,440
- - (789,036) (789,036)
(5,202,673) (4,518,710) - (4,518,710)
3,196,392 24,065,009 35,582,479 59,647,488
354,831 2,740,301 3,313,363 6,053,664
(705,527) (4,408,340) (1,661,526) (6,069,866) (3,866,364) (30,526,047) (48,898,141) (79,424,188)
2,855,106 44,483,364 40,720,044 85,203,408
(3,486,089)$ 86,469,261$ 588,682$ 87,057,943$ - (161,857) - (1 61,857)$
- (115,828) - (115,828)
- 1,187,547 - 1,187,547
- (4,558,681) - (4,558,681)

FINANCIAL SECTION CITY OF PASADENA
36 Annual Comprehensive Financial Report | June 30, 2022 Statement of Net Position
Fiduciary Funds
June 30, 2022
Employee
Benefit Private-Purpose
Trust Funds Custodial Funds Trust Funds Total
Assets:

Cash and cash equivalents 327,861,636$ 458,511$ 192,734$ 328,512,881$ C ash wit h fiscal agent - - 7,943 7,943
Short-term inves tments 608,561 - - 608,561 Receivables:

Accounts recei va bl e - 2 ,317,108 - 2 ,317,108
Contribution 2,634,599 - - 2 ,634,599
Interest 283,993 - - 283,993
Notes receivable - - 515,000 515,000
Allowanc e for unc ollec t ible long-ter m r ec eiv ables - - (515,000) (515,000) Total receivables 2,918,592 2,317,108 - 5,235,700 Other assets - 4,414 - 4,414
Investments, at fair value:

Government and a gencies 19,255,353 - - 19 ,255,353 Corporate obli gat ions 2 2,970,722 - - 22 ,970,722 Fixed income mutual fund 15,676,777 - - 15 ,676,777 Rea l es tate 15,029,667 - - 15,029,667
Corporate stocks 40,724,068 - - 40 ,724,068
Total investments 113,656,587 - - 113 ,656,587 Ca pit al asset s , net - - 214,261 214,261
Total assets 445,045,376 2,780,033 414,938 448,240,347 Liabilities:

Accounts payable and ac c r ued liabilities 6 0,343 1,492,711 - 1 ,553,054 Due to other governments - 3,960 - 3,960
Due to bondholders - 944,635 - 944,635
Pendi n g purchases 8,230,969 - - 8 ,230,969
Total liabilities 8,291,312 2,441,306 - 10 ,732,618 Net Position/(Deficit):

Res tri cted for pensions 436,754,064 - - 436 ,754,064 Res tri cted for s pecial assessments - (1,655) - (1,655) Re
s tri cted for l i bra ry equi pment - 304,830 - 304,830 Res tri cted for WIOA - 833,001 - 833,001
Restricted for bondholders - (797,449) - (797,449)
He
ld in trust for other purposes - - 414,938 414,938
Total net position 436,754,064$ 338,727$ 414,938$ 437,507,729$ The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 37 Statement of Changes in Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2022

Employee
Benefit Private Pur pose
Trust Funds Custodial Funds Trust Funds Total
Additions:

Contributions:

Pl an members 16,645,496 $ - $ - $ 16,645,496$ Property ta xes - - 8 ,572,235 8 ,572,235 Inter gov ernmental rev enue - 3 ,719,300 - 3 ,719,300 Assessment r ev enue - 114 ,055 - 114 ,055 Total contributions 16,645,496 3 ,833,355 8 ,572,235 29 ,051,086 Net investment income (loss):

Inv estment earnin gs (loss ) (40,644,722) (10,997) 7 (40,655,712) Interest (12,759,021) - - (12,759,021) Dividends 1 ,786,426 - - 1 ,786,426 Gross investment income (loss) (51,617,317) (10,997) 7 (51,628,307) Les s i nvestment ex penses (337,741) - - (337,741) Total net investment income (51,955,058) (10,997) 7 (51,966,048) M isc ellaneous r ev enues - - 7 ,745 7 ,745 Total additions (35,309,562) 3,822,358 8 ,579,987 (22,907,217) Deductions:

Benefits paid to par tic ipants 3 5,6 61 ,93 2 - - 35,661,932 Contributi ons to Ci ty - 27,620 - 27,620 Program expense - 3,980,290 - 3,980,290 Fiscal a genc y expenses - - 1,902 1 ,902 Interest ex pense - 56,632 - 56 ,632 Statutory pass-through expenses - - 7,638,691 7,638,691 Admi ni s tra ti ve expens es 576,477 2,999 - 579,476 Count y administr ativ e ex penses - - 933,544 933 ,544 Succes s or a gency a dmi ni s tra ti ve cos t a l l owa nce - - 36,142 36,142 Total deductions 36,238,409 4,067,541 8,610,279 48,916,229 Transfers:

Transfers in - - 24,899 24,899 Transfers out - - (24,899) (24,899) Total transfers - - - - Change in net position (71,547,971) (245,183) (30,292) (71,823,446) Net position (defic it) held in tr ust -
begi nni ng, a s res ta ted 508,302,035 583,910 445,230 509,331,175 Net position held in trust - ending 436,754,064$ 338,727$ 414,938$ 437,507,729$

The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION CITY OF PASADENA 38 Annual Comprehensive Financial Report | June 30, 2022 Combining Statement of Net Position
Discretely Presented Component Units
June 30, 2022

Rose Bowl Pasadena Center Pasadena
Operating O perating Community
Company Company Access Corp.T otal
Assets:

Current assets:

Cash and investments 36
,112,298$ 10 ,572,001$ 360 ,983$ 47 ,045,282$ Accounts recei va bl e, net 5,961,352 943 ,736 100 6 ,905,188 Lease receivable - 7 ,495 - 7 ,495 Inventor y 122,897 - - 122 ,897 Due from Cit y of Pasadena 225,789 1 ,869,378 - 2 ,095,167 Pre paids and other assets 347,573 116 ,600 23 ,004 487 ,177 Total current assets 42,769,909 13 ,509,210 384 ,087 56 ,663,206 Noncurrent assets:

Restr ic t ed asset s - c ash and inv est ment s 1 1 ,188,835 8 ,743,502 474 ,874 20 ,407,211 Due from Cit y of Pa s a dena 438,830 - - 438 ,830 L ease r ec eiv able 4 7 9 ,042 - - 479 ,042 Ca pi ta l a s s ets :

Not bein g de preci a ted/amor t ized 97 0 2,474,302 - 2 ,475,272 Bein g de preci a ted/amor tized , net 155,450,983 119 ,098,828 280 ,093 274 ,829,904 Total noncurrent assets 167,558,660 130 ,316,632 754 ,967 298 ,630,259 Total assets 210,328,569 143 ,825,842 1 ,139,054 355 ,293,465 Deferred outflow of resources:

Accumulated decr ease in fair v alue of hed gin g - 10,763,362 - 10,763,362 Deferred refundin g cha rges 1 ,776,732 911 ,331 - 2 ,688,063 Pension related 888 ,259 - - 888 ,259 Total deferred outflow of resources 2,664,991 11 ,674,693 - 14 ,339,684 Liabilities:

Current liabilities:

Accounts
payable and ac c r ued liabilities 6,003,963 765 ,219 8 ,021 6 ,777,203 Accrued salaries and benefits 640 ,588 357 ,887 24 ,320 1 ,022,795 Accrued interest payable 3,110,530 565,433 35 3,675,998 Due to Cit y of Pasadena 1,532,654 - - 1 ,532,654 De pos i ts 377,285 1 ,399,386 - 1 ,776,671 Lon g-term adv ance due within one yea r 100,000 - - 100 ,000 Com pensated absences due within one year - - 30,259 30 ,259 Lease liabilit y due within one year - 23,334 169 ,339 192 ,673 Lon g-term debt due within one year 4,670,904 6 ,025,197 - 10 ,696,101 Unearned rev enue 4 ,298,319 - - 4 ,298,319 Total current liabilities 20,734,243 9 ,136,456 231 ,974 30 ,102,673 Noncurrent liabilities:

Der iv ativ e instr ument liabilit y - 10 ,763,362 - 10 ,763,362 Lon g-term a dva nce 500,000 - - 500 ,000 Accrued salaries and benefits - 146 ,626 - 146 ,626 Lease liabilit y - - 28 ,403 28 ,403 Lon g-term debt , net of current portion 199,571,679 134 ,478,644 - 334 ,050,323 Net pension liabilit y 1,390,048 - - 1 ,390,048 Total noncurrent liabilities 201,461,727 145 ,388,632 28 ,403 346 ,878,762 Total liabilities 222,195,970 154 ,525,088 260 ,377 376 ,981,435 Deferred inflow of resources:

Deferred refundin g cha rge- 4 ,166,486 - 4 ,166,486 Serv ice concession a greement - 193 ,519 - 193 ,519 Lea s e rel a ted 694 ,573 7 ,488 - 702 ,061 Pension related 1 ,213,439 - - 1 ,213,439 Total deferred inflow of resources 1,908,012 4 ,367,493 - 6 ,275,505 Net Position:

Net inv estment in c a pital assets (16,001,853) 2,432,565 82 ,351 (13,486,937) Restricted 11 ,188,835 870 ,240 474 ,874 12 ,533,949 Unrestricted (6,297,404) (6,694,851) 321,452 (12,670,803) Total net position (11,110,422)$ (3,392,046) $ 878,677 $ (13,623,791)$

The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
Annual Comprehensive Financial Report | June 30, 2022 39 Combining Statement of Revenues, Expenditures and Changes in Net Position Discretely Presented Component Units
For the Fiscal Year Ended June 30, 2022
Rose Bowl Pasadena Center Pasadena
Operating Operating Community
Company Company Access Corp.T otal
Operating revenues:

Charges for services:

