Finance Committee
January 22, 2024

AGENDA

FINANCE/AUDIT COMMITTEE

SPECIAL MEETING NOTICE
JANUARY 22, 2024
PUBLIC MEETING 3:00 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?camera_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 SPECIAL MEETING FOR JANUARY 22, 2024, AT 3:00 P.M. WILL BE ACCEPTED IN-PERSON AND BY VIDEOCONFERENCE/TELECONFERENCE.

Link 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:

[email protected]

Correspondence 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,

IF 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
J
ANUARY 22, 2024
Public Meeting: 3:00 P.M.

Council Chamber, Pasadena City Hall
100 North Garfield Avenue, Room S249
PUBLIC MEETING - 3:00 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
D
ecember 11, 2023 Special Meeting
December 25, 2023 Cancellation Notice
January 8, 2024 Cancellation Notice

OLD BUSINESS

1. AUT
HORIZE CITY MANAGER TO AMEND CONTRACT NO. 9706-3 WITH

NORTON SIMON MUSEUM TO INCREASE ANNUAL LANDSCAPE
MAINTENANCE CONTRACT BUDGET FROM $159,756 TO $328,226

ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE INDEX INCREASE

2. I

NTRODUCTION TO ENTERPRISE RISK MANAGEMENT

3. SWAP ANALYSIS

NEW BUSINESS

4. AM
ENDMENTS TO FISCAL YEAR 2024 CAPITAL IMPROVEMENT

PROGRAM

5. AUT

HORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT WITH

PERKINS EASTMAN FOR THE DEVELOPMENT OF A MASTER PLAN FOR THE SR 710 NORTHERN STUB PLANNING PROJECT IN THE AMOUNT OF $2,820,744 AND APPROPRIATE $800,000 TO THE CITY MANAGER’S

OFFICE OPERATING BUDGET
PAGE 1
2 6. ADOPTION OF THE FY 2024 RECOMMENDED OPERATING BUDGET OF

THE RENT STABILIZATION DEPARTMENT

7. FISCAL YEAR JUNE 30, 2023 ANNUAL FINANCIAL REPORTS

INFORMATION ONLY

8. ROSE BOWL OPERATING COMPANY FINANCIAL UPDATE

9. PASADENA CENTER OPERATING COMPANY FINANCIAL UPDATE

10. FINANCIAL UPDATE JANUARY 2024

11. MITIGATION FEE ACT ANNUAL REPORTS

ADJOURN
PAGE 2
APPRO

VAL OF MINUTES
S pecial Meeting
Cancellation Notice
 December 11, 2023
 December 25, 2023
 January 8, 2024 Cancellation Notice
PAGE 3
01 12/11/2023 Finance/Audit Committee

CITY OF PASADENA

FINANCE/AUDIT COMMITTEE MINUTES

PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER S249
DECEMBER 11, 2023

SPECIAL MEETING
OP
ENING Chair Gordo called the special meeting of the Finance/Audit Committee to order at 3:11 p.m.

ROL
L CALL: Mayor Victor M. Gordo (Chair)
Councilmember Tyron Hampton ( Arrived at 3:29 p.m.)
Vice Mayor Felicia Williams

Staff: Miguel Márquez, City Manager
Brenda Harvey-Williams, Assistant City Manager
Theresa Fuentes, Assistant City Attorney
Matthew Hawkesworth, Director of Finance
Tony Olmos, Director of Public Works
Joaquin Siques, Acting Director of Transportation
Ruthe Holden, Internal Audit Manager
Alex Souto, Deputy City Manager
Koko Panossian, Director of Parks, Recreation & Community Services Kris Markarian, Deputy Director of Public Works/City Engineer Vic Erganian, Deputy Director of Finance/Treasurer
Tim Park, Budget Administrator
Jennifer O’Reilly-Jones, Program Coordinator III
Kimberly Siemen, Management Analyst V
William Grisafe, Police Commander
Kenneth James, Recreation & Community Services Administrator Darrell Walker, Recreation & Community Services Superintendent Byanca Banaga, Senior Administrative Analyst
Enrique Arroyo, Management Analyst V
Sam De Sylva, Police Lieutenant
David Klug, Economic Development Director
Hayden Melbourn, Principal Engineer
Diane Russel Carter, Executive Director, Workforce Development Board Gloria Acevedo, Recording Secretary
Gue
sts: Denise Callahan, TAP International Inc.

APP
ROVAL OF MINUTES: It was moved by Vice Mayor Williams, seconded by PAGE 4
02 12/11/2023 Finance/Audit Committee
Chair Gordo, to approve the minutes of the December 11, 2023 (special meeting) and the December 25, 2023 and January 8, 2024 cancellation notices, as submitted. (Motion Unanimously carried) (Absent: Councilmember Hampton)
NEW
BUSINESS AMEND THE POLICE DEPARTMENT’S FISCAL YEAR 2024 OPERATING BUDGET BY APPROPRIATING $148,456 FROM THE GENERAL FUND’S

UNAPPROPRIATED FUND BALANCE AND ADDING THREE PARK

SAFETY SPECIALIST POSITIONS AND ONE POLICE SUPPORT

ASSISTANT POSITION
Chair Gordo introduced the item and Miguel Márquez, City Manager , introduced William Grisafe, Police Commander, who provided a PowerPoint presentation and responded to questions.

Vice Mayor Williams asked about where the new positions will be assigned.

Mr. Grisafe confirmed that the new positions will be rotated amongst all City parks.

Chair Gordo asked for clarification on whether the positions were identified in the penal code. Mr. Grisafe confirmed that they are; therefore, allowing them the ability to write citations and make arrests for certain infractions and misdemeanors (after completion of arrest training). Chair Gordo suggested for the department to blend park security during the mid-night hours with Park Safety Specialist staff and Police Officers.

It was moved by Vice Mayor Williams, seconded by Chair Gordo to approve staff’s recommendation, and forward the item to the City Council for consideration. (Motion Unanimously carried) ( Absent: Councilmember Hampton)
APPROVAL OF BUDGET AMENDMENT TRANSFERRING $120,000 FROM THE HOUSING DEPARTMENT’S FISCAL YEAR 2024 OPERATING
BUDGET TO THE PUBLIC HEALTH DEPARTMENT’S FISCAL YEAR 2024

OPERATING BUDGET TO PROVIDE WEATHER-ACTIVATED MOTEL

VOUCHER SERVICES
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced Jennifer O’Reilly-Jones, Program Coordinator III , who provided a PowerPoint presentation.

It was moved by Vice Mayor Williams, seconded by Chair Gordo to approve staff’s recommendation, and forward the item to the City Council for consideration. (Motion Unanimously carried) (Absent: Councilmember Hampton)
PAGE 5
03 12/11/2023 Finance/Audit Committee
AUTHORIZE CITY MANAGER TO AMEND CONTRACT NO. 9706 -3 WITH

NORTON SIMON MUSEUM TO INCREASE ANNUAL LANDSCAPE
MAINTENANCE CONTRACT BUDGET FROM $159,756 TO $328,226

ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE INDEX

INCREASE
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced Brenda Harvey-Williams, Assistant City Manager, who provided a PowerPoint presentation and responded to questions.

Councilmember Hampton requested for staff to confirm with the Pasadena Unified School District that students are still participating in field trips to the Norton Simon Museum.

Chair Gordo agreed with Councilmember Hampton in the importance that PUSD students are attending the Norton Simon and that clear evidence of their participation is document ed. If that information is not being tracked, he asked that moving forward it is tracked and reported on an annual basis. Along with the number of PUSD student participation, outreach efforts to local public schools should be tracked.

Vice Mayor Williams added that data should be collected on how the Norton Simon is making it accessible for those that are unable to attend due to cost , such as seniors. Councilmember Hampton agreed and suggested for transportation to the museum to be provided.

The item did not receive approval to move to the City Council and was tabled for a future Finance Committee Meeting.

AMENDMENTS TO THE FISCAL YEAR 2024 GENERAL FEE SCHEDULE

TO REVISE AND ADD AQUATICS FEES
Chair Gordo introduced the item and Miguel Márquez, City Manager, introduced Koko Panossian, Director of Parks, Recreation & Community Services, who provided a PowerPoint presentation and responded to questions.

Councilmember Hampton expressed gratitude for the adjustments to the fee schedule and thanked staff for their efforts.

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) AMENDMENT TO FISCAL YEAR 2024 CAPITAL IMPROVEMENT
PROGRAM TO APPROPRIATE $1,000,000 IN GENERAL FUND FOR

WORK AT THE YWCA BUILDING
Chair Gordo introduced the item and Tony Olmos, Director of Public Works , provided a PowerPoint presentation.

PAGE 6
04 12/11/2023 Finance/Audit Committee
Public Speaker Ann Sc heid expressed concern over the deteriorating condition of the YMCA building, in particular the roof, the swimming pool, and the columns in the basement. Ms. Scheid suggested for the building to be converted into office space.

Chair Gordo shared that there is an exclusive negotiation agreement with HRI Properties (HRI). Miguel M árquez, City Manager, shared that after supreme court approval, HRI plans to move forward with converting the building to a hotel. The estimated time for the negations to conclude is six-months to one year.

Councilmember Hampton asked if the roof issues are being addressed such as the quality of the tarp. Mr. Olmos stated that a heavier duty tarp was recently placed on the roof and that previously the issue was with the sun deteriorating the tarp. The new tarp should hold up until the City transfers maintenance or operations to HRI.

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)

AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT WITH HORIZONS CONSTRUCTION COMPANY INTERNATIONAL INC., FOR
VIÑA VIEJA PICKLEBALL COURTS – PHASE 1 PROJECT FOR AN
AMOUNT NOT-TO-EXCEED $544,848 AND AMENDMENT TO THE FISCAL YEAR 2024 CAPITAL IMPROVEMENT PROGRAM
Chair Gordo introduced the item and Hayden Melbourn, Principal Engineer, provided a PowerPoint presentation and responded to questions.

Councilmember Hampton requested for confirmation that the contract had gone through Sourcewell. Mr. Melbourn stated that it was after the bids in the response to the Request for Proposal (RFP) came in very high, he also indicated several tasks were removed prior to reaching out to Sourcewell.

Councilmember Hampton suggested for staff to first reach out to Sourcewell to get pricing on future projects and then release an RFP based on the figures received from Sourcewell. This will allow for local vendors to bid on projects that otherwise would be out of their reach. Mr. Hayden stated it is always the departments’ goal to reach out to local vendors first, before reaching out to Sourcewell.

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) PAGE 7
05 12/11/2023 Finance/Audit Committee
ANNUAL ADJUSTMENTS TO THE FISCAL YEAR 2024 SCHEDULE OF
TAXES, FEES, AND CHARGES RELATED TO NEW YEAR’S DAY AND

THE ROSE BOWL
Chair Gordo introduced the item and Matthew Hawkesworth, Director of Finance, gave a brief outline of the item and introduced Byanca Banaga, Senior Administrative Analyst.

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)

QUARTERLY INVESTMENT REPORT - QUARTER ENDING
SEPTEMBER 30, 2023
Chair Gordo introduced the item and Vic Erganian, Deputy Director of Finance/Treasurer, provided a brief outline.

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: Councilmember Hampton)
INFORMATION ONLY APPROVAL OF INTERNAL AUDIT PLAN FOR FY 2024/2025 Chair Gordo introduced the item and Ruthe Holden, Internal Audit Manager, provided a PowerPoint presentation and responded to questions.

Vice Mayor Williams asked if the Pasadena Rental Housing Board becoming a City Department would make them eligible to be part of next year’s audit report. Ms. Holden responded that the staff of the board are auditable since they will now report to the City Manager.

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

FINAL REPORT FOR THE AUDIT OF THE CITY OF PASADENA AS

PROGRAM ADMINISTRATOR OF THE FOOTHILL WORKFORCE

DEVELOPMENT BOARD
Chair Gordo introduced the item and Ruthe Holden, Internal Audit Manager, introduced Denise Callahan, TAP International, Inc., who provided a PowerPoint presentation and responded to questions.

Councilmember Hampton inquired about the structure of the Foot hill Workforce Development Board (FWDB) and the Pasadena Rental Housing Board. Councilmember Hampton also inquired about the low participation rate while receiving State designation for the FWDB as a high performing board.

Ms. Callahan explained that the state is looking at a different set of criteria in making their designation.

PAGE 8
06 12/11/2023 Finance/Audit Committee
Chair Gordo asked about a few items of concern, such as a decline in program participation, stated that the internal controls are very important in particular related to complying with the provisions of the Joint Powers Agreement, asked for an explanation of the segregation of duties being recommended, and about the submittal of supporting documents in order to receive timely payments.

Lastly, Chair Gordo requested for updates to the Finance/Audit Committee as the recommendations to internal controls are being implemented.

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

INTRODUCTION TO ENTERPRISE RISK MANAGEMENT
The item has held for the following Finance Committee Meeting

SWAP ANALYSIS
The item has held for the following Finance Committee Meeting ADJOURNMENT On the order of the Chair, the special meeting of the Finance/Audit Committee was adjourned at 4:38 p.m.

AT
TEST: ______________________
Mayor Victor Gordo, Chair
Finance/Audit Committee
________
____________
Gloria Acevedo
Recording Secretary
PAGE 9
PAGE 10
PAGE 11

OLD BUSINESS
ITEM 1

1. AUTHO

RIZE CITY MANAGER TO AMEND
CONTRACT NO. 9706-3 WITH NORTON SIMON

MUSEUM TO INCREASE ANNUAL LANDSCAPE

MAINTENANCE CONTRACT BUDGET FROM
$159,756 TO $328,226 ANNUALLY SUBJECT TO

ANNUAL CONSUMER PRICE INDEX INCREASE
PAGE 12
i
I
!
b^0
^^4-
0•y
* ^
z
OQ 0<© 0
^ -0
0^
Agenda Report
January 29, 2024
TO:Honorable Mayor and City Council
THROUGH: Finance Committee (January 22, 2024)
FROM: Parks, Recreation, and Community Services Department SUBJECT: AUTHORIZE CITY MANAGER TO AMEND CONTRACT NO. 9706-3

WITH NORTON SIMON MUSEUM TO INCREASE ANNUAL
LANDSCAPE MAINTENANCE CONTRACT BUDGET FROM $159,756
TO $328,226 ANNUALLY SUBJECT TO ANNUAL CONSUMER PRICE

INDEX INCREASE
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed action is not a project subject to the California Environmental Quality Act (CEQA) pursuant to Section 21065 ofCEQA and Sections 15060(c)(2), 15060(c)(3), and 15378 of the State CEQA Guidelines and, as such, no environmental document pursuant to CEQA is required;

2. Authorize the City Manager to amend contract No.9706-3 with Norton Simon Museum to increase the annual contract landscape maintenance budget from $159,756 to $328,226, subject to annual Consumer Price Index; and

3. Appropriate $70,196 from the General Fund to the FY 2024 Parks, Recreation and Community Services Department Operating Budget (10118070-811400) to cover increased expenses related to landscape maintenance at Norton Simon Museum.

BACKGROUND:

In 1975, the City of Pasadena entered into a 75-year ground lease agreement with Norton Simon Museum (NSM). As part of the agreement, NSM was responsible for all building improvements and structural maintenance, while the City was responsible for the upkeep of trees, shrubs, ground covers, planters, walkways, and the service, replacement and repair of irrigation systems. In 1978, the agreement was amended to allow NSM to undertake the contractual responsibility for landscape maintenance and required the City to reimburse NSM for payments made to the landscape contractor of their choice. In 1990, a second amendment was executed extending the term from 75 to MEETING OF.AGENDA ITEM NO..

PAGE 13
Norton Simon Museum Contract Amendment
January 29, 2024

99 years and incorporating an annual Consumer Price Index escalator for landscape maintenance expenses. Finally, in 2003, the City Council approved an amendment to the contract to increase the annual landscape maintenance costs due to significant improvements and renovations on the museum grounds. The lease agreement is set to expire in 2075.

The landscape needs at NSM have increased over time due to maturing trees, landscape improvements, and deferred pond maintenance. Through an evaluation of existing landscaping needs, NSM identified that the current vendor contract was insufficient to meet the landscape needs of the museum. Therefore, the current budget is no longer sufficient to maintain the grounds at a "reasonably satisfactory condition" as outlined in the lease agreement.

In April 2022, NSM issued a request for proposals for a new landscape contractor and received three bids. City staff assisted NSM with the preparation of the bid specifications to ensure the scope of work was consistent with the lease agreement provision and met NSM landscape needs. NSM selected Meier Brothers Landscape to provide landscaping, pest control, and pond maintenance services; and Brightview Tree Care Services to provide tree trimming service.

The $168,470 (from $159,756 to $328,226) increase in the annual maintenance cost is attributed to:
l) Increase in staffing levels- from 80 hours a week to 128 hours; 2) Increase in service frequency - from five days a week service to seven days a week; and
3) Added a dedicated account manager to host bi-weekly meetings with the NSM facility director.

These service elements are crucial to adequately meet NSM's growing maintenance needs and align with the lease agreement provisions. As the selected bidders, Meier Brothers Landscape and Brightview Tree Care Services have entered into an agreement with NSM.

The following table represents the cost summary.

ServiceAnnual Amount
Maintenance activities (landscaping, pest
control and pond maintenance)$295,814
Tree trimming$32,412
Total Annual Cost$328,226
In addition to the annual landscape maintenance reimbursement, the City provides in- kind support for trash disposal, water for landscape maintenance, irrigation support, and capital projects such as the recently completed parking lot improvement.

PAGE 14
Norton Simon Museum Contract Amendment
January 29, 2024

Public Benefits
Since its inception, NSM has offered various public benefits to Pasadena and non- Pasadena residents and children through education programs. Public benefits from July 1,2022 - June 30, 2023 included:
70 free school tours reaching approximately 2,300 students in fifth through twelfth grades. Of these, approximately 1,070 were PUSD students and 80 from non-PUSD Pasadena schools. PUSD provides transportation to and from the museum for its students*;
Approximately 2,200 students (K-college) participated in the free, self-guided tour program (14% from Pasadena schools);
Four virtual tours reached 145 students for schools unable to visit the site in- person and three virtual lectures related to special exhibitions reached 495 attendees (35% Pasadena residents);
Free admission on the first Friday of the month from 4:00 p.m.-7:00 p.m.

Organized a one-day artmaking workshop at La Pintoresca Library and invited attendees and their families to the museum for a free tour; and Reduced admission rate of $15 for seniors (adult admission $20), and low- income seniors with a Golden State Advantage card received free admission. *PUSD data confirmed by PUSD staff
**P/ease note in-person school tours were re-introduced beginning November 2022 **,
In addition, NSM provides free admission to children under age 18, active military personnel, students with valid school identification cards, and holders of EBT cards.

Approximately 17,000 children, active military personnel and EBT card holders received free admission in fiscal year 2023, and 26,000 students above 18 years of age received free admission during the same period. Please see Attachment A for additional information on public benefits provided by NSM.

COUNCIL POLICY CONSIDERATION:

This action is consistent with the City Council's goals to improve, maintain, and enhance public facilities and infrastructure, and to support and promote the quality of life and the local economy.

ENVIRONMENTAL ANALYSIS:

The action proposed herein is not subject to the California Environmental Quality Act (CEQA) in accordance with Section 21065 of CEQA and Sections 15060 (c)(2), 15060 (c)(3), and 15378. The authorization to amend a contract for continued landscape PAGE 15
Norton Simon Museum Contract Amendment
January 29,2024

maintenance is a continuing administrative and maintenance activity. Therefore, this action is not a "project" subject to CEQA, and no environmental document is required.

FISCAL IMPACT:

Approval of the recommended actions will amend the Parks, Recreation, and CommunityServices (PRCS) Department's FY 2024 Operating Budget (10118070-811400) by appropriating $70,196 from the unappropriated fund balance of the General Fund (101).This represents five months sen/ice payments in FY 2024, with an effective date of February 1, 2024. The full year allotment will be included in the PRCS FY 2025 Operating Budget.

Respectfully sybmitted,
..--
.^"^•^'^/_^£^^^2L
7 ^y^-/^
Prepared by:
h^OKb PANOSSIAN'
Director of Parks, Recreation and
Community Services
s&^u^
Tsega Selassie
Management Analyst IV
Approved by:
^ A—
MIGUEt-MAR'QUEZ
City Manager
Attachment A - Digital Impact of the Norton Simon Museum (July 2022- June 2023) PAGE 16
Norton
Simon
Museum
Attachment A
Impact Report of the Norton Simon Museum
2022-2023 (July 1, 2022 -June 30, 2023)
I
s
:^
*-!
/•^^"s i
4st t ^
'-f
^ ^f iasaaKi&fX.
^•s-
Summary of Key Statistics:

Annual Attendance
Pre-COVID = 170,000 visitors (Pasadena Residents = 23,800, or 14%) 2022-2023 = 128,000 visitors (Pasadena Residents = 17,920, or 14%) 2023-2024 = 135,000* visitors (Pasadena Residents = 18,900, or 14%) * = Projected Based on our most recent visitor survey in 2019, approximately 13% of our visitors during our regular operating hours are Pasadena residents (second to Los Angeles at 14.5%). Factoring in school tours provided during non-public hours, approximately 14% of all visitors are Pasadena residents.

Breakdown of 2022-2023 Attendance
Adults (paid) = 48,000
Students (free) = 26,000
Seniors (paid) = 22,250
Members (paid membership) = 13,000
Children (18 and younger) (free) = 10,000 (normal operating hours) Children (school tours) (free) = 2,300 (public and non-public hours) Pasadena Police and Fire Department employees (plus one guest), active military members (and family members) and Museum guests (all free) = 3,000 EBT/Golden State Advantage Card (plus one guest) (free) = 1,400 Other, including museum staff members throughout the world (free) = 2,050 Total free admission = 44,750 (35% of total attendance) •
Image Credits Above Left to Right: Installation photo of Picasso Ingres: Face to Face, a collaboration with the National Gallery, London (in Pasadena from Oct 21, 2022-Jan 30, 2023); Visitors participating in our expansive free public program An Evening in Focus: Art & the Essence of Food (April 18, 2023); Visitors at our annual Garden Party (June 10, 2023) PAGE 17
Free School Tours (5th-12th grade students) for the 10-Year Period 7/1/2009-6/30/2019 (Pre-Pandemic, excluding self-guided school tours)
Attendance = 102,000 students (from Pasadena schools = 16,000, or 15.7%) 12,000 of total (11.8%) from PUSD schools
4,000 of total (3.9%) from other Pasadena schools
Free School Tours Conducted by the Museum (5th-12th grade students) for the 2022-2023 Year Museum conducted 70 free school tours
Attendance = 2,300 students (Pasadena students = 1,150 (50%), of which 1,070 were PUSD fifth graders participating in the My Masterpieces program Free Self-Guided Tours (K-College) for the 2022-2023 Year (Led by a school's teacher that is scheduled with the Museum's Education Department) Attendance = 2,200+ students (308, or 14%, from Pasadena schools) Museum Members
Current Museum Members = 4,211, of which 1,128 (26.8%) Member households are in Pasadena
Serving our Community
The Norton Simon Museum is committed to providing access to our exceptional art collections and to meaningful educational opportunities for all members of our community: children and their families, students and teachers, lifelong learners and people with different abilities. The Museum's programs are designed to foster the imagination and build a deep understanding of human creativity and expression. They center on the Museum's art collections, which range from classical Indian and Southeast Asian sculpture, to European painting, sculpture and prints from the early Renaissance through the early 20th century, to postwar American painting, sculpture and photography.

Some of the ways we serve Pasadena residents include:

Conducting Free PUSD & My Masterpieces School Tours
During the academic years of 2009 through 2019, the Museum served nearly 102,000 5th-12th grade students from throughout Southern California through our free school tour program. Of these, approximately 16,000 (15.7%) were from Pasadena schools, including nearly 12,000 (11.8%) 2 PAGE 18
PUSD students. After pausing our school tour program during our pandemic-related closure, we provided a virtual school tour program for the 2021-22 academic year that served 1,200 PUSD students. In fall 2022 we began offering in-person school visits, although we continued to follow Covid-related protocols including group size.

For our participation in the PUSD My Masterpieces program, the Museum's Education staff work directly with Karen Anderson, PUSD's Arts & Enrichment Coordinator/GATE Specialist. For PUSD school visits outside of the My Masterpieces program, teachers reach out to us directly, filling out a request form on our website and then coordinating their visit with our Education staff.

Highlights for the 2022-23 academic year include:

The Museum conducted 70 free school tours reaching approximately 2,300 students in 5th- 12th grade students from throughout Southern California. Of these, approximately 1,150 (50%) were from Pasadena schools and 1,070 (46%) were PUSD fifth graders participating in the My Masterpieces program (38 tours for 14 schools). Led by paid Museum educators with backgrounds in art history, and based on a curriculum designed by Museum staff in consultation with PUSD, these tours offer students and teachers the opportunity for lively discussion and engagement around important works of art, artistic styles and processes, and historical periods.
• The Museum welcomed approximately 2,200+ students (K-college) in our self-guided tour program (tours led by a school's teacher that are scheduled through the Museum's Education Department), 308 (14%) of whom were from Pasadena schools.

The Museum hosted 4 virtual school tours reaching 145 students (we continue to offer virtual school tours for schools unable to visit in-person).

Providing Access to the Arts
Serving the Pasadena community is one of the primary focuses of the Museum's education and external affairs program. The diversity of the population and extraordinary range of cultural and educational institutions make Pasadena an ideal city for expanding and engaging with our audiences. The Museum offers free, onsite car and bicycle parking, and is accessible from several Pasadena Transit and Metro bus lines that stop directly in front of our site.

During the 2022-23 year, we hosted approximately 86 free public events that reached some 4,000 participants. These events included lectures with curators and scholars invited to speak on a particular topic, performances, educator-led talks and tours, educator- and teaching-artist-led art 3 PAGE 19
classes and workshops for elementary, middle school, high school students and adults, as well as focus nights that celebrate a special exhibition, featuring spotlight talks, art-making activities for all ages and live music.

Some of the ways that we strive to provide an accessible environment include:

Pasadena's Chi I d ren and Youth
Admission for all children 18 and younger is always free and all of our children and youth programs are free. In 2022-23 we welcomed nearly 10,000 children during our regular hours of operation.
• Examples of our free programming includes monthly "Stories in the Afternoon" for toddlers and preschoolers, bimonthly "Family Days" for children 12 and younger, quarterly "Young Creatives" and "Teen Arts" programs for Middle and High School students, and our all-ages programs including our "Evening in Focus" events, the annual "Garden Party" and our summer "Chess in the Garden" series.

We organize a summer program at local Pasadena libraries where our educators lead artmaking workshops one afternoon, then invite the children and their families to the Museum on a separate day for free tours. In summer 2023, this was held at the La Pintoresca branch.

The Museum provides membership cards to the My Masterpieces program for families of students served in the program to use for their own visits.

Free admission program
We understand that admission fees can present a barrier to many, including Pasadena residents. As such, the Museum has an expansive free admission policy, including:

Free admission for all students with ID. In 2022-23 we welcomed nearly 26,000 students during our regular hours of operation (excludes educator-led school tours).

As stated above, we offer free admission for all children 18 and younger. In 2022-23 we welcomed nearly 10,000 children during our regular hours of operation (excludes educator- led school tours).

Free First Friday hours for all on the first Friday of the month from 4:00-7:00 p.m. (reinstated in July 2023 after a pandemic-era pause). In 2018-19 (most recent full year of program) we welcomed 6,613 visitors for our Free First Friday program. 4 PAGE 20
•As stated above, we provide free admission for students participating in our educator-led school tours program. In 2022-23 we welcomed approximately 2,300 students in our school tours program.

Free admission for all Pasadena Police and Fire Department employees (plus guest), all active military members (plus family members), and Museum guests (an estimated 3,000 in 2022-23).

Free admission for all holders of the EBT/Golden State Advantage Card, plus one guest. In 2022-23 we welcomed nearly 1,400 EBT card holders.

Free admission for staff from museums throughout the world, including at Pasadena's USC Pacific Asia Museum, the Pasadena Museum of History, the Armory and the Gamble House. •
Pasadena's Seniors
•
•
Seniors receive a reduced admission rate of $15 (adult admission is $20). In 2022-23 we welcomed nearly 22,250 seniors.

Low-income seniors who have a Golden State Advantage card receive free admission.

We have provided complimentary group admission for senior center visits with low-income seniors who do not have the Golden State Advantage card.

The Museum's curatorial staff have presented lectures and talks at Pasadena Senior Center prior to the Covid pandemic.

Visitors with DisabilitLes
The Museum is committed to serving all visitors. Our educators and visitor services staff participate in annual trainings from experts in inclusion and access. Recent training sessions have been led by the Braille Institute, the Alzheimer's Association and EasterSeals. In addition to training our staff:

We offer specialized, free tours and programs to visitors with developmental and learning disabilities and those on the autism spectrum; visitors who are blind or partially sighted; and visitors who are deaf or have hearing loss.

We provide free admission to caretakers of people with disabilities. • We have invested in making our website accessible, including open captioning and transcripts on our videos and audio, a years-long initiative to provide alt-texton all of the artworks on our site, and ensuring our web design is accessible. • We have open captioning and transcripts for all our onsite digital content, including our orientation video screened daily in the theater, and our free audio tour of the collection.

We provide wheelchairs for visitors upon request.
5 PAGE 21
We provide assisted listening devices for visitors who are deaf or hard of hearing that can be used in the theater during special programs or during weekly tours.

We provide free ASL interpretation for all programs and events with advance request.

Looking Ahead:

Collaboration with California Institute of Technology (Caltech) The Norton Simon Museum is collaborating with Caltech on a program that will enable faculty and students of their Visual Culture minor to work closely with the collections and staff of the Norton Simon Museum as part of their standard curriculum and for specialized research. We hope to host seminar-style courses in the galleries, with the potential to build towards jointly organized programming, such as digital exhibitions, lectures or film series. In fall 2024 our two organizations are co-presenting a 2-day symposium titled Plugged In: Art and Electric Light that will bring scholars from around the country to Pasadena to participate in discussions that explore the rich intersections between art and electric light. Our conservator is also in conversation with Katherine Faber about more technical collaborations, that might involve conducting analysis on Simon objects.