Rose Bowl 30,225,641$ - $ -$ 30,225,641$
Golf course 8 ,624,885 - - 8,624,885
Pasadena Center O peratin g Compan y - 8,494,453 - 8,494,453 Pasadena Communit y Ac c ess C orporation - - 1,027,814 1,027,814 Total operating revenues 38,850,526 8,494,453 1,027,814 48,372,793 Operating expenses:

Rose Bowl 26 ,329,694 - - 26,329,694
Golf course 5,993,624 - - 5,993,624
Pasadena Center O peratin g Compan y - 8,542,537 - 8,542,537 Pasadena Communit y Ac c ess C orporation - - 835,437 835,437 De preci a ti on/a morti za ti on 12,454,402 3,975,554 213,168 16,643,124 Total operating expenses 44,777,720 12,518,091 1,048,605 58,344,416 Operating loss (5,927,194) (4,023,638) (20,791) (9,971,623) Non
operating revenues (expenses):

Contributions from Cit y of Pasadena 9,258,005 9,750,623 - 19,008,628 Grant revenues 10,000,000 2,552,274 - 12,552,274
Tour ism business im provement district tax - 3,189,250 - 3,189,250 Fa cilit y res tora ti on fee - 65,872 - 65,872
Inv estment income (loss ) (3,997,110) (2,486,935) 49 (6,483,996) Int
erest ex pense (12,275,424) (5,490,931) (595) (17,766,950) Publ
ic, education, and government (PEG) revenue - - 143,220 143,220 Other nono peratin g revenues 5,175,617 - - 5,175,617 Total nonoperating revenues 8,161,088 7,580,153 142,674 15,883,915 Income before capital contributions 2,233,894 3,556,515 121,883 5,912,292 Capital contributions - 76,055 - 76,055
Changes in net position 2,233,894 3,632,570 121,883 5,988,347 Net pos i ti on a t begi nni ng of yea r (13,344,316) (7,024,616) 425,140 (19,943,792) Net position at beginning of year, as restated - - 756,794 756,794 Net position at end of year (11,110,422)$ (3,392,046)$ 878,677$ (13,623,791)$ The accompanying notes are an integral part of these financial statements

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ANNUAL COMPREHENSIVE FINANCIAL REPORT | JUNE 30, 2022

NOTES TO THE

BASIC FINANCIAL STATEMENTS

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 42 Annual Comprehensive Financial Report | June 30, 2022

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 43 Note Index
(1) Summary of Significant Accounting Policies ................................................................................................................. 44 (A) Reporting Entity ....................................................................................................................................................... 44 (B) Basis of Accounting and Measurement Focus .......................................................................................................... 47 (C) Major Funds, Internal Service Funds and Fiduciary Fund Types .............................................................................. 50 (D) Cash Equivalents....................................................................................................................................................... 51 (E) Cash and Investments .............................................................................................................................................. 51 (F) Inventories ............................................................................................................................................................... 51 (G) Advances to Other Funds ......................................................................................................................................... 51 (H) Prepaids .................................................................................................................................................................... 51 (I) Restricted Cash and Investments ............................................................................................................................. 52 (J) Property Held for Resale .......................................................................................................................................... 52 (K) Capital Assets ........................................................................................................................................................... 52 (L) Leases (new in fiscal year 2022) ............................................................................................................................... 53 (M) Insurance Claims Payable ......................................................................................................................................... 53 (N) Compensated Absences ........................................................................................................................................... 53 (O) Net Pension Liability ................................................................................................................................................. 53 (P) Postemployment Benefits Other than Pension Obligation (OPEB) .......................................................................... 54 (Q) Bond Premiums / Discounts / Issuance Costs .......................................................................................................... 54 (R) Deferred Outflows and Inflows of Resources ........................................................................................................... 54 (S) Fund Balance ............................................................................................................................................................ 54 (T) Property Taxes .......................................................................................................................................................... 55 (U) Use of Estimates ....................................................................................................................................................... 55 (V) Interfund Activities ................................................................................................................................................... 56 (W) Endowments ............................................................................................................................................................ 56 (X) New and Future Accounting Pronouncements ........................................................................................................ 56 Detailed Notes to the Basic Financial Statements ................................................................................................................... 57 (2) Cash and Investments ................................................................................................................................................... 57 (3) Accounts Receivable ..................................................................................................................................................... 61 (4) Notes Receivable – Primary Government ..................................................................................................................... 62 (5) Due to and from Other Funds ....................................................................................................................................... 62 (6) Advances to and from Other Funds .............................................................................................................................. 63 (7) Capital Assets ................................................................................................................................................................ 64 (8) Leases ........................................................................................................................................................................... 68 (9) Deferred Inflows and Outflows .................................................................................................................................... 71 (10) Long-Term Debt and Other Liabilities ........................................................................................................................... 73 (11) Derivative Instruments ................................................................................................................................................. 85 (12) Fund Balance and Net Position ..................................................................................................................................... 88 (13) Restricted Net Position – Stranded Investments .......................................................................................................... 91 (14) Accumulated Fund Deficits ........................................................................................................................................... 92 (15) Excess of Expenditures over Appropriations ................................................................................................................ 94 (16) Pledged Revenue .......................................................................................................................................................... 95 (17) Transfers ....................................................................................................................................................................... 96 (18) Self-Insurance ............................................................................................................................................................... 99 (19) Deferred Compensation Plan ..................................................................................................................................... 101 (20) Pension Plans .............................................................................................................................................................. 101 (21) Postemployment Benefits Other than Pensions (OPEB) ............................................................................................ 113 (22) Commitments and Contingencies ............................................................................................................................... 118 (23) Subsequent Events ..................................................................................................................................................... 119

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 44 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Signific ant Accounting Policies
The basic financial statements of the Cit
y of Pasadena, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. (A) Reporting Entity
The City was incorporated on June 19, 1887 as a Charter City, which operates under a Council-City Manager form of government. The City is a municipal corporation governed by an elected mayor and seven (7) council members.

As required by GAAP, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The Ci ty is considered to be financially accountable for an organization if the City appoints a voting majority of th at organization's governing body and the City is able to impose its will on that organization or there is a potent ial for that organization to provide specific financial benefits to or impose specific fina ncial burdens on the City . The City is also considered to be financially accountable if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City is such that their exclusion would cause the City's financial statements to be misleading or incomplete.

The two methods of reporting component unit data in the basic financial statements are blended and discrete presentation. Blending is limited exclusively to when the board of the component unit is substantively the same as that of the City or if the component unit serves the City exclusively, or almost exclusively.

Blended component units, although legally separate entities, are in substance part of the City’s operations; data from these units are combined with data of the City. Component units that do not meet the criteria for blending are included within financial statemen ts as discrete presentations. Disc retely presented component units are reported in a separate column in the government-wid e financial statements to emphasize they are legally separate from the government. Similar to the City, each blended and discretely presented component unit has a June 30th year-end.

Jointly governed organizations provide goods or services to the citizenry of two or more governments, but do not have an ongoing financial interest or responsibility by the participating governments.

Blended Component Units
Pasadena Parking Authority (The Authority)
The Authority was created by Resolution No. 1399, dated June 6, 1972, pursuant to the provisions of the Parking Law of 1949 (California Streets and Highways Code, Sections §32651 and §32661.1). The City Council constitutes the governing board of the Authority pursuant to the aforementioned resolution. The primary purpose of the Authority is to establish parking facilit ies for motor vehicles within the Ci ty, to furnish motor vehicle parking spaces, and to care for such vehicles within any parking facility or space owned, controlled or operated by the Authority. The City has operational re sponsibility for the Authority. The Authority is reported as an Enterprise Fund and does not release a separate financial report.

Pasadena Civic Improvement Corporation (PCIC)
PCIC was created on August 9, 1985, pursuant to the Non-profit Public Benefit Corporation Law of the State of California (Title 1, Division 2, Part 2 of the California Co rporations Code). At the request of the City, PCIC was organized for the specific and primary purpose of providing financial assistance to the City by acquiring or constructing property and appurtenances for and on behalf of the City. This is accomplished through the issuance of such financing instruments as certif icates of participation. The PCIC is a non-profit organization with three directors: Chief Executive Officer, Secretary/Financial Officer, and Assistant Executive Officer/Assistant Secretary. PCIC's financial data and transactions are blended with the Debt Service and Capital Projects Funds.

The PCIC does not release a separate financial report.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 45 (1) Summary of Significant A ccounting Policies (Continued)

(A) Reporting Entity (Continued)

Pasadena Housing Authority (Housing Authority)
Formerly known as the Local Housing Authority, the Pasadena Housing Authority administers the City's federally funded housing programs under contract with the United States Department of Housing and Urban Development (HUD). The Housing Authority’s purpose is to help provide safe and sanitary housing accommodations for citizens with low income. It is governed by the City Council and the City has operational responsibility for the Authority.

The Housing Authority’s financial data and transactions are blended as a Special Revenue Fund. The Housing Authority does not release a separate financial report.

Pasadena Public Financing Authority (PPFA)
The Pasadena Public Financing Authority was created through the joint exercise of powers agreement between the City and the Pasadena Community Development Commission (PCDC) dated April 24, 2000. The purpose of creating the PPFA is to accomplish the purposes of the law and the Bond Pooling Act, including the financing of public capital improvements and the pur chase of certain local obligations issu ed or incurred by the City, PCDC, or other public agencies or the sale of such local obligations or the issuan ce of bonds of th e PPFA secured in whole or in part by such local obligations, or by any other designated source of revenues, all permitted by the law or the Bond Pooling Act. The Bond Pooling Act authorizes and empowers the PPFA to, among other things, (1) issue bonds and to expend or loan the proceeds thereof to the City or PCDC, (2) finance the acquisition and/or construction of public capital improvements and to sell or lease such improvements to the City or PCDC, and (3) purchase bonds issued by the City or PCDC, all for the purpose of financing public capital improvements, working capital, liability and other insurance needs, or certain other projects wh enever there are significant public benefits, as determined by the City or PCDC. PCDC ceased operations as an entity on January 31, 2012, and the City became the successor agency to the PCDC to perform all of PCDC’s continuing obligations. PPFA’s financial data and transactions are blended with the Debt Service and Capital Projects Fund. The PPFA does not release a separate financial report.

Pasadena Fire and Police Retirement System (FPRS)
FPRS was originally established by the City Charter in 1919. The system was closed on June 30, 1977 but continues to pay out benefits to retirees and their beneficiaries. FPRS covers all sworn fire and police personnel who were employed by the City prior to July 1, 1977, except those who elected to transfer to the California Public Employees’ Retirement System (CalPERS) when the system closed. FPRS is managed by a five-member Retirement Board. Three of the members are appointed by the City Council. The other two members represent firefighter and police officials and are each appointed by their respective members. The accompanying financial statements include FPRS under the Employee Benefit Trust Fund. Additional information related to FPRS is included in the detailed notes on Pension Plans.

Successor Agency to PCDC (Successor Agency)
The Successor Agency to PCDC was crea ted to serve, in a fiduciary capacity , as custodian for the assets and to wind down the affairs of the former Pasadena Co mmunity Development Commission (PCDC). The Successor Agency operates under the auspices of a legislatively formed oversight board who has authority over its financial affairs and supervises its operations and timely dissolution. Its assets are held in trust for the benefit of the taxing entities within the former PCDC boundaries and as such are not available for City use. The accompanying financial statements include the Successor Agency under the statutorily required Private-Purpose Trust Fund.

Discretely Presented Component Units

The following organizations are considered to be discretely presented component units of the City:

Rose Bowl Operating Company (RBOC)
RBOC was incorporated on January 18, 1994, as a legally separate entity wi th the primary purpose of returning economic and civic value to the City by managing a world class stadium a nd a professional quality golf course complex in a residential open-space environment. RBOC is governed by a thirteen-member board. Eleven members are appointed by the City Council, while th e University of California, Los Angeles (UCLA) and the Tournament of Roses appoint one each.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA

46 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting Entity (Continued)

RBOC operations are discretely presented in the accompanying financial statements since neither of the two criteria for blended component units, as described ab ove, have been met. RBOC’s budget is reviewed and approved by the City Council. Separate component unit financial statemen ts of RBOC are issued and available upon request from the RBOC Administration Office at 1001 Rose Bowl Drive, Pasadena, California 91103. RBOC’s financials were audited in accordance with Government Auditing Standards . Additional information is available at https://www.rosebowlstadium.com/.

Pasadena Center Operating Company (PCOC)
PCOC was established on September 19, 1973, as a legally separate entity with the primary purpose of managing and operating the Pasadena Center, a civic facility designed for conferences, ex hibitions, trade shows, assemblies, cultural, educational, and recreational programs, and for the use, benefit, and enjoyment of the public. PCOC was also established to supervise the activi ties of the Pasadena Convention and Visitors Bureau.

PCOC is governed by a fourteen-member board who are appointed by the City Council. The City provides a significant portion of the operating support of PCOC through allocation of the Transient Occupancy Tax collected by the City. Separate component unit financial statements of PCOC are issued and available upon request from Pasadena Center Operating Company, 300 E. Green Street, Pasadena, CA 91101. PCOC’s financials were audited in accordance with Government Auditing Standards . Additional information is available at https://www.visitpasadena.com/.

Pasadena Community Access Corporation Board (PCAC)
PCAC was created by the City Council in July 1983 an d established on December 9, 1983 by Articles of Incorporation. The PCAC's primary purpose is to provide a means for individuals or groups to use cable telecommunications to communicate and share information. The PCAC board consists of eleven members. Seven are appointed from each Council district, one each by the Mayor and City Manager, two members, including one representing Pasadena City College (PCC) and another one representing Pasadena Unified School District (PUSD) with residency required except for the PCC and PUSD representative. The City can impose its will on PCAC through its ability to appoint a majority of its board members. PCAC’s budget is reviewed and approved by the City Council. The City provides support through the 1% Public, Education, and Government (PEG) allocation. Separate component unit financial statements of PCAC are issued and available upon request from Pasadena Community Access Corporation, 150 South Los Robles Avenue, Pasa dena, CA 91101. PCAC’s financials were audited in accordance with Government Auditing Standards . Additional information is available at

https://www.pasadenamedia.org/.

Jointly Governed Organizations

The following organizations are considered to be jointly governed organizations of the City:

Hollywood Burbank Airport
The Hollywood Burbank Airport (formerly marketed as Bob Hope Airport) is under the governance of the Burbank-Glendale-Pasadena Airport Authority (Airport Au thority). The Airport Author ity is a separate agency created in 1977 under a joint powers agreement (JPA) between the three cities for the sole purpose of owning and operating the Bob Hope Airport. Three commissioners fr om each city, appointed by each city's respective city council, make up the nine members of the Airport Authority. There is no ongo ing financial interest or responsibility by the participating governments.

Additional information is available at www.hollywoodburbankairport.com.

County of Los Angeles (County)
Under a Joint Powers Agreement dated November 22, 1966, both the City and the County participated in the construction of a parking structure at 199 North Garfield Avenue, Pasadena, California. In 1985, the County exercised an option to purchase the structure from the Retirement Board of the Los Angeles County Employees' Retirement Association, at which time the City became tenant in common, holding a 30% share of the facility.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 47 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting Entity (Continued)

Foothill Air Support Team (FAST)
On July 31, 2000, the cities of Monrovia, Arcadia, Az usa, Covina, West Covina, and Pasadena formed a Joint Powers Agreement (JPA) for police helicopter services kn own as the FAST. Currently, the cities of Alhambra, Arcadia, Covina, Glendora, Monrovia, Pasadena, Pomona , San Marino, Sierra Madre, and South Pasadena are parties to the JPA. This arrangement provides police helicopter support to a number of neighboring cities on an hourly cost reimbursement basis. The City of Pasadena operates a fleet of police helicopters which it has made available for a limited set number of weekend hours and then on an on-call basis. Cities are billed for their actual utilization. FAST does not own or operate helicopters, has not issued debt, and cannot levy taxes. The City bears the burden of purchasing, op erating, maintaining, and providing helicopter support. It does so under the City’s General Fund.

Rose Bowl Aquatics Center (RBAC)
On December 11, 1987, the City and the RBAC entered into an Operating and License Agreement for RBAC to build and operate swimming facilities owned by the City in the designated area of Brookside Park. The most recent Operating and License Agreement has a 15-year te rm with 3 five-year extensions and was executed on June 3, 2008. The City leases the property to the RBAC for $1 per year and provides various financial and operational supports to the community aquatics facility. In return RBAC operates as a year - round community aquatics facility, is responsible for capital improvements and repairs, and provides scholarship assistance and community services. The City Council and Mayor appoint 5 of the 21 members of the RBAC Board of Directors.

Foothill Workforce Development Board (FWDB)
Developed 35 years ago, the City Council approved a JPA among the cities of Arcadia, Duarte, Monrovia, Sierra Madre, South Pasadena, and Pasadena. The JPA created the Foothill Employment and Training Consortium (FETC) which the City of Pasadena is the fiscal agent and ha s the authority to receive and administer workforce development funds. FETC formed the Foothill Workforce Development Board (FWDB) to take the lead in developing the implementation plan for workforce deve lopment services for job seekers and businesses. The mission is to support economic growth in the San Gabriel Valley by investing in skill development and job training to ensure that businesses have qualified workforce talent and job seekers have career opportunities. The FWDB’s Americas Job Center of California is lo cated at 1207 East Green Street in Pasadena and is funded through the Workforce Innovation and Opportunity Act (WIOA).

(B) Basis of Accounting and Measurement Focus

The basic financial statements of the City are composed of the following:
• Government-wide financial statements
• Fund financial statements
• Notes to the basic financial statements

Government-wide Financial Statements

Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government (including its blended component units), as well as its discretely presented component units. Eliminations have been made in the statement of activities so that certain allocated expenses are recorded only once (by function to which they were allocated). However, general governmental expenses have not been allocated as indirect expenses to the various functions of the City.

Government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting . Under the economic resources measurem ent focus, all economic resources and obligations of the reporting government (both current and long-term) are reported in the government-wide

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 48 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant A ccounting Policies (Continued) (B) Basis of
Accounting and Measurement Focus (Continued)
financial statements. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities are recognized in accordance with various GASB Statements.

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

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

Fund Financial Statements
The underlying
accounting system of the City is organized and operated based on separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its asse ts, 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 how spending activities are controlled.

Fund financial statements for the City are governmental, proprietary, and fiduciary funds and they are presented after the government-wide financial statements. These statements disp lay information about major funds individually and non-major funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations.

Governmental Funds
In the fund financial statements, gover
nmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets.

Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or s oon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a sixty-day availability period. The City accrues the following revenue types: taxes, licenses, fines and forfeits, and miscellaneous revenues.

Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in th e period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the under lying exchange transaction on wh ich they are based takes place. Imposed non- exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable le gal claim to the revenues arises or when they are received, whichever occurs first.

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and curre nt liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is a measure of “available spendable resources.” Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net cu rrent assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 49 (1) Summary of Significant A ccounting Policies (Continued)

(B) Basis of Accounting and Measurement Focus (Continued)

Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets despite their spending measurement focus. Special reportin g treatments are used to i ndicate that they should not be considered “available spendable resources,” since they do not represent net current assets. Recognition of governmental fund type revenues represented by non-current receivables are deferred until they become current receivables. Non-current portions of other long-term receivables are reflected in nonspendable fund balance.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since th ey do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing source rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

Proprietary Funds

The City’s Enterprise and Internal Service Funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when the related g oods or services are deliver ed. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether cu rrent or non-current) associated with their acti vity are included on their balance sheets. Proprietary fund ty pe operating statements present increases (revenues) and decreases (expenses) in total net position.