Participation in ArtNight Pasadena
The Norton Simon Museum was one of the founding organizations ofArtNight Pasadena. Afterthe pandemic, with limited hours and staffing challenges, we had to pause our participation. We are pleased to note that the Museum will open its doors and welcome guests for the upcoming ArtNight on March 8, 2024.

Celebrating our 50th Anniversary in 2025
The year 2025 will mark the Norton Simon Museum's 50th anniversary. As such, we are planning a year-long celebration with special exhibitions, community events and programs, a new publication, a new anniversary-focused micro-website, a robust marketing and communications plan, and so much more. Our goals for this celebration are to reenergize the Museum's identity and spotlight our many special qualities and initiatives.
6 PAGE 22

OLD BUSINESS
ITEM 2

2. INT

RODUCTION TO ENTERPRISE RISK MANAGEMENT
PAGE 23
PAGE 24
PAGE 25
PAGE 26
PAGE 27
PAGE 28
PAGE 29

OLD BUSINESS
ITEM 3

3. SWAP ANALYSIS
PAGE 30
PAGE 31
Swap Analysis
December 11, 2023

Swap was approximately $14 million and far exceeded any potential interest rate savings of refunding the VRDBs for fixed rate bonds. The City Council approved the staff recommendation to terminate the Swap with DEPFA Bank and enter into a new identical Swap with a financial institution with a qualified credit rating, Royal Bank of Canada (RBC).

Rece
ntly, staff requested the City’s Swap advisor to provide a current market analysis of the Swap. As of November 15, 2023 the market value of the Swap was $6 million, which represents the difference in future interest payments between the Swap rate of 3.536% and the current market rate for the duration of the life of the bonds. In other words, the termination value of the swap was $6 million.

The
independent Swap analysis below dated as of September 30, 2023 indicates that the Swap has performed better than expected and generated a synthetic fixed rate lower than the 3.536% fixed rate in the swap agreement. The below analysis presents the actual numbers, on an inception to date basis, since the swap agreement was put in place in 2006. The analysis further indicates that the City has saved a cumulative $958,495.18 in interest cost (basis differential), which resulted in a reduction of the synthetic fixed rate from 3.536% to 3.487%. Therefore, adding to the synthetic fixed rate the average 0.35% letter of credit fee and 0.07% remarketing fee paid on the bonds, the total synthetic fixed rate, or the actual financing rate on the bonds to date equals to 3.9%.

PAGE 32
Swap Analysis
December 11, 2023

Current status of the swap and financing cost
Over the last 12 months and still continuing, the reset rates on the City’s Variable Rate Demand Bonds (VRDBs) have been much lower than the floating leg swap receipts (64% of LIBOR (now 64% of SOFR+11.44 bps)) resulting in total average interest costs close to

3.00% (rather than 3.9%) for those months. The below graph indicates this economic benefit to the City. The green line represents the variable rates paid by the City on its bonds and the orange line represents the variable rates received by the City from the swap agreement and the blue bars represent the economic benefit to the City in Dollars.

To
further illustrate this phenomenon, the below graph represents the spread differential between SIFMA, the average variable rate paid by AA rated tax-exempt issuers and the actual rates paid by the City on its VRDBs. It is evident that the City’s bonds have been remarketed at a much lower rate as compared to SIFMA in the last 18 months and still continue to do so; therefore, confirming the material financial benefits to the City.

RBC_01 / $133,000,000 02/01/34
Swap Receipts Total: 11,125,994.58$
Bond Interest Payments Total: (10,167,499.40)$
Basis Differential ($): 958,495.18$
Average of Difference: 6,389.97$
Average of Swap Floating Leg Reset Rate: 0.65977%
Average of Bond Coupon Rate: 0.61144%
Basis Differential (%): 0.04833%
Swap Fixed Payment Total: (58,929,699.54)$
Net Synthetic Fixed Payment on Bonds Total: (57,971,204.36)$ Swap Fixed Rate: 3.53600%
Net Synthetic Fixed Payment Rate on Bonds: 3.48767%
PAGE 33
Swap Analysis
December 11, 2023

The
graph represents the difference in rates between SIFMA, which is the average AA rated variable rate bond in the market that resets every week, and the actual reset rates on the City of Pasadena bonds. Historically, these two rates have been almost the same and therefore the difference between the two was close to zero. There was one anomaly for a very short period of time when the pandemic began; however, in the last 18 months, SIFMA rates have been reset much higher than the City of Pasadena bond reset rates by as much as 2%. The larger the blue line, the greater difference between SIFMA and the City’s VRD bonds and therefore the greater the financial benefit to the City.

The
total financing cost of the City’s PCOC bonds inception to date was 3.9%. The current financing cost today is approximately 3% or less. The true interest cost of a refunding in today’s market, assuming the inclusion of the termination cost of the swap in the refunding will be approximately 4.25%.
-4
-3
-2
-1
0 1
2 3
4 5
2/2/2012
4/2/2012
6/2/2012
8/2/2012
10/2/2012
12/2/2012
2/2/2013
4/2/2013
6/2/2013
8/2/2013
10/2/2013
12/2/2013
2/2/2014
4/2/2014
6/2/2014
8/2/2014
10/2/2014
12/2/2014
2/2/2015
4/2/2015
6/2/2015
8/2/2015
10/2/2015
12/2/2015
2/2/2016
4/2/2016
6/2/2016
8/2/2016
10/2/2016
12/2/2016
2/2/2017
4/2/2017
6/2/2017
8/2/2017
10/2/2017
12/2/2017
2/2/2018
4/2/2018
6/2/2018
8/2/2018
10/2/2018
12/2/2018
2/2/2019
4/2/2019
6/2/2019
8/2/2019
10/2/2019
12/2/2019
2/2/2020
4/2/2020
6/2/2020
8/2/2020
10/2/2020
12/2/2020
2/2/2021
4/2/2021
6/2/2021
8/2/2021
10/2/2021
12/2/2021
2/2/2022
4/2/2022
6/2/2022
8/2/2022
10/2/2022
12/2/2022
2/2/2023
4/2/2023
6/2/2023
8/2/2023
10/2/2023
Historical SIFMA Spread To Pasadena VRDOs
PAGE 34

NEW BUSINESS
ITEM 4

4. AMENDMENTS TO FISCAL YEAR 2024 CAPITAL

IMPROVEMENT PROGRAM
PAGE 35
PAS^b^0
^'^.^-
•7 0
* *
(D z00 0<D 0's
^<^ .0^ 0^ l?<reo
Agenda Report
January 22, 2024
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: Department of Public Works
SUBJECT: AMENDMENTS TO FISCAL YEAR 2024 CAPITAL IMPROVEMENT

PROGRAM
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed actions are not "projects" as defined in the California Environmental Quality Act (CEQA), Public Resources Code Section 21065 and Section 15378(b)(4) and (5) of the State CEQA Guidelines and, as such,are not subject to environmental review; and

2. Amend the Fiscal Year 2024 Capital Improvement Program (CIP) Budget as detailed in Attachment A of this report.

BACKGROUND:

Throughout the Fiscal Year (FY), the Department of Public Works in conjunction with other impacted departments review active CIP projects to determine if budgetary changes are needed. Staff has completed this report detailing needed budget adjustments. The budgetary changes to the projects are listed below.

1. Building Maintenance FY 2021-2025 (71903) - The Department of Public Works recommends appropriating $16,889.65 in Private Capital from Crown Castle to this project and increasing the budget by a like amount. This funding will be used to continue security upgrades at the City Yards.

2. Hydrogen Fueling Station (75133) - The Department of Transportation (DOT) recommends appropriating $20,000 in EnergllZE Grant, and $4,500,000 in Proposition A/C - Local Return Fund to this project and increasing the budget by a like amount.

The City was awarded $3,355,860 in EnergllZE grant funds, but on the September 11 , 2023, CIP Budget Amendments agenda report, only $3,335,860 was appropriated.

This action will appropriate the full grant amount awarded to date. The Prop A/C funding will be used to build a temporary hydrogen fueling station that will be installed j
i
MEETING OF.AGENDA ITEM NO.

PAGE 36
Amendments to FY 2024 CIP Budget
January 22, 2024

in advance of the permanent station to accelerate the deployment of hydrogen fueled zero-emission vehicles.

3. Purchase of Dial-A-Ride Vehicles (75086) - The Department of Transportation recommends appropriating $106,589 in Low Carbon Transit Operations Program Grant and $160,611 in Proposition A/C - Local Return Fund to this project and increasing the budget by a like amount. This funding will be used to purchase one zero-emission Dial-A-Ride van in FY 2024 with delivery expected in FY 2025.

4. Walnut St Corridor Signal Improvements (75121) - The Department of Transportation recommends appropriating $108,000 in Private Capital collected as a condition of development from the Heritage Housing Project at 1878 E. Walnut Street and increasing the budget by a like amount. This funding will be used to install a video detection system, upgrade the traffic signal controller, and install a new larger cabinet and CCTV pole along the Walnut Street corridor.

5. Signal Preemption Equipment at Traffic Signals Citywide - Phase II (75916) - The Department of Transportation recommends appropriating $40,000 in Private Capital collected as a condition of development at 1878 E. Walnut Street Condominium project. This funding is designated for the installation of emergency vehicle traffic signal preemption system at two intersections. This action will move this project from the Future Unfunded section of the FY 2024 - 2028 CIP Budget to the active Transportation section.

6. Citywide Complete Streets Program (75114) - The Department of Transportation recommends appropriating $67,300 from the General Fund and increasing the budget by a like amount. In FY 2023, $250,000 was appropriated from the General Fund (previously planned as ARPA) to DOT'S operating budget to fund the Safer Streets Campaign. The program only needed $182,700 of the $250,000 to implement the campaign. DOT recommends appropriating the remaining $67,300 to fund a pilot program for the installation of traffic safety treatments at various locations around the City, particularly in neighborhood traffic management plan areas. This effort would enhance the Safer Streets Campaign's mission.

7. Washington Park Community House and Restroom - Construction Phase (78089) - The Department of Public Works recommends appropriating $100,000 in Residential Impact Fees and transferring $195,000 in Charter Capital Funds from Public Works Building - Seismic Upgrades (71915) to this project and increasing the budget by a like amount. This funding was utilized to install new security cameras on the buildings, keycard access controls, and associated upgrades required for the doors and locking hardware; purchase furniture; and cover associated soft costs due to weather and material procurement delays. Security cameras for the rest of the park will be addressed in a future CIP project. The Public Works Building- Seismic Upgrades (71915) project is on-hold until future funding is identified. To date, the project design was completed, and the project was advertised for construction three times, but all bids received significantly exceed the overall project budget.

PAGE 37
Amendments to FY 2024 CIP Budget
January 22, 2024

8. Robinson Park - Pool and Pool Building Renovations (78085) - The Department of Public Works recommends appropriating $60,000 in Residential Impact Fees and transferring $156,000 in Charter Capital Funds from Public Works Building - Seismic Upgrades (71915) to this project and increasing the budget by a like amount. This funding was utilized to install new security cameras and keycard access controls; new walkway lighting adjacent to the playground and parking lot; repairs to pool building structural framing due to unforeseen conditions; and associated soft costs due to weather and material procurement delays. The Public Works Building - Seismic Upgrades (71915) project is on-hold until future funding is identified. To date, the project design was completed, and the project was advertised for construction three times but all bids received significantly exceed the overall project budget.

9. Customer Information System Managed Services - Power (3271) - The Water and Power Department recommends transferring $1,500,000 in Power Funds from the Customer Information System (3022) project to this project and increasing the budget by a like amount. These funds will allow for the continued enhancement of Customer Information System Managed Services (3271) project, including purchasing a business intelligence reporting tool and new customer portal features. The Customer Information System (3022) project is complete, and appropriations are no longer required.

10. Security, Access Control, and Lighting Program at Power Facilities (3248) - The Water and Power Department recommends transferring $500,000 in Power Funds from the Customer Information System (3022) project to this project and increasing the budget by a like amount. This increase is necessary to install a virtual fence surveillance system at the City Yard, which is essential to combat recent theft and increase safety at the City Yard. The Customer Information System (3022) project is complete, and appropriations are no longer required.

11. Power System Equipment (3254) - The Water and Power Department recommends transferring $24,500 in Power Funds from the Power Substation Weatherizing Enhancements (3279) project to this project and increasing the budget by a like amount. These funds will be used to purchase a portable oil booster pump. Recent oil analysis data indicates the presence of contaminants in substation equipment and a portable oil booster pump is required to assist with additional drain and/or flush corrective actions to improve conditions. The Power Substation Weatherizing Enhancements (3279) project is under budget and the remaining funds are sufficient to complete the FY 2024 workplan.

COUNCIL POLICY CONSIDERATION:

All of the above projects and actions address City Council's goals to maintain fiscal responsibility and stability and improve, maintain, and enhance public facilities and infrastructure.

PAGE 38
Amendments to FY 2024 CIP Budget
January 22, 2024

ENViRONMENTAL ANALYSIS:

CEQA excludes from environmental analysis those actions that are not "projects" as defined by State CEQA Guidelines Section 15378. That section excludes from the definition of "project" the creation of government funding mechanisms and fiscal activities which do not yet commit the lead agency to any specific project, and also excludes organizational or administrative governmental activities that do not result in physical changes to the environment. The actions proposed herein are budgetary and part of the City's normal administrative process as it takes early steps to prepare for the possibility of undertaking a project, and therefore they are not yet "projects" as defined by CEQA.

FISCAL IMPACT:

The cumulative result of these recommendations will increase the FY 2024 CIP budget by $5,179,390. The specific funding sources for the budget amendments are listed on Attachment A.

Respectfully submitted,
TO^V OLM6S, P.E.

Director of Public Works
Prepared by:
^
^N^i
Phyllis'Hallowell
Management Analyst V
Approved by:
^^^^
UEfc-MARQUEZMIGUE
City Manager
Attachment A - Amendments to the FY 2024 - 2028 CIP Budget PAGE 39
Amendments to the FY 2024-2028 CIP BudgetAttachment A
Project/Fund Source
Appropriations
Through FY
2024Changes
Revised
Appropriation
1Building Maintenance FY 2021 - 2025 (71903)
Private Capital
Building Preventive Maintenance Fund
Charter Capital
General Fund
Total
104,549
6,590,027
475,000
575,000
7,744,576
16,890
0 0
0 16,890
121,439
6,590,027
475,000
575,000
7,761,466
2Hydrogen Fueling Station (75133)
Proposition A/C - Local Return
EnergiZE Grant
Transit Intercity Rail Capital Program Grant
Total
6,518,140
3,335,860
6,126,000
15,980,000
4,500,000
20,000
0 4,520,000
11,018,140
3,355,860
6,126,000
20,500,000
3Purchase of Dial-A-Ride Vehicles (75086)
FTA 5310 enhanced Mobility of People with Disabilities
Low Carbon Transit Operations Program Grant
Private Capital
Proposition A/C Local Returns
Transit and Intercity Rail Capital Program Grant
Total
939,369
236,755
32,258
302,689
392,000
1,903,071
0 106,589
0 160,611
0 267,200
939,369
343,344
32,258
463,300
392,000
2,170,271
4Walnut St Corridor Signal Improvements (75121)
Measure R Mobility Improvement Program Grant
Private Capital
Total
4,100,000
0 4,100,000
0 108,000
108,000
4,100,000
108,000
4,208,000
5Signal Preemption Equipment at Traffic Signals Citywide -Pha3ell(75916)
Private Capital
Total
0 0
40,000
40,000
40,000
40,000
6Citywide Complete Streets Program (75114)
Gas Tax
Commercial Development Fee
Traffic Reduction Fee
Measure R Mobility Improvement Program Grant
General Fund
Total
149,915
50,000
275,000
100,000
0 574,915
0 0
0 0
67,300
67,300
149,915
50,000
275,000
100,000
67,300
642,215
7Washington Park Community House and Restroom -
Construction Phase (78089)
Residential Impact Fee
Charter Capital
Total
3,000,000
0 3,000,000
100,000
195,000
295,000
3,100,000
195,000
3,295,000
Public Works Building - Seismic Upgrades (71915)
FEMA Hazard Mitigation Grant Program
Refuse Fund
Charter Capital Funds
General Fund
Total
1,425,037
11,671
600,000
23,342
2,060,050
0 0
(195,000)
0 (195,000)
1,425,037
11,671
405,000
23,342
1,709,050
PAGE 40
Amendments to the FY 2024-2028 CIP BudgetAttachment A
Project/Fund Source
Appropriations
Through FY
2024Changes
Revised
Appropriation
8Robinson Park - Pool and Pool Building Renovations
(78085)
Proposition A (Parks) - Cities Excess Funds
Residential Impact Fees
Community Development Block Grant
Charter Capital Funds
Public Works Building - Seismic Upgrades (71915)
FEMA Hazard Mitigation Grant Program
Refuse Fund
Charter Capital Funds
General Fund
Total
500,000
4,000,000
1,400,000
0 5,900,000
0 60,000
0 156,000
216,000
1,425,037
11,671
405,000
23,342
2,060,050
0 0
(156,000)
0 (156,000)
500,000
4,060,000
1,400,000
156,000
6,116,000
1,425,037
11,671
249,000
23,342
1,709,050
9Customer Information System Managed Services -
Power (3271)
Power Fund
Total
Customer Information System (3022)
Power Fund
Total
2,175,000
2,175,000
19,411,433
19,411,433
1,500,000
1,500,000
(1,500,000)
(2,000,000)
3,675,000
3,675,000
17,911,433
17,411,433
10Security, Access Control, and Lighting Program at
Power Facilities (3248)
Power Fund
Total
Customer Information System (3022)
Power Fund
Total
670,000
670,000
17,911,433
19,411,433
500,000
500,000
(500,000)
(2,000,000)
1,170,000
1,170,000
17,411,433
17,411,433
11Power System Equipment (3254)
Power Fund
Total
Power Substation Weatherizing Enhancements (3279)
Power Fund
Total
1,731,347
1,731,347
352,000
352,000
24,500
24,500
(24,500)
(24,500)
1,755,847
1,755,847
327,500
327,500
Net Changes 5,179,390
PAGE 41

NEW BUSINESS
ITEM 5

5. AUT

HORIZE THE CITY MANAGER TO ENTER INTO A

CONTRACT WITH PERKINS EASTMAN FOR THE
DEVELOPMENT OF A MASTER PLAN FOR THE SR 710

NORTHERN STUB PLANNING PROJECT IN THE AMOUNT
OF $2,820,744 AND APPROPRIATE $800,000 TO THE CITY
MANAGER’S OFFICE OPERATING BUDGET
PAGE 42
PA^b^Q
^^^
07 •^ *
© z<0 0<D 0
-p>^ -0^ 0^ •^w
Agenda Report:
i
January 22, 2024
TO: Honorable Mayor and City Council
THROUGH: FINANCE COMMITTEE
FROM: City Manager
SUBJECT: AUTHORIZE THE CITY MANAGER TO ENTER INTO A CONTRACT

WITH PERKINS EASTMAN FOR THE DEVELOPMENT OF A MASTER
PLAN FOR THE SR 710 NORTHERN STUB PLANNING PROJECT IN
THE AMOUNT OF $2,820,744 AND APPROPRIATE $800,000 TO THE

CITY MANAGER'S OFFICE OPERATING BUDGET
RECOMMENDATION:

It is recommended that the City Council:

1. Find that the proposed action herein is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA guidelines Section 15061 (b)(3);

2. Authorize the City Manager to enter into a contract, as the result of a competitive selection process, as specified by Section 4.08.047 of the Pasadena Municipal Code, with Perkins Eastman for the SR 710 Northern Stub Project in an amount not to exceed $2,820,744 for a period of three years. Competitive price bidding is not required pursuant to City Charter Section 1002(F) (contracts for professional or unique services);

3. Authorize the City Manager to extend the three-year contract for up to two additional one-year periods; and

4. Recognize and appropriate $800,000 to the City Manager's Office operating budget for the anticipated expenditures needed in FY 2024.

BACKGROUND:

As part of the SR 710 Northern Stub planning work, the City Manager's Office sought qualified proposals to assist in creating a SR 710 Northern Stub Master Plan document.

The SR 710 Northern Stub (710 Stub) area was relinquished to the City in August of i
[
MEETING OF.AGENDA ITEM NO.

PAGE 43
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

2022. In February of 2023, the City Council appointed a 16-member Reconnecting Communities 710 Advisory Group to assist in the effort to determine the future use of the approximately 50 acres of under-utilized land. The creation of a comprehensive master plan will ensure that all future development in the 710 Stub area meets the City's expectations as well as its General Plan goals and policies. Currently, the relinquished area has no land use or zoning designations. The master plan will serve as the guiding planning document for the future development of the area and the foundation for the creation of a new SR 710 Northern Stub Area Specific Plan.

The master plan document will include seven work products:

1. Community Engagement Strategy;

2. Restorative Justice Framework;

3. Data Collection and Existing Physical Conditions;

4. Economic Study and Market Demand Analysis;

5. Mobility and Circulation Analysis;

6. Land Use Options; and

7. Climate Resilient Infrastructure Development and Services Plan.

Additionally, as part of the master planning effort, the findings of the Historic Report on the 710 Displacement, will be incorporated into the final master plan. The Historic Report on the 710 Displacement contract work was awarded to three consultants in October of 2023, and will compile a comprehensive history that includes information about the neighborhoods that were displaced and the impacts of the construction of the SR 710 and the SR 210 on the community.

Solicitation and Request for Proposals
The relinquishment of the 710 Stub became a historic opportunity for the City to develop the underutilized piece of land. Given this unique opportunity, in March of 2023, the City issued a Request for Information (RFI) and invited experienced land use experts to participate in the information gathering process for the creation of the master plan request for proposals (RFP). The rare opportunity to re-envision a section of a community as unique as Pasadena garnered significant international attention, drawing the interest of several globally renowned consulting firms specializing in large-scale developments and land use planning. The RFP, Development of a New Master Plan/Specific Plan, was issued on August 15,2023,and the RFP submission period closed on September 28, 2023. A total of eight proposals were received. The proposals were evaluated and went through a meticulous evaluation process where they were scored by a panel of three experienced staff members utilizing the scoring criteria included in the RFP.

CriteriaWeight
Proposed solution, work sample and additional
materials
30 PAGE 44
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

Staffing assigned to the project
Proposed schedule
25 25
Cost Proposal20
TOTAL SCORE100
Per the evaluation procedures and criteria in the RFP, proposals were scored and ranked as set forth in Attachment A to this report. It is important to note that because of the potential use of Federal grant funds for the master plan, "Local Pasadena Business," proposal evaluation points could not be included in the scoring criteria.

Nonetheless, the proposal submitted by the firm Perkins Eastman rose to the top of the proposals and received 88.59, the highest score, and as a result, staff recommends this group be awarded the contract.

Perkins Eastman
The Perkins Eastman firm has 40 years of experience planning and creating various large-scale mixed-use plans or projects for urban environments. Their award-winning portfolio of projects around the world demonstrates their experience. Perkins Eastman's response to the City's RFP, included approaches to each of the seven work products that indicate knowledge and awareness of the City's unique history and its goal of restitching the underutilized 710 Stub back into the surrounding Pasadena community. The Perkins Eastman team and highly qualified subconsultants will be led by Principal and Urban Planner Vaughan Davies who has over 30 years of experience creating dynamic environments with pedestrian-first developments. Many of the large- scale projects Davies has worked on reflect the City's design and mobility vision for large developments and neighborhoods.

The diverse projects the assembled team has worked on regionally speak to their understanding of governmental entitlement processes, robust community engagement strategies, and land use solutions. Their ability is demonstrated by the high-profile projects they have collaborated on, like Park 101 for the City of Los Angeles, which proposes to cap portions of the 101 Freeway to create open space. Team members were also involved in the LA Waterfront Master Plan for the City of Los Angeles, and other significant work for the City of Long Beach, including the Downtown Long Beach Master Plan and the Rainbow Harbor, Queensway Bay Master Plan which redesigned a complex freeway off-ramp system at the southern 710 Stub in the City of Long Beach.

Most recently, Perkins Eastman received the "Best of the Best" award at the 2023 ICSC Global Design & Development Awards for The Wharf in Washington D.C. This project was recognized for its excellence in design and commitment to reuse and revitalization, as well as a Sustainable Commendation. The riverfront development is a mile long and sits along the Washington Channel. Its development revitalized the existing waterfront, which had been underutilized for decades. The Wharf's design is driven by a sensitivity to the community, ecology, and economy of the waterfront community.

PAGE 45
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

The Restorative Justice Framework process will be led by Estolano Advisors in partnership with Perkins Eastman. Relevant to this project, Estolano brings to Pasadena recent experience on the Park 101, as well as engagement on the Los Angeles Countywide Sustainability Plan. Perkins Eastman in coordination with The Estolano Group will create a restorative justice framework that will be bolstered by a collaborative process that includes information from the Historic Report on the 710 Displacement and engagement from the community. Creating a restorative justice framework aims to acknowledge the long-term effects the 710 Stub displacement has had on various community groups and will use that knowledge to inform the development of land use and mobility options, ultimately growing an equitable planning approach. The Restorative Justice Framework is not meant to offer a "solution" but to create a structured strategy that will produce a master plan that will align with the goals of the engaged community.

A successful master planning process must incorporate the engagement of the surrounding community. To ensure this is a robust and intentional effort, The Robert Group, in collaboration with CARS (Community Art Resources) and Prairie Form's Place It!, will direct the community engagement process during the master planning phases. Outreach will begin with creating branding to ensure legibility and to unify all project communications. Engagement with the community will happen through community-wide surveys, stakeholder focus groups, community events, pop-up sites, social media, school outreach, and email distribution to assess community priorities and preferences of initial ideas.

For the Mobility and Circulation Analysis portion of the master plan, Perkins Eastman is partnering with the Iteris Inc. group to oversee the existing conditions and on-ramp modification portion of the master plan work. The Iteris Inc. team is familiar with the 710 Stub area and the various transportation circulation scenarios vetted by Caltrans. The City utilized Iteris for work on the SR 710 Northern Stub Repurposing - Technical Feasibility Assessment, which was completed in January 2021. Iteris' familiarity with the traffic circulation surrounding the project area is invaluable to the transportation planning process because the transportation solution is a foundational piece of the master plan. As part of the relinquishment agreement made between the City, Caltrans and the California Transportation Commission, the 710 Stub must continue to serve as a transportation corridor.

Additional mobility and circulation planning work to integrate the 710 Stub into the City's existing arterial and surface streets will be managed by Gibson Transportation Consulting, Inc., another reputable and experienced transportation firm. They will work closely with the City's Department of Transportation (DOT)and Caltrans to ensure proposed solutions or modifications align with DOT'S sustainable transportation goals, like walkable streets, bike lanes, and public transportation.

PAGE 46
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

The total budget for these services is as follows:

Community Engagement Strategy$323,000
Restorative Justice Framework/Policy$280,000
Data Collection, Existing Physical Conditions/SD Modeling$205,000 Economic Study/Market Demand Analysis$182,620
MobilitY^and Circulation Analysis$200,000
Land Use Options$950,000
Climate Resilient Infrastructure Services Plan$210,000
TOTAL$2,350,620
The proposed contract fully complies with the City's Competitive Selection process.

The contract with Perkins Eastman will be an amount not to exceed $2,820,744 for a period of three years, which includes the base contract amount of $2,350,620 and a contingency of $470,124 (20%) to provide for any necessary change orders. If the work is not completed in three years, the City Manager will have the authority to extend it for up to two, one-year periods with not changes to the project budget.

The City has not worked directly with Perkins Eastman but has worked with several of its subconsultants, including AECOM, which is currently working with the Planning Department to update the City's multiple specific plans and who will lead the Economic Study and Demand Analysis of the 710 Stub master plan process.

Additionally, the Iteris Inc. group is currently working with the City's Department of Transportation on work related to three signalized intersections. Given the extensive experience of Perkins Eastman and its subconsultants, the City looks forward to collaborating with them on developing the 710 Northern Stub Master Plan. They are recognized for their innovative and thoughtful approach to urban design and master plans. Therefore, we anticipate that their contributions will be valuable in enhancing the City's vision for future infrastructure and development.

COUNCIL POLICY CONSIDERATION:

The proposed contract award will further the City Council goals to improve, maintain and enhance public facilities and infrastructure, support and promote the quality of life and local economy and improve mobility and accessibility throughout the City. It also supports the General Plan Land Use Element and would be consistent with Guiding Principle 1: "Growth will be targeted to serve community needs and enhance the quality of life. Higher density development will be directed away from residential neighborhoods and into the Central District, Transit Villages, and Neighborhood Villages. These areas will have a diverse housing stock, job opportunities, exciting districts with commercial and recreational uses, and transit opportunities. New development will build upon Pasadena's tradition of strong sense of place, great neighborhoods, gardens, plazas, parks, and trees.," and Goal 9, regarding sustainable environment: "Development and infrastructure practices that sustain natural environmental resources for the use of future generations and, at the same time, contribute to the reduction of greenhouse gas emissions and impacts on climate change."
PAGE 47
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

ENVIRONMENTAL ANALYSIS:

This project is exempt from CEQA review pursuant to State CEQA Guidelines Section 15061(b)(3). The contract award is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment.

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to the provisions of CEQA. Such is the case with the proposed request to authorize the City Manager to enter into a contract for the SR 710 Northern Stub Project for the preparation of a master plan.

PAGE 48
Contract for the Development of a Master Plan for the 710 Displacement Project January 22, 2024

FISCAL IMPACT:

The total cost of this contract is an amount not to exceed $2,820,744, which includes the base contract amount of $2,350,620 and a 20% contingency of $470,124 to provide for any necessary change orders.

The City Manager's Office also recommends that the City Council appropriate, in the current year, $800,000 from the $5 million payment made to the City as part of the SR 710 Corridor relinquishment, currently allocated to the General Fund Projects Fund (105). Once cost factors are more fully known, the City Manager's Office will return to the City Council as part of a future budget clean-up report to request additional appropriations of funds.