Operating revenues and expenses generally result from providing services and prod ucing and delivering goods in connection with a proprietary fund’s principal ongoin g operations. The principal operating revenues of the Light and Power Fund, Water Fund, Off-Street Parking Facilities Fund and of the City’s Internal Service Funds are charges to customers for sales and services. Operating ex penses for the Enterprise Funds and Internal Service Funds include the cost of sales and se rvices, administrative expenses, and depreciation/amortization on capital assets. All revenue and expenses not meeting this definition are reported as non-operating revenues and expenses.

Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as expense. Proc eeds of long-term debt are recorded as a liability in the proprietary fund financial statements. Amounts paid to reduce long-term liability of the pr oprietary funds are reported as a reduction of the related liability.

When both restricted and unrestricted resources are combined in a fund, expenses are paid first from restricted resources, and then from unrestricted resources.

Fiduciary Funds

The City’s fiduciary funds include Employee Benefit Tr ust Funds, Custodial Funds, and Private-Purpose Trust Funds. Employee Benefit Trust Funds are used to account for resources that are required to be held in trust for the members and beneficiaries of benefit and contribution plans. Private-Purpose Trust Funds are to account for receipt of incremental property tax and payment of enforceable obligations (debts) of the former redevelopment agency.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 50 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant A ccounting Policies (Continued) (C) Major Fund
s, Internal Service Funds and Fiduciary Fund Types
The City reports the following major governmental funds:

General Fund – The primary fund of the City; accounts for all general revenues of the City not specifically levied or collected for other City funds and for expenditures related to the rendering of general services by the City. Included under the General Fund are American Rescue Plan Act (ARPA) activities. ARPA funds are restricted for the bridging of budget shortfalls, ed ucation, housing, and healthcare-related funding, including COVID-19 vaccines, testing and contact tracing, and emergency paid leave.

Project Management Capital Projects Fund – Accounts all capital improvement projects, except for those involving the utilities, and special assessment districts, where revenues are received from grants by other governments, private parties, and through transfer from other City funds.

General Debt Service Fund – Accounts the payment of interest and principal of the pension bonds and other city-wide obligations.

Housing Successor Fund – Accounts the use of property tax increment legally restricted for increasing or improving housing for low- and moderate-income households effective February 1, 2012.

The City reports the following major proprietary funds:

Light and Power Fund – Accounts the oper ations of the City’s electric utility; a self-supporting activity that renders services on a user-charge basis to residents and businesses as prescribed by the City Charter.

Water Fund – Accounts the operations of the City’s water utility; a self-supporting activity that renders services on a user-charge basis to residents and businesses as prescribed by the City Charter.

Off-Street Parking Fund – In fiscal year ended 2014, the City combined all the parking funds into the Off- Street Parking Fund. This fund accounts the operation of the parking facilities throughout the City.

The City reports the following internal service funds:

Computing and communication servic es, building maintenance, fleet replacement, fleet repair and maintenance, employee benefits, workers’ compensation, general liability, and the 311 call center to other departments or agencies of the City.

The City reports the following fiduciary fund types:

Employee Benefit Trust Funds – The funds account for transactions of the Pasadena Fire and Police Retirement System (FPRS) and the City’s Deferred Compensation Plan.

Custodial Funds – These funds account for resources held by the City in a purely custodial capacity. Custodial funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. The custodial funds account for monies received from agencies and financial activities for: (1) La ke/Washington Special Assessm ent District, (2) library equipment, (3) the Workforce Innovation and Opportunity Act (WIOA), and (4) the Open Space Assessment District.

Private-Purpose Trust Funds – These funds account for monies held on behalf of others in a fiduciary capacity, typically pursuant to a formal trust agreem ent. The City uses a private purpose trust fund to account for the receipt of incremental property tax and payment of enforceable obligations (debts) of the former redevelopment agency that were approved on the Recognized Obligation Payment Schedule (ROPS) by the California Department of Finance until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 51 (1) Summary of Significant A ccounting Policies (Continued) (D) Cash Equivalents
For purposes of
the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known am ounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the Proprietary Funds’ share in the City’s cash and investment pool. Cash equivalents have an original maturity date of three months or less from the date of purchase. (E) Cash and Investments
Investments are reported in the accompanying financial statements at fair value based on quoted market prices, except for certain certificates of deposit, money market investments that mature within one year of acquisition and investment contracts that are reported at cost because they are not transferable, they have terms that are not affected by changes in market interest rates, and provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors.

Both realized and unrealized changes in fair value that occur during a fiscal year are recognized and recorded as net changes in fair value of investments . Investment earnings include net changes in fa ir value of investments, interest earnings, and all other investment income.

The City pools cash and investments of all funds, except for certain fund specific City held portfolios, deferred compensation assets, and assets held by fiscal agents. Each fund’s sh are in this pool is displayed in the accompanying financial statements as cash and investments.

Investment income earned by the pooled investments is allocated to the various fu nds based on each fund’s average cash and investment balance, except for investment earnings associated with the following funds not legally required to receive p ooled investment earnings that have been assigned to and recorded as revenue in the General Fund, as provided by the legal provisions of the California Government Code Section §53647: Health, Housing and Community Development, Project Manage ment, Workers’ Compensation, General Liability, Employment and Training, South Lake Business Improvem ent District and Old Pasadena Business Improvement District.

The City enters into interest rate swap agreements to modify rates on outstanding debts. Other than the net interest expenditures resulting from these agreements, no amounts are recorded in the financial statements. (F) Inventories
Inventories held by the Light and Power Fund and Water Fund (Enterprise Funds) are carried at the lower of weighted average cost or market computed on a first-in/first-out basis depending on the type of inventory. There are three types of inventories, those held for consumption in operations, those capitalized, and inventory held for resale. Inventories held by the Fleet Maintenance Fund (Internal Service Fund) are carried at average cost.

Inventory items are accounted for as an expenditure or expense when consumed or sold. (G) Advances to Other Funds
Long-term interfund advances are recorded as a receivable and as nonspendable fund balance by the general fund since they do not reflect current appropriable reserves. (H) Prepaids
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid assets. The City utilizes the allocation method to reco rd its prepaids. The prepaid assets recorded in the Governmental Funds do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is nonspendable.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 52 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant A ccounting Policies (Continued) (I) Restricted Cas
h and Investments
The City considers all cash and invest ments from bond proceeds in Proprietary Funds as restricted. The City is legally mandated under bond indentures to use these resources only for the purposes specified. Also included as restricted cash and investments ar e amounts accumulated in the Light and Power Fund for the purpose of meeting future contractual commitments, including th e Stranded Investment Reserve (SIR) Utilization Plan (discussed further in the detailed notes), deferred comp ensation, and all cash and investments belonging to Employee Benefit Trust and Custodial Funds held by trustees. (J) Property Held for Resale
Property held for resale represents land, structures, and their related improvements that were acquired for resale. This includes the properties acquired in accordance with the objective of the former Pasadena Community Development Commission (PCDC) project area.

On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 that provides for the dissolution of all redevelopment agencies in Calif ornia. The bill provides that upon d issolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the “succe ssor agency” to hold the assets until they are distributed to other units of state and local government. The City Council elected to become the Successor Agency on January 30, 2012.
(K) Capital Assets
Capital assets (including infr astruct
ure) greater than $10,000 are capitalized and recorded at cost or at the estimated fair value of the assets at the time of acqu isition where complete historical records have not been maintained. Contributed capital assets, works of art, and capital assets received in service concession agreements are reported at acquisition value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Capital assets include public domain (infrastructure) general assets consisting of certain improvements including roads, streets, sidewalks, medians, sewer systems and storm drains.

Capital assets are depreciated or amortized using the st raight-line method over the following estimated useful lives:

Production pla nt 20 to 40 years Source of s upply 20 to 50 years Trans mis s i on pla nt 25 to 40 years Pumping pl ant 10 to 50 years Dis tribution pla nt 20 to 40 years Treatment pla nt 10 to 20 years Genera l pl ant 10 to 40 years Tra ns mis s ion and dis tributi on pla nt 10 to 80 years Equi pment 4 to 10 years General pl ant 6 to 50 years Ri ght-to-us e l eas ed a s s ets Equi pment 4 to 10 years Ri ght-to-us e l eas ed as s ets Shorter of the leased asset's useful life or the lease term
Buildings and improvements 20 to 50 years Buil di ng a nd i mprovements 20 to 50 years Machinery and equipment 2 to 20 years Machinery and equipment 2 to 20 years Infras tructure 8 to 200 years Ri ght-to-us e l eas ed as s ets Shorter of the leased asset's useful life or the lease term
Light and Power Fund Water Fund
All Other Funds
Shorter of the leased asset's
useful life or the lease term

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 53 (1) Summary of Significant A ccounting Policies (Continued)

(L) Leases (new in fiscal year 2022)

Leases are financings of the right-to-use an underlying asset. In accordance with GASB Statement No. 87, Leases, parties to a lease agreement, the lesse e and lessor, are required to recogniz e a lease liability and an intangible right-to-use lease asset (a capital asset hereinafter refe rred to as the lease asset), and a lease receivable and deferred inflow of resources, respectively. A general de scription of the leasing arrangements, the aggregated amounts of resource inflows and outflows recognized from lease contracts, including those not included in the measurement of the lease liability and receivable, and the disclosure of the lo ng-term effect of lease arrangements on a government’s resources are further discussed in the detailed notes.

(M) Insurance Claims Payable

The City records a liability for material litigation, judgments, and claims (including incurred but not reported losses) when it is probable that an asset has been significantly impaired, or a material liability has been incurred prior to year- end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated.