Respectfully submitted,
DAVID RE^ES^
Assistant City Manager
Prepared by:
/
WeMy Maci^s\
Senior Projec\l\4anager
Respectfully submitted,
£^4--^-
BRENDA E. HARVE^f-WILLIAMS
/
Assistant City Manager
Approved by:
^-^S) ^
^RQUEZ
City Manager
Attachments:

Attachment A: Evaluation Summary
Attachment B: Historic Resources Group Taxpayer Protection Amendment Forms PAGE 49

ATTACHMENT A
Master Plan/Spedfic Plan Proposals
Vendor
Totals
Total Average ScoreTotal Cost
Perkins Eastman88.59$2,350,620
SWA Group86.67$1,871,513
Michael Maltzan Architecture86.39$2,380,000
Grimshaw86.12$2,275,000
Gensler85.73$2,379,000
Gruen Associates85.33$1,871,615
Toole Design Group, LLC83.39$1,999,625
Moule & Polyzoides, Architects and Urbanists76.41$3,187,540 PAGE 50
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its trustees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please printlegibly. Use additional sheets as necessary.)

1.Contractor/Organization Name:Perkins Eastman Architects DPC

2. Type of Entity:
el non-govemment a nonprofit 501(c)(3), (4), or (6)

3. Name(s) of trustees, directors, partners, officers of Contractor/Organization:

I Executive Committee Members: Brad Perkins. Marv-Jean Eastman. Alan Schtossbera.

Brad Perkins Andrew Adelhardt, Shawn Basler, Jeffrey Brand, Nick Leahy, Ench A. BurKhart, and Jason Haimytephanie

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

Brad Perkins
Prepared by: Vaughan Davies
Title: Principal
Phone: T. 1 310 754 1523 | M. 1 213 840 9416
Date: 8.30.2023
{project.template.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
Perklns Eastman 153
PAGE 51
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Orgamzation hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1. Contractor/Organization Name:

M. Arthur Gensler, jr. & Associates, Inc. (Gensler)

2. Type of Entity:

X non-govemment a nonprofit 501(c)(3), (4), or (6)

3.Name(s) of trustees, directors, partners, ofRcers of Contractor/Organization:
lordan Goldstein. FAIA. FIIDA. LEED AP. NCARB. RA rn.rcric Diane Hoskins, FAIA, NCARBDiane Hoskins. FAIA. NCARB
Andy Cohen, FAIA, NCARBHao Ko. AIA. LEED AP. RA
Board of Directorsloseph Lauro. AIA. CDT. LEED AP. RA
Robin KlehrAvia,CID,FIIDAXiaomeiLee.LEEDAP
Samuel Bermudez Urena, RAPhilippe Phaneuf
Joseph Brancato*, FAIA, NCARBTheresa Shells, FAIA, LEED AP BD+C, NCARB Elizabeth Brink, EDAC, LEED AP BD+CJulia Simet, FIIDA, LEED AP, LEED AP ID+C, NCIDQ Andy Cohen, FAIA, NCARBCindySimpson.FIIDA.LEED

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

M. Arthur Gensterjr. & Associates. Inc. is a private company owned by its Employee Stock Ownership Plan and its individual employee shareholders where no one owns more than 6%. Gensler is a global firm with over 6,100 professionals across 53 offices.

Prepared by: Dylan Jones, AIA
Title: Principal
Phone:

Date:
(213) 243-8838
December 7.2023
w
{project.template.processClassification} - {projert.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 52
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Conti-actor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1. Contractor/Organization Name:

Grimshaw Architects

2. Type of Entity:
is non-govemment a nonprofit 501(c)(3), (4), or (6)

3.Name(s) of trustees, directors, partners, officers of Contractor/Organization:

North American Partners:

Andrew Byme
Vincent Chang
Andrew Whalley
William Horgan
Mark Husser
Juan Porral

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization;
Entity structured such that no individual Partner has more than 10% equity.

Prepared by: Andrew Byme
Title:Partner
Phone:323.471.6700
Date:9.27.23
r^.

A€^i{projecttemplate.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 53
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its trustees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1.Contractor/Organization Name:

Gruen Associates

2. Type of Entity:
s non-govemment D nonprofit 501(c)(3), (4), or (6)

3.Name(s) of trustees, directors, partners, officers of Contractor/Organization:

Michael A. Enomoto. FAIA. Managing Partner
Larrv Schlossbera. AIA, AICP. LEED AP BD+C, Partner
Debra Gerod, FAIA, LEED AP, Partner
Ashok Vanmail, AIA, Partner
Jilt Waaner. AIA. LEED AP. Partner

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

Michael A. Enomoto, FAIA. Managing Partner 26.52%
Larry Schlossberg, AIA, AICP, LEED AP BD+C, Partner 24.48% Debra Gerod, FAIA, LEED AP, Partner 23.5%
Ashok Vanmail, AIA, Partner 23.5%
Larry Schlossberg, AIA, AICP, LEED AP BD+C
Partner Title:

Phone:323.937.4270
September 27, 2023
{project.template.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 54
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1. Contractor/Organization Name: Michael Maltzan Architecture, Inc.

2. Type of Entity:

D non-govemment a nonprofit 501(c)(3), (4), or (6)

3. Name(s) of trustees, directors, partners, officers of Contractor/Organization:

Michael Maltzan. President

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

Michael Maltzan, President
Prepared by: Betty Tanaka
Title: Managing Principal, Michael Maltzan Architecture, Inc.

Phone: (323)913-3098
Date: sePtember 7. 2023
@
{project.template.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 55
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1. Contractor/Organization Name: Moule & Polyzoides Architects and Urbanists

2. Type of Entity:
e5 non-govemment D nonprofit 501(c)(3), (4), or (6)

3. Name(s) of trustees, directors, partners, officers of Contractor/Organization:

Elizabeth Moule
Stefanos Polvzoides

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

Elizabeth Moule
Stefanos Polvzoides
Prepared by: Sasha Reyes
Title: Director of Administration
Phone: (626) 844-2400
Date: 9/28/23
®
^£^/•°sgSS^
{project.template.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 56
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organization hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessary.)

1. Contractor/Organization Name:

SWA Group

2. Type of Entity:
10 non-govemment D nonprofit 501(c)(3), (4), or (6)

3.Name(s) of trustees, directors, partners, officers of Contractor/Organization:

Gerdo Aquino, Co-Ceo
David Thompson, Co-Ceo
Raymond Siu, CFO

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

N/A
Prepared by:

Title:

Gerdo Aguino
Co-CEO
Phone:213.236.9090
Date:September 13, 2023
^"^"
{project.template.processClassification} - {project.title} Release Date: {project.releaseProjectDate}
PageS
PAGE 57

TAXPAYER PROTECTION AMENDMENT
Disclosure Pursuant to the
City of Pasadena Taxpayer Protection Amendment
Pasadena City Charter, Article XVII
Contractor/Organizadon hereby discloses its tmstees, directors, partners, officers, and those with more than 10% equity, participation, or revenue interest in Contractor/Organization, as follows:
(If printing, please print legibly. Use additional sheets as necessan'.)

1.Contractor/Organization Name: TDG Engineering, Inc.

2. Type of Entity:

R non-govermnent D nonprofit 501(c)(3), (4), or (6)

3.Name(s) of trustees, directors, partners, officers ofContractor/Organization:

President: Jennifer Toole
Vice President: Amalia Leighton Cody
Vice President: Nick Jackson
Secretary: William Schultheiss
Treasurer: Roswell Eldridge
Directors: Jennifer Toole, Roswell Eldridge, William Schultheiss

4. Names of those with more than 10% equity, participation or revenue interest in Contractor/Organization:

President: Jennifer Toole
Prepared by: Jessica Fields, PE,AICP^
(/ ••—~—^-Ly
Title: Director of Operations, Western U.S.

Phone: 213.257.8680x145
Date: September 27, 2023
DEVELOPMENT OF A NEW MASTER PLAN/SPECIFIC PLAN109
PAGE 58

NEW BUSINESS
ITEM 6

6. ADOPTION OF THE FY 2024 RECOMMENDED

OPERATING BUDGET OF THE RENT STABILIZATION

DEPARTMENT
PAGE 59
i
i
PASb^^0 ^^^
07 * *
© z
co 0q? 0
^^ ^^ 0^ ^rio
"(
Agenda Report
January 22,2024
TO: Honorable Mayor and City Council
THROUGH: Finance Committee
FROM: RentStabilization Department
SUBJECT: ADOPTION OF THE FY2024 RECOMMENDED OPERATING BUDGET

OF THE RENT STABILIZATION DEPARTMENT
I
I
I
3 i
j
RECOMMENDATION:

It is recommended that the City Councij:

1. Find that the proposed action is exempt from the Catifornia Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines Section 15 061 (b)(3) (common sense exemption); and

2. Adopt the FY2024 Recommended Operating Budget of $2,876,232 for the Rent Stabilization Department, inclusive of the previously appropriated $600,000, and

12.0 FTE positions as detailed in the report. Due to the anticipated delay in billing the FY2024 Rental Housing Fee, a temporary negative cash position for the department is acknowledged as described in the report.

BACKGROUND:

The Rent Stabilization Department (RSD) was created in December 2023 to supportthe Pasadena Rental Housing Board (PRHB) duties to regulate rent increases on certain rental properties in the city, provide eviction protections, and carry out the other duties set forth inthe Pasadena Fair & Equitable Housing Charter Amendment (Charter Amendment) approved by Pasadena votes in November 2022.

On January 10, 2024, the PRHB adopted the FY2024 Recommended Operating Budget for the RSD and set the FY2024 Rental Housing Fee to be levied on each applicable rental unit.

The RSD's annual budget will be incorporated into the City budget approval process, and therefore must be adopted by the City Council. The PRHB independently sets the Rental Housing Fee in accordance with Section 1811 (t) of the Charter Amendment ,i
,!
I
MEETING OF.AGENDA ITEM NO.

PAGE 60
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

Rental Housing Fee in accordance with Section 1811 (I) of the Charter Amendment based on the approved annual budget. The fee is anticipated to support the full expenses of the RSD.

The remainder of the report outlines the initial operating budget for the RSD and the Rental Housing Fee for the current fiscal year (July 1 , 2023 through June 30, 2024)to implement the provisions of the Charter Amendment. The report also highlights the RSD's responsibilities, anticipated expenditures, staffing needs and work plan.

Department Responsibilities
RSD is responsible for:

Enforcing rent stabilization laws: Implementing policies and procedures to prevent unfair rent increases, eviction, and other habitability violations while ensuring rental-property owners receive a fair return on investment in accordance with the Charter Amendment.

Assisting tenants and landlords: Provide counseling and guidance to empower tenants and landlords to understand their rights and responsibilities and navigate PRhlB processes for petitions, hearings and accessing other city services.

Collecting and analyzing data: Comprehensive data on rents, housing availability, and other data to inform policy decisions, and enforce regulations.

Engaging in community outreach and education: Collaborative initiatives with community organizations will educate tenants and landlords about their rights and responsibilities under Pasadena's rent stabilization law (Charter Article XVIII).

Support the PRHB to fulfill its policy development functions, processes and facilitate public meetings.

Recommended Budget for FY2024 (July 1, 2023 thru June 30, 2024) To effectively fulfill its mission, the RSD requires an initial operating budget of $2,876,232 and authorization to hire 12 staff (12.0 FTE). Funding for the department will be provided by revenues collected from the Rental Housing Fee of $91.85 on all rental units affected by the Charter Amendment. The budget allocation breaks down as follows:

PAGE 61
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22,2024

Summary of Appropriations by Expense Category & FTEs
Category
Personnel
FY 2024
Recommended
$ 1,005,426
Services & Supplies$1,531,500
Internal Service Charges $339,306
Grand Total $2,876,232
FTE12.0
Summary of Revenues
Category
Rental Housing Fee (31,316 units x $91.85)(1) $
FY 2024
Recommended
2,876,232
Grand Total $2,876,232
(1) The Rental Housing Fee incorporates repayment of the $500,000 advance from the City's General Fund, as authorized by the City Council in May 2023 to fund start-up expenses. The budget accounts for $457,379 already spent by the PRhlB as of 12/31/2023. Additionally, $5,060 was spent on audio-visual services during the previous fiscal year (FY2023).

Budget Discussion
Staff recommends a phased approach to budgeting, considering both short-term and long-term needs during the start-up phase of the department:

Phase 1: Initial Implementation (FY2024)
Initial Budget: The recommended budget for the remainder of FY2024 (through June 30, 2024) takes a conservative approach, factoring in existing authorized expenditures from the PRHB, establishing the Rental Registry, hiring of staff, supporting communication and outreach needs, securing office space, and implementing otherstart-up infrastructure. The estimated operating expenses for the remainder of the fiscal yearwere in part calculated based on prior expenditures.
•Limited Information: While a full year of actual expenditure data is not yet available for forecasting future budgets, staff are utilizing the best information currently available, including a comprehensive staffing model and cost analysis provided by Bhyv Consulting (Attachment A). This model estimates costs to run PAGE 62
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

the RSD at full capacity to be $5,914,056 annually and $765,000 in one-time costs for initial setup.

Previous appropriations: The recommended budget also incorporates $600,000 in appropriations already authorized by the City Council during the startup phases for the PRHB, including:
(1) $425,000 for Bhyv Consulting on July 31, 2023
(2) $175,000 for Goldfarb & Lipman LLP on October 2, 2023 Phase 2: Ongoing Operations (FY2025 and Beyond)
Subsequent budgets for FY2025 and beyond will be informed by:
o Actual expenditures incurred during Phase 1.
o Ongoing monitoring and adjustments based on real-time data and evolving needs.
o Refinement of the original cost analysis model based on actual staffing and operational requirements.

Cost of Service Study in FY2025: To ensure the long-term financial sustainabilityofthe RSD and accurately quantify the resources needs for fulfilling the Charter Amendment, staff plans to engage an experienced firm to conduct a comprehensive Cost of Service Study in FY2025. This study will leverage all relevant data collected to date and future projections to provide a data-driven and transparent assessment of the RSD's financial requirements. This data-driven approach will ensure the RSD operates efficiently, effectively fulfills its duties, and remains financially sustainable for the long term.

Personnel
RSD will begin hiring the first 12.0 full-time equivalent (FTE) positions over the next six months. The table below describes those positions that will be prioritized for hiring in the remainder of the fiscal year. The notes column indicates the number of months the position will be budgeted in the current fiscal year.

Position
Annual Salary
and BenefitsNotes
FY24
RecommendedFTE
Executive Director$341,756 I 7 months | $199,358 | 1.0
Senior Office Assistant$113,682 I 6 months | $56,841 | 1.0 Public Information Coordinator$159,434 I 3 months | $39,859 | 1.0 hlousing Counselor (Program
Coordinator I)
$145,746 I 6 months$218,619 | 3.0
Senior hlearing Officer$279,976 I 3 months | $69,994 | 1.0 Management Analyst IV$198,399 I 3 months | $49,600 | 1.0 Customer Service
Representative
$106,820 | 3 months$26,705 | 1.0
PAGE 63
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

Deputy City Attorney^2)$279,976 I 3 months I $69,994 | 1.0 Senior IT Support Specialist^$65,277 | 6 months | $32,639 | 1.0 Senior Business Systems
Analyst(2)
$193,3376 months$96,669 | 1.0
PRHB Members (13)$145,150 | 12 months [ $145,150
Subtotal$ 1,005,426
FTE Total12.0
(2) While the budget for the IT and Legal positions resides within the RSD, these FTEs will be allocated to, filled and managed by their respective existing departments-the Department of Information Technology and the City Attorney's Office. This approach ensures the RSD has access to dedicated, full-time expertise from highly qualified personnel within established city structures.

See Attachment B for the RSD proposed organization chart.

Services & Supplies
Establishing and running the RSD will require an investment in both startup and ongoing costs. Consultants hired by the PRHB in 2023 laid the groundwork for the work activities of the future department, while setting up a new office will require one-time infrastructure expenses. Ongoing costs cover staffing, essential technology, and operational needs, such as office rent and supplies. The budget projections for the current fiscal year incorporate recommendations from Bhyv Consulting's cost analysis (Attachment A), consider actual expenditures to date, and conservative estimates for the remaining months of the fiscal year. The annual amount column represents either already committed expenses or annual cost estimates for future fiscal years. The notes column indicates if the expense is one-time, ongoing annual amount or a calculated amount based on the ongoing annual amount.

Services & Supplies
Annual
AmountNotes
FY2024
Recommended
Consultant/Professional Services
Management Consulting
(Bhyv Consulting)$425,000 I One-time I $425,000
Legal Counsel
(Goldfarb & Lipman LLP)$225,000 | One-time | $225,000
Public Relations
(Allegra Consulting)$75,000 | One-time | $75,000
Language Translation sen/ices$75,000 | Ongoing | $75,000 Audio Visual Services for PRHB
Meetings$12,000 | Ongoing [ $12,000
Staffing Recruitment Services$75,000 | One-time | $75,000 Software Subscriptions & Maintenance
PAGE 64
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

Rental Registry$150,000 | Ongoing | $ 150,000
Outreach Activities
Communications, Marketing,
Advertising$120,000 | Ongoing | $25,000
Printing$20,000 | Ongoing | $10,000
Postage$10,000 | Ongoing | $2,500
Materials & Supplies$30,000 | Ongoing | $5,000
Dues, Memberships, Professional
Subscriptions$5,000 ] Ongoing | $5,000
Training Costs$15,000 | Ongoing | $5,000
Conference & Meetings$7,000 | Ongoing | $5,000
Office Rent$216,000 I 4 months | $72,000
Office Equipment & Furniture Start-up$90,000 | One-time | $90,000 Office IT Infrastructure Startup$275,000 | One-time | $ 275,000 Subtotal$ 1,531,500
Internal Service Charges
Internal service charges are the annual costs to integrate the RSD into the City's existing infrastructure and systems for revenue collection, procurement, human resources, general legal support, and IT services. The Finance Department and Department of Information Technology have calculated the RSD's estimated share - its "pro-rata" cost - for all the shared services. This approach ensures all City departments contribute fairly to the maintenance and operation of these shared services. The annual amount column represents annual cost estimates for a full year.

Internal Services
Annual
AmountNotes
FY2024
Recommended
Cost Allocation Plan (CAP) - Human
Resources, Finance, General Legal$332,167 | 7 months | $ 193,764 IT Services$249,5001 7 months | $ 145,542
Subtotal$ 339,306
Revenues
The Charter Amendment specifies the PRHB will fund its operations through an annual fee levied on each rental unit in accordance with Section 1811 (I) of the Charter Amendment based on the approved annual budget. On January 10, 2024 the PRHB adopted a resolution setting the FY2024 Rental Housing fee that supports the full expenses of the RSD. See Attachment C for the adopted resolution of the PRhlB.

PAGE 65
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

Fee Timing: Staff recommends delaying the billing of the Rental Housing Fee for FY2024 to:

Align with the launch of the Rental Registry database: The system for registering properties and collecting the fee won't be operational until June 2024 (estimated). Delaying the billing of the fee aligns with the system's availability.

RSD will work with the Finance Department to accept payment of the Rental Housing Fee prior to the launch of the Rental Registry database, when requested by a rental property owner.

The Rental Housing Fee also incorporates repayment of the $500,000 advance from the City's General Fund, as authorized by the City Council in May 2023 to fund start-up expenses. The budget accounts for $457,379 already spent by the PRHB as of 12/31/2023. Additionally, $5,060 was spent on audio-visual sen/ices during the previous fiscal year (FY2023).

RevenuesNotes
FY2024
Recommended
Rental hlousing Fee -
31,316 Rental Units @ $91.85Delayed$2,876,322
Subtotal$2,876,232
Department Cash Position
Staff recommends delaying the billing of the Rental Housing Fee until the Rental Registry is launched in June 2024 (estimated). By not billing the Rental Housing Fee, the RSD will face a negative cash position that could reach $2,876,232 by the end of the fiscal year if all expenses occur. Approving the FY2024 budget authorizes this temporary position, which is anticipated to be recovered by the collection of Rental Housing Fees of $2,876,232 after the Rental Registry is launched.

FY2024 Department Work Plan
Over the course of the next six months, the primary activities for the RSD are described below. Staff plan to provide a more detailed workplan in a future meeting with milestone dates that will be shared with the PRHB and to the public.

Establish the Rent Stabilization Department:

Secure office space and technology infrastructure.

Hire and onboard initial staff (e.g., director, housing counselors, administrative personnel).

Develop organizational structure and internal policies.

Implement the Rental Registry Database
0 0
0 PAGE 66
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

Implement Petition and Hearing Processes
Outreach and Education:

Create the RSD website with relevant information for tenants and landlords
Create robust communications channels for receiving and processing inquiries.

Expand existing efforts to develop communication materials and public awareness campaigns to inform landlords and tenants about the new department and its role.

Support community meetings and workshops to provide education on tenant rights and landlord responsibilities.

Support the PRHB with Policy Development
Review existing rent stabilization laws and regulations.

Implement policies and procedures for handling hearing and petitions.

Develop and implement data collection and management systems.

Tenant & Landlord Education and Support:

Provide consultative services to tenants and landlords.

Support educational workshops on rights and responsibilities.

Partner with housing advocacy organizations to refer support services.

Create Rental Registry outreach plan and workshops to assist landlords register rental units into the database.
0 0
0 0
0 0
0 0
0 0
0 FY2025 Future Outlook
In preparing for the next fiscal year starting July 1 , 2024, staff anticipates building a robust budget that carefully considers updated staffing needs and a recommended Rental Housing Fee, developing a work plan outlining the department's priorities and planned activities for the year ahead, and ensuring the department is fully operational and delivering all the services expected by the Charter Amendment and set by the PRHB.

Compared to FY2024, the department's FY2025 budget and staffing levels are likely to increase significantly reflecting the department's transition from initial startup to full operations. The Bhyv Consulting report (Attachment A) serves as the best estimate for the department's future needs:

Operating Expenses: $5,914,056
Staffing Level: 22.5 Full-Time Equivalents (FTE)
Rental Housing Fee: $213•
Due to the delay in billing the FY2024 Rental Housing Fee, rental property owners may receive a combined charge for both fiscal years in the future. This combined charge could range from $200 to $300 or more. Staff will present fee collection options for Board approval as part of the FY2025 Housing Rental Fee adoption anticipated for April/May 2024 and informed by the status of the Rental Registry launch status.

PAGE 67
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22,2024

COUNCIL POLICY CONSIDERATION:

The City Council's strategic planning goal of maintaining fiscal responsibility and stability will be advanced through the adoption of the FY 2024 Recommended Operating Budget for the Rent Stabilization Department.

ENVIRONMENTAL ANALYSIS:

The proposed action is exempt from the CEQA pursuant to State CEQA Guidelines Section 15061 (b) (3), the "common sense" provision of CEQA (formerly the general rule), which applies to projects which may have the potential for causing a significant effect on the environment. The proposed action will not result in any new development or physical changes.

PAGE 68
Adoption of Rent Stabilization Department FY2024 Operating Budget January 22, 2024

FISCAL IMPACT:

The FY2024 Recommended Operating Budget proposes total operating appropriations of $2,876,232 in the Rent Stabilization Fund (689) and revenues collected from the Rental Housing Fee to cover all expenses. A temporary negative cash balance for the department will occur until the Rental Housing Fee can be collected.

The FTE positions funded represent 12.0 FTEs.

Respectfully submitted,
^

PHILLIP LCCLAIR
Interim Executive Director
Rent Stabilization Department
Approved by:

J^=—
MIGU&b^lARQUEZ
City Manager
Attachment A: Bhyv Consulting - Staffing Model and Cost Analysis for Pasadena Rent Stabilization Department
Attachment B: Rent Stabilization Department Proposed Organization Chart Attachment C: Resolution RHB-2024-01 -Adopting the FY2024 Recommended Operating Budget, Setting the FY2024 Rental Housing Fee, and Delaying Collection of the FY2024 Rental Housing Fee From Landlord
PAGE 69
aS{| bhyv
To: Pasadena Rental Housing Board
From: bhyv Consulting LLC
Date: December 20, 2023
Re: Staffing Model and Cost Analysis for Pasadena Rent Stabilization Department I. EXECUTIVE SUMMARY
Pasadena voters passed Measure H to amend the City Charter and enact rent control on November 8, 2022. On December 12, 2022, the City Council adopted Resolution No. 9970, certifying the November 8, 2022 General Election results showing that Measure H - the Pasadena Charter Amendment Initiative Petition Measure Imposing Rent Control was approved by voters. The Charter Amendment was subsequently filed with the California Secretary of State and took effect on December 22, 2022. The Pasadena Fair and Equitable Housing Charter Amendment under Article XVIII in the Municipal Code details the extent and purview of Pasadena's rent control ordinance, including the establishment of a rental housing fee for applicable rental units, a rent registry that is a database of all eligible rental units, and a Rental Board to oversee the administration and implementation of the Charter Amendment.

This report provides the recommended staffing model for an effective rent stabilization program under the Charter Amendment and includes a cost and fee analysis for establishing this new agency.

It gives an estimate of one-time costs and ongoing annual costs needed to fund Pasadena's new rent stabilization department. $5,914,056 will be needed to cover ongoing annual costs and $765,000 is required in one-time costs for initial IT and office set-up, for a total of $6,679,056 in the first year.1 Based on these calculations, this report calculates that Pasadena's rental housing fee needs to be $213 per unit to cover the costs of creating and implementing its rent stabilization program. The rental housing fee will need to be recalculated each year as a part of the Rental Board's approval of the Rent Stabilization's Department ongoing operating budget.

The report is organized in 5 sections listed below:

Background
Analysis of Program Structure and Costs
Rental Housing Fee
Comparison to Other Municipalities
Conclusion
1 The projected ongoing annual cost is within 10% of the proposed budget in Management Partner's 2022 analysis for the City of Pasadena. Management Partners estimated $5,453,460 in ongoing annual cost and $310,000 in one-time costs for a total proposed budget of $5,763,460 for the first year. Their analysis did not include administrative costs required to support City of Pasadena departments and calculated lower estimates for the IT start-up and database acquisition. The costs in this report are based on more accurate estimates provided by the City of Pasadena. 1 PAGE 70
aStB bhyv
II. BACKGROUND
Pasadena's Rent Stabilization Program and State Limitations Strong rent control and eviction protections are essential elements of anti-displacement housing policies. Studies have revealed that cities with active enforcement programs achieve greater compliance and reduce the amount of rent overcharges tenants pay. For example, in 2009, Berkeley and Los Angeles conducted separate research analyzing their respective programs. At the time, Los Angeles employed a passive enforcement model whereas Berkeley implemented active enforcement of its ordinance. The research found that 27% of Los Angeles tenants were paying 5% or more above the legal allowed amount for their unit whereas in Berkeley only 5% of tenants were being overcharged.2 Pasadena voters enacted an active enforcement program for their city through Measure H by requiring the establishment of a rent registry. A rent registry is a database of all eligible rental units that tracks their allowable rental increases over time. It is considered the gold standard for an active enforcement program.

State law under Costa-Hawkins (1995) restricts California cities from imposing rent control on units constructed after the legislation was adopted. This means rent regulations can only apply to pre-1995 units. However, the law does not preclude cities from imposing just cause eviction limitations on rental units built after 1995. The Pasadena Fair and Equitable Housing Charter Amendment applies eviction regulations to post-1995 units. Pasadena's rent control program will therefore be responsible for enforcing rent control for eligible units built prior to 1995 and also be responsible for enforcing just cause for evictions in eligible units built before and after 1995.

Pasadena's Housing Stock and Eligible Rental Units
The tables below provide a breakdown of the housing units in Pasadena by building size and number of units that would be eligible for Pasadena's rent stabilization program. On the next page, Table 1 estimates the number of rental units that were built before 1995, and Table 2 estimates the number of units built after 1995.
2Los Angeles report: Economic Roundtable, Economic Study of the Rent Stabilization Ordinance (RSO) and the Los Angeles Housing Market, 2009, available at the LA. Housing Department website; Berkeley report:

Berkeley Rent Stabilization Board, REport on the April - May 2009 Sun/ey of Tenants of Registered Rental Units, March 15, 2010, available on the BErkeley Rent Stabilization Program website. 2 PAGE 71
a^M bhyv
Table 1: Estimated Number of Rental Units Built Before 1995 Unit TypeNumber of Housing
Complexes
Number of
Units
Estimated Number of
Tenant Occupied Units
Percent of Units that
are Tenant Occupied
CondosN/A6,8143,68054%
Duplex1,7603,5202,49971%
Triplex5951,7851,46482%
Quadplex4641,8561,55984%
Multi-Family | 1,16315,65015,650100%
TotalN/A29,62524,85283.9%
Source: City of Pasadena, Planning and Community Development Department Table 2: Estimated Number of Rental Units Built After 1995 Unit TypeNumber of Housing
Complexes
Number of
Units
Estimated Number of
Tenant Occupied Units
Percent of Units that
are Tenant Occupied
CondosN/A3,0291,63654%
Duplex21423071%
Triplex3 9 782%
Quadplex28784%
Multi-Family | 614,7844,784N/A
TotalN/A7,8726,46482.1%
Source: City of Pasadena, Planning and Community Development Department As the above tables indicate, an estimated 24,852 rental units would have Pasadena's rent control provisions apply to them and an additional 6,464 rental units would have the City's just cause eviction protections apply to them. Given the complexity of the law, Pasadena's Rental Board will need an agency that can regulate rents; administer a rent registry; oversee mediations, hearings, and appeals; and monitor evictions to determine that they are in compliance with local law. In the next section, this report will detail the staffing model necessary to implement and enforce Pasadena's rent stabilization and eviction protection laws and regulations. 3 PAGE 72
8^9 ^^yv
III. ANALYSIS OF PROGRAM STRUCTURE AND COSTS
This report has identified 5 cost categories for this new agency which include:

Personnel
• IT startup costs and services, operations and maintenance, and other administrative services • Office Space
• Rental Board Compensation
• Other One-Time Costs and Considerations
Personnel
The largest cost category in a rent stabilization departmental budget is personnel.

Pasadena's Charter Amendment created an active model of rent stabilization and eviction protections that necessitates multiple divisions to support the different functions required to successfully implement the law. This report will detail the recommended operational structure, required employee classifications, and the number of employees needed to accomplish the anticipated workload in each division. This structure is based on best practices in similar municipalities with active enforcement rent stabilization programmatic models. Additionally, City of Pasadena staff were consulted through a series of interviews and collaborative meetings, and citywide job classifications were examined in order to inform the recommendations in this report.

Department Structure and Staffing
Based on best practices in California, it is recommended that the Rent Stabilization Department is organized into 5 divisions as follows:
• Administration and Policy Division to support the Rental Board, oversee data collection and analysis, budget management, and other administrative policy and managerial functions; Public Information and Outreach Division to support community engagement, outreach, and education efforts;
Hearings Division to adjudicate rent increase petitions and facilitate mediation procedures; Rent Registration Division to manage, maintain, and implement the rent registry and other enforcement activities;
Legal Division to advise the Board and department staff on policy and procedural and legal issues, support enforcement activities, and represent the Board in litigation and writ proceedings.

Table 3 on the next page has a detailed breakdown of division activities:
4 PAGE 73
f4?iB bhyv
Table 3: Rent Stabilization Department Divisions and Activities Divisions of
Office
Number
of FTEs
Activities
Administration
& Policy
4FTEsSupports the Rental Board, policy matters, and overall administration • Leads data collection and analysis
Prepares annual report
Administers contracts, billings, invoicing
Implements programmatic policies and creates strategic plans Creates budget, program, and staffing plan
Coordinates with other City Departments
Public
Information
and Outreach
6FTES•
•
•
Delivers informational services to the public through drop-in clinics and responding to phone calls and emails
Prepares, updates, and distributes public information materials Makes presentations at workshops, seminars, and other events Attends community-based events to answer questions related to landlord and tenant issues and to distribute information on rent control program Provides topical informational postcards to owners and tenants Hearings4FTEsConducts hearings, prepares hearing decisions, manages appeals Conducts mediations ofowner/tenant disputes (separate and independent of the petition process)
Analyzes and recommends regulatory amendments to Board based on hearing trends and changes in the law
Manages client communications, scheduling of hearings, and other tasks Rent
Registration
4FTES
•
•
•
Oversees database used to create and maintain a rent registry Manages IT updates and software development to support rent registry Tracking and monitoring of rents and rent increases
Inputs data and relevant landlord information into rent registry and certifies they've provide requisite information each year Provides customer service to landlords and tenants around rent registry information
Coordinates with billing and fee collection personnel to field inquiries concerning exemptions, fees, and increases compliance monitoring Monitors rent ceilings and sends mailing to owners and tenants Monitors Ellis Act compliance
Monitors and enforces other relevant rent stabilization and eviction protection related laws and policies
Legal4FTEs• Provides legal expertise on cases or lawsuits challenging the local law Represents the Rental Board in negotiations and in lawsuits Provides legal expertise on policy changes and proposed regulations The next section will detail the personnel necessary for each division and their estimated costs. At the end of this section, a summary table is provided to illustrate the total personnel needed to implement Pasadena's rent stabilization and just cause eviction framework. The City of Pasadena Human Resources Department provided all staffing cost estimates based on existing Pasadena 5 PAGE 74
a?M bhyv
classifications. This includes the maximum base salary, health, and CalPERS retirement benefits.

Where this report determined a new classification was justified, the City of Pasadena Human Resources Department provided an estimate for this new classification to ensure pay equity within the City.

Administration & Policy Division
Staff: 4.0 FTEs
Budget: $824,909
Table 4: Administration & Policy Division Staffing Model Breakdown Job ClassificationNew/Existing
Class?
FTEsSalaryBenefitsEstimated
Annual Cost
Department DirectorNew1.0$ 228,781$112,975$341,756
Management AnalystExisting1.0$ 108,903$ 67,231$176,134
Senior Business System AnalystExisting1.0$121,295$ 72,042$ 193,337 Senior Office AssistantExisting1.0$ 63,779$49,904 | $113,682 Total4.0$ 522,758$ 302,152$ 824,909
This Division would provide the department's leadership, management, and administrative oversight.

Because there are currently no equivalent positions for the Department Director in the City, the Board will need to draft and approve a new job classification for this role.

The remaining personnel in this unit will serve various high-level supportive roles to the Department Director as follows:

Management Analyst III - is the lead administrative manager for the department and will supervise other administrative staff in the various departmental units. Additionally, this position is responsible for contract management, communications, and budget management support. This position also supports the Board and serves as liaison with other city departments concerning administration for Rental Board meetings.

Senior Business System Analyst - is responsible for overseeing technological needs and its data collection protocols. This role would be expected to work closely with the City of Pasadena's Department of Information Technology (DoIT) to identify the department's ongoing tech innovations and serve as the liaison with contracted technology vendors.

Senior Office Assistant - performs a number of administrative, clerical, and logistical duties to support the Division in effectively leading the agency, including serving as executive assistant to the Department Director.
6 PAGE 75
a?M bhyv
Public Information and Outreach Division
Staff: 6.0 FTEs
Budget $852,178
Table 5: Public Information and Outreach Division Staffing Model Breakdown Job ClassificationNew/Existing
Class?
FTEsSalaryBenefitsEstimated
Annual
Cost
Public Information CoordinatorExisting1.0$97,766 | $61,668$ 159,434 Housing CounselorNew4.0$347,497 | $235,486$ 582,983
Office AssistantExisting1.0$ 60,954 | $ 48,807$ 109,761 Total6.0$506,217$ 345,961$852,178
The Public Information and Outreach Division is responsible for disseminating information about Measure hi and related regulations as well as other relevant laws and ordinances concerning landlord-tenant issues affecting Pasadena residents. This Division will also be responsible for providing holistic housing counseling to support residents in resolving landlord-tenant-related challenges related to their specific situations.

In order to support the work of this division, the following staff are recommended:

4.0 FTE Housing Counselors - Because of the large volume of community engagement activities and expected requests for housing counseling services, it is recommended that the Board hire 4 housing counselors to serve in this division. The Rental Board will need to create a new Housing Counselor job classification.

Public Information Coordinator - The Housing Counselors will report to the Public Information Coordinator, who will supervise the Division. The Public Information Coordinator is an existing position in Pasadena.

Office Assistant - The Office Assistant will support this Division with its administrative and clerical work to send out mailings, coordinate events, order supplies, and other administrative tasks required to administer the ordinance. These tasks could include data entry related to eviction notices and coordinating with other City staff in supporting the implementation of the relocation Charter provisions.
7 PAGE 76
aS{| bhyv
Hearings Division
Staff: 4.0 FTEs
Budget: $933,896
Table 6: Hearings Division Staffing Model Breakdown
Job ClassificationNew/Existing Class?FTEsSalaryBenefitsEstimated Annual Cost
Senior Hearing OfficerNew1.0$ 183,389$ 96,587$ 279,976
Hearing OfficerNew2.0$ 330,300$ 178,969$ 509,269
Legal AssistantExisting1.0$ 85,907$ 58,744$ 144,651
Total4.0$ 599,596$ 334,300$ 933,896
This Division is responsible for processing all petitions around rent increases, mediating cases when necessary, and presenting appeals to the Rental Board. Additionally, Hearing Officers will support other department staff in responding to complex community inquiries and serve as an integral support for Housing Counseling services and other related outreach activities.

In order to support the work of this division, the following staff are recommended:

Senior Hearings Officer - will supervise and oversee the work of the unit and provide direct support to the Board in appeals proceedings.

2.0 FTE Hearings Officers - will adjudicate petition-retated disputes and mediations.

Legal Assistant - will provide the administrative and clerical support.

The Rental Board will need to create a new job classification series for the roles of Hearing Officer and Senior Hearing Officer once the hearings' adjudicative process and regulations are developed, 8 PAGE 77
a?iB bhyv
Rent Registration Division
Staff. 4.0 FTEs
Budge?: $598,411
Table 7: Rent Registration Division Staffing Model Breakdown Job ClassificationNew/Existing
Class?
FTEsSalaryBenefitsEstimated
Annual Cost
Management Analyst IVExisting1.0$ 124,941$ 73,458$ 198,399 Management AnalystExisting1.0$ 108,903$ 67,231$176,134
Senior Customer Service
Representative
Existing1.0$66,210$ 50,848$117,058
Customer Service RepresentativeExisting1.0$ 58,836 | $ 47,984 | $ 106,820 Total4.0$ 358,890$ 239,521$ 598,411
This Division is responsible for managing the rental registration process, which includes maintaining the rent registry database, monitoring compliance with the City's rent stabilization and eviction protection provisions, and providing customer service and support to property owners and tenants.

In order to support the work of this division, the following staff are recommended:

Management Analyst IV - serves as division lead and is responsible for overall supervision and management of the rent registration process.

Management Analyst III - leads compliance and enforcement efforts including monitoring exemption status, Ellis Act, and other no-fault evictions.

2.0 FTE Customer Service Representatives - responsible for data entry, providing registration-retated inquiries, and general administrative and clerical support. 9 PAGE 78
a?iB bhyv
Legal Division
Staff: 4.0 FTEs
Budget $1,046,569
Table 8: Legal Division Staffing Model Breakdown
Job ClassificationNew/Existing
Class?
FTEsSalaryBenefitsEstimated
Annual Cost
General Counsel/Assistant
City Attorney
New/Existing1.0$ 228,040$113,925$341,965
Staff Attorney/Deputy City
Attorney
New/Existing2.0$ 366,778$193,174$ 559,952
Legal AssistantExisting1.0$ 85,907$ 58,744$ 144,651
Total4.0$ 680,725$ 365,843$ 1,046,569
The Legal Division will advise the Board and department staff on policy and procedural and legal issues, support enforcement activities, and represent the Board in litigation and writ proceedings.

Rent Board jurisdictions throughout the state either house the legal team within the Rent Stabilization Department, directly reporting to the Department Director, or within the City Attorney's office, directly reporting to the City Attorney and dedicated to serving the Department.

To estimate staffing costs, Pasadena's HR Department provided salary information related to the City Attorney classification series. The General Counsel is equivalent to an Assistant City Attorney Position, and the Staff Attorneys are equivalent to Deputy City Attorney Positions.

Staff in City of Pasadena Departments
Staff: 0.50 FTE
Budget: $65,277
Table 9: Pasadena Department of Information Technology (DolT) Staffing Model Breakdown Job ClassificationNew/Existing
Class?
FTEsSalaryBenefitsEstimated
Annual Cost
Senior IT Support
Specialist
Total
Existing0.5

0.5 $ 45,662
$ 45,662
$19,615
$19,615
$ 65,277
$ 65,277
10 PAGE 79
r4.13 bhyv
As a part of analyzing possible costs for Pasadena's rent stabilization department, interviews were conducted with the City of Pasadena's HR, IT, and Finance departments. Based on these interviews, this report determined that while no additional hlR or Finance staff are necessary, the Rent Board would need to support adding an additional IT Support Specialist in Pasadena's DolT to help support the various technology needs of the new agency. The Senior IT Support Specialist will work closely with the Senior Business System Analyst in the Administration and Policy Division to develop and integrate the rent stabilization office's software systems with the rest of the City of Pasadena's IT infrastructure. This Specialist would also provide technical assistance with any maintenance or technology issues that the department's staff is having with utilizing their specialized software.

Total Personnel for Pasadena Rent Stabilization Program Staff: 22.5 FTEs
Budget $4,321,239
Table 10: Rent Stabilization Department Personnel Breakdown By Division DivisionRequired FTEs | Estimated Annual Cost
Administrative & Policy Division4.0$ 824,909
Public Information, Outreach, &
Enforcement Division

6.0$852,178
Hearings Division4.0$ 933,896
Rent Registry Databases &
Management

4.0$598,411
Legal Division4.0$1,046,568
Subtotal22.0$4,255,962
City of Pasadena's DolT0.5$ 65,277
Total22.5$4,321,239
In order of priority, this reports recommends that the Rental Board focus on hiring the following staff in the next few months:

The Department Director

2.0 FTE Housing Counselor

1.0 FTE Senior Business System Analyst

0.5 FTE Senior IT Support Specialist
11 PAGE 80
aSjg bhyv
The Department Director will lead efforts in hiring and setting up overall department infrastructure; the Housing Counselors will begin to field inquiries and calls from tenants and property owners; the Senior Business System Analyst and Senior IT Support Specialist will work together to begin to build the rent registry database and other programmatic technology systems.

The next section will go over the initial infrastructure costs and ongoing costs the department will need for its daily operations & maintenance (i.e. O&M).

IT startup costs and ongoing services, O&M, and other City of Pasadena administrative services In meetings with City of Pasadena staff, they advised integrating the Rent Stabilization Department into the City's existing infrastructure for revenue collection, purchasing, HR, and IT support.

Municipalities typically pay for inter-departmental sen/ices by paying a certain administrative overhead. The Pasadena Finance Department works with an outside consulting firm to calculate the administrative overhead it charges departments. This firm provided their calculation of $332,167 in administrative overhead for the new Rent Stabilization Department for this report, but this amount may change slightly when the City receives the final approved operating budget from the Rental Board. In addition to administrative overhead, the Rent Stabilization Department will need to have a separate budget for its daily operations and maintenance (O&M) which are a part of staff completing their work. This report recommends an additional $250,000 to hire outside counsel to provide representation for low-income tenants and support their right to counsel during this time period.

Finally, the total proposed budget must also include one-time costs for building the department's IT infrastructure. Table 11 summarizes these costs below.

Table 11: One-time and Ongoing IT, O&M, and Other Administrative Costs Breakdown Type of ServiceOne-Time CostsOngoing Annual
Costs
Cost
City of Pasadena Administrative
Overhead1
$332,167$332,167
City of Pasadena IT Services2$249,500$249,500
Operations & Maintenance3$400,000$400,000
Contracted Legal Services$250,000$250,000
City of Pasadena IT Office Set-up$275,000$275,000
Database Acquisition Budget4$400,000$400,000
Total$675,000$1,281,667$1,906,667
12 PAGE 81
r4^9 ^^yv
(1) The City of Pasadena Finance Department provided this estimate of the administrative overhead rate, which is based partially on the Rent Stabilization Board's full FTE count and total annual budget. (2) The City of Pasadena's DolT provided this estimate. Included in the ongoing IT services are the following: 24/7 support for all computing devices, telephones, email, network and web connectivity, software licensing and applications, project management, and equipment replacement.
(3) The Rent Stabilization Department's O&M is estimated based on municipalities with similar FTE levels. It includes funding for office supplies, outreach, interpretation and translation, subscriptions, and other contracted outside sen/ices. (4) Database includes the rental registry. The cost is estimated based on rental registry startup costs of municipalities that recently created a rental registry.

Qne-TimeTechnolo.qv Costs
The City's DolT staff estimated the initial IT office set-up costs based on the full outfitting of an empty office without City network infrastructure (assuming the location involves new or upgraded cabling, wiring and jacks, City Network connection, Wi-Fi), enhanced conference room technology to support virtual meeting experience, additional office equipment, and building security in terms of door access controls and security cameras.

The one-time cost of database acquisition is based on conversations with the City's DolT staff on their capacity to create databases in-house for the Rent Stabilization Department, particularly for its rent registry. Pasadena IT Staff indicated that such databases are not in their wheelhouse of expertise and would be more costly to create internally rather than contract with an outside vendor.

The $400,000 cost estimate assumes an RFP process to have competitive bids from software vendors for the creation of a rent registry database, a hearings database, and an evictions database.

Office Space
The Rent Stabilization Department will need its own office space for its staff and to accommodate visits and meetings with tenants, landlords, and other stakeholders. Assuming an allowance of 150 square feet for each of the 22.5 FTEs and an allowance for a lobby/waiting area, a public counter, and two large conference rooms, this report recommends roughly 6,000 square feet of office space.

City staff advised that monthly rents for unfurnished office space in Pasadena cost approximately $3.00 per square foot/ for a total annual cost of $216,000. This report recommends including an additional one-time expense of $15/square foot ($90,000) to equip and furnish the office space. City staff have identified several office spaces close to Pasadena City Ha\\ that have connections to the City's fiber optic network that the Rental Board can select for the new agency (see Attachment B for details). Table 12 shows the costs below:
13 PAGE 82
aSjg bhyv
Table 12: One-time and Ongoing Costs of Office Space
Type of CostOne-time/OngoingCost
Annual rent for officeOngoing$216,000
Furnishing new officeOne-time$90,000
Total$306,000
Rental Board Compensation
Under Section 1811(j) of the Charter Amendment, each Rental Board member may be compensated for a maximum of twenty hours per week at an hourly rate equal to 2.5 times the Pasadena minimum wage. The 2023 minimum wage in Pasadena is $16.93, and therefore the hourly rate for Board members would be $42.33. For the first six months, Board members worked on average 3.77 hours each week. For the purposes of accurate budget projections, this report anticipates that Board members will work approximately five hours per week during the remaining fiscal year to meet the needs of the Department. Some Board members may work more or fewer hours depending on need, and the five hours per week average does not limit individual Board members from working additional hours if needed. As such, the base compensation for this report's cost analysis is calculated for thirteen Board members working a total of 65 hours per week ($2,751.45). The annual base compensation is approximately $143,075 for this first year. According to the Pasadena Human Resources Department, once costs for the City's portion of Medicare contributions are added, the total cost for the 13-member Board is approximately $145,150 for this first year. Table 13 below shows the Board's cost:

Table 13: Rental Board Compensation Cost
Fiscal
Year
One-time/
Ongoing
Cost
Pasadena
Minimum
Wage
Board
Hourly
Rate1
Estimated
Hours
Served
Base
Amount
Fringe
Benefits (if
applicable)2
Total
Cost
FY 23-24Ongoing$16.93$42.333,380$143,075$2,075$145,150
(1) The Charter Amendment states Rental Board's hourly rate will be 2.5 the City's minimum wage. (2) These estimates were provided from the Pasadena Human Resources Department and are in part calculated on the number of hours the Rental Board is sewing.
14 PAGE 83
a?1B bhyv
Total Estimated Program Costs
Based on the above cost analysis for personnel, Rental Board compensation, office space, technology and administrative support, and initial start-up costs, this report estimates the cost of implementing the Rent Stabilization Department would be about $6,679,056 in the first year and about $5,914,056 the second year, as shown in Table 14 below.

Table 14: Estimated Program Costs for Rent Stabilization Department Program ComponentsOne-Time CostsOngoing Annual
Costs
Total
Personnel1$4,321,239$4,321,239
O&M$ 400,000$ 400,000
Administrative overhead2$332,167$ 332,167
Contracted legal services$ 250,000$ 250,000
IT annual support$ 249,500$ 249,500
Office space rental$216,000$216,000
Rental Board compensation3$ 145,150$ 145,150
Office space furnishings$ 90,000$ 90,000
IT startup support$ 675,0004$ 675,000
Total$ 765,000$ 5,914,056$ 6,679,056
f1) Personnel costs for a 22.5-member staff includes additional DolT staff (0.5 FTE). (2) This estimate was provided by the Pasadena Finance Department. (3) Rental Housing Board compensation includes five hours per week for 13 Board members, plus the City's Medicare contribution.
(4) This number includes the City's DolT office IT setup and the budget for acquiring a database from software vendors. 15 PAGE 84
a^9 bhyv
IV. RENTAL HOUSING FEE
Section 1811(1) of the Charter Amendment specifies that the Rental Housing Board will finance its program expenses by charging an annual Rental Housing Fee to landlords. Per the Charter Amendment, landlords are not allowed to pass on the fees to tenants.

To offset the $6,679,056 in estimated program costs, the Rental Housing Fee in Pasadena would be approximately $213 per unit, as shown in Table 15.

Table 15: Rental Housing Fee Required to Offset Program Costs Total CostsTotal Number of Rental Units
Affected by the Amendment
Rental hlousing Fee Per Unit
$ 6,679,05631,316$213
V. COMPARISON TO OTHER MUNICIPALITIES
The total ongoing annual cost for Pasadena's rent stabilization program is comparable to other jurisdictions that also have an active enforcement model. See Table 16 below for comparison:

Table 16: Comparison Cities with Rent Stabilization Programs PasadenaBerkeleyOaklandSanta
Monica
West
Hollywood
Year Rent Stabilization
Program Established
20221978198319791985
Population135,732123,065433,82392,40834,886
Number of
Rent-stabilized Units
24,85219,60776,00026,62015,838
Number of Units Subject
to "Just Cause" Only
6,46424,306 19,000N/AN/A
Total Units31,31643,91395,00026,62015,838
Total Ongoing Budget$5,914,056$7,506,460$8,269,014$5,976,033$3,734,698 Number of FTEs22.527.0 28.024.012.0
Rental Housing Fee$213$2907$ 178$101$228$144
16 PAGE 85
aBIB bhyv
VI. CONCLUSION
The stated purpose of Pasadena's Fair and Equitable Housing Charter Amendment is to promote neighborhood and community stability by regulating rent increases and preventing arbitrary evictions.

The Charter Amendment's rent regulations would limit the year-to-year increases in rents and the eviction regulations would prohibit evictions except in specified circumstances. A Rental Board would be appointed by the City Council to oversee the Charter Amendment's various provisions. The Rental Board will need a dedicated new Rent Stabilization epartment to support it in its oversight.

This report estimates the new Rent Stabilization Department will cost $6,679,056 million to implement during the first year and require hiring 22.5 FTE employees. The program would be paid for through annual fees charged to landlords for each rental unit. These fees can not be passed on to tenants. The annual fee amount would be approximately $213 per unit. The rental fee will need to be adjusted each year depending on the operating budget the Rental Board approves for the Rent Stabilization Department.

To support the expedient setup of this new agency, this report recommends prioritizing hiring the following positions as soon as possible:

The Department Director

2.0 FTE hlousing Counselor

1.0 FTE Senior Business System Analyst

0.5 FTE Senior IT Support Specialist
Two of these positions require the City of Pasadena creating new job descriptions. This report provides job descriptions in Attachment A for reference and for use. 17 PAGE 86
StIS bhyv
ATTACHMENT A: JOB DESCRIPTIONS FOR NEW JOB CLASSIFICATIONS Department Director
Job Description
Under policy direction of the Pasadena Rental Housing Board, the Department Director plans, organizes, and directs the activities of the Rent Stabilization Department and performs related work as assigned. The Department Director is responsible for overall planning, administration and operation of a variety of functions prescribed by the Pasadena Fair and Equitable Housing Charter Amendment (Charter Article XVIII) and supporting regulations. The purpose of the Rent Stabilization Department is to regulate residential rent increases and to protect tenants from unwarranted rent increases and arbitrary, discriminatory, or retaliatory evictions. This position is distinguished from other department management positions in that the responsibilities relate specifically to the administration of the Rent Stabilization Department.

Example of Duties
The following list of duties is intended only to describe the various types of work that may be performed and the level of technical complexity of the assignments) and is not intended to be an all-inclusive list of duties.

Develops and directs the implementation of goals, objectives, policies and procedures for the Rent Stabilization Department; administers the Department, including planning, organization, financial management and public relations.
• Selects, supervises, reviews and evaluates subordinate staff; provides for their training and professional development; may discipline staff as required. • Coordinates the establishment and maintenance of an automated database of residential rental property for the billing and collection of delinquent accounts.

Consults with legal services staff regarding the enforcement of the Fair and Equitable Housing Charter Amendment (Charter Article XVIII)
Prepares and administers the annual budget for the Rent Stabilization Department; prepares and submits to the Board reports of program progress, finances and administrative activities. • Maintains effective working relationships with Board members, tenants, property owners, public officials and City staff.

Reviews the procedures of the administrative hearings and legal units to ensure a fair and unbiased administrative hearings process.

Represents the Board before legislative bodies and at public functions.

Maintains records and prepares reports and correspondence as required.

Performs related duties as assigned.
18 PAGE 87
aSjB bhyv
Knowledge and Abilities
Knowledge of:

Principles and practices of program management, including development, planning, monitoring, evaluation, and administration.

Principles and practices of administrative management, including goals and objectives development, work planning, budgeting and effective employee supervision including selection, training, work evaluation and discipline.
• Applicable local, state and federal laws, ordinances and regulations.

Budgetary and control principles and practices.

Skill in:

Planning, organizing, assigning, directing, reviewing and evaluating the work of assigned staff.

Training staff in work procedures and providing for their professional development.

Administering and managing a variety of program elements.

Providing professional assistance and staff leadership to the Rental Housing Board.

Using sound independent judgment and responding sensitively to community issues and concerns.

Communicating effectively with residents, tenants, landlords, groups and boards and commissions.

Preparing clear and concise reports and other written correspondence.

Minimum Qualifications
Equivalent to graduation from a four-year college or university with major coursework in public or business administration, law, urban planning or a closely related field and at least eight (8) years of administrative or supervisory experience which has included program planning and development and supervision of a professional and support staff. Experience in the housing field is desirable.

Progressively responsible related experience may be substituted for the college coursework on a year-for-year basis.
19 PAGE 88
8^9 b^yv
Housing Counselor
Job Description
Housing counselors provide free information to tenants, landlords, realtors, and other parties about their rights and responsibilities as they relate to the Pasadena Fair and Equitable Housing Charter Amendment (Charter Article XVIII). Counseling is non-advocacy/non-directive, meaning counselors do not take sides in disputes, argue a resident's case, or tell residents what choices to make.

Instead, counselors provide information and options to empower residents to make their own choices. Counselors cannot provide legal advice but can make referrals to community-based organizations as needed. Housing counselors can also help parties navigate Rent Board processes for requesting mediations, filing petitions, and accessing other city department services.

Example Of Duties
The following list of duties is intended only to describe the various types of work that may be performed and the level of technical complexity of the assignments) and is not intended to be an all-inclusive list of duties.
• Provides holistic housing counseling to the public which includes responding to telephone inquiries, and emails, and engaging in other public information activities as directed; Works closely with and provides technical assistance, directly or through subordinate staff, to the Rent Board and community and neighborhood-based committees and groups; Compiles and analyzes data; prepares written and oral reports for the Rent Board and other senior staff on a variety of development policies and programs; Works with the program supervisor, other City departments and public agencies, boards and commissions, and the private sector in developing a comprehensive and integrated approach to the administration of the local rent stabilization laws and regulations; Works with various community groups and membership organizations to encourage an interest in program goals and projects;
Organizes special community education programs, workshops, conferences, meetings, and speaker's bureaus; advises departmental personnel on the use of educational materials and techniques and the use of community resources;
Represents the Rent Board at meetings and in contacts with other agencies, commissions, business and community groups, and members of the public; Provides technical assistance to others on Measure H and related regulations; may supervise support staff on a project or regular basis;
Performs related duties as assigned.

Knowledge And Abilities
Knowledge of:

Federal, state, and local housing policy or specific knowledge of landlord- tenant law.

Methods of data collection, monitoring, and program evaluation; Basic leadership and training principles;
20 PAGE 89
r4^9 ^^yv
Basic supervisory principles and practices, with knowledge of conflict resolution and mediation preferred but not required.

Skill in:
• Providing community outreach, program assistance to, and direction for community and City programs;
• Assessing community needs, interpreting relevant laws and regulations, and identifying appropriate resources for assistance and referrals;
Coordinating programs with other community agencies and services; Collecting, evaluating, and interpreting varied information and data and developing sound conclusions;
Conducting educational programs and workshops;
Understanding a variety of population groups as they relate to the provision of services and community organizing efforts;
Working with a diverse community, and providing strong verbal and written communication.

Minimum Qualifications
A Typical Way Of Gaining The Knowledge And Skills Outlined Above Is:

Equivalent to graduation from a four-year college or university with major coursework in sociology or a related field and two (2) years of professional-level experience in community organization, program monitoring and evaluation, or the development and delivery of community service programs.

Progressively responsible related experience may be substituted for the college coursework on a year-for-year basis.
21 PAGE 90
8Sj) bhyv
ATTACHMENT B: POTENTIAL OFFICE SPACES FOR RENT STABILIZATION DEPARTMENT RE: RE: Preliminary budget numbers for Pasadena
Rent Control program
Takahashi, Rebecca •;-rak5hashi.g:cityofp3sa.3ena.nef- 10,W20£3 - 7;£i arr- To: ecsi@bhy.,!:onsi.rti'-g.ccm
C':: cnsnee&bny.^onsuitino.sc.'fl . sdrT.'nig'bi-yvccnsu ltirg.com . agnestecshyvccisufting.com 1 attschm<ni (4.1 MB)
;—--
PCF
1iO£.LcsRcbies....pdr
Ecat,
Sorr-.a updates:
• Finance anticipates receiving the CAP informstion either today or tomorrow. • The Sea! Estate Manager actually found some tangible options if the board was ready ts move today.

The best scenario he identified is office space at the building where our Water & Power oepartment is locat&d J1SO S i.0i Robiesi
On our City fiber netwsrk loop and waiking distarce to City Hall they h ave abo ut 7K SF on each of the 7 S8'- & 9th floors.

The cost of th* lease would be around SS.OO/SF/montft. The ofTxes could be ready very soon as tl^ey are already built out with need af mirsor temnt improvmer'.ts., if the layaut works, » 'n addition, the building at 199 S. Los Rabies \s aiso on our City fiber network, ioop- They have 7K SF on a coupie offtoc.rs at $3.25/SF/month
Please let me know if this wiit suffice for your projections, o'fif if need to do any adlditionat fQflow-up.

I am alia going to reach out to Tiffsrsy today to ccnffrm if there ifadditionat fringe beyortd Medicare to' the board members to account for.
-Rebecca
22 PAGE 91
>
^
v^
^
/ ^ ^es^aaav
yaw-
^ ^at"-- ^»"^
^ amis'
/ %r
^^^f;^^
^
's' .;;«[^-^
r
v ^tir
A'
yi
^
L- v
•s
•£'•a
^M ^
i1^
\
^
in
iT%Id •i
tl
u \
CD
"•',<f'——^^-^^ =
3 0z Fi"
Q.