These claims are only recorded on a case-by-case basis. These liabilities are recorded and liquidated from the City’s Workers’ Compensation and General Liability Internal Service Funds. Detailed notes discuss excess liability insurance covers claims greater than the self-insurance thresholds.

(N) Compensated Absences

The City accounts for compensated absences including accumulated va cation, floating holidays, and compensatory time-off, and certain sic k leave in the Benefits Internal Service Fund. Management time off is recorded under departmental expense as incurred. Upon separation, employees are paid for all their unused vacation leave, floating holidays, management time off, and compensatory time -off subject to maximums described below.

Eligible employees accumulate 3 to 22 days of vacation each year, depending on the employee’s bargaining unit and length of service, but may not carry over from one year to the next more than the equivalent of one to three (depends on Memorandum of Understanding or Salary Resolution) year’s vacation without prior approval of the respective department head and/or City Manager.

A liability is recorded for unused va cation and similar compensatory leav e balances since the employees' entitlement to these balances is attributable to services already rendered and it is probable that virtually all these balances will be liquidated by either paid time-off or payments upon termination or retirement. The City does not accrue for unused holiday and management time off.

Compensated absences are primarily liquidated by the General Fund, Light and Power Fund and Water Fund. Sick pay benefits only accumulate; they can be converted at retirement from the City for PERS Service Credit.

Consistent with this policy, the City does not accrue sick pay benefits. The to tal outstanding vacation, compensatory time-off obligations are accrued at fiscal year-end and included under Compensated Absences in the Benefits Internal Service Fund as a current liability.

(O) Net Pension Liability

For purposes of measuring the net pension liability, de ferred outflows and inflows of resources related to pensions, and pension expense, information about the fi duciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office and are in accordance with the im plementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website, www.calpers.ca.gov, under Forms and Publications.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 54 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant A ccounting Policies (Continued) (P) Po
stemployment Benefits Other than Pension Obligation (OPEB) For purpose of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about th e fiduciary net position of the City’s OPEB plan, and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary and are in accordance with the im plementation of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

See note 20 for additional details.
(Q) Bond Premiums / Discounts / Issuance Costs
For Governmental-wide and Proprietar y Funds financial statements, issuance costs are recognized during the current period. Any bond premiums and discounts are capitalized and amortized over the life of the bonds. Bond proceeds, premiums and discounts are reported as other financing sources in the governmental fund financial statements.
(R) Deferred Outflows and Inflows of Resources
Pursuant to GASB Statements No. 63 and 65, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Po sition and Items Previously Reported as Assets and Liabilities , respectively, the City recognizes deferred outflows and inflows of reso urces. A deferred outflow of resources is defined as a consumption of net assets by the government that is applicable to a future reporting period. A deferred inflow of resources is defined as an acquisition of net assets by the government that is applicable to a future reporting period.
(S) Fund Balance
In the fund financial statements, governmental fund balance is made up of the following components:

Nonspendable fund balance is the portion of fund balance that cannot be spent due to form. Examples include inventories, prepaid amounts, long-t erm loans, notes receivable, and pr operty held for resale, unless the proceeds are restricted, committed or assigned. Also, am ounts that must be mainta ined intact legally or contractually, such as the principal of a permanent fund are reported within the nonspendable category. • Restricted fund balance is the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors. • Committed fund balance is the portion of fund balance that is subject to self-imposed constraints due to City Council resolutions, as they have the highest level of decision-making authority. • Assigned fund balance is the portion of fund balance that is constrained by the City’s intent to utilize fund balance for a specific purpose. The authority to assign fund balance has been delegated by the City Council to the Finance Director through the Fund Balance Policy. • Unassigned fund
balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. The general fund should be the only fund that reports a positive unassigned fund balance amount. In a governmental fund other than the general fund, expenditures incurred for a specific purpose might exceed the amounts in the fund that are restricted, committed, and assigned to that purpose and a negative residual balance for that purpose may result.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 55 (1) Summary of Significant A ccounting Policies (Continued) (S) Fund Balance (Continued)
The accounting policies of the City consider restricted fund balance to have been spent first when expenditures are incurred for purposes for which both the restricted and unrestricted fund balance is available. Similarly, when expenditures are incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned and then unassigned amounts.

In June 2017, the City Council directed staff to revise the Fund Balance Policy to split the General Fund Emergency Contingency into two components of committed fund balance: the General Fund Emergency Contingency Reserve and a General Fund Operating Reserve. The go al of a 20 percent General Fund reserve as committed fund balance continues but is split 15 percent to the Emergency Contingency Reserve and 5 percent to the Operating Reserve. These percentages continue to be calculated using that year’s General Fund budgeted appropriations. It is intended that these committed fund balances would not be reduced below a 20 percent level without the direction of Council or upon a declared local emergency. (T) Property Taxes
The assessment, levy and collection of property taxes are the responsibility of the County of Los Angeles. The City records property taxes as revenue when received from the County, except at year-end, when property taxes received within 60 days are accrued as revenue.

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

Lien January 1
Levy July 1 to June 30
Due Nov ember 1 - 1st installment
M ar c h 1 - 2nd installment
C ollec tion Dec ember 1 0 - 1st installment
Apr il 1 0 - 2nd installment
Property taxes on the secured roll are due in
two installments: on November 1 and March 1 of the fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. Such delinquent property may thereafter be redeemed by payment of the delinquent taxes and the delinquent penalty, plus a redemption penalty of 1% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is then subject to sale by the County Tax Collector.

Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent, if unpaid, on August 31. A 10% penalty attaches to delinquent taxes on property of the unsecured roll, and an additional penalty of 1% per month begins to accrue. Collection of delinquent unsecured taxes is the responsibility of the County of Los Angeles using the several means legally available. (U) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that a ffect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenditures. The City has made certain estimates and assumptions relating to the revenues due and expenditures incurred through fiscal year-end, collect ability of its receivables, the valuation of property held for resa le, the useful lives of the capital a ssets, the ultimate outcome of claims and judgments, and the valuation of pension and othe r postemployment benefit plan liabilities and related deferred outflows and inflows of resources. Actual results may differ from those estimates and assumptions.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 56 Annual Comprehensive Financial Report | June 30, 2022 (1) Summary of Significant A ccounting Policies (Continued) (V) Interfun
d Activities
Certain eliminations have been made as prescribed by GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments , regarding 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 to tal government column. In th e statement of activities, internal services funds transactions have been eliminated. However, tr ansactions between governmental and business-type activities have not been eliminated.
(W) Endowments
The City has been the recipient of endowments that are recorded in Permanent Funds. The endowments are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the City’s programs or specific restrictions that were placed on the endowment when the donation to the City was made. Please refer to the Permanent Funds section for additional details. (X) New and Future Accounting Pronouncements
In fiscal year ended June 30, 2022, the City adopted GASB Statement No. 87, Leases.

GASB Statement No. 87, Leases, establishes a uniform approach for lease accounting based on the principle that leases are financings of the right to use an underlying asset. In accordance with the statement, parties to a lease agreement, the lessee and lessor, are required to recogniz e a lease liability and an intangible right-to-use lease asset (a capital asset hereinafter referred to as the leas e asset), and a lease receivable and deferred inflow of resources, respectively. The new leas es standard also requires enhanced disclosure which include a general description of the leasing arrangemen t, the aggregated amount of resour ce inflows and outflows recognized from lease contracts, including those not included in th e measurement of the lease liability and receivable, and the disclosure of the long-term effect of lease arrangements on a government’s resources.

GASB has issued the following pronouncements that may affect future financial position, results of operations, cash flows, or financial presentation of the City upon implementation. Management has not yet evaluated the effect of implementation of these standards:

GASB
Statement
No. GASB Accounting Standard
Effective Fiscal
Year
91 Conduit Debt Obligations 2023
94 Public-Private and Public-Public Partnerships and
Availability Payment Arrangements 2023
96 Subscription-Based Information Technology Arrangements 2023 99 Omnibus 2022 2023 and 2024
100
Accounting Changes and Error Corrections—an amendment
of GASB Statement No. 62 2024
101 Compensated Absences 2025

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 57 Detailed Notes to the Basic Financial Statements
(2) Cash and Investments
Primary Governme
nt
Cash and investments as of June 30, 2022 ar
e classified in the accompanying financial statements as follows:

Statement of net position:

Ca s h a nd i nves tments 621,162,579$
Res tri cted ca s h a nd i nves tments 100,287,212
Fiduciary funds:

Ca s h a nd ca s h equi va l ents 328,512,881
Tota l ca s h a nd i nves tments 1,049,962,672$
Cash on hand 52,737$
Deposits with financial institutions (2,207,809)
Investments 1,052,117,744
Total cash and investments 1,049,962,672$
Ca s h a nd i nves tments a s of June 30, 2022 cons i s t of the fol l owi ng:

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

Authorized By * Maximum * Maximum
Investment Types Investment * Maximum Percentage Investment Authori zed by State Law Pol i cy Maturi ty of Portfol i o i n One Is suer Local Agency Bonds Yes 5 years None None
US Treasury Obl i gati ons Yes 5 years None None
US Agency Securities Yes 5 years None None
Banker's Acceptance Yes 180 days 40% 30%
Commercial Paper Yes 270 days 15% 10%
Negotiable Certificates of Deposit Yes 5 years 30% None Repurchase Agreement Yes 1 year None None
Reverse Repurchase Agreements Yes 92 days 20% of base value None Time Deposits Yes N/A 25% None
Medium Term Notes Yes 5 years 30% 5%
Mutual Funds Yes N/A 20% 10%
Money Market Mutual Funds Yes N/A 20% 10%
Mortgage Pass-Through Securities Yes 5 years 20% None
Corporate Bonds Yes 5 years 20% 10%
County Pooled Investment Fund Yes N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None None
JPA Pools (other investment pools) Yes N/A None None
Regi stered State Warrants Yes N/A None None
* Base d on state law re quire m e nts or inve stm e nt policy re quire m e nts, whiche ve r is m ore re strictive .

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA

58 Annual Comprehensive Financial Report | June 30, 2022 (2) Cash and Investments (Continued)

Investments Authorized by Debt Agreements

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

Ma xi mum
Authorized Inves tment Type Ma turity
US Treasury Obligations None
US Agency Securi ti es None
Ba nker's Accepta nce 360 days
Commerci al Paper 270 days
Money Ma rke t Mutua l Funds N/A
Investment Contracts 20-30 years
Pre-refunded Municipal Bonds None
Repurchase Agreements 1 year
Loca l Agency Inves tment Fund (LAIF) N/A
Gener al Obligation Bonds None

Disclosures Relating to Interest Rate Risk

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

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

Information about the sen sitivity of the fair values of the City’s inve stments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

12 Months 13 to 24 25 to 60 More than
Investment Type Total or Less Months Months 60 Months
Corporate Bonds 92,512,513 $ 29,785,275 $ 13,427,756 $ 49,299,482 $ - $ Supernationals 23,391,788 - 4,830,263 18,561,525 - Federal Agency Securities 353,226,428 3,928,323 49,540,887 274,208,582 25,548,636 Municipal Bonds 40,230,551 10,435,038 8,430,193 20,540,376 824,944 Certificates of Deposit 1,235,299 - - 1,235,299 - California Asset Management Program 76,825,076 76,825,076 - - - Money Market Funds 692 692 - - - Commercial Paper Disc 9,762,274 9,762,274 - - - State Investment Pool 48,331,063 48,331,063 - - - US Treasury 56,478,385 9,657,254 23,734,883 23,086,248 - Held by Bond Trustee:

Federal Agency Securities 12,122,475 - - 5,285,599 6,836,876 Money Market Funds 1,212,148 1,212,148 - - - Held by Pension Section 115 Trustee:

Mutual Fund 11,696,726 11,696,726 - - - Deferred Compensation Plan:

Mutual Funds 325,092,326 325,092,326 - - - Total 1,052,117,744 $ 526,726,196 $ 99,963,982 $ 392,217,111 $ 33,210,456 $ Remaining Maturity (in Months)

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 59 (2) Cash and Investments (Continued)
Disclosure
s Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an in vestment will not fulfill its oblig ation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.

Minimum
Legal Not
Investment Type Rating AAA Aa A Rated
Corporate Bonds 92,512,513 $ A 18,551,820$ -$ 73,960,693 $ -$ Supernationals 23,391,788 A 23,391,788 - - -
Federal Agency Securities 353,226,428 N/A 353,226,428 - - - Municipal Bond 40,230,551 N/A 3,549,562 35,558,233 1,122,756 - Certificate of Deposit 1,235,299 A 1,235,299
California Asset Management Program 76,825,076 N/A - - - 76,825,076 Money Market Funds 692 N/A - - - 692
Commercial Paper Disc 9,762,274 AA - - 9,762,274 - State Investment Pool 48,331,063 N/A - - - 48,331,063 US Treasury 56,478,385 N/A 56,478,385 - - -
Held by Bond Trustee:

Federal Agency Securities 12,122,475 A 12,122,475 - - - Money Market Funds 1,212,148 A 1,212,148 - - - Held by Pension Section 115 Trustee:

Mutual Fund 11,696,726 N/A - 11,696,72 6 - -
Deferred Compensation Plan:

Mutual Fund 325,092,326 N/A - 325,092,32 6 - -
Total 1,052,117,744$ 468,532,606$ 372,347,285$ 84,845,723$ 126,392,130$ Rating as of Year-End
Concen
tration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Go vernment Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:

Issuer Type Amount
Federal Home Loan Bank Federal Agency Securities 183,354,908$ Federal Home Loan Mortgage Bank Federal Agency Securities 96,994,346 Feder al Far m C r edit Bank Feder al Agency Secur ities 8 0,3 5 1,7 41 U.S. Treasury U.S. Tresury 56,478,385
Custodial Credit Risk
Custodial
credit risk for deposits is the r isk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investment s, other than the following provision for deposits: The California Government Code requires that a financial institut ion secure deposits made by state or local governmental units by pledging securities in an undivided collateral p ool held by a depository regulated under state law (unless so waived by the governmental unit).

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 60 Annual Comprehensive Financial Report | June 30, 2022 (2) Cash and Investments (Continued)
The market value of the pledged securities in the collate ral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2022, the City did not have bank balances related to deposits with financial institutions in excess of the federal depository insurance limits held in uncollateralized accounts.

For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.

California Asset Management Program (CAMP)
The City is a participant in the California Asset Mana gement Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust and created th rough a joint powers agency as a pooled short-term portfolio and cash management vehicle for California public agencies under California Government Code Section 53601(p). CAMP is governed by a seven-member Board of Trustees comprised of finance directors and treasurers of California public agencies. The City reports its investment s in CAMP at the fair valu e amounts provided by CAMP, which is the same as the value of the pool share in accordance with GASB 79 requirements. On June 30, 2022, the CAMP pool had an average maturity of 28 days and it exempt from the fair value hierarchy.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAI F) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro- rata share of the fair value pr ovided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

Fair Value Hierarchy
The City categorizes its fair value meas urements within the fair value hierar chy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset or liability. Level 1 inputs are quoted prices in active markets for identical assets ; Level 2 inputs are quoted prices in active markets for similar assets. Level 3 inputs are significant unobservable inputs.

The City has the following recurring fair value measurements as of June 30, 2022:

Measure by Fair Value
Not Subject to
Fair Value
Hierarchy 1 2 3 Total
Corporate Bonds -$ -$ 92,512,513$ -$ 92,512,513$ Supernationals - - 23,391,788 - 23,391,788
Federal Agency Securities - - 353,226,428 - 353,226,428 Municipal Bond - - 40,230,551 - 40,230,551
Certificates of Deposit 1,235,299 1,235,299
California Asset Management Program - - 76,825,076 - 76,825,076 Money Market Funds 692 - - - 692
Commercial Paper Disc - - 9,762,274 - 9,762,274 State Investment Pool 48,331,063 - - - 48,331,063 US Treasury - - 56,478,385 - 56,478,385 Held by Bond Trustee:

Federal Agency Securities - - 12,122,475 - 12,122,475 Money Market Funds 1,212,148 - - - 1,212,148 Held by Pension Section 115 Trustee:

Mutual Fund - - 11,696,726 - 11,696,726 Deferred Compensation Plan:

Mutual Fund - 99,300,298 225,792,028 - 325,092,326 Total 50,779,202$ 99,300,298$ 902,038,244$ -$ 1,052,117,744$ Level

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 61 (3) Accounts Receivable
As of June 30, 2022, accounts receivable are categorized as follows:

Non-Major
Project Housing Governmental Internal
General Management Successor Funds Service Total
Governmental Activities:

Accounts receivable 6,567,393$ 958,689$ 5,145$ 8,396,195$ 46,317$ 15,973,739$ Accrued revenue
receivable 23,425,853 - - 8,708,072 141,889 32,275,813 Interest receivable 265,480 - 1,229 372,277 121,424 760,410 Paramedics receivable 4,123,963 - - - - 4,123,963 Utility receivable 2,237,639 - - 940,492 - 3,178,131 36,620,328 958,689 6,374 18,417,035 309,630 56,312,056 Less: allowance for
uncollectible amounts (2,648,020) - - (195,029) - (2,843,049) Total 33,972,308$ 958,689$ 6,374$ 18,222,006$ 309,630$ 53,469,007$ Non-Major
Light and Off-Street Enterprise
Power Water Parking Funds Total
Business-type Activities:

Accounts receivable 135,690$ 304,418$ 506,821$ 265,716$ 1,212,645$ Accrued revenue
receivable 14,628,663 5,865,928 365,751 1,270,176 22,130,518 Interest receivable 467,244 184,652 35,038 27,909 714,844 Paramedics receivable - - - - - Utility receivable 18,443,090 6,673,422 - 1,560,194 26,676,706 33,674,687 13,028,420 907,611 3,123,995 50,734,713 Less: allowance for
uncollectible amounts (4,663,093) (1,462,370) - (563,395) (6,688,858) Total 29,011,594$ 11,566,050$ 907,611$ 2,560,600$ 44,045,855$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 62 Annual Comprehensive Financial Report | June 30, 2022 (4) Notes Receivable – Primary Government
The notes receivable in the
governmental funds amounted to $102,691,952 at June 30, 2022. $58,023,672 consisted of primarily Housing and Community Deve lopment loans, which arose from the sale of land to project developers and other agencies, and the provision of loan assistance unde r the City’s affordable housing programs, subject to approved redevelopment plans. $26,31 8,280 consisted of loans that the former redevelopment agency made to assist the development of affordable rental housing projects and the purchase of homes by homebuyers. These loans are secured by trust deeds and were funded with redevelopment low-moderate income housing set-aside funds.

These notes have various terms, including maturities ranging from 5 to 45 years and interest rates ranging from 1.5% to 11%. Due to the uncertainty of th eir collectability at June 30, 2022, the City has recorded an allowance for uncollectible long-term receivables of $89,186,557.