StLU ^
m ^
^>
iS^
'??
&
Q< A
^^
fy ^
:. •;
;1\i^
in
0 •••'
^'~
\
^\. ^:\ ^
in ^
m
.i*
\': :¥ky
^' £i
^M ^
s'rr ^•^ »
PAGE 92
••••Itl.-
??•
*-8
?;.s
fc
^:^ 'I
^ (-
i I";'./•s "t'1-^ ri s? V;'.
-"£
i^ -'».^ ;~'.--2
*^-i
^^
i 6 ^ •^.t; w/'t
» ..te ^^ -*<
I^ t
'V^«.,<
^f^ •<
f
w-;^^^.'ws •i
^
Ay.,,
.? »
^Wi ^c
«,•
^'t
K'
^
Ss&SiEiAwasas:;s
y•s
^
fc?if
I.
y
I 1I
:<
^
L«
•»3
s s-_
*?.' --*•
".;•
] t<<l
(^
'A.
<»•^0
-**'•A.'
^1A'^\ <
<6^
^
Kt>
i>
^ s ^
«t;
^
^
^..sa
r
•£^
&a. "
^s— *S('
^
w-•
ie?
m-~^
A••y
^;. E» -»«.l
%
^
<
,'
)LU
0 on ID
;^i
m uj
Q>
w cr <
Q
^
ss
SB
S—n
^
(
<\
»<It.
f k LU
^»:-
<
Q
LU
'"]
a:
u
0 LAJ
u
I '^
•s ^
^ 5
^ u
<y M
-=; rt
= i
?

7. f
<^1
s£j
> c
C t-
c-
0 =.li-^
(^ 2 ^
<
cn
<
u
y:

Vi
y
c
Y:
2^
&, u
x
4-1
rt
!-i
3 ?;
X
y
^
7:
y
(D
s
rt
^ 's
-2
rta
'^ ^
T3^£=
'^ ^
FI
PAGE 93
f^<
(^U
U3LO
z Q5u -I
:0>
ina<
0 LO
>•
I
^
i•E
D
I/)
..£
^s^
.^3^i^m<tA
@
w
I

8.^
II
ftII
0 m
in T-I
Illtit
2£
E
Ill
000
.1.1^
~^
II
go0
£2
^0
So
S ^ <u
< (D £
i^i
os^
^ g^
^ =
^••fi ~?v.^ oi/l-Oi/l
^
I
I
I
LQ
^s
II3^
&0-0
II
3 0
m
g
-0
^
I
"s
•a
^
s
Is
N
•t^
LL.
g
.^.•'^
SJ°£
ItII
It
^
la
6-a
IIII
1/»
£]|cCS3
fc.^^'^
^5
.y^x
1?^
ll?
ss|
s^Ill
sss
<£:|S
0)^3 CD
1111
3 ? ?,
si=l£
i^sf^l
0 y-
/
^
'J
y^m
^
^<-^
f
:^ ',••.

I
•«
f*
a-
S!
>*.-B
fJ
in
(-'••
c-
^
'*
f.^^^
7^f
1^^^ ?<'&
v
5; ^
'•{ '•'"<r
t^ m ^,y •-•»^ .l"ft ,«;< (A•<?^ 6^^
^ )>
••^ s /'.w^^ ,^.-».-. -
s^^:^^':^
l^ :m. i.1 /
^ -'^^^ ??^^ ,-ft.••;
^</i^ t< t;
v^1..«,
PAGE 94
« \,»1»;.
^ f:
^~-"1r^-
w^
t
«•—'•
fl
!i*l
II s
\< (
M
\
S2
„!
f
-a
m
^
— J
^
y\\ \' ^
\\' /
/ »»BSt|
;/ ^
»,
\\ -V
y
f;;
^f 4
ll
t,
ih
r^.

LU
-J
CD
<
£ U 0& ^ ^
SP in in
•i T-i ^
3v><A
U-)
I
L?
";^iQ:
ft
§^'
ui
u u uo y
i/i LD LD in i/)LL L. U- LL U-
in in in u-i
T-1 r-1 T-( <-1 T-1n ro n con
1A W- tft <A *A
i
^
^
y y <J y
ui in in </)
U; LL LL U.
ininin in
CO CO 00 CO
«>^ <^ <^ <A
^
0 ^3^-
^:
t--&
^0^
t^^:
•-£
0 13U U 0
in tn </) i/) i/>

U- LL LL LL LL
in in in in u~>
r-1 <-1 T-1 ^-1 TH
n n n rom
t^ <A -tft 1A <A
I
10 s
^
^
ill
<
Q£
I
in
s s
^
s
<-1
CM"
0 0
0 ID
T-1 ^f
^ ^ ^ -£-£
jo jro ^ro jro JO
in
°°
n
I
I 8 S §
T-<
^ n cs <N
0 ln
10 0
in<0
0 •o
^ -£ ^ -£
3333
^ ^ ^ ^
t ^ 0 00r< o o T-<
-t CN m 'I
CN in CM c^
ir>
r^
0 •Of>r~.
ft t t t
jTD JTQ J"0 JTI ^CU
op
n
r^ rsi T-I ^-o^ m <N m
o^ in ^ o
n M CM r'4
8SS^ §8 S ^
scooo0
PAGE 95
I
W)
^
^
ro
III
•<t
n
<
Q-
QL
p
6 >
_I I_
7 ^
w v n^l
-c^^^
^
^jn
TD
-4 ^
I-
co
rH
PAGE 96
LDLQ
Q:a: 1/1
sTT-1
00U-}
co in0^"rr>
^}
00 J2
in00 s•^t
ro
Si£ >
<
U1LO
/'^~!\t\
QS.

J _
z
<
D-
Q^
Q
0 r
J_^1
X
SUIIB
450
I
h-
^-
PAGE 97
I
1^
I
I
8^
^ s
i!
T^
z
<
Q-
QL
0 Q
LL
z
I-
in
I
•
^
•^^ »fa ^
^-. %•
^
s^^a^L^
y * „?
%• ^i
rII ^ M. s
^
©^
fW^qi
@1
it ^St
i "
18 s
^ Q
»•
8»
^s
rvi_w
°B3i SS——-S
© f
^
PAGE 98
u- u-u.

LDLO(/) iyi
Q;ec:C£Q; tnu_
a^ ^coCO:^r\
0^j-nr\Qi
rMco^CM IrtCNoj roCNCQ
£•^t-
0 0 J2inU~]
0in<0r\ -2•s 0-^)•o •o
"ro££^s >
<33
LO(^mw
<
a-
a:
0 0
UL
z
I-
s0
L
j Q..J;.
^ .L^.^
i
"']
•i
1'
iN^r^^7
;,
.'fl
f
.^
^
3!
'?
n
~
^
S -. . I, ,
l;=^==Jj:^ s ^7
^i-L.
f i ^:

I^N.. II
L
-••t
••;;^i;:" |
-IT4"
l<:
».
[.r^^r~"
PAGE 99
L U- LL.

LOww
LL CsLCLQ: w
s a^0co
00 CNIU-)^.c^ t0OJ~n m
^
00 0 J2
0•o -2
•s r\r\r~.
"ro-s£ £! >
<^ u U-)1/1
z
<
Q-
01 0
Q
LL
I
h-
rs
1,
r'
i
.
)~
i
;
r-a--,L:
e.i.t.ra-^s^.r.'—j^a».a
^-ri-—-•^ i
.^_
I"—£;
m
,-a B2-. . !
L...

I 1-^'YI
7 •
n:-^ s l^
^JL-.^—^I-
i?-
t
m&s
'*^yu!~~'-
tev1,'?.^^»!:.
^'-|'-^"-%^3iS-WKS . ? . -:; '1.. : "^-".?.-•''
z
@
IT-
-/^ilI A^
y^^L
^.^^•'^-''^
K :'^. ••.' :'<^^•',
^
'm
^m
^y&
1 I!
PAGE 100
V
I
(/)
I
I
Ll- LL.
s ^
Ill
co ^-
0 0 r-~'
n co ..
00 03 .^?
111
U1
z
<
CL
Q^
p
0 r' —'
:^ 03 s
1 •^-
I
^
^^l^^~K7\'^7\
^__J^^_^^-^-1
!—,
-••-S' r-^
{ri ['.^^
^
p-i L.s...n
r
ra'i

1. L>/^j
u -J
»
!L.^^ ^ .1i'- ,
^
<;
°1_-1
vrw..jya"A- ?•vr->.i/^J -s
i i J
•;;.r^" - y3
I
h-
00 PAGE 101
L LLL.
ancnai
Q;a:Q; 1/1
LL
s^- CN
^ coMm
in ^0[\ yir^jCMCMco
jy
0 ^300
0U-)r^ J5•s €>'0^ (>.
'roSi^^5 >
<u U-)iyiin
f
z
<
QL
or
Q
Q
LL
I
H
Os
^'
1i
—Ja
L.^..J
,"
r
JV^te^:

T g*.
ni
ryc
^\^r— ^r—
m !^M
WT^'^J^r"^^
^^-j ^^jg^^.jJT.,?^^
^L,..n:^ ^
':^^KvA^Mi(^
7°"
-Jr"=
/
J
a
r
j
~\
%¥
"I
i

0. ft-^t
-.'•
^.•^is^&M:

PAGE 102
Q
LOSSi
-IGQ£
u'§i
<u
•^
i
8 S
2:5
U v
^•^I 1
< l2
Ip
idm
03 ^f •—0
o'5°;u-i Qn
u->@;
(>. 6
m u •_:
°0^-?
?i w
00 (D
^11^.i.sQ ^'^
0 iS
^^1112-i^
1^8°
1 illllii
i- . .— U
<3 irQ:5)^
c
!sm ^
in (U ^-i
^IS
OtM
1 ^t°
•o ^^ dA iu°o'°Za; •^T-1
llsll
+ E
(S^Q-S^
£lpf
ffifl
i3^
s
^ ill
pilll.i9S
s I ;1 jNiil
ij^
wItljii?i!£lilllWl^
s«?t"
tllS1^1
Mil1yw
;!?'
ll8t
^ lsi I
Illiiiiyii
11=?°1
illilplli£s|Ji
r^l^
-0
Ill
^^
^
^
i ^ 'I sa S .£ tESg1c<
w
ti 11
0 £ gj ^
jjll
^t'oS
dj —
^
as|Is g5
o n u a A \- s o [ t| o i( s' o ) • s' u i. i
PAGE 103
Attachment B
Rent Stabilization Department Proposed Organization Chart I-
Administration &
-I Policy
(2.0) i
Rental Housing Board support
Department administration
Data collection and analysis
Implementation of policies, procedures,
and plans
Public Information
& Outreach
(4.0)
hlearings
(1.0)
Rent Registration
(2.0)
Communications and
community engagement
Outreach and Education
Housing Counseling Services
Conducts hearings and
manages appeals
Mediations of owner/tenant
disputes
Rental Registry Database
management
Billing and fee collection
Customer Services
Compliance monitoring
Legal *
(1.0)
I
Technology
Support*
(2.0)
Advises the Board and department staff on policy
Procedural and legal issues
Support enforcement activities
•
•
Initial implementation of the Rental Registry
Other software and technology needs
Ongoing technical support.
* FTE in Legal and Technology Support functions will be allocated to their respective existing departments - City Attorney's Office and the Department of Information Technology.

PAGE 104

PASADENA

RENTAL HOUSING BOARD
RESOLUTION NO. RHB-2024-01

A RESOLUTION OF THE PASADENA RENTAL HOUSING BOARD ADOPTING THE FY2024 RECOMMENDED BUDGET FOR THE RENT STABILIZATION DEPARTMENT, SETTING THE FY2024 RENTAL HOUSING FEE, AND DELAYING COLLECTION OF THE FY2024 RENTAL HOUSING FEE FROM LANDLORD
WHEREAS, the Pasadena Fair and Equitable Charter Amendment ("Charter Amendment") went into effect on December 22, 2022, and the Rental Housing Board ("Board") was appointed on April 19, 2023;and
WHEREAS, on December 11, 2023, the City Council of the City of Pasadena ("City Council") adopted an ordinance providing for the creation of the Rent Stabilization Department ("Department") in the City to support the work of the Board and its implementation and enforcement of the provisions of the Charter Amendment; WHEREAS, Section 1811(e)(10) of the Charter Amendment authorizes and requires the Board to establish a budget for the reasonable and necessary implementation of the provisions of the Charter Amendment, including, without limitation, the hiring of necessary staff and maintenance of a Rental Registry, and to charge fees in an amount sufficient to support the Board's adopted budget; WhlEREAS, Section 1811(1) of the Charter Amendment requires all Landlords subject to the Charter Amendment to pay a per-unit Rental Housing Fee on an annual basis and requires the Board to determine the amount of the Rental Housing Fee; WHEREAS, the Board has determined it will delay collection of the FY2024 Rental Housing Fee from Landlords until the Board has established an operational Rental Registry, which is estimated to occur in June 2024; WHEREAS in order for the Board and the Department to continue the work of implementing the Charter Amendment, including hiring necessary staff, before the Board can being collecting Rental Housing Fees, the Department will face a temporary negative cash position;
NOW, THEREFORE, BE IT RESOLVED that the FY2024 Recommended Budget for the Rent Stabilization Department of $2,876,232, inclusive of $600,000 previously appropriated by the City Council, including 12.0 FTE, is hereby adopted by the Board; BE IT FURTHER RESOLVED that the FY2024 Rental Housing Fee of $91.85 per rental unit is hereby adopted by the Board; and
BE IT FURTHER RESOLVED that the Board shall delay the billing and collection of the FY2024 Rental Housing Fee until the Rental Registry database is functional 01/16/2024
1806\06\3670727.1
PAGE 105
(expected June 2024 or later), resulting in a temporary negative cash position for the Department.

The foregoing Resolution was adopted at a regular meeting of the Pasadena Rental Housing Board, duty held on the 10th day of January 2024, by the following vote:

AYES: Board Members Dunlop, Gonzalez, Henry, Naj'era, Pitts, Chavez, Siegel, Santiago, Torres, Vice Chair Lamar, Chair Bell
NOES:

ABSTAIN:

ABSENT:

ATTEST:
\.

UAU \
\
DESIREEACOSTA \

RECORDING SECRETARY
BOARD
RYAI/J. BELL
C<H<IR, RENTAL HOUSING BOARD
01/16/2024
1806\06\3670727.1
PAGE 106

NEW BUSINESS
ITEM 7

7. FI
SCAL YEAR JUNE 30, 2023 ANNUAL FINANCIAL REPORTS
PAGE 107
PASb^tO ^^^
y 0
* li-
(0 z
a? 0co 0•'s
^^ 0^ 0y 'ws
Agenda Report
January 22, 2024
TO:Honorable Mayor and City Council/Successor to Pasadena Community Development Commission
THROUGH: Finance/Audit Committee
FROM: Department of Finance
SUBJECT: FISCAL YEAR JUNE 30, 2023 ANNUAL FINANCIAL REPORTS RECOMMENDATION:

It is recommended that the following reports for the year ended June 30, 2023 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 Financial Statements D. Rose Bowl Operating Company Basic Financial Statements E. Pasadena Community Access Corporation Financial Statements F. Pasadena Fire and Police Retirement System A Pension Trust Fund of the City of Pasadena, California Financial Statements
G. City of Pasadena, California Air Quality Management District Fund Financial Statements
H. Pasadena Housing Successor Pasadena, California Financial Statements I. City of Pasadena, California Foothill Workforce Development Board Financial Statements
J. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets
K. Independent Accountants' Report on Applying Agreed-Upon Procedures for review of Deferred Compensation
L. The Auditors' Communications with the City's Finance/Audit Committee MEETING OFAGENDA ITEM NO. _.

PAGE 108
Fiscal Year June 30, 2023 Annual Financial Reports
January 22,2024

EXECUTIVE SUMMARY:

This action is to receive and file the City's eight (8) annual financial statements and four (4) compliance-related reports for the fiscal year ended June 30, 2023. All financial statements received an unmodified (or clean) opinion. A presentation will be made by the City's Finance Department and external auditors, Lance, Soil, & Lunghard LLP, at the January 22, 2024, Finance/Audit Committee and City Council meetings. The Single Audit is still in progress, but will be completed by the federal deadline of March 31, 2024. The Single Audit Report will report on federal grant related findings, if any.

BACKGROUND:

This year's audit was the first annual audit performed by Lance, Soil, & Lunghard, LLP, who was awarded a three-year contract with two one-year optional extensions on June 12, 2023, to perform the City's audits. On June 12, 2023, the City Council approved the contract with Lance, Soil, & Lunghard, LLP that required sampling from all funds. The audit was conducted in a hybrid manner, on-site and in a remote setting. The remote audit was facilitated by the City's use of Tyler Munis and the electronic storage of documents.

All eight (8) 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.

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, 2023, 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.

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 repori:s two 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 PAGE 109
Fiscal Year June 30, 2023 Annual Financial Reports
January 22,2024

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, but two significant deficiencies. A "material weakness" is defined as a deficiency in internal control, such that there is a reasonable possibility that a material misstatement of the entities' financial statements will not be prevented, or detected and corrected, on a timely basis. A "significant deficiency" in internal control, is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

The first significant deficiency was related to the timeliness of the bank reconciliationpreparation. Due to the complexity of the City, volume, and detail of the cash transactions, the bank reconciliations were delayed. A multi-department working group is reviewing processes to make efficiency improvements to the monthly bank reconciliation process.

The second significant deficiency, was related to the number of journal entries and corrections made to the trial balance, by City staff, after the start of the audit. While these correcting entries were mostly the result of implementation of complex Government Accounting Standards Board pronouncement, management agrees that implementation of formal year-end process and procedures are necessary for sufficient review and to ensure staff limits its post-closing entries after the start of the audit.

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'ConneII.

PAGE 110
Fiscal Year June 30, 2023 Annual Financial Reports
January 22,2024

Air Quality Improvement Fund Financial and Compliance Report (Attachment G)
Assembly Bill 2766 (AB2766) authorized the South Coast Air Quality ManagementDistrict (SCAQMD) to impose an annual vehicle registration fee and to distribute aportion of those collected revenues to all local jurisdictions within the South CoastAir Basin. These revenues are to be used solely to reduce air pollution from motorvehicles by implementing new programs and studies necessary for the implementation of the California Clean Air Act. The City's Air Quality ImprovementFund 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 IndependentAuditors' 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. Thisfacilitates meeting the state's required reporting and auditing requirements for thisfund. To meet the reporting requirements, the draft of the Housing Successor Financial Statements and the draft Independent Auditors' Report on Internal Controlover Financial Reporting and on Compliance were submitted to the CaliforniaDepartment of Housing and Community Development (HCD) on December 28,2023. The final version of the Housing Successor Financial Statements, theIndependent Auditors' Report on Internal Control over Financial Reporting and onCompliance and Other Matters regarding the Low-and Moderate-lncome HousingAsset Fund, will be delivered to the Mayor and City Council members on January 22,2024 and posted on the City's website. The final version of the repori:s will also besubmitted to the HCD as well as the Housing Successor governing body. Theauditors opined that the Housing Successor has complied in all material respectswith the compliance requirements they must report on and they did not identify anynoncompliance with the California Health and Safety Code requirements.

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

PAGE 111
Fiscal Year June 30, 2023 Annual Financial Reports
January 22,2024

Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheet (Attachment J)
Section 1.5 of Article XIIIB of the California Constitution requires that the City followthe procedures agreed upon by the State of California and the League of CaliforniaCities (as presented in the League publication entitled Article XIIIB AppropriationsLimitation Uniform Guidelines) to determine the annual appropriations limit. Theauditors 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 toEmployee Deductions for the Internal Revenue Code Section 457 DeferredCompensation Program (Attachment K) At the request of the City, the auditors performed certain procedures as enumeratedin the report to verify the accuracy and timely posting of contributions to the DeferredCompensation 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 No. 114, requiresdefined and documented communications between the auditors and the City's Finance/Audit Committee. This letter provides an opportunity for the auditors to report on any difficulties or major concerns discovered during the audit and to furtherexplain their role. They provide commentary on management's responsibilities for accounting policies and states that no significant difficulties were encountered inperforming the audit and no disagreements occurred with management. They pointout whether management has corrected or passed on correcting all known misstatements.

COUNCJLPOyCY CONSIDERATION:

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

PAGE 112
Fiscal Year June 30, 2023 Annual Financial Reports
January 22,2024

HSCAUMPACT^
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,
i
/
v ^^.-...--
^TfHEW^E: HAWKESMATTHEW^: HAWKESWORTH
Director of Finance
Approved by:

A^J3^
MIGUELA4ARQUEZ
City Manager
Attachments: (12)
A. Annual Comprehensive Financial Report
B. Independent Auditor's Report on Internal Control over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performed inAccordance with Government Auditing Standards C. Pasadena Center Operating Company Financial Statements D. Rose Bowl Operating Company Basic Financial Statements E. Pasadena Community Access Corporation Financial Statements F. Pasadena Fire and Police Retirement System A Pension Trust Fund of the City of Pasadena, California Financial Statements
G. City of Pasadena, California Air Quality Management District Fund Financial Statements H. Pasadena Housing Successor Pasadena, California Financial Statements I. City of Pasadena, California Foothill Workforce Development Board Financial Statements J. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheets
K. Independent Accountants' Report on Applying Agreed-Upon Procedures for review of Deferred Compensation
L. The Auditors' Communications with the City's Finance/Audit Committee PAGE 113

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2023
Attachment A
PAGE 114
(This page intentionally left blank)
PAGE 115

CITY OF PASADENA, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
Year Ended June 30, 2023
MIGUEL MÁRQUEZ, 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
Vice-Mayor
District 2
Justin Jones
Councilmember
District 3
Gene Masuda
Councilmember
District 4
Jessica C.

Rivas
Councilmember
District 5
Steve Madison
Councilmember
District 6
Jason Lyon
Councilmember
District 7
PAGE 116
(This page intentionally left blank)
PAGE 117

TABLE OF CONTENTS CITY OF PASADENA
Annual Comprehensive Financial Report | June 30, 2023 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 .................................................................................................................................................. xix Management’s Discussion and Analysis (Required Supplementary Information) ........................................................................ 1 Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position ................................................................................................................................................... 16 Statement of Activities ........................................................................................................................................................ 18 Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet .............................................................................................................................................................. 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .......................................................................................................................... 21 Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................................ 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities .......................................................................................................................................... 23 Proprietary Fund Financial Statements
Statement of Net Position ............................................................................................................................................ 24 Statement of Revenues, Expenses and Changes in Net Position .................................................................................. 26 Statement of Cash Flows.............................................................................................................................................. 28 Fiduciary Fund Financial Statements
Statement of Net Position ............................................................................................................................................ 32 Statement of Changes in Net Position ......................................................................................................................... 33 Notes to the Basic Financial Statements ................................................................................................................................. 37 PAGE 118

CITY OF PASADENA
ii Annual Comprehensive Financial Report | June 30, 2023

TABLE OF CONTENTS
FINANCIAL SECTION (Continued)
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund ........................................................................................................................................................... 121 – Housing Successor Fund – Special Revenue Fund .................................................................................................... 122 – Project Management Fund – Capital Projects Fund ................................................................................................. 123 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 Fire and Police Retirement System Plan Investment Return ......................................................................... 137 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................................................... 138 Schedule of OPEB Plan Contributions ................................................................................................................................ 139 Supplementary Information
Nonmajor Governmental Funds
Combining Balance Sheet .......................................................................................................................................... 142 Combining Statement of Revenues, Expenditures and Changes in Net Position ....................................................... 143 Special Revenue Funds
Combining Balance Sheet .......................................................................................................................................... 148 Combining Statement of Revenues, Expenditures and Changes in Net Position ....................................................... 150 B u d g e t a r y C o m p a r i s o n S c h e d u l e s Special Revenue Funds
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 Funds .................................................................................................................................................... 162 PAGE 119

TABLE OF CONTENTS CITY OF PASADENA
Annual Comprehensive Financial Report | June 30, 2023 iii FINANCIAL SECTION (Continued)
Capital Projects Funds
Combining Balance Sheet .......................................................................................................................................... 166 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 168 Permanent Funds
Combining Balance Sheet .......................................................................................................................................... 174 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 176 Nonmajor 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 Net Position– 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 Component Unit
Combining Statement of Net Position ........................................................................................................................ 218 Combining Statement of Revenues, Expenses and Changes in Net Position .............................................................. 219 Rose Bowl Operating Company
Combining Statement of Net Position ........................................................................................................................ 220 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................. 221

STATISTICAL SECTION
Financial Trends
Net Position by Component ...................................................................................................................................... 226 Changes in Net Position ............................................................................................................................................. 228 Fund Balances of Governmental Funds ..................................................................................................................... 232 Changes in Fund Balances of Governmental Funds ................................................................................................... 234 PAGE 120

CITY OF PASADENA
iv Annual Comprehensive Financial Report | June 30, 2023

TABLE OF CONTENTS
STATISTICAL SECTION (Continued)
Revenue Capacity
Assessed Value and Actual Value of Taxable Property ............................................................................................. 237 Direct and Overlapping Property Tax Rates .............................................................................................................. 238 Principal Property Taxpayers ..................................................................................................................................... 240 Property Tax Levies and Collections .......................................................................................................................... 241 Taxable Sales by Category… ....................................................................................................................................... 242 Electricity Sold by Type of Customer ......................................................................................................................... 244 Electricity Rates ......................................................................................................................................................... 246 Electricity Customers ................................................................................................................................................. 247 Debt Capacity
Ratios of Outstanding Debt by Type .......................................................................................................................... 248 Ratios of General Bonded Debt Outstanding ............................................................................................................ 252 Direct and Overlapping Debt… .................................................................................................. ................................ 255 Legal Debt Margin Information ................................................................................................................................. 256 Pledged Revenue Coverage – Governmental Activity Debt ...................................................................................... 258 Pledged Revenue Coverage – Business-type Activity Debt ....................................................................................... 259 Demographic and Economic Information
Demographic and Economic Statistics ....................................................................................................................... 260 Principal Employers ................................................................................................................................................... 261 Operating Information
Full-time and Part-time City Employees by Function ................................................................................................ 262 Operating Indicators by Function .............................................................................................................................. 264 Capital Asset Statistics by Function ........................................................................................................................... 266 PAGE 121

INTRODUCTORY SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT | FISCAL YEAR ENDED JUNE 30, 2023 PAGE 122
(This page intentionally left blank)
PAGE 123

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2023 vii December 28, 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, 2023 (FY 2023) 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. Because 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 Lance, Soll & Lunghard, 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 2023 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 2023 and that these financial statements are fairly presented in co nformity 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 compliance 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.

PAGE 124

LETTER OF TRANSMITTAL CITY OF PASADENA
viii Annual Comprehensive Financial Report | June 30, 2023

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 a nd 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 City's Manager, City Attorney/City Prosecutor, 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 2023 population of 136,988, 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; on the south by South Pasadena and San Marino; on the east by Arcadia and Sierra Madre; and on the north by the unincorporated community of Altadena.

REPORTING ENTITY AND ITS SERVICES
This report includes all funds of the City , as well as all its component units. Component units are legally separate entities for which the City is financia lly 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, and the Pasadena Fire and Police Retirement System are reported as part of the City. The Successor Agency to the Pasadena Community Development Commission is shown as a Private-Purpose Trust Fund reported in the Fiduciary Funds Section. The Pasadena Rental Housing Board (PRHB) is shown as a Custodial Fund reported in the Fiduciary Funds Section as well. Discretely pres ented 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 ca sh flows from those of the City. The Rose Bowl Operating Company, the Pasadena Center Operating Company, and the Pasadena Community Access Corporation are discretely presented component units. Separate financial statements are also available for all three discretely presented component units. The City is a party to, and designated administrator for, two Joint Powers Authorities, the Foothill Air Support Team 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 the affirmative vote of at least five-members of the City Council. The accounts of the City are maintained 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.

PAGE 125

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2023 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 shifts in the global economy including rising interest rates and inflationary pressures.

THE CURRENT ECONOMIC CLIMATE
The national and global economies continue to face inflat ionary pressures, initially caused by ongoing supply chain shortages, and the war in Ukraine. Up ward price pressures on energy, raw ma terials, and finished goods translate to inflation and increase to the Consumer Price Index (CPI) across all sectors of the economy. The year-over-year CPI rose 5.0% in March of 2023, which is lower than one-year ago and continues to trend downward. This, however, is well above the 2.1% three-year average before the pandemic and the 2.0% goal for the Federal Reserve Board (Fed).

In an effort to control inflation, the Fed continued to ra ise interest rates, including a 0.25% increase in May 2023 that brought the overall Fed Funds rate to the 5.00-5.25% target range. 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 2023, as property tax, sales tax, utility users’ tax, and transient occupancy tax continue to show resilience and recovery.

The City received $52.2 million in direct support through the American Rescue Plan Ac t (ARPA). The City used approximately $21.7 million in FY 2022 for revenue lo ss replacement and fund prev iously postponed capital improvement projects. The remainder of the ARPA funds were transferred to the General Fund in the revenue loss category in FY 2023 to be utilized to support public safety, housing, and public health.

Looking Forward
The rebound in our local, state, and national economie s form COVID-19 has largely subsided and most revenue growth is normalizing to more traditional levels. Inflatio n will continue to have a gr owth impact on some tax revenues, such as sales tax growth due to higher prices be ing taxed. It is important to recognize that while some revenues may increase, the cost of do ing business has also increased. To urism and travel related to business meetings and conferences have continued to recover.

Fortunately, the City benefited from having a diverse econ omy that is not over-reliant on one industry or tax base.

A solid mix of automotive dealers, general and consum er goods businesses, restau rants, and hotels provide a relatively stable tax base. When combined with growing technology and heal th/life sciences sectors, the overall economic blend provides more stability. Additionally, interest in the City by businesses in many of these key sectors continues to grow. As shown by the recent additions of Lucid Motors, Build Your Dreams, Xencor, General Motors Design Studio, Doheny Eye Institute, and the renewed lease through 2035 of Western Asset.

PAGE 126

LETTER OF TRANSMITTAL CITY OF PASADENA
x Annual Comprehensive Financial Report | June 30, 2023 General Fund Five-Year Forecast
FY 2022 FY 2023 FY 2023 FY 2024 FY 2025 FY 2026 FY 2 027 FY 2028 Final Budget Forecast Budget Forecast Forecast Forecast Forecast Beginning Amount Available for Appropriations -$ 2,862,525 $ 3,599,811$ 4,705,630$ 3,631,302$ 6,345,136$ 8,481,257$ 10,193,342$ Revenues
Tax Re venues 235,450,392 233,807,300 239,647,529 250,860,100 259,554,112 267,716,588 275,373,622 283,296,920 Other Re venu es 38,773,949 43,419,712 43,804,810 51,094,667 52,327,280 53,591,231 54,887,333 56,216,421 Contributions/Svs. From Other Funds 30,734,245 20,715,438 41,080,568 16,840,438 26,840,438 21,840,438 21,840,438 21,840,438 Total Revenues 304,958,586 297,942,450 324,532,907 318,795,205 338,721,830 343,148,257 352,101,394 361,353,779 Expenses
Perso nnel 172,
168,785 186,860,271 185,451,679 203,776,326 209,586,945 216,488,579 223,014,867 228,410,771 De bt Se rvice 20,646,499 11,597,702 11,597,702 11,702,452 12,322,553 12,323,966 12,317,139 11,290,184 Contributions T o Other Fun ds 20,774,735 14,629,784 16,189,784 13,567,521 12,308,871 12,555,049 12,806,150 13,062,273 Other Expenses 79,473,305 82,852,050 88,557,436 94,643,234 96,789,627 99,644,542 102,251,152 104,934,444 Total Expenses 293,063,323 295,939,806 301,796,601 323,689,533 331,007,997 341,012,135 350,389,308 357,697,672 Operating lncome/(Loss} 11,895,262 2,002,644 22,736,307 (4,894,328) 7,713,834 2,136,121 1,712,086 3,656,108 Ending Amount Available for Appropriations 11,895,262 4,865,169 26,336,118 (188, 698) 11,345,136 8,481,257 10,193,342 13,849,449 Contributions to Capital Projects - - - (19,180,000) - - - - Rese rve fo r Capital & Other Fun ds (5,616,537) - (20,365,130) 18,000,000 - - - - Red uction/(Contribution) to Policy Rese rve (3,416,200) (1,265, 358) (1,265,358) 5,000,000 (5,000,000) - - - Net lncome/(Loss) with Reserve Contribution 2,862,525$ 3,599,811$ 4,705,630$ 3,631,302$ 6,345,136$ 8,481,257$ 10,193,342$ 13,849,449 $ The rapid rise in energy and fuel prices
put tremendous pressure on the power utility during FY 2023. These increases negatively impacted the regional wholesale price of electricity, since natural gas is a cost factor in the production of electric power across the region, which effects wholesale prices in the California Independent System Operations area. While the power utility did implement a Power Cost Adjustment of 2.5¢/kWh on March 1, 2023, and an additional 0.5¢/kWh on April 1, 2023, these cost adjustments were forecasted to be insufficient to generate sufficient net income in the FY 2023 to make the original forecasted $18 million General Fund Transfer for FY 2024 as required by the City’s Charter.

FISCAL YEAR 2023 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 2023 accomplishments
include:
• Adoption of a balanced budget for the eleventh consecutive year; maintained an IRS Section 115 trust for future pension obligations and other postemployment benefits; and maintained the City’s AAA issuer credit rating with Standard & Poor’s and AA+ with Fitch rating agency, consistent with the City Council’s goal to maintain fiscal responsibility and stability;
• Received $31.2 million in local sales tax revenue from Measure I, and provided $10.3 million to the Pasadena Unified School District to protect and strengthen our public schools; • Completed recruitment of a new City Manager;
• 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;
• Successfully completed relinquishment of the 710 freeway right-of-way, including $5 million for required maintenance from Caltrans and secured $230.5 million in Metro Measure R funding for mobility improvements along the corridor;
PAGE 127

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Compr
ehensive Financial Report | June 30, 2023 xi
• Began the process for reconnecting the 710 corridor area into the greater Pasadena fabric by initiating meetings by the City Council-appointed Citizen Committee, charged with visio ning and overseeing this process;
• After the appointment of th e PRHB, established as a result of the November 2022 passage of Measure H, provided support and guidance for the initiation of the Board’s work; • Developed and executed the “Authentically Yours, Pasadena” holiday shopping campaign in support of Pasadena’s local business community. The Convention and Visitors Bureau partnered with the City on the campaign. The campaign was shared on social media, generating over 30,000 impressions and nearly 1,800 shopping totes were given to loca l shoppers. Small businesses reported strong sales during the holiday season and the addition of new customers;
• Innovation and technology cluster in Pasadena continued to thrive and demonstrate strength as a tech hub in Southern California. New leases and existing expan sions include Miso Robotics, Motive Space Systems, Xencor, and Innova Medical Group;
• The Pasadena Outreach Response Te am (PORT) comprised of a case manager (social worker), a public health nurse, a firefighter, and an outreach worker from the Union Station Homeless Services utilizes a street-based approach that engage s, assesses, and provides links to housing opportunities for those experiencing chronic homelessness, severe mental illness, substance use disorders, physical disabilities, and complex chronic health conditions. The Port Team lin ked people experiencing homelessness to 110 total clinical appointments and made 153 average monthly points of contact and outreach; • The Homeless Outreach Psychiatric Evaluation (H.O.P.E). Team has addressed homelessness and mental health issues within our community over the past year through prevention, intervention, and enforcement strategies, while working with Municipal Assistance, Solutions and Hiring (MAS H), Housing Coordinators, the Pasadena Public Health Department, PORT1 & PORT2, Union Station, the LA County Department of Mental Health, and Caltrans, specif ically working with their Unified Homelessness Response Center. The people who occupy area encampments are transitory, have many barriers, and tend to temporarily cooperate by vacating the area, but will later return or move into nearby land. The H.O.P.E. Team, PORT Teams, MASH, and Caltrans are collaboratively moving forward with fu rther outreach and removal efforts along freeway embankments and other locations around Pasadena where people are taking shelter. The H.O.P.E. Team handled 4,604 incidents in 2022 to include 2,455 Foot Patrols; • Continued pursuit of both major and minor public works improvements to preserve and expand the City’s infrastructure and resources;
• Made substantial progress on affordable housing projects to address the widespread housing crisis; • Continued implementation of multi-year Enterprise Resource Planning system project that delivers real- time information to City management, integrates financial transactions, provides enhanced internal controls, and improves audit functions;
• Continued pursuit of Central Library’s assessment, mitigation plan, and seismic retrofit with infrastructure and programming improvements to ensure public safe ty, without disruption of library services to the community;
• Maintained American Pub lic Power Association’s prestigious Re liable Public Power Provider (“RP3”) “Platinum” designation for providing highest degree of reliable and safe electric services the RP3 designation recognizes public power utilities that demonstrate proficiency in four key disciplines: reliability, safety, workforce developmen
t and system improvement; and
• Demonstrated ongoing support to Pasadena Water and Power’s commitment to invest in renewable energy and sustainable water resources in an operationally and fiscally responsible manner, approved a new Power Purchase Agreement for the purchase of renewable energy and capacity, and supported rate actions to recover the water and electric systems' increased operating and capital costs.

PAGE 128

LETTER OF TRANSMITTAL CITY OF PASADENA
xii Annual Comprehensive Financial Report | June 30, 2023 • 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, 2022. This was the 24 th 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.

These noted accomplishments are just a sample of the hu ndreds of FY 2023 accomplishments, which are listed by department in the FY 2024 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 has faced in the past, with no reduction in the quality and level of services provided to the community. The City has thri ved in many areas coming out of the pandemic. The FY 2023 Annual Comprehensive Financial Re port illustrates the City’s mission to deliver exemplary municipal service and responsiveness to our entire community, consistent with our history, culture, and unique character.

PAGE 129
(This page intentionally left blank)
PAGE 130

CITY OF PASADENA
City Officials

CITY COUNCIL

M a y o r V i c t o r M . G o r d o
Vice Mayor (District 2) Felicia Williams
Councilmember (District 1) Tyron A. L. Hampton
Councilmember (District 3) Justin Jones
Councilmember (District 4) Gene Masuda
Councilmember (District 5) Jessica C. Rivas
Councilmember (District 6) Steve Madison
Councilmember (District 7) Jason Lyon

APPOINTED OFFICIALS
C i t y M a n a g e r M i g u e l M a r q u e z
City Attorney Michele Beal Bagneris
C i t y C l e r k M a r k J o m s k y

EXECUTIVE LEADERSHIP TEAM
Assistant City Manager Nicholas Rodriguez
Assistant City Manager David Reyes
Assistant City Manager Brenda E. Harvey-Williams
Director of Finance Matthew E. Hawkesworth
Director of Housing William K. Huang
Director of Human Resources and Career Services Tiffany Jacobs-Quinn Director of Parks, Recreation &
Community Services (Acting) Lola Osborne
Director of Libraries & Information Services Tim McDonald Chief Information Officer Phillip Leclair
Director of Planning and Community Development Jennifer Paige Chief of Police Arthur Chute
Director of Public Health (Acting) Manual Carmona
Director of Public Works Tony Olmos
Director of Transportation Laura Cornejo
General Manager of Water and Power Sidney Jackson
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 Jen Weiden
Executive Director/Chief Executive Officer,
Pasadena Community Access Corporation George Falardeau
xiv Annual Comprehensive Financial Report | June 30, 2023 PAGE 131
Assistant City
Manager
NICHOLAS G.

RODRIGUEZ
City Manager
MIGUEL MÁRQUEZ
Assistant City
Manager
BRENDA E.

HARVEY-WILLIAMS
City Attorney/
City Prosecutor

MICHELE BEAL

BAGNERIS
Assistant City
Manager

DAVID REYES
Transportation

LAURA CORNEJO
Planning & Community
Development

JENNIFER PAIGE
Libraries &
Information Services

TIM MCDONALD
Police

EUGENE HARRIS
Human Resources

TIFFANY

JACOBS-QUINN
Fire

CHAD AUGUSTIN
Housing

WILLIAM HUANG
Rose Bowl
Operating Company

JENS WEIDEN
Pasadena Community
Access Corporation

GEORGE FALARDEAU
Parks, Recreation &
Community Services

LOLA OSBORNE
(ACTING)
Public Works

TONY OLMOS
Finance
MATTHEW E.

HAWKESWORTH
Public Health

MANUEL CARMONA
(ACTING)
Information
Technology

PHILLIP LECLAIR
Pasadena Center
Operating Company

MICHAEL ROSS
Citizens
of Pasadena
Mayor &
City Council
City Clerk

MARK JOMSKY
Water & Power

SIDNEY JACKSON

CITY OF PASADENA

ORGANIZATION CHART
June 30, 2023
Annual Comprehensive Financial Report | June 30, 2023 xv PAGE 132
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, 2022
Executive Director/CEO
xvi Annual Comprehensive Financial Report | June 30, 2023

CITY OF PASADENA
PAGE 133

FINANCIAL SECTION
ANNUAL COMPREHENSIVE FINANCIAL REPORT | FISCAL YEAR ENDED JUNE 30, 2023 PAGE 134
(This page intentionally left blank)
PAGE 135
1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N . Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Pasadena, Californi
a
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 City of Pasadena, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial st atements referred to above pres ent 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, as of June 30, 2023, and the respective changes in financial position, and, where ap plicable, cash flows thereof, and the respective 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 represents 14.94%, 20.71%, and 1.47%, respectively, of the assets, fund balance/net position, and revenues of the aggregate remaining f und information as of June 30, 2023. Those statements were audited by other auditors whose report has been furnished to us, and our opinion(s), insofar as it relates to the amounts included for the Pasadena Fire and Polic e 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 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 Auditor’s Responsibilities for the Audit of the Financial State ments section of our report. We are required to be independent of the City and to meet our other ethical responsib ilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2023, the City adopted new accounting guidance, GASB Statement No. 96, Subscription Based Information Technology Arrangements . Our opinion is not modified with respect to this matter.

PAGE 136
To the Honorable Mayo
r and Members of the 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 accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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 an y currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to is sue an auditor’s report that includes our opinions.

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

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

Required Supplementary Information
Accounting pr
inciples generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison schedules for the General Fund and major special revenue funds, and the required pension and other postemployment benefits schedules, a s listed on the table of contents, 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 xx Annual Comprehensive Financial Report | June 30, 2023 PAGE 137
To the Honorable Mayor and Me
mbers of the City Council
City of Pasadena, California
operational, economic, or histori cal context. We have applied certain limited procedures to the required supplementary information in a ccordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the m ethods of preparing the information and comparing the information for consistency with management’s res ponses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited 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 accompanying combini ng and individual fund financial statements and schedules (supplementary information) are presented for purpose s of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financia l statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 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 agreement s 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 p erformed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Brea, California
December 28, 2023
Annual Comprehensive Financial Report | June 30, 2023 xxi PAGE 138
(This page intentionally left blank)
PAGE 139
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 1 MANAGEMENT’S DISCUSSION AND ANALYSIS
(Unaudited)
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, 2023 (FY 2023). 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 vi- xii 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 16-19 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 bala nces of spendable resources avail
able at the end of the fiscal year. Such informatio n may be useful in evaluating a government’s near-term financing requirements.

PAGE 140
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
2 Annual Comprehensive Financial Report | June 30, 2023 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 nonmajor 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 20-23 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, building 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 sin gle, aggregated presentation. Individual fund data for each of these nonmajor 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 24-31 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 reported with the City’s fiduciary funds as a private-purpose trust fund. The activities of the Pasadena Rental Housing Board are reported with the City’s fiduciary funds as a custodial fu nd. 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 fund
financial statements can be found on pages 32-33 of this report.

PAGE 141
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 3 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 37-117 of this report.

Other Information
In addition to the basic financial statements and ac companying notes, this repo rt 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 121-139 of this report.

The combining statements referred to earlier in connection wi th nonmajor 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 142-213 of this report. Combining statements of the discretely presented component units can be found on pages 218-221 of this report.

FINANCIAL HIGHLIGHTS
New Significant Accounting Standard Implemented
In FY 2023, the City adopted one new statement of financial accounting standards issued by the Government Accounting Standards Board (GASB), Statement No. 96, Subscription Based Information Technology Agreements (SBITA) (GASB 96).

GASB 96 provides guidance on the accounting and financia l reporting for subscription-b ased information technology arrangements (SBITAs) for government end users (governments) . This Statement (1) defines a SB ITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subs cription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA.

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, 127.1 million at the close of the most recent fiscal year.
$1,015.1 million of the City’s net position reflect its net investme nt in capital assets (e.g., land, 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.

PAGE 142
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
4 Annual Comprehensive Financial Report | June 30, 2023 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
City of Pasadena’s Net Position
(in millions)
2023 2022 2023 2022 2023 2022 $ Change % Change
Other a s s ets 390.4$ 372.6 $ 588.3 $ 602.1 $ 978.7 $ 974.7 $ 3.9$ 0.4% Ca pi tal a s s ets 543.4 519.5 736.0 716.4 1,279.4 1,235.9 43.5 3.5% Total assets 933.8 892.2 1,324.3 1,318.5 2,258.1 2,210.7 47.4 2.1% Deferred outflows 192.8 96.9 34.3 14.8 227.1 111.8 115.3 103.2% Current l ia bil i ti es 107.6 133.6 60.2 48.1 167.8 181.8 (14.0) -7.7% Long-term debt* 187.2 193.3 290.1 303.2 477.3 496.5 (19.2) -3.9% Net pens ion li a bi l ity 480.1 252.0 95.2 50.3 575.3 302.3 273.0 90.3% Other noncurrent liabilities 89.7 103.7 8.8 14.9 98.5 118.6 (20.1) -16.9% Total liabilities 864.6 682.6 454.2 416.5 1,318.9 1,099.2 233.7 21.3% Deferred inflows 28.6 156.9 10.5 37.5 39.1 194.5 (155.4) -79.9% Net Position:

Net investment in
capi ta l as s ets 493.1 476.7 522.0 499.7 1,015.1 976.4 38.7 4.0% Res tri cted 86.1 81.5 93.3 109.5 179.5 191.0 (11.5) -6.0% Unres tri cted (345.9) (408.6) 278.5 270.0 (67.4) (138.6) 71.2 -51.4% Total net position 233.4 $ 149.6 $ 893.8 $ 879.2 $ 1,127.1$ 1,028.8 $ 98.4$ 9.6% * For both current and noncurrent portions
Governmental
Activities
Business-type
Activities Total Primary Government
The restricted portion of the City’s net position, $179.5 million or 15.9% 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 $67.4 million, or 6.0% of the total net position is for unrestricted us es 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 net pension liability, implementation of GASB 68, Accounting and Financial Reporting for Pensions , i.e., $188.0 million, and GASB 75, Other Postretirement Employment Benefits (OPEB), i.e., $16.3 million, upon the recognition of actuarial estimated future costs related to pension retirement and post-employment medical benefits.

During FY 2023, the primary government’s net position increased by $98.4 million, where approximately $83.8 million relates to the increase in governmental activities, and $14.6 million to the increase in the City’s business-type activities. The increase in the governmental activities reflects decrease in spending , in comparison to an increase in revenues. The increase in business-type activities is the continuance of strong trend in revenues in addition to a smaller increase in expenses.

PAGE 143
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 5 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
City of Pasadena’s Changes in Net Position
(in millions)
Governmental Activities Business-type Activities Total Primary Government 2023 2022 $ Change % Change 2023 2022 $ Change % Change 2023 2022 $ Change % Change Revenues:

Progra m Revenues :

C har ges for ser v ic es 75 .0 $ 68.4 $ 6.7$ 9.8% 347.1$ 319.6 $ 27.5$ 8.6% 422.1$ 387.9 $ 34.2$ 8.8% Operating grants and contributions 108.9 80.7 28.1 34.8% 2.2 6.2 (4.0) -65.1% 111.0 86.9 24.1 27.7% Capital gra nts and contributions 22.2 10.2 12.0 118.2% 5.9 4.6 1.3 29.4% 28.1 14.7 13.4 90.7% General revenues:

Taxes:

Property taxes , levied for
genera l purpos e 84.3 79.1 5.2 6.5% - - - - 84.3 79.1 5.2 6.5% Sales taxes 76.9 74.4 2.5 3.4% - - - - 76.9 74.4 2.5 3.4% Utility user s' tax 32 .8 30.1 2.7 8.9% - - - - 32.8 30.1 2.7 8.9% Transient occupancy tax 18.7 14.7 4.0 26.9% - - - - 18. 7 14.7 4.0 26.9% Other taxes 32.6 27.6 5.1 18.3% 6.7 6.2 0.6 8.9% 39.3 33.7 5.6 16.6% Other revenues 30.2 11.5 18.7 162.5% 2.6 (22.3) 24.8 -111.5% 32.8 (10.7) 43.5 -404.9% M isc ellaneous r ev enues 3 . 4 4.7 (1.3) -27.9% 2.9 10.6 (7.6) -72.2% 6.3 15.2 (8.9) -58.6% Tota l revenues 485.0 401.4 83.6 20.8% 367.3 324.8 42.5 13.1% 852.3 726.2 126.2 17.4% Expenses:

Ge ne ra l gove rnment 68.5 86.1 (17.6) -20.4% - - - - - 86.1 (86.1) -100.0% Publ i c s a fety 157.9 151.0 6.9 4.6% - - - - - 151.0 (151.0) -100.0% Transporta tion 49.5 44.8 4.8 10.7% - - - - - 44.8 (44.8) -100.0% Culture and leisure 50.4 48.5 1.9 3.9% - - - - - 48.5 (48.5) -100.0% Community development 59.4 62.7 (3.3) -5.3% - - - - - 62.7 (62.7) -100.0% Intere s t a nd other fi s ca l cha rge s 6.3 6.4 (0.1) -0.8% - - - - 6.3 6.4 (0.1) -0.8% Electric - - - - 239.4 196.7 42.7 21.7% 239.4 1 9 6.7 42.7 21.7% Water - - - - 61.7 61.5 0.2 0.3% 61.7 61.5 0.2 0.3% Other expenses 24.9 23.3 1.7 7.1% 34.9 29.9 5.0 16.9% 59.9 53.2 6.7 12.6% Total expenses 417.1 422.8 (5.7) -1.3% 336.0 288.1 47.9 16.6% 753.1 710.9 42.2 5.9% Increase (decrease) in net
position, before transfers 67.9 (21.4) 89.3 -417.5% 31.3 36.7 (5.4) -14.7% 99.2 15.3 83.9 549.1% Transfers 15.9

11.0 4.9 44.8% (15.9) (11.4) (4.6) 40.2% (0.1) (0.4) 0.3 -83.3% Increase (decrease) in net position 83.8 (10.4) 94.2 -902.5% 15.4 25.2 (9.8) -39.0% 99.2 14.7 84.4 574.0% Net position at beginning of year 149.6 160.0 (10.4) -6.5% 878.4 854.1 24.4 2.9% 1,028.0 1,014.1 13.9 1.4% Net position at end of year 233.4$ 149.6 $ 83.8$ 56.0% 893.8$ 879.2 $ 14.6$ 1.7% 1,127.1$ 1,028.8 $ 98.4$ 9.6% Governmental Activitie
s
Governmental activities net position increased by $83.8 million or 56.0%. Key elements of this increased are a combination of factors as follows:

The revenue components of governmental activities increased by $ 83.6 million or 20.8% from prior year revenues. The following categories illustrate the changes: charges for services increased by $6.7 million, operating grants and contributions increased by $28.1 million, capital grant and contributions increased by $12.0 millio n, property taxes increased by $5.2 million, sales taxes increased by $2.5 million, utility users’ tax increased by $2.7 million, transient occupancy tax increased by $4.0 million, other taxes increased by $5 .1 million and other revenues by $18.7 m illion. Miscellaneous revenues decreased by $1.3 million.
• Charges for services increase of $6.7 million includes changes in the following categories:
o $1.5 million increase in public safety charges due to police outside event revenues related to increased business activities and increased emergency medical services; o $2.2 million increase in transportation charges; and
o Smaller increases in community development, culture leisure, health and sanitation charges. • Operating grants and contributions in creased by $28.1 million, primarily due to the recognition of American Rescue Plan Act (ARPA) revenue during the current fiscal year.

PAGE 144
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
6 Annual Comprehensive Financial Report | June 30, 2023 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
• Capital grants and contributions increased by $12.0 millio n, primarily due to the recognition of ARPA revenue and other reimbursement type grant funds for Public Work s and Transportation during the current fiscal year.

The increase of capital grant monies is related to the increase in capital grant-type expenses. • Property taxes increased by $5.2 million due to appreciation of property value in Pasadena. • Sales taxes increased by $2.5 million. Regular sales tax increased by approximately $0.7 million, and Measure I sales tax increased by $1.7 million due to increased spending activity within City jurisdiction during the current fiscal year.
• Transient occupancy taxes increased by $4.0 million, as the hospitality industry rebounded. • Other taxes increased by $5.1 million mainly due to the following categories:
o $1.3 million increase in construction taxes, as the city experienced increase in construction; o $2.0 million increase in business license taxes; and
o $1.0 million increase in franchise taxes.
• Other revenues increased by $18.7 million, primarily due to more favorable investment performance during the current fiscal year. The breakdown is as follows:
o $13.6 million increase in net change in investment fair value; and o $2.6 million increase in investment earnings.
• Miscellaneous revenues decreased by $1.3 million. The decrease was related to reduced interest revenue, where in FY 2022, large collections of interest penalty inflated the FY 2022 balance. Other factors include a large reduction in the inclusionary housing fund and a reduction in filming permits and rental fees.

The expense components of governmental activities decreased by $5.7 million or 1.3%. The changes in expenses were:
general government decreased by $17.6 millio n, public safety increased by $6.9 mil lion, transportation increased by $4.8 million, culture and leisure increased by $1.9 million, and community developmen t decreased by $3.3 million. The other categories have a net increase of $1.6 million.
• General government expense decrease is primarily due to the decrease of $9.2 million in City contribution to the Rose Bowl Operating Company for debt service ob ligations. The City made Rose Bowl’s debt service payments in FY 2021 and FY 2022 because of revenue lo sses due to COVID-19. Additionally, there was a $18.4 million decrease in general liability expenses. These decreases were offset by other expense increases. • Public safety expense increase is mainly due to increases of $6.2 million in personnel. • Transportation expense increase is mainly due to increases in capital project activity, causing an increase of $3.0 million in personnel and $2.1 m illion in services and supplies. These increases were offset by other expense decreases.
• Community development expense decrease is primarily due to the $3.1 million decrease in affordabl e housing program expenses.
• Other expenses increase is mainly due to increases of $1.0 million in pers onnel and $1.5 million in services and supplies. These increases were offset by other expense decreases.

PAGE 145
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 7 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Charges for services

15.37%
Operating grants and
contributions

22.30%
Capital grants and
contributions

4.55%
Property taxes,
levied for general
purpose

17.27%
Sales taxes

15.75%
Utility users' taxes

6.71%
Transient occupancy taxes

3.82% Business license taxes

1.61%
Other taxes

5.07%
Motor vehicle in-lieu

4.94%
Other intergovernmental,
unrestricted

0.26%
Use of money -
investment earnings

0.99%
Use of property -
lease activity

0.34%
Net change in fair value of
investments

0.34%
Miscellaneous revenues

0.69%
Other:

2.61%
Revenues by Source - Governmental Activities
$0
$50
$100
$150
$200
Program Revenues and Expenses - Governmental Activities (in millions)
Program Revenue
Expenses
PAGE 146
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
8 Annual Comprehensive Financial Report | June 30, 2023 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Business-type Activities
Business-type activities increased the City’s net position by $14.6 million. Key elements of this year’s increase are as follows:
• Net income of the Light and Power, Water, Off-Street Pa rking, and nonmajor enterprise funds were $12.0 million, $5.8 million, $0.6 million, and $3.1 million losses, respectively. • Electric charges for services increased $27.0 million or 11.5% from the prior fiscal year. Majority of the increase was due to an increase in retail revenue.
• Electric expenses increased by $42.7 million or 21.7% from the prior year. The increase in expense was primarily due to increase in power purchased to support to high energy demand. • Water charges for services decreased by $4.7 million or 6.5% over the prior year mainly due to a decrease in water sales because of water conservation.
• Water expenses decreased by $0.2 million or 0.3% from the prior year mostly due to decrease in water demand, led to decrease in water purchased.
• Off-Street Parking operating revenues increased by $2.5 m illion or 22.4%, and expenses increased $2.3 million or

21.3% mostly due to resuming administering parking enforcement post suspension of enforcement due to the pandemic.
• Off-Street Parking net gain of $0.6 millio n was primarily the result of recoveri es. As the public resumed activities, the city experienced increased parking activity as well as increased revenues in previously suspended parking enforcement.

PAGE 147
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 9 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
$0
$50
$100
$150
$200
$250
$300
Program Revenues and Expenses - Business-type Activities (in millions)
Program Revenues
Expenses
Charges for
services

92.2%
Operating grants and
contributions

0.6%
Capital grants and
contributions

1.6%
Franchise taxes

1.8%
Investment earnings

1.7%
Lease revenues

0.1%
Net change in fair value
of investments
-1.2%
Miscellaneous
revenues

0.8%
Revenue by Sources - Business-type Activities
PAGE 148
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
10 Annual Comprehensive Financial Report | June 30, 2023 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)
2023 2022 $ Change % Change
Revenues:

Taxes 245.3 $ 225.9 $ 19.4$ 8.6%
Licenses and permits 17.1 15.3 1.8 11.6%
Intergovernmental 158.7 106.2 52.5 49.5%
Cha rge s for s e rvi ce s 47.8 43.5 4.3 9.8%
Fines and forfeitures 5.4 4.2 1.2 27.9%
Inv estment earnings 4.7 2.2 2.5 111.5%
Net c hange in fair v alue of inv estment s (1 .6 ) (14.8) 13.2 -88.9% Lease revenues 5.2 4.5 0.7 15.4%
Miscellaneous revenues 6.6 8.2 (1.6) -19.3%
Contributions 1.5 3.1 (1.6) -50.7%
Total revenues 490.6 398.3 92.3 23.2%
Expenditures:

Current:

Genera l government 58.6 63.8 (5.2) -8.1%
Publ i c s a fety 159.3 147.6 11.7 8.0%
Transportation 47.5 40.8 6.7 16.4%
Utility 0 .1 0.1 0.0 35.0%
Sa nita ti on 5.9 6.0 (0.1) -1.9%
Health 18.9 16.5 2.4 14.8%
Culture and leisure 48.3 45.9 2.4 5.2%
Community development 53.1 55.7 (2.6) -4.6%
Capital outlay 40.3 25.0 15.3 61.2%
Debt service:

Principal retirement 5.8 5.4 0.4 7.8%
Interest 6.2 6.4 (0.2) -2.8%
Lea s e pa yments 1.2 1.1 0.1 12.2%
Subscription payments 0.7 - 0.7 -
Int er est - leases and subsc r ipt ions 0.1 - 0.1 -
Total expenditures 446.1 414.3 31.8 7.7%
Excess (deficiency) of revenues over
(under) expenditures 44.5 (16.0) 60.5 -377.8%
Other financing sources (uses):

Transfers in 77.5 73.5 4.0 5.4%
Transfers out (60.9) (65.0) 4.1 -6.3%
Tra ns fer to component uni t (0.1) (0.4) 0.3 -83.3% Leases issued 0.8 0.1 0.7 738.0%
Subsc r ipt ions issued 0.9 - 0.9 -
Total other financing sources (uses) 18.2 8.2 10.0 122.1% Net change in fund balances 62.7 (7.8) 70.5 -903.4% Fund balances at beginning of year 268.2 276.1 (7.9) -2.9% Fund balances at end of year 330.8$ 268.2 $ 62.6$ 23.3% Government
al 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.

PAGE 149
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 11 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued) 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 11, 2023, the City Counc il committed the full 15% or $43.9 million for the FY 2023 Emergency Contingency Reserve and up to 5% or $14.6 million for Operating Reserve.