In January 2009, Light and Po wer utilized $80 million of Reserves for Stranded Investment and in return received Subordinated Notes totaled $70 million from Intermountain Power Agency (IPA) to defease some of IPA’s outstanding debt service requirement for Intermountain Power Project (IPP) bonds. These notes have various maturity dates, and the proceeds, when mature, will be us ed to stabilize future energy costs. The balance of the notes as of June 30, 2022 is $1,440,417.
(5) Due to and from Other Funds
Current interfund re
ceivable and payable balances at June 30, 2022 are as follows:

Light and
Due to Other Funds General Fund Power Fund Total
Non-Major Governmental Funds 8, 475,653$ 1,463,031 $ 9,938,684$ Internal Service Funds 30,186,797 - 30,186,797
Total 38,662,450$ 1,463,031$ 40,125,481$
Due From Other Funds
The above balances are
due to short-term payable between funds and negative cash balances at the end of the fiscal year.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 63 (6) Advances to and from Other Funds

Primary Government

Long-term interfund receivable and payable balances at June 30, 2022 are as follows:

Advances to Other funds
Li ght
and Power
Advances from Other funds Fund Total
General Fund 110,000 $ 110,000 $ Total 110,000 $ 110,000 $

Outstanding at
June 30, 2022
Light and Power
On May 14, 2012, City Council authorized a loan from Power Fund of Pasadena Water and Power (PWP) to Public Works Department (Public Works) and appropriated it to the fiscal year 2013 Capital Improvemen t Program Budget for the repair and/or replacement of existing street lighting syst ems CIP Project. Public Works agreed to repay the loan to PWP in ten equal annual installments of $110,000 each on January 31 of each year starting on January 31, 2014 and ending on January 31, 2023. $ __110,000

Total advances between City funds $ 110,000

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 64 Annual Comprehensive Financial Report | June 30, 2022 (7) Capital Assets
Primary Govern
ment
Capital asset activity for the year ended June 30, 2022 is as follows:

Restated (1)
Balance at Balance at
Governmental Activities: June 30, 2021 Additions Deletions Transfers June 30, 2022 Capital assets not being
depreciated/amortized:

Land 87,336,607$ -$ (370,000)$ 354,989$ 87,321,596$ Construction in progress 22,524,764 23,997,878 - (15,113,989) 31,408,653 Total capital assets not being
depreciated/amortized 109,861,371 23,997,878 (370,000) (14,759,000) 118,730,249 Capital assets being
depreciated/amortized:

Right-to-use leased land - 53,726 - - 53,726 Buildings and improvements 300,494,310 278,921 - 6,950,546 307,723,777 Right-to-use leased buildings 4,351,610 19,079 - - 4,370,689 Machinery and equipment 91,206,304 1,456,238 (7,750,511) 3,120,534 88,032,565 Right-to-use leased equipment 677,593 37,583 - - 715,176 Infrastructure 328,504,579 - - 4,822,722 333,327,301 Total capital assets being
depreciated/amortized 725,234,396 1,845,547 (7,750,511) 14,893,802 734,223,234 Less accumulated depreciation/amortization:

Right-to-use leased land - (11,939) - - (11,939) Buildings and improvements (148,104,293) (5,980,935) - 21,768 (154,063,460) Right-to-use leased buildings - (925,125) (925,125)
Machinery and equipment (54,346,699) (6,765,681) 7,746,249 - (53,366,131) Right-to-use leased equipment - (245,454) (245,454)
Infrastructure (119,483,025) (7,049,993) - - (126,533,018) Total accumulated depreciation/
amortization (321,934,017)
(20,979,127) 7,746,249 21,768 (335,145,127) Total capital assets, being
depreciated/amortized, net 403,300,379 (19,133,580) (4,262) 14,915,570 399,078,107 Governmental activities
capital assets, net 513,161,750$ 4,864,298 $ (374,262) $ 156,570 $ 517,808,356$ (1) The beginning balance was restated to add the right-to-use lease assets due to the implementation of GASB Statement No. 87 , Leases. See Note 1X.

During the year,
governmental activities received proceeds of $124,686 from the disposal of capital assets with a net gain of $60,206.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 65 (7) Capital Assets (Continued)
Primary Government (Continued)
Depreciation
/amortization expense was charged in the following functions and activities in the statement of activities:

General Government 4,575,873$
Public Safety 1,787,177
Transportation 1,942,379
Health 155,568
Culture and Leisure 1,428,748
Community Development 6,490,615
Computing and Communication 3,244,347
Building Maintenance 208
Fleet Maintenance 1,345,894
Fleet Repair and Maintenance 8,318
Total 20,979,127$
The following is a summary of governmental activities amount of intangible lease assets by major classes of underlying assets for the fiscal year ended June 30, 2022 as a result of the implementation of GASB 87, Leases.

Governmental Activities:

Lease assets:

Lease land 53,726 $
Less accumulated amortization (11,939)
Lease land, net 41,787
Lease building 4,370,689
Less accumulated amortization (925,125)
Lease building, net 3,445,565
Lease equipment 715,176
Less accumulated amortization (245,454)
Lease equipment, net 469,723
Total lease assets, net 3,957,074 $

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 66 Annual Comprehensive Financial Report | June 30, 2022 (7) Capital Assets (Continued)
Primary Govern
ment (Continued)
Restated (1)
Balance at Balance at
Business-type Activities: June 30, 2021 Additions Deletions Transfers June 30, 2022 Capital assets not being
depreciated/amortized:

Land 14,675,193 $ - $ -$ 9,472$ 14,684,665$ Construction in progress 82,506,094 56,782,535 (33) (57,292,972) 81,995,624 Total nondepreciable assets 97,181,287 56,782,535 (33) (57,283,500) 96,680,289 Capital assets being
depreciated/amortized:

Buildings and improvements 141,995,745 434,835 (1,630,304) 1,489,243 142,289,519 Right-to-use leased buildings 2,642,494 19,079 (422,283) - 2,239,290 Utility lines, machinery and
equipment 1,209,040,360 1,074,675 (12,002,848) 55,496,078 1,253,608,265 Right-to-use leased equipment -
31,631 - - 31,631
Total capital assets being
de
preciated/amortized 1,353,678,599 1,560,220 (14,055,434) 56,985,321 1,398,168,705 Less accumulated depreciation/amortization:

Buildings and improvements (68,070,511) (4,231,461) 1,609,204 - (70,692,768) Right-to-use leased buildings (422,283) (958,228) 422,283 - (958,228) Utility lines, machinery and
equipment (580,454,801) (41,394,579) 11,758,006 (21,768) (610,113,142) Right-to-use leased equipment - (7,100) - - (7,100) Total accumulated
de
preciation/amortization (648,947,595) (46,591,368) 13,789,493 (21,768) (681,771,238) Total capital assets, being
depreciated/amortized, net 704,731,004 (45,031,148) (265,941) 56,963,553 716,397,467 Business-type activites
ca
pital assets, net 801,912,291$ 11,751,386 $ (265,974) $ (319,947) $ 813,077,756$ (1) The beginning balance was restated to add the right-to-use lease assets due to the implementation of GASB Statement No. 87, Leases. See Note 1X.

During the year, business-type activities received proceeds of $99,403 from the disposal of capital assets and incurred a
net loss on disposal of $166,537.

Depreciation/amortization expense was charged in the following functions in the statement of activities:

Electric 33,980,866$
Water 9,863,812
Refuse 642,274
Off-Street Parking 1,935,147
Telecommunications 169,269
Total 46,591,368$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 67 (7) Capital Assets (Continued)
Primary Government (Continued)
The following is a summary
of business-ty pe activities amount of intangible right-to-use leased assets by major classes of underlying assets for the fiscal year ended June 30, 2022 as a result of the implementation of GASB 87, Leases.

Business-type Activities:

Right-to-use leased assets:

Lease building 2,239,289$
Less accumulated amortization (958,228)
Lease building, net 1,281,061
Lease equi pment 31,631
Less accumulated amortization (7,100)
Lease equi pment, net 24,531
Total right-to-use leased assets 1,305,592 $
Fid
uciary Funds – Private-Purpose Trust Fund
Balance at Balance at
Fiduciary Funds June 30, 2021 Additions Deletions June 30, 2022 Capital assets not depreciated/amortized:

Land 214,261$ -$ -$ 214,261$
Total cost of assets not depreciated/
amortized 214,261 - - 214,261
Capital assets, net 214,261$ -$ -$ 214,261$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 68 Annual Comprehensive Financial Report | June 30, 2022 (8) Leases
A lease is defined as a contractual agreement that conveys co ntrol of the right to use another entity’s nonfinancial asset, for a minimum contractual period of greater than one year, in an exchange-like transaction.

In fiscal year 2022, the City adopted Statement No. 87, Leases, issued by the Government al Accounting Standard Board (GASB). This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. In a ccordance with the statement, parties to a lease agreement, the lessee and lessor, are required to recognize a lease liability and an intangible right-to-use lease asset, and a lease receivable and deferred inflow of resources, respectively.

City as Lessor
The City is a lessor of land and building nonfinancial assets. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.

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

The following are key estimates and judgments how the City determines the discount rate on the expected lease receipts to present value, lease term, and lease receipts:
• The City uses its estimated incremental borrowing rate as the discount rate for leases • The lease term includes the noncancellable period of the lase. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

As lessor, the City recognized twelve lease agreements subject to GASB 87, Leases, at the beginning of the fiscal year.

During the fiscal year, the City entered into one lease agreement. The lease terms range from 18 to 120 months for the right to use land, land improvements, buildings, and infrastructure. Most of these leases include periodic adjustments to the lease amounts at determined intervals. The fixed monthly lease payment ranges from $1,340 to $51,156, with the incremental borrowing rate ranging from 0.185% to 1.040%. For the year ended June 30, 2022 the City received an immaterial amount of variable and other payments from these lease arrangements.

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 certai n changes occur that are expected to significantly affect the amount of the lease receivable.

Changes in lease receivable for the year ended June 30, 2022 are as follows:

Restated (1)
Balance at Balance at
June 30, 2021 Additions Reductions June 30, 2022 Governmental Activities:

Lease receivable 3,124,989$ - $ (687,493)$ 2,437,496$ Deferred inflow of resources 3,124,990 - (741,905) 2,383,085 Business-type Activities:

Lease receivable 1,314,728 364,695 (379,832) 1,299,591 Deferred inflow of resources 1,314,728 364,695 (391,611) 1,287,812 (1) The beginning balance was restated to add the lease receivable due to the implementation of GASB Statement No. 87, Leases.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 69 (8) Leases (Continued)
City as Lessor (Continued)
During the year ended June 30, 2022, the City recognized the lease revenues and interest revenues as follows:

Governmental Business-type
Activities Activities
Amortization of deferred inflow of resources 741,905$ 391,611$ Short-term rental revenues 4,040,123 -
Total lease revenues 4,782,028$ 391,611$
Lease interest revenues 8,606$ 6,904$
City as Lessee
The City is a lessee of
nonfinancial assets such as land, buildings, and equipment. The City recognizes a lease liability and intangible right-to-use lease assets in the governme nt-wide financial statements. The City recognizes lease liabilities with an initial, individual value of $10,000 or more.