At the end of FY 2023, the City’s governmental funds reported combined ending fund balances of $330.8 million, an increase of $62.6 million in comparison with the prior year. The nons pendable fund ba lance of $15.9 million represents assets generated by prepayments, permanent trust fund balances and re ceivables in funds, net of a llowances. The restricted fund balance of $81.0 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 $173.7 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 $58.8 million designa tes the portion of fund balance that reflects the City’s intended use of resources. The unassigned fund balance of $1.4 million represents the residual amount after the nonspendable, restricted, committed, and assigned balances have been identified of total fund balance.

Total expenditures increased by $31.8 million or 7.7%. These ex penditure categories increased: public safety $11.7 million, transportation $6.7 million, culture and leisure $2.4 million, health $2.4 million, and capital outlay $15.3 million. These expenditure categories decreased: general government by $5 .2 million and community develo pment by $2.6 million. The other categories have a net increase of $1.0 million. In additi on, due to the implem entation of GASB 87 and 96, lease and subscription payments, as well as the corresponding interest expenditures are presented under debt service. Prior to FY 2022, these expenditures were presented within the governmental funds’ function. • General government expenditure decrea se is mainly due to the $9.3 million de crease in City operating expenses related to the contribution to the Rose Bowl’s debt service. The decrease is offset by the $2.6 million increase in personnel costs, $1.0 million increase in service and supplies, and $0.4 million increase in internal service fund costs. • Public safety expenditure increase is due to several factors: expenses r elated to othe r contract services, such as additional law enforcement services, supplemental traffic control services for the New Year’s parade in 2023 in comparison to 2022. An overall increase in personnel and benefit, services and supplies costs contributed to the overall increase for FY 2023.
• Transportation expenditure increase is mainly due to the increase in general liability, personnel, and benefit costs. • Culture and leisure expenditure increase is due to the increase of $1.0 million in personnel costs. Additionally, there was an increase of $1.6 million in other contract services, payable to Pasadena Center Operating Company, for their portion of the transient occupancy taxes in FY 2023.

In FY 2023, the net governmental fund transfers in increased by $8.1 million ma inly due to an increase of $4.9 million in transfers from the General Fund to the Project Management Fund, and an increase of $0.5 million in transfers from the General Fund to nonmajor governmental funds.

PAGE 150
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
12 Annual Comprehensive Financial Report | June 30, 2023 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued) The General Fund is the chief op erating fund of the City. At the end of FY 2023, total fund balance equaled $164.6 million, versus $106.2 million in the prior year. The fund balance increased by $58.4 million or 55.0%, during FY 2023. Key factors for this change are as follows:

General Fund total revenues increased by $64.1 million or 21.9% mainly due to increases in four categories of revenue and decrease in one category, as explained below:
• Taxes increased by $19.5 million primarily due to an increase of $5 million in property taxes. Sales tax increased by $2.4 million, utility users’ tax increased by $2.7 million, and transient occupancy tax revenue increased by $4 million.

Streetlight & traffic signal tax increase d by $1.4 million. Business license tax increased by $2.0 million. The other taxes had a net increase of $2.0 million.
• Intergovernmental revenues increased by $35.3 million, prim arily due to an increase of $26.7 million received in ARPA funding and an increase of $1.1 million in motor vehicle in-lieu tax. There was also an increase of $5.0 million in Caltrans highway construction, and an increase of $1 .6 million from the California Arts Council grant revenue.

Other intergovernmental revenue increased by $0.9 million. • Charges for services increased by $2.9 million, primarily due to a $1.0 million increase in police and fire assignments for Rose Bowl Stadium events, an increase of $0.8 million in paramedic emergency medical aid response, an increase of $0.6 million in Department of Transportation-related services, and an increase of $0.6 million in city-wide internal service charges in cost allocation and services to the Power and Fleet Maintenance funds. • Net change in fair value of investments increased by $4.9 million due to a more favorable investment activity during the fiscal year.
• Miscellaneous revenues decreased by $1.1 million, primarily due to a decrease of $0.4 million in Collections-Interest charges, a $0.3 million decrease in Fire and Rescue services, a $0.2 million de crease in Filming Permits & Rentals, and a $0.2 million decrease in Claim Settlements.

General Fund total expenditures increased by $13.5 million or 5.0% primarily due to:
• Public safety increased by $12.1 million in personnel and internal service charges in fleet and equipment. • Capital outlay increased by $2.5 million for a property purchase and for new lease and subscription assets. • Transportation increased by $2.3 million due to the same causes mentioned above in overall governmental funds on the increased internal costs for general liability, workers’ compensation, and benefits. • The overall expenditure increase is offset by a $5.1 million decrease in general government expenditures.

The Housing Successor Fund has a fund ba lance of $1.0 m illion, which is a decrease of $0.9 million from the prior year. The key factors contributing to this decrease are as follows:
• Total revenue increased by $0.4 million mainly from loan repayments. • Total expenditures decreased by $1.3 million, primarily due to the Bridge Housing affordable housing project.

PAGE 151
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 13 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued) 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 $223.4 million and those for the Water, Off-Street Parking Fund, and nonm ajor enterprise funds amou nted to $44.4 million, $2.8 million, and $7.8 million respectively. The total operating net income/(loss) before transfers and contributions for each fund was $20.9 million, $5.6 million, $0.8 million, and ($1.9) million, respectively.

Light and Power operating revenues increased by $29.3 million or 12.9% from prior year. The increase was primarily due to an increase of 25.7 million in retail revenue due to a combination of increase in re tail sales and the implementation of the Power Cost Adjustment ("PCA") to manage the increase in energy costs. Total operating expenses increased by $41.7 million, the majority of increase was due to higher energy costs and stronger energy demand. $23.0 million increase in power purchase expenses, $7.0 million increase in gas expenses, $6.0 million in customer and commercial expenses and $4.0 million in depreciation and amortization expenses, and $2.0 million in other production costs.

Water Fund operating revenues decreased by $4.4 million or 6.3% from prior year ma inly driven by the lower retail water sales. The decrease resulted from th e continued Voluntary Level 2 Water Supply Shortage Plan and the ongoing water conservation effort, partially offset by the second of two water rate increases approved and implemented in FY 2023. Water Fund operating expenses decreased by $0.4 million or 0.6% from the prior year due to the lower purchased water costs as a result of lower water demand.

The Off-Street Parking Fund had a net gain of $0.6 million in FY 2023, as compared to $1.4 million net gain in FY 2022. This is primarily due to the increase of parking revenues from all parking structures and resuming parking enforcement and citations.

Implementation of GASB 68 resulted in showing a Net Pension Liability in the Proprietary Funds. At June 30, 2023, the net pension liability is $63.6 million, $21.8 million, $1.3 million, and $8.5 million for Light and Power, Water, Off-Street Parking, and nonmajor enterprise funds, respectively.

Implementation of GASB 75 resulted in showing a Net OPEB Liability in the Proprietary Funds. At June 30, 2023, the net OPEB liability is $8.9 million, $4.3 million, $0.06 million, and $2.2 m illion for Light and Power, Wate r, Off-Street Parking, and nonmajor enterprise funds, respectively.

PAGE 152
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA
14 Annual Comprehensive Financial Report | June 30, 2023

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, 2023 amounts to $1,368.6 million, net of accumulated depreciation/amortization. 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 capital assets for the current fiscal year was $24.4 million, a $18.0 million increase for governmental activities and $6.4 million increase for business-ty pe activities. There is a restatement for the FY 2022 ending balance/FY 2023 beginning balance of subscription assets due to the retrospective application required for prior years under GASB 96 by restating financial statements for all periods presented.

City of Pasadena’s Capital Assets
(Net of depreciation/amortization, in millions)
2023 2022 2023 2022 2023 2022
La nd 87.5$ 87.3$ 14.7$ 14.7$ 102.2$ 102.0$ Construction in progress 54.1 31.4 74.6 82.0 128.7 113.4 Buildings and improvements 148.0 153.7 68.7 71.6 216.7 225.2 L ease asset - buildings 2 .9 3.4 2.2 1.3 5.1 4.7 Machinery and equipment 36.2 34.7 659.9 643.5 696.1 678.2 L ease asset - equipment 0 .6 0.5 - - 0.6 0.5 Subs cri pti on a s s ets 7.6 7.5 * 5.2 5.8 * 12.8 13.4 * Infrastructure 206.4 206.8 - - 206.4 206.8
Total 543.3$ 525.3 $ 825.3 $ 818.9 $ 1,368.6 $ 1,344.2 $ Total Primary GovernmentGovernmental Activities Business-type Activities * June 30, 2022 ending balance was restated to reflect the addition of subscription assets due to the implementation of GASB 96.

Major capital asset-related events
during FY 2023 included the following:
• A variety of street maintenance and construction, technology, traffic control, parks and landscape projects continue city-wide. The city spent $43.0 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, 2023 is $54.1 million and $74.6 million for business-type activities. • In the area of technology upgrade projects, the city sp ent $1.9 million. Of this amount, $0.7 million is for building security management, $0.4 million toward replacement of communication e quipment, $0.7 million for Police CAD and RMS replacement, and $0.1 million for City fiber network expansion. • Public Works acquired eight (8) cranes for Solid Waste for $3.2 million, Police acquired a mobile comment center van for $1.8 million, Fire spent $1.0 million on fire apparatus, and the City purchased 47 EVs for various departments for $1.2 million.
• Improvement of city-owned facilities continues. Nearly $7.3 million was spent in city buildings for preventive maintenance and repair, $8.8 million in parks and landscape projects, and $8.3 million for street improvements. • Major capital improvements for Transportation includes: $7.4 millio n to construct Union Street cycle track and $1.4 million for the Cordova Street project.
• As of June 30, 2023, the busin ess-type activities net assets amounted to $825.3 million, an increase of $6.4 million over the prior year.

PAGE 153
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS
Annual Comprehensive Financial Report | June 30, 2023 15 CAPITAL ASSETS AND DEBT ADMINISTRATION (Continued)
• Pasadena Water and Power (PWP) utility plant net assets am ounted to $778.0 million, an increase of $6.0 million.

During the fiscal year, the City spent $53.0 million on various water and power projects and moved $60.4 million into completed projects.
• Some of the major water projects that completed are: $3.4 million on insta llation of new and replacement water distribution mains at various locations throughout the City; $3.1 million on the installation or replacement of new or worn-out water meters, services, mains, fire hydrants and $0.5 million on enhancement and upgrade costs for the new Customer Information and Utility Billing System (CIS). • Some of the major power projects that completed are: $19.9 million on GT-1 & GT-2 Upgrades and Replacement; $3.5 million to install a new 34.5KV sub transmission system circuit from PWP’s Oak Knoll Substation to PWP’s Santa Anita Receiving Station and $3.2 million to replace of 34-20 sub transmission Circuit between Santa Anita and Chester substations.

Additional info
rmation on the City’s capital assets can be found in Note 6 on pages 60-63 of this report.

Long-Term Debt
At year-end, the City has a number of debt issues outstanding. These include $130.5 million of taxable pension bonds, $288.6 million of revenue bonds, $48.4 million of certificates of participation, $5.0 million in loan payable and $4.3 million of notes payable. Long-term debt decreased by a net amount of $19.2 million as a result of normal scheduled principal maturities and refunding of debt. 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 Debt
(in millions)
Governmental Activities Business-type Activities
2023 2022 2023 2022 2023 2022
Long-term debt:

Notes payable 4.3 $ 4.6 $ - $ - $ 4.3 $ 4.6 $ Bonds payable 130 133 289 301 419 434 Certificates of participation 48 51 - - 48 51 Loan payable 4 5 1 2 5 7
Total long-term debt 187$ 193 $ 290 $ 303 $ 477 $ 496 $ Total Primary Government
Additional info
rmation on the City’s long-term debt can be found in Note 10 on pages 72-84 of this report.

The City reports one item of significant economic importance in its subsequent event Note 24 on page 117.

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.

PAGE 154

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
16 Annual Comprehensive Financial Report | June 30, 2023 Statement of Net Position
June 30, 2023
Total Aggregate
Governmental Business-t ype Primary Component
Activities Activities Government Units
Assets:

Current assets:

Cash and investments 295,547$ 350,388$ 645,935$ 53,163$ Accounts receivable, net 53,583 44,294 97,877 6,141 Notes receivable, net 13,505 74 13,579 - Inventories 410 29,279 29,689 316
Lease receivable 760 433 1,193 18
Prepaids and other assets 1,995 944 2,939 356 Due from component units 1,977 11 1,988 - Due from City - - - 911
Due from other governments 6 - 6 -
Deposits - - - 12
Restricted - cash and cash investments - - - 8,468 Total current assets 367,783 425,423 793,206 69,385 Noncurrent assets:

Restricted - cash and investments 21,671 65,841 87,512 10,633 Due from City - - - 422
Lease receivable 959 750 1,709 272
Long-term prepaid and other assets - 6,989 6,989 - Capital assets:

Not being depreciate
d/amortized, net 141,634 89,251 230,885 2,426 Being depreciated/amortized, net 401,750 736,008 1,137,758 265,604 Total capital assets 543,384 825,259 1,368,643 268,030 Total noncurrent assets 566,014 898,839 1,464,853 279,357 Total assets 933,797 1,324,262 2,258,059 348,742 Deferred outflow of resources
Accumulated decrease in fair value of
hedging derivatives - - - 4,432
Debt refunding related 20,059 749 20,808 2,230 Pension related 166,676 31,997 198,673 1,780 OPEB related 6,032 1,555 7,587 -
Total deferred outflow of resources 192,767 34,301 227,068 8,442 (Continued)
Primary Government
The accompanying notes are an integral part of these financial statements.

PAGE 155

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 17 Statement of Net Position (Continued)
June 30, 2023
Total Aggregate
Governmental Business-type Primary Component
Activities Activities Government Units
Liabilities:

Current liabilities
Accounts payable and other ac c r ued liabilities 37,947 27,650 65,597 10,895 De posits 4,656 8,300 12,956 3,989
Due to com ponent units 9 - 9 -
Due to pri ma ry gov ernment - - - 1,529
Due to other governments - - - -
Advances - - - 100
Unearned rev enues 7,691 10,387 18,078 5,191
Compensat ed absenc es 12,033 - 12,033 212
Insurance claims payable 36,038 - 36,038 -
Lon g-term debt due within one year 6,008 11,656 17,664 12,013 L ease liabilit y 992 848 1,840 90
Subsc r iption liability 2 ,2 3 3 1,341 3,574 89
Total current liabilities 107,607 60,182 167,789 34,108 Noncurrent liabilities:

Der iv ativ e instr ument liability - - - 4,432 Lon g-term adv ances from pri ma ry government - - - 400 Net pension liabilit y 480,103 95,214 575,317 3,526 Net OP EB liabilit y 59,852 15,437 75,289 -
Compensat ed absenc es 820 - 820 98
Insurance claims payable 28,825 - 28,825 -
Lon g-term debt 181,198 278,394 459,592 324,701
Lease liability 2 , 6 4 9 1,578 4,227 11
Subscr iption liability 3 , 5 8 4 3,429 7,013 137 Total noncurrent liabilities 757,031 394,052 1,151,083 333,305 Total liabilities 864,638 454,234 1,318,872 367,413
Deferred inflow of resources
Debt refundin g rel a ted - 1,697 1,697 3,699
Ser v ic e c onc ession agreement - - - 117
Lea s e rela ted 1,641 1,174 2,815 509
Pension related 7,944 2,776 10,720 88
OPEB rel ated 18,983 4,896 23,879 -
Total deferred inflow of resources 28,568 10,543 39,111 4,413 Net Position:

Net inv estment in c apit al asset s 493,108 521,998 1,015,106 (12,391) Restricted:

Nonex pendable 1,433 - 1,433 -
Expendable:

Communit y develo pment 12,318 - 12,318 -
P ublic safety 5,049 - 5,049 -
Capital projects 2,372 - 2,372 -
Debt service 6,759 25,574 32,333 11,189
Stranded investments - 40,341 40,341 -
Trans porta tion 41,852 - 41,852 -
Contribution to General Fund - 14,544 14,544 -
C ultur e and liter acy 3,322 - 3,322 -
Other purposes 139 12,876 13,015 2,199
Air qualit y im provement 303 - 303 -
Trust and loans 12,596 - 12,596 -
Unrestricted (345,893) 278,453 (67,440) (15,639)
Total net position 233,358$ 893,786$ 1,127,144$ (14,642)$ Primary Government
PAGE 156

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
18 Annual Comprehensive Financial Report | June 30, 2023 Statement of Activities
For the Fiscal Year Ended June 30, 2023
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Primary government:

Governmental activities:

Genera l government 68,549 $ 13,551$ 39,812$ -$ Publ ic s a fety 157,931 15,285 4,423 -
Tra ns porta ti on 49,533 18,761 19,315 16,302
Utilit y 1 3 5 - - -
Sa ni ta tion 5,831 7,721 - 3,100
Hea l th 18,967 2,610 11,481 -
Culture and leisure 50,399 840 1,331 2,821
Community development 59,411 16,276 32,514 -
Interest and other fiscal charges 6,311 - - -
Total governmental activities 417,067 75,044 108,876 22,223 Business-type activities:

Electri c 239,414 255,825 1,961 3,826
Wa ter 61,705 64,961 93 2,071
Refus e 21,509 12,309 107 -
Pa rki ng 13,222 13,545 - -
Telec ommunications 188 415 - -
Total business-type activities 336,038 347,055 2,161 5,897 Total primary government 753,105 422,099 111,037 28,120 Aggregate Component Units 88,675$ 66,251$ 67$ 76$ General revenues:

Taxes:

Property, levied for general purpose
Sales
Utilit y us
er s'
Transient occupancy
Construction
Business lic ense
Franchise
Other
Grants and contributions, unrestricted
Motor vehicle in-lieu, unrestricted
Use of money - investment earnings
Use of property - lease activ ity
Net c hange in fair v alue of inv est ment s
Miscellaneous revenues
Total general revenues
Transfers
Total general revenues and transfers
Changes in net position
Net position (deficit) at beginning of year, as restated Net position at end of year
Pro
gram Revenues
The accompanying notes are an integral part of these financial statements.

PAGE 157

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 19 Total A ggregate
Governmental Business-t ypeP r i m a r y Component
Activities Activities Government Units
(15,186)$ -$ (15,186)$ -$
(138,223) - (138,223) -
4,845 - 4,845 -
(135) - (135) -
4,990 - 4,990 -
(4,876) - (4,876) -
(45,407) - (45,407) -
(10,621) - (10,621) -
(6,311) - (6,311) -
(210,924) - (210,924) -
- 22,198 22,198 -
- 5,420 5,420 -
- (9,093) (9,093) -
- 323 323 -
- 227 227 -
- 19,075 19,075 -
(210,924) 19,075 (191,849) -
(22,281)
84,327 - 84,327 -
76,899 - 76,899 -
32,790 - 32,790 -
18 ,675 - 18,675 11,300
3,969 - 3,969 -
7,841 - 7,841 -
3,749 6,713 10,462 -
17,048 - 17,048 4,029
1,276 - 1,276 137
24,111 - 24,111 -
4,817 6,568 11,385 1,004
1,652 441 2,093 16
(1,651) (4,449) (6,100) -
3,361 2,940 6,301 4,776
278,864 12,213 291,077 21,262
15,865 (15,933) (68) -
294,729 (3,720) 291,009 21,262
83,805 15,355 99,160 (1,019)
149,553 878,431 1,027,984 (13,623)
233,358$ 893,786$ 1,127,144$ (14,642)$
Net (Expenses) Revenues and
Changes in Net Position
Primary Government
PAGE 158

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
20 Annual Comprehensive Financial Report | June 30, 2023 Balance Sheet
Governmental Funds
June 30, 2023
Special Revenue Ca pital Projects Debt Service
Nonmajor Total
Housing Project General Governmental Governmental
General Successo r Management Debt Service Funds Funds
Assets:

Pooled cash and investments 81,217$ 1,012$ 8,367$ -$ 159 ,640$ 250,236$ Accounts recei va bl e, net 31,471 9 4,779 - 17,085 53,344 L ease r eceiv able 3 7 5 - - - 716 1,091 Notes receivable 18,350 27,217 - - 61,269 106,836 Allowance for uncollectible notes
receivable (4,845) (27,217) - - (61,269) (93,331) Due from other funds 45,834 - - - - 45,834 Due from com ponent units 1,965 - - - - 1,965 Due from other gov ernments 6 - - - - 6 Prepaids and other assets 811 - - - 149 960 Restricted assets:

Cash and investments 12,194 - - - 2,645 14,839 C ash with fisc al a gent - - - 5 6,827 6,832 Total assets 187,378 1,021 13,146 5 187,062 388,612 Liabilities:

Accounts payable and accrued
liabilities 16,786 - 6,163 - 6,369 29,318
De posits 3,300 - - - 1,356 4,656
Due to other funds - - - - 8,826 8,826 Unearned rev enue 2,014 - 2,879 - 2,798 7,691
Total liabilities 22,100 - 9,042 - 19,349 50,491 Deferred inflow of resources:

Unavailable revenues 313 - 1,651 - 4,292 6,256
Lea s e rel a ted 354 - - - 693 1,047 Total deferred inflow of resources 667 - 1,651 - 4,985 7,303 Fund balances:

Nons pendable 14,316 - - - 1,582 15,898 Restricted 12,596 1,021 521 5 66,887 81,030 Commi tted 71,985 - 571 - 101 ,164 173,720
Assi gned 57,407 - 1,361 - - 58,768
Unassi gned 8,307 - - - (6,905) 1,402
Total fund balances 164,611 1,021 2,453 5 162 ,728 330,818 Total liabilities, deferred inflow of
resources and fund balances
187,378$ 1,021$ 13,146$ 5$ 187,062 $ 388,612$ The accompanying notes are an integral part of these
financial statements.

PAGE 159

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 21 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2023
Amounts re ported for gov ernmental activ ities in the statement of net position are different because:

Total fund balances - governmental funds 330,818$
C apital asset s 843,212
Accumul a ted depreci a ti on (327,812)
L ease asset s 5,517
Subs cription as s ets 5,643
Accumula ted a mortiza tion (2,687) 523,873 Differences between ex pected and actual ex periences , assum pti on cha nges and net differences between projected and actual earnin gs and contributions subse quent to the measurement date for the pos tretirement benefits (pension and OPEB ) ar e reco gnized as deferred outflows of resources and deferred inflows of resources on the statement of net position.

Deferred outfl ows - pens i on rel a ted 123,312
Defer r ed outflows - OP EB r elated 5 ,4 9 1
Deferred i nfl ows - pens i on rel a ted (5,350)
Deferred i nfl ows - OPEB rel a ted (17,278) 106,175 Unavailable revenues are not available to pay for current period ex penditures and , therefore , are deferred in the funds. 6,256
The substance of an advanced refundin g is r eported as deferrin g the difference and amortizin g it over future periods. 20,059
Long-term liabilities and deferred inflows of resources are not due , payable , or av ailable in the current period , and therefore , ar e not r eported in the funds.

Notes payable (4,322)
Pension bonds payable (130,525)
C er tific ates of par tic ipation (44,570)
Unamortized premi um (discount ) (3,807)
Accrued i nteres t payable on lon g-term debt , leases , and SBITA (1,592) Loa n payable (3,982)
L ease liabilit y (3,628)
Subscr iption liability (3,414)
Net OP EB liabilit y (54,474)
Net pension liabilit y (363,730) (614,044)
Inte
rnal service funds are used b y mana gement to char ge the cos ts of certa in a ctivities, suc h as e qui 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. (139,779) Net position of governmental activities 233,358$
Capital assets used in governmental activities are not current financial resources and are therefore not reported in the governmental funds.

PAGE 160

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
22 Annual Comprehensive Financial Report | June 30, 2023 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Fiscal Year Ended June 30, 2023
Special Revenue Ca pital Projects Debt Service
Nonmajor Total
Housing Project General Governmental Governmental
General Successo r Management Debt Service Funds Funds
Revenues:

Taxes 234,258$ -$ -$ -$ 11 ,040$ 245,298$ Licenses and permits 3,731 - - - 13 ,337 17,068 Inter gov ernmental 71,161 - 10 ,504 - 77 ,053 158,718 Cha rges for serv ices 35,822 7 34 - 11 ,896 47,759 Fines and forfeitures 5,372 - - - - 5,372
Inv estment earnin gs2 ,127 92 - 6 2,429 4,654 Net chan ge in fair v alue of inv estments (640) - - - (998) (1,638) Lease rev
enues 1,349 - 423 - 3,419 5,191 Interest - leases (as lessor ) 2 - - - 4 6 Miscellaneous revenues 3,226 289 56 - 3,048 6,619 Contributions 33 - 677 - 817 1,527
Total revenues 356,441 388 11,694 6 122 ,045 490,574 Expenditures:

Current:

General gov ernment 58,369 - 225 7 10 58,611
Publ i c s a fety 156,122 - - - 3,217 159,339
Trans portation 24,290 - 5,716 - 17 ,465 47,471
Ut ility - - - - 135 135
Sani ta ti on - - - - 5,886 5,886
Health - - - - 18 ,944 18,944
Culture and leisure 33,419 - - - 14 ,851 48,270 Communi ty develo pment 8,683 1,260 - - 43 ,169 53,112 Capit al outla y 2,556 - 36 ,321 - 1,419 40,296
Debt service:

Pri ncipa l reti rement - - - 3,327 2,495 5,822 Interest 3 - - 3,992 2,225 6,220
Lea s e payments 644 - 42 - 548 1,234
Subscription payments 447 - 79 - 199 725
Inter est - leases and subsc r i ptions 33 - - - 21 54 Total expenditures 284,566 1,260 42,383 7,326 110,584 446,119 Excess (deficiency) of revenues over
(under) expenditures 71,875 (872) (30,689) (7,320) 11,461 44,455 Other financing sources (uses):

Tr ansfer s in 2 0 ,667 - 30 ,083 7,324 19,388 77,462 Tr ansfer s out (35,203) - (437) - (25,270) (60,910)
Transfer t
o com ponent unit (67) - - - - (67)
L eases issue
d 5 0 6 - 11 - 321 838
Subsc r ipt ions issued 6 1 7 - 98 - 172 887 Total other financing sources (uses) (13,480) - 29 ,755 7,324 (5,389) 18,210 Net change in fund balances 58,395 (872) (934) 4 6,072 62,665 Fund balances at beginning of year 106,216 1,893 3,387 1 156,656 268,153 Fund balances at end of year 164,611$ 1,021$ 2,453$ 5$ 162,728 $ 330,818$ The accompanying notes are an integral part of these
financial statements.

PAGE 161

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 23 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, 2023
Amounts reported for gov ernmental activ ities in the statement of activ ities are different because:

Net change in fund balances - total governmental funds 62,665$ Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation/ amortization expense. This is the amount by which depreciation/amortization expense exceeded capital outla y tha t wa s ca pi tal ized in the current peri od.

Ca pita l outl ay 36,417$
Depreciation/amortization expense (19,159) 17,258
The net effec t of v ar ious misc ellaneous t r ansac t ions inv olv ing c apit al asset s (i. e., sales, t r ade-ins, and donations) is to decrease net position.

L oss on sale of asset s (1,046)
Rev enues in the statement of activ ities that do not prov ide current financial resources are not reported as revenues in the funds. (6,029)
Bond
and other debt proceeds provide current financial resources to governmental funds, but issuing debt inc r eases long-t er m liabilit ies in t he st at ement of net posit ion. Repay ment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the statementof net position. Also, gov er nmental funds r epor t the effec t of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred a nd a mortized in the s tatement of activiti es .

P r incipal paid on notes 317
Principal paid on pension bonds 2,355
P r inc ipal paid on c er tific ates of par tic ipation 2,195 P r inc ipal paid on leases 1,234
P r inc ipal paid on subsc r iptions 725
P r inc ipal paid on loan 955 7,781
Bond deferred charges and similar items are recorded as expenditures in governmental funds when debt is first issued, whereas these pay ments are deferred and amortized in the statement of activ ities.

This amount is the net offset of the difference.
(1,113)
Inte
rnal service funds are used by management to charge the costs of certain activities, such as computing and communication, building maintenance, fleet maintenance, fleet replacement, benefits, workers' c ompensation, gener al liability , and 3 11 c all c enter , to indiv idual funds. The net r ev enue (ex pense) 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 . 10 ,175
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

Accrued interest on long-term debt, leases, and SBITA 29 Amortization of bond premiums and discounts and deferred amounts of refunding 247 Net change in deferred (inflows) and outflows of resources - pension related (4,132) Net
change in deferred (inflows) and outflows of resources - OPEB relaed (2,030) (5,886) Cha
nge in net position of governmental activities 83,805$
The acc
ompanying notes are an integral part of these financial statements.

PAGE 162

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
24 Annual Comprehensive Financial Report | June 30, 2023 Statement of Net Position
Proprietary Funds
June 30, 2023
Light Off-Street
and Power Water Parking
Assets:

Current assets:

C ash and inv est ment s 269,684$ 54,035$ 4 ,538$ Accounts recei va bl e, net 30,184 10,681 573
Notes receivable , res tri cted 74 - -
Due from com ponent units - - -
Inv entories 19,547 9,732 -
Lease r ec eiv able - 1 377
Prepaids and other assets 205 492 247
Total current assets 319,694 74,941 5,735
Noncurrent restricted assets:

Cash and investments 14,451 5,068 -
Cash and investments - stranded investments reserve 40,267 - - Cash with fiscal a gent 38 4,200 1,817
Total noncurrent restricted assets 54,756 9,268 1,817 Other noncurrent assets:

De posit with Inde pendent S yst em Operator (ISO ) 200 - - Prepaid lon g-term assets 6,789 - -
Lease r ec eiv able - 11 739
Ca pita l a s s ets , net of a ccumula ted
depreci a ti on/a morti za ti on 537,612 240,504 39,846 Total other noncurrent assets 544,601 240,515 40,585 Total noncurrent assets 599,357 249,783 42,402
Total assets 919,051 324,724 48,137
Deferred outflow of resources:

Bond refunding related 749 - -
Pension related 20,635 7,661 550
OPEB related 888 441 6
Total deferred outflow of resources 22,272 8,102 556 Liabilities:

Current liabilities:

Accounts payable and accrued liabilities 13,731 10,714 1,471 De posits 1,608 434 209
Insurance claims payable - - -
Due to other funds - - -
Due to com ponent units - - -
Unearned rev enues 7,195 2,123 2
C ompensat ed absenc es - - -
Revenue bonds 7,485 2,795 900
Loan payable - - 476
Lease liabilit y 662 182 1
Subscr iption liability 997 327 -
Total current liabilities 31,678 16,575 3,059
Noncurrent liabilities:

Insurance claims payable - - -
C ompensat ed absenc es - - -
Net pension liabilit y 63,591 21,832 1,282
Net OP EB liability 8,868 4,323 63
Revenue bonds 185,945 72,857 18,600
Loan payable - - 992
Lease liabilit y 1,577 1 -
Subscri ption liabilit y 2,498 875 -
Total noncurrent liabilities 262,479 99,888 20,937
Total liabilities 294,157 116,463 23,996
Deferred inflows of resources:

Bond refundin g rel a ted 217 1,480 -
Lea s e rela ted - 12 1,086
Pension related 1,790 665 48
OPEB related 2,806 1,378 20
Total deferred inflows of resources 4,813 3,535 1,154 Net position:

Net inv estment in c a pit al assets 3 38,235 157,665 18,877 Restricted:

Debt service 14,489 9,268 1,817
Contribution /reimbursement to General Fund 13,000 1,544 - Stranded investments 40,341 - -
Other purposes 12,876 - -
Unrestricted 223,412 44,351 2,849
Total net position (deficit) 642,353$ 212,828$ 23,543$ The accompanying notes are an integral part of these financial statements.

PAGE 163

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 25 Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023

Governmental
Nonmajor Total Activities -
Enterprise Enterprise Internal
Funds Funds Service Funds
22,131$ 350,388$ 45,311$
2,856 44,294 239
- 74 -
11 11 12
29,279 410
55 433 307
- 944 1,035
25,053 425,423 47,314
- 19,519 -
- 40,267 -
- 6,055 -
- 65,841 -
- 200 -
- 6,789 -
- 750 321
7,297 825,259 19,512
7,297 832,998 19,833
7,297 898,839 19,833
32,350 1,324,262 67,147
- 749 -
3,151 31,997 43,364
220 1,555 541
3,371 34,301 43,905
1,734 27,650 7,037
6,049 8,300 -
- - 36,038
- - 37,009
- - 9
1,067 10,387 -
- - 12,033
- 11,180 -
- 476 1,194
3 848 13
17 1,341 -
8,870 60,182 93,333
- - 28,825
- - 820
8,509 95,214 116,373
2,183 15,437 5,378
- 277,402 -
- 992 -
- 1,578 -
56 3,429 1,209
10,748 394,052 152,605
19,618 454,234 245,938
- 1,697 -
76 1,174 594
273 2,776 2,594
692 4,896 1,705
1,041 10,543 4,893
7,221 521,998 17,096
- 25,574 -
- 14,544 -
- 40,341 -
- 12,876 -
7,841 278,453 (156,875)
15,06
2$ 893,786$ (139,779)$
PAGE 164

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
26 Annual Comprehensive Financial Report | June 30, 2023 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Light Off-Street
and Power Water Parking
Operating revenues:

Utilities 2 5 5,8 25 $ 64,961$ -$
Off-s treet pa rki ng - - 13,545
Refuse collection - - -
Tel ecommunica tion - - -
Computing and communication services - - -
Building maintenance - - -
Fleet maintenance - - -
Employee benefits - - -
Insurance - - -
311 Ca l l Ce nte r - - -
Total operating revenues 255,825 64,961 13,545
Operating expenses:

Utilit y pr oduc tion 1 4 2 ,4 8 2 29,148 -
Utilit y t r ansmission and distr ibution 2 0 ,7 2 5 7,709 - Utilit y c ommer c ial and gener al 2 9 ,7 0 9 11,408 - Off-s treet pa rki ng - - 10,386
Refuse collection - - -
Tel ecommunica tions - - -
Computing and communication services - - -
Building maintenance - - -
Fleet maintenance - - -
Benefits - - -
Insurance - - -
311 Ca l l Ce nte r - - -
Depr eciation/amor tization 3 7,8 50 10,326 1,886 Total operating expenses 230,766 58,591 12,272
O
perating income (loss) 25,059 6,370 1,273
Nonoperating revenues (expenses):

Taxes - - -
Intergov ernmental 1,961 93 -
Inv estment earnings 4,954 1,126 125
Net c hange in fair v alue of inv est ment s (3 ,8 7 3 ) (378) 4 Lease revenues - - 391
Int er est - leases (as lessor ) - - 7
Noncompliance forfeitures - - -
Othe r 1,454 1,485 -
Interes t expens e (7,278) (2,427) (969)
Gain (loss) on sale of assets (1,370) (687) -
Total nonoperating revenues (expenses) (4,152) (788) (442) Income (loss) before transfers and contributions 20,907 5,582 831 Capital contributions 3,826 2,071 -
Transfers in 5,311 - -
Transfers out (18,000) (1,894) (196)
Changes in net position 12,044 5,759 635
Net position (deficit) at beginning of year,
as restated 630,309 207,069 22,908
Net position (deficit) at end of year 642,353$ 212,828$ 23,543$ The accompanying notes are an integral part of these
financial statements.

PAGE 165

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 27 Governmental
Activities -
Nonmajor Total Internal
Enterprise Enter prise Service
Funds Funds Funds
-$ 320,786$ -$
- 13,545 -
12,309 12,309 -
415 415 -
- - 20,073
- - 14,530
- - 15,728
- - 40,559
- - 36,673
- - 981
12,724 347,055 128,544
- 171,630 -
- 28,434 -
- 41,117 -
- 10,386 -
20,144 20,144 -
10 10 -
- - 17,372
- - 13,972
- - 10,717
- - 46,481
- - 25,516
- - 759
1,113 51,175 3,330
21,267 322,896 118,147
(8,543) 24
,159 10,397
6,713 6,713 -
107 2,161 -
368 6,573 165
(202) (4,449) (13)
41 432 297
- 7 3
(430) (430) -
- 2,939 -
(2) (10,676) (66)
19 (2,038) 11
6,614 1,232 397
(1,929) 25,391 10,794
- 5,897 -
123 5,434 1,095
(1,277) (21,367) (1,715)
(3,083) 15,355 10,174
18,145 878,431 (149,953)
15,062$ 893,786$ (139,779)$
.

PAGE 166

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
28 Annual Comprehensive Financial Report | June 30, 2023 Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Light Off-Street
and Power Water Parking
Cash Flows from Operating Activities:

Ca s h recei ved from cus tomers 253,875$ 65,941$ 13,880$ Ca s h pa yments to s uppl i ers for goods a nd s ervi ces (150,014) (32,630) (8,788) Ca s h pa yments to empl oyees for s ervi ces (34,832) (12,948) (1,147) Ca s h pa yments to other funds for s ervi ces (7,354) (4,153) - M isc ellaneous r ev enue 1 , 4 5 4 1,485 -
Other payments - - -
Net cash provided by (used for) operating activities 63,129 17,695 3,945 Cash Flows from Noncapital Financing Activities:

C ash t r ansfer s in 6 , 7 7 4 - -
Ca s h trans fers out (18,000) (1,894) (196)
Advances from other funds 110 - -
Taxes received - - -
Intergovernmenta l revenues 1,961 93 -
Net cash provided by (used for) noncapital financing activities (9,155) (1,801) (196) Cash Flows from Capital and Related Financing Activities:

Acqui s i ti on a nd cons tructi on of ca pi ta l a s s ets (37,395) (17,030) - P r oc eeds fr om sale of c apit al asset s 4 1 17 -
Proceeds from lease activities - 1 390
Pa yments on l eas es a nd s ubs cri pti ons (1,840) (750) (9) Capital contributions 4,097 1,449 -
Pri nci pa l pa i d on debt (7,225) (2,725) (1,364)
Interes t pai d on debt (8,487) (3,133) (969)
Net cash used for capital and related financing activities (50,809) (22,171) (1,952) Cash Flows from Investing Activities:

Proceeds from sale of investments 2,598 - -
P ur c hase of inv est ment s - (729) -
Inves tment earni ngs 4,554 1 ,028 4
Net cha nge i n fa i r val ue of i nves tments (3,873) (378) 123 P ay ments r ec eiv ed fr om loans made to supplier s 1 , 3 6 6 - - Net cash provided by (used for) investing activities 4,645 (79) 127 Net increase (decrease) in cash and cash equivalents 7,810 (6,356) 1,924 Cash and cash equivalents at beginning of year 271,730 66,362 4,431 Cash and cash equivalents at end of year 279,540 60,006 6,355 Reconciliation of cash and cash equivalents to amounts
reported on the Statement of Net Position:

Ca s h and i nves tments 269,684 54,035 4,538
Restricted:

C ash and st r anded inv est ment s r eser v e 4 0 , 2 6 7 - - Cas h a nd i nves tments 14,451 5,068 -
C ash wit h fisc al agent 3 8 4,200 1,817
Les s non-ca s h equi va l ents (44,900) (3,297) -
Cash and cash equivalents at end of year 279,540$ 60,006$ 6,355$ The acco
mpanying notes are an integral part of these financial statements.

PAGE 167

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 29 Governmental
Activities -
Nonmajor Total Internal
Enterprise Enterprise Service
Funds Funds Funds
14,187$ 347,883$ 117,172$
(11,996) (203,428) (39,631)
(7,515) (56,442) (68,385)
- (11,507) -
- 2,939 -
(1,223) (1,223) -
(6,547) 78,222 9,156
123 6,897 1,095
(1,277) (21,367) (1,715)
- 110 -
6,713 6,713 -
107 2,161 -
5,666 (5,486) (620)
(3,288) (57,713) (5,481)
19 77 11
53 444 277
- (2,599) -
- 5,546 -
- (11,314) -
- (12,589) -
(3,216) (78,148) (5,193)
- 2,598 -
- (729) -
368 5,954 165
(202) (4,330) (13)
- 1
,366 -
166 4,859 152
(3,931) (553) 3,495
26,062 368,585 41,815
22,131 368,032 45,310
22,131 350,388 45,311
- 40,267 -
- 19,519 -
- 6,055 -
- (48,197) -
22,131$ 368,032$ 45,311$
PAGE 168

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
30 Annual Comprehensive Financial Report | June 30, 2023 Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Light Off-Street
and Power Water Parking
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:

Opera ti ng i ncome (l os s ) 25,059$ 6,370$ 1,273$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreci a ti on a nd a morti za ti on 37,850 10,326 1,886 Miscellaneous and other revenue (loss) 1,454 1,485 - (Increa s e) decrea s e i n a ccounts recei va bl e (2,351) 485 335 Increase (decrease) in allowance for uncollectible accounts 1,580 495 - Increase (decrease) in due to other funds - - -
(Increa s e) decrea s e i n i nventori es (659) (1,559) - (Increase) decrease in prepaids and other assets 2,456 20 (12) Increase (decrease) in accounts payable and other
a ccrued l i a bi l i ti es (1,161) 45 528
Increa s e (decrea s e) i n unea rned revenue (1,193) - 2 Increase (decrease) in insurance claims pay able - - - Increase (decrease) in compensated absences - - -
Increase (decrease) in deposits payable 354 56 (40)
Increa s e (decrea s e) i n deferred i nfl ows - non-l ea s e rel a ted (12,429) (4,582) (461) (Increa s e) decrea s e i n deferred outfl ows (9,820) (3,550) (344) Increase (decrease) in net OPEB liability 385 199 (2) Increase (decrease) in net pension liability 21,604 7,905 780 Total adjustments 38,070 11,325 2,672
Net cash provided by (used for) operating activities 63,129$ 17,695$ 3,945$ Non-Cash Investing, Capital and Financing Activities
Ga i n (l os s ) on di s pos i ti on of ca pi ta l as s ets (1,411)$ (703)$ -$ Amortization of deferred charges (38) 83 -
Amortization of premiums (discounts) 532 644 - The accompanying notes are an integral part of these financial statements.

PAGE 169

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 31 Governmental
Activities -
Nonmajor Total Internal
Enterprise Enterprise Service
Funds Funds Funds
(8,543)$ 24,159$ 10,397$
1,113 51,175 3,330
(1,223) 1,716 -
(297) (1,828) 60
- 2,075 18
- - 6,822
- (2,218) 98
24 2,488 527
744 156 (740)
(130) (1,321) -
- - (11,291)
- - 666
1,761 2,131 -
(2,510) (19,982) (33,046)
(1,961) (15,675) (27,586)
127 709 92
4,348 34,637 59,810
1,996 54,063 (1,240)
(6,547)$ 78,222$ 9,157$
-$ (2,114)$ -$
- 45 -
- 1,176 -
PAGE 170

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
32 Annual Comprehensive Financial Report | June 30, 2023 Statement of Net Position
Fiduciary Funds
June 30, 2023
Pension
(and Other
Employee Benefit) Private -Purpose
Trust Funds Custodial Funds Trust Funds
Assets:

Cash and cash equivalents 353,315$ 461$ 213$
Cash with fiscal agent - - 80
Short-term inves tments 4,877 - -
Receivables:

Accounts 2 705 -
Pendi ng trade s a les 1,854 - -
Interest 173 - -
Notes r ec eiv able - - 515
Allowanc e for unc ollec t ible not es r ec eiv able - - (515) Total receivables 2,029 705 -
Investments, at fair value:

Government and a gencies 15,344 - -
Corporate obli gat ions 2 0,865 - -
Fixed income mutual fund 13,798 - -
Rea l es tate 12,722 - -
Corporate stocks 39,934 - -
Total investments 102,663 - -
Ca pit al asset s, net - - 214
Total assets 462,884 1,166 507
Liabilities:

Accounts payable and accrued liabilities 59 855 -
Due to other governments - 10 -
Due to bondholders - 916 -
Pendi ng purchases 7,761 - -
Total liabilities 7,820 1,781 -
Net position/(deficit):

Res tri cted for pensions 455,064 - -
Res tri cted for l i bra ry equi pment - 309 -
Held in trust for other purposes - (924) 507
Total net position 455,064$ (615)$ 507$
.

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

PAGE 171

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 33 Statement of Changes in Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2023
Pension
(and Other
Employee Benefit) Private Purpose
Trust Funds Custodial Funds Trust Funds
Additions:

Contributions:

Pl an members 15,570$ -$ -$
Property ta xes - - 6,250
Inter gov ernmental - 1,920 -
Assessment revenue - 112 -
Total contributions 15,570 2,032 6,250
Net investment income:

Inv estment earnin gs 3 4,291 5 -
Interest 2,950 - -
Dividends 1,617 - -
Gross investment income 38,858 5 -
L ess inv est ment expenses (581) - -

Total net investment income 38,277 5 -
Miscellaneous revenues - - 669
Total additions 53,847 2,037 6,919
Deductions:

Benefits paid to par tic ipants 3 4 ,9 7 7 - -
Contributions to City - 33 -
Progra m expens e - 2,895 -
Interest ex pense - 55 -
Statutory pass-through expenses - - 5,275
Administrative expenses 560 8 -
Count y administ r at iv e expenses - - 903
Succ essor agenc y administr ativ e c ost allowance - - 648 Total deductions 35,537 2,991 6,826
Change in net position 18,310 (954) 93
Net position held in trust at beginning of year 436,754 339 414 Net position (deficit) held in trust at end of year 455,064$ (615)$ 507$ .

PAGE 172
(This page intentionally left blank)
PAGE 173

NOTES TO THE

BASIC FINANCIAL

STATEMENTS

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2023
PAGE 174
(This page intentionally left blank)
PAGE 175

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 3
0, 2023 37
Note Index
Note Index ..................................................................................................................................................................... 37 (1) Summary of Significant Accounting Policies .................................................................................... ................... 38 (A) Reporting Entity ....................................................................................................................................................... 38 (B) Basis of Accounting and Measurement Focus .......................................................................................................... 43 (C) Major Funds, Internal Service Funds and Fiduciary Fund Types .............................................................................. 45 (D) Cash Equivalents....................................................................................................................................................... 46 (E) Cash and Investments .............................................................................................................................................. 46 (F) Inventories ............................................................................................................................................................... 47 (G) Advances to Other Funds ......................................................................................................................................... 47 (H) Prepaids .................................................................................................................................................................... 47 (I) Restricted Cash and Investments ............................................................................................................................. 47 (J) Property Held for Resale .......................................................................................................................................... 48 (K) Capital Assets ........................................................................................................................................................... 48 (L) Leases ....................................................................................................................................................................... 48 (M) Subscription-Based Information Technology Agreements (SBITA) (GASB 96, new in fiscal year 2023)................... 49 (N) Insurance Claims Payable ......................................................................................................................................... 49 (O) Compensated Absences ........................................................................................................................................... 49 (P) Net Pension Liability ................................................................................................................................................. 50 (Q) Other Postemployment Benefits (OPEB) .................................................................................................................. 50 (R) Bond Premiums / Discounts / Issuance Costs .......................................................................................................... 50 (S) Deferred Outflows and Inflows of Resources ........................................................................................................... 50 (T) Fund Balance ............................................................................................................................................................ 50 (U) Property Taxes .......................................................................................................................................................... 51 (V) Use of Estimates ....................................................................................................................................................... 52 (W) Interfund Activities ................................................................................................................................................... 52 (X) Endowments ............................................................................................................................................................ 52 (Y) New and Future Accounting Pronouncements ........................................................................................................ 52 (2) Cash and Investments ........................................................................................................................................ 53 (3) Accounts Receivable .......................................................................................................................................... 58 (4) Notes Receivable – Primary Government ........................................................................................................... 59 (5) Due to and from Other Funds ................................................................................................... ......................... 59 (6) Capital Assets ................................................................................................................ .................................... 60 (7) Leases ........................................................................................................................ ....................................... 64 (8) Subscription-Based Information Technology Arrangements (SBITA) ................................................................... 68 (9) Deferred Inflows and Outflows .......................................................................................................................... 70 (10) Long-term Debt ................................................................................................................ ................................. 72 (11) Derivative Instruments ........................................................................................................ .............................. 84 (12) Fund Balance ..................................................................................................................................................... 87 (13) Restricted Net Position – Stranded Investments ................................................................................................. 89 (14) Accumulated Fund Deficits ................................................................................................................................ 90 (15) Excess of Expenditures over Appropriations ....................................................................................................... 92 (16) Pledged Revenue ............................................................................................................................................... 93 (17) Transfers ..................................................................................................................... ...................................... 94 (18) Self-insurance .................................................................................................................................................... 96 (19) Deferred Compensation Plan .................................................................................................... ......................... 98 (20) Pension Plans ................................................................................................................. ................................... 99 (21) Other Postemployment Benefits (OPEB) .......................................................................................................... 111 (22) Commitments and Contingencies ................................................................................................. ................... 116 (23) Restatement of Beginning Net Position ............................................................................................................ 117 (24) Subsequent Events ............................................................................................................. ............................. 117 PAGE 176

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
38 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies
The basic financial statements of the Ci ty 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 polici es of the City are described below. All amounts, unles s otherwise indicated, are expressed in thousands of dollars; and some of the totals may not foot or cross foot due to rounding.
(A) Reporting Entity
The City was incorporated on June 19,1886 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 financially accountable. The City is financially accountable for an organization if the City appoints a voting majority of that organization's governing body, and the City is able to impose its will on that organization or there is a potential for that organization to provide specific fi nancial benefits to or impose specific financial 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 responsibility for the Authorit y. The Authority is reported as an enterprise fund and does not release a separate financial report.

PAGE 177

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 39
(1) Summary of Significant Accounting Policies (Continued) (A) Reporti
ng Entity (Continued)
Blended Component Units (Continued)
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 bl ended with the debt service and capital projects funds.

The PCIC does not release a separate financial report.

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 servic e and capital projects fund. The PPFA does not release a separate financial report.

PAGE 178

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
40 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (A) Reporting Ent
ity (Continued)
Blended Component Units (Continued)
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 wh o 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 tr ust 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 in the fiduciary funds section.

Pasadena Rental Housing Board (PRHB)
The Pasadena Rental Housing Board (PRHB) was established as part of the adoption of a voter-initiated City Charter Amendment (Measure H), which was approved by Pasadena voters at the November 2022 General Municipal Election. Codified as City Charter Article XVIII, Section 1811 of the Charter establishes the PRHB, its composition, duties, authority, and oversight of the Pasadena Fair and Equitable Housing Charter Amendment.

The accompanying statements include PRHB as a custod ial fund in the fiduciary funds section. Additional information is available at https://www.cityofpasadena.net/commissions/pasadena-rental-housing-board.

Discretely Presented Component Un
its
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.

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/.

PAGE 179

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 41
(1) Summary of Significant Accounting Policies (Continued) (A) Reporti
ng Entity (Continued)
Discretely Presented Component Units (Continued)
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 C
ommunity Access Corporation Board (PCAC)
PCAC was created by the City Counc il in July 1983 and esta blished 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 participat ing 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.

PAGE 180

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
42 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (A) Reporting Entity (Continued)
Jointly Governed Organizati
ons (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).

Verdugo Communities Joint Powers Authority (AVCJPA)
The City is a party to, and administra tor for, the AVCJPA. This separate entity is a vehicle for the six-member agencies: cities of Burbank, Glendale, La Cañada Flintridge, Pasadena, South Pasadena, and County of Los Angeles 5th District (La Crescenta-Montrose) to coordinate regional and cooperative planning, primarily in transportation and determine how to prioritize regional transportation projects and the allocation of Measure M funds. The JPA is financially accountable to the member agencies and is governed by a Boar d of Directors. The JPA has its own audit of financial statements and is available at https://avcjpa.org/.

PAGE 181

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 43
(1) Summary of Significant Accounting Policies (Continued) (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 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 underlyin
g accounting system of the City is organized and operated based on separate funds, each of which is a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues and ex penditures 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 nonmajor funds in the aggregate for gove rnmental 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.

PAGE 182

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
44 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (B) Basis of Accou
nting and Measurement Focus (Continued)
Governmental Funds
In the fund financial statements,
governmental 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 the following revenue availability periods:
• Reimbursement-type grants 90 days
• All other governmental fund revenues 60 days
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 cu rrent liabilities are gene rally 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.

Noncurrent 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 noncurrent receivables are deferred until they become current receivables. Noncurrent 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 noncurrent 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.

PAGE 183

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 45
(1) Summary of Significant Accounting Policies (Continued) (B)
Basis of Accounting and Measurement Focus (Continued)
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 delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurre nt) associated with their ac tivity are included on their balance sheets. Proprietary funds type operating stat ements 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 Fu nd, Off-Street Parking Facilities Fund, a nd the City’s internal service funds are charges to customers for sales and services. Operating expenses for the enterprise and internal service funds include the cost of sales and services, administrative expenses, and depreciation/amortization on capital assets.

All revenue and expenses not meeting this definition are reported as nonoperating 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 trust funds, custodial funds, and private-purpose trust funds.

Employee benefit trust funds account for resources required to be held in trust for the members and beneficiaries of benefit and contribution plans. Private-purpose trust funds account for receipt of incremental property tax and payment of enforceable obligations (debts) of the former redevelopment agency. (C) Major Funds, 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.

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

Project Management Capital Projects Fund – Accounts for 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 for the payment of interest and principal of the pension bonds and other city-wide obligations.

PAGE 184

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
46 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (C) Major Funds, I n
ternal Service Funds and Fiduciary Fund Types (Continued) The City reports the following major proprietary funds:

Light and Power Fund – Accounts for the operations of th e 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 for 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 for 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, work ers’ compensation, general liability, and the 3-1-1 ca ll center to other departments or agencies of the City.

The City reports the following fiduciary fund types:

Pension (and Other 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 Assessment District, (2) Library equipment, (3) Workforce Innovation and Opportunity Act (WIOA), (4) Open Space Assessment District, and (5) Pasadena Rental Housing Board.

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. (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 deposits, 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.

PAGE 185

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 47
(1) Summary of Significant Accounting Policies (Continued) (E) Cash
and Investments (Continued)
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 are carried at the lower of weighted average cost or market computed on a first-in/first-out basis dependin g on the type of inventory. There are three types of inventories, those held for consumption in operatio ns, those capitalized, and inventory held for resale.

Inventories held by the Fleet Maintenance 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.
(I) Restricted Cash and Investments
The City considers all cash and investments from bond pr oceeds 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.

PAGE 186

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
48 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (J) Property Held for Resale
Property held for resale repr esents
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 infrastructure, greater than $10 are capitalized and recorded at cost or at the estimated fair value of the assets at the time of acquisition where complete historical records have not been maintained.

Contributed capital assets, works of art, and capital assets received in servic e concession agreements are reported at acquisition value. The cost s of normal maintenance and repairs th at 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 plant 20 to 40 years Source of supply 20 to 50 years Transmission plant 25 to 40 years Pumping plant 10 to 50 years Distribution plant 20 to 40 years Treatment plant 10 to 20 years General plant 10 to 40 years Transmission and distribution plant 10 to 80 years Equipment 4 to 10 years General plant 6 to 50 years Lease assets Equi pment 4 to 10 years
Lease assets
Subscription assets
Subscription assets
Buildings and improvements 20 to 50 years
Machi nery and equi pment 2 to 20 years
Infrastructure 8 to 200 years
Lease assets
Subscription assets
Light and Power Fund Water Fund
Shorter of the us eful life of the
underly ing asset or the lease term
Shorter of the us eful life of the
underlying asset or the subscription
term
Shorter of the useful life of the
underlying asset or the lease term
Shorter of the useful life of the
underlying asset or the subscription
term
All Other Funds
Shorter of the us eful life of the
underly ing asset or the lease term
Shorter of the us eful life of the
underlying asset or the subscription
term
(L) Leases
Leases are financings of the ri
ght 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.

PAGE 187

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 49
(1) Summary of Significant Accounting Policies (Continued) (M) Subscrip
tion-Based Information Technology Agreements (SBITA) (GASB 96, new in fiscal year 2023) In accordance with GASB Statement No. 96, Subscription-Based Information Technology Agreements (SBITA), a government should recognize a right-to-use subscrip tion asset—an intangible asset—and a corresponding subscription liability. A government should recognize the subscription liability at the commencement of the subscription term, which is when the subscription asset is placed into service. The subscription liability should be initially measured at the pr esent value of subscription payments expected to be made during the subscription term. Future subscription payments should be discounted using the interest rate the SBITA vendor charges the government, which may be implicit, or the government’s incremental borrowing rate if the interest rate is not readily determinable. A government should recognize amor tization of the discount on the subscription liability as an outflow of resources (for example, interest expense) in subsequent financial reporting periods. (N) Insurance Claims Payable
Insurance claims payable are claims and judgments recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated, net of insurance coverage. Such claims, including an estimate for claims incurred but not reported at ye ar end, are recorded as liabilities in the workers’ compensation and general liability inte rnal service funds. The City record s a liability for material litigation, judgments, and claims on a case-by-case basis when it is probable a material liability has been incurred on or before June 30, and the probable amount of loss can be reasonably estimated. Detailed notes discuss excess liability insurance covers claims greater than the self-insurance thresholds. (O) Compensated Absences
The City accounts for compensated absences including accumulated va cation, floating holidays, and compensatory time-off, and certain si ck 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 converte d 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.

PAGE 188

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
50 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (P) 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. (Q) Other Postemployment Bene
fits (OPEB)
OPEB are benefits (other than pensions) the City provid es to retired employees. 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 the 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 implementation 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. (R) Bond Premiums / Discounts / Issuance Costs
For governmental-wide and proprietary 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.
(S) 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. The City has four items that qualify for reporting in this category: deferred amounts for bond refunding, pensions, OPEB, and leases.
(T) 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.

PAGE 189

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 51
(1) Summary of Significant Accounting Policies (Continued) (T) Fund Bala
nce (Continued)
• 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 th e 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.

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. (U) 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:

Li en Ja nua ry 1
Levy July 1 to June 30
Due Nov ember 1 - 1 st installment
February 1 - 2nd installment
C ollec tion Dec ember 1 0 - 1 st installment
Apr il 1 0 - 2 nd installment
Property taxes
on the secured roll are due in two installments: on November 1 and February 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.

PAGE 190

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
52 Annual Comprehensive Financial Report | June 30, 2023 (1) Summary of Significant Accounting Policies (Continued) (V) 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 assets, 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. (W) Interfund 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.
(X) 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.
(Y) New and Future Accounting Pronouncements
In
fiscal year ended June 30, 2023, the City adopted GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

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
99 Omnibus 2022 2023 and 2024
100 Accounting Changes and Error Corrections— an
amendment of GASB Statement No. 62 2024
101 Compensated Absences 2025
PAGE 191

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 53
(2) Cash and Investments
Primary Govern
ment
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of net pos ition:

Cas h and i nves tments 645,935$
Rest r ic t ed c ash and inv est ment s 8 7 , 5 1 2
Fiduciary funds:

Cash and cash equivalents 353,988
Total cash and investments 1,087,435$
Cash on hand 57$
Deposits with financial institutions (2,774)
Investments 1,090,152
Total cash and investments 1,087,435$
Cash and investments as of June 30, 2023 consist of the following:

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 Issuer Local Agency Bonds Yes 5 years None None
US Tre asury Obligations Ye s 5 ye ars None N one
US Agency Securities Yes 5 years None None
Banker's Acceptance Yes 180 days 40% 30%
Commercial Paper Yes 270 days 15% 10%
N e gotiable Ce rtificate s of De posit Ye s 5 ye ars 30% N one Repurchas e 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 me nts or inve stm e nt policy re quire m e nts, whiche ve r is more re strictive .

PAGE 192

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
54 Annual Comprehensive Financial Report | June 30, 2023 (2) Cash and Investments (Continued)
Investments Authorized by De
bt 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 truste e. 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 turi ty
US Treasury Obligations None
US Agency Securities None
Ba nker's Accepta nce 360 da ys
Commerci a l Pa per 270 da ys
Money Market Mutual Funds N/A
Inves tment Contra cts 20-30 yea rs
Pre-refunded Municipal Bonds None
Repurchase Agreements 1 y ear
Local Agency Investment Fund (LAIF) N/A
General 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 term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the 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 76,560$ 23,378$ 13,706$ 