At the commencement of a lease, the Ci ty initially measures the lease liabilit y at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its usef ul life, which is the shorter of the leased asset’s useful life for the lease term.

The following are key estimates and judgements on how the City determines its discount rate on the expected lease payments to present value, lease term, and lease payments:
• The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payment and purchase option price that the City is reasonably certain to exercise.

As lessee, the City recognized ten le ase agreements subject to GASB 87, Leases, at the beginning of the fiscal year.

During the fiscal year, the City entered into five lease agreements. The lease terms range from 9 to 108 months for the right to use buildings and equipment. Most of these leases include periodic adjustments to the lease amounts at determined intervals. The fixed monthly lease paym ent ranges from $417 to $68,878 with the incremental borrowing rate ranging from 0.165% to 1.530%. For the year ended June 30, 2022 the City paid an immaterial amount of variable and other payments from these lease arrangements.

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

Right-to-use leased assets are reported with capital assets (see Note 7); lease liabilities are reported with long-term debt and other liabilities (see Note 10).

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 70 Annual Comprehensive Financial Report | June 30, 2022 (8) Leases (Continued)
City as Less
ee (Continued)
Changes in lease asset and lease liability for the year ended June 30, 2022 are as follows:

Restated (1)
Balance at Balance at
June 30, 2021 Additions Reductions June 30, 2022
Governmental Activities:

Lease assets
Ri ght-to-us e land - $ 53,726$ -$ 53,726$
Right-to-use buildings 4,351,610 19,079 - 4,370,689 Ri ght-to-us e equipment 677,593 37,583 - 715,176 Total lease assets 5,029,203 110,388 - 5,139,591 Accumulated amortization - (1,182,518) - (1,182,518)
T otal le ase asse ts, ne t 5,029,203$ (1,072,130)$ -$ 3,957,073$ Lease liability 5,029,203$ 110,313$ (1,115,633)$ 4,023,883$ Business-type Activities:

Lease assets
Right-to-use buildings 2,642,494$ 19,079$ (422,283)$ 2,239,290$ Ri ght-to-us e equipment - 31,630 - 31,630
T otal le ase asse ts 2,642,494 50,709 (422,283) 2,270,920 Accumulated amortization - (1,387,611) 422,283 (965,328) T otal le ase asse ts, ne t 2,642,494$ (1,336,902)$ -$ 1,305,592$ Lease liability 2,642,494$ 50,709$ (1,316,720)$ 1,376,483$ (1) The beginning balance was restated to add the lease receivable due to the implementation of GASB Statement No. 87, Leases.

During the year ended June 30, 2022, the City recognized the lease expenses and interest expenses as follows:

Governmental Business-type
Activities Activities
Amortization of lease assets 1,182,517 $ 1,387,611 $ Other l ease (non-GASB 87) expens es 939,341 451,872 Total lease expenses 2,121,858$ 1,839,483$
Lease i nterest expenses 32,148$ 3,872$
Other l ease (non-GASB 87) i nteres t expenses 93,604 60,660 Total l ease i nterst expenses 125,752$ 64,532$ As of June 3
0, 2022, the City had minimum principal and inte rest payment requirements for its leasing activities with a remaining term in excess of one year, as follows:

Lease Payable Principal and Interest Requirements to Maturity Fiscal Year Principal Interest Total Payments
2023 1,906,864 $ 106,915 $ 2,027,160 $
2024 1,723,156 86,300 1,809,457
2025 1,475,276 65,771 1,541,047
2026 1,470,482 45,286 1,515,768
2027 1,435,060 24,517 1,459,577
2028 - 2031 949,755 15,177 1,008,491
Fiscal Year Principal Interest Total Payments
2023 1,428,080$ 50,389$ 1,478,468$
2024 885,398 36,267 921,664
2025 492,809 23,237 516,047
2026 502,448 10,085 512,533
Governmental Activities
Business-type Activities
See more information for leas
e liability (City as lessee) in the long-term liabilities in Note 10.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS Annual Comprehensive Financial Report | June 30, 2022 71 (9) Deferred Inflows and Outflows
Primary Gover
nment
Deferred outflows on the government-wide statement of net position consists of the following at June 30, 2022:

Govermental Activities Balance at Balance at
June 30, 2021 Increase Decrease June 30, 2022 0
2015A Refunding COP Deferred Charges 4,090,929$ -$ (246,689)$ 3,844,240$ 2020A Refunding POB Deferred Charges 12,273,658 - (514,979) 11,758,679 2020B Refunding POB Deferred Charges 5,920,718 - (351,726) 5,568,992 GASB 68 Contribution Subsequent to Measurement Date 51,421,992 54,426,047 (51,421,992) 54,426,047 GASB 68 Net Difference on Pension Plan Investments 9,891,122 - (9,891,122) - GASB 68 Change of Assumptions 8,964,309 2,068,688 (8,964,309) 2,068,688 GASB 68 Difference in Experience 5,762,033 3,795,493 (5,762,033) 3,795,493 GASB 75 Net Difference on Pension Plan Investments - 172,656 - 172,656 GASB 75 Change of Assumptions 11,187,954 8,320,875 (11,187,954) 8,320,875 GASB 75 Difference in Experience - 629,084 - 629,084 GASB 68 FPRS Net Difference on Pension Plan Investments - 6,359,000 - 6,359,000 109,512,715$ 75,771,843$ (88,340,804)$ 96,943,754$ Business-type Activities Balance at Balance at
June 30, 2021 Increase Decrease June 30, 2022
1998 Electric Bonds Deferred Charges 216,928$ -$ (108,464)$ 108,464$ 2008 Electric Bonds Deferred Charges 855,561 - (53,475) 802,086 2003 Water Bonds Deferred Charges 132,323 - (66,161) 66,162 GASB 68 Contribution Subsequent to Measurement Date 11,373,463 11,375,259 (11,373,463) 11,375,259 GASB 68 Net Difference on Pension Plan Investments 2,132,880 - (2,132,880) - GASB 68 Difference in Experience 659,296 181,628 (659,296) 181,628 GASB 75 Net Difference on Pension Plan Investments - 43,285 - 43,285 GASB 75 Change of Assumptions 2,921,224 2,086,078 (2,921,224) 2,086,078 GASB 75 Difference in Experience - 157,716 - 157,716
18,291,675$ 13,843,966$ (17,314,963)$ 14,820,678$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA 72 Annual Comprehensive Financial Report | June 30, 2022 (9) Deferred Inflows and Outflows (Continued)
Deferred inflows on the government-wide statement of net position consists of the following at June 30, 2022:

Governmental Activities
Balance at Balance at
June 30, 2021 Increase Decrease June 30, 2022
GASB 68 Change of Assumptions 1,184,883 $ 243,960$ (1,184,883)$ 243,960$ GASB 68 Difference in Experience 4,075,060 2,808,521 (4,075,060) 2,808,521 GASB 68 Net Difference on Pension Plan Investments - 129,606,843 - 129,606,843 GASB 75 Change of Assumptions 156,707 19,124,031 (156,707) 19,124,031 GASB 75 Difference in Experience 3,994,348 2,766,957 (3,994,348) 2,766,957 GASB 75 Differences between projected and actual
earnings on OPEB plan investments 136,284 - (136,284) - GASB 87 Lease Related - 2,383,085 - 2,383,085
GASB 68 FPRS Net Difference in Experience 10,243,000 - (10,243,000) - 19,790,282$ 156,933,397$ (19,790,282)$ 156,933,397$ Business-type Activities Balance at Balance at
June 30, 2021 Increase Decrease June 30, 2022
2019 Electric Bonds Deferred Gain 617,000 $ - $ (200,110) $ 416,890$ 2021 Water Bonds Deferred Gain - 1,716,307 (87,059) 1,629,248 GASB 68 Change of Assumptions 310,008 - (310,008) - GASB 68 Difference in Experience 945,356 942,088 (945,356) 942,088 GASB 68 Net Difference on Pension Plan Investments - 27,781,068 - 27,781,068 GASB 75 Change of Assumptions 40,917 4,794,476 (40,917) 4,794,476 GASB 75 Difference in Experience 1,042,943 693,688 (1,042,943) 693,688 GASB 75 Di fferences between projected and actual
earnings on OPEB plan investments 35,584 - (35,584) -
GASB 87 Lease Related - 1,287,812 - 1,287,812
2,991,808$ 37,215,439$ (2,661,977)$ 37,545,270$ Deferred in
flows on the governmental funds consists of the following at June 30, 2022:

General Project Non-Major Total
Fund Management Governmental Governmental
Unavailable Revenues 2,286,400$ 931,321$ 9,067,520$ 12,285,241$ GASB 87 Lease Related 611,783 - 960,333 1,572,116
2,898,183$ 931,321$ 10,027,853$ 13,857,357$
In ac
cordance with GASB Statement No. 65 revenue reco gnition requirements, the fo llowing revenues have been deferred, because the related cash was not available at year-end. The breakdown by fund is as follows:

Fund Name Amount
General Fund 2,286,400$
Health 2,369,133
Building Services 34,917
Air Quality Improvement 47,791
Public Safety 88,460
Transportation 40,107
Housing and Community Development 6,487,112
Project Management 931,321
Total unavailable revenues 12,285,241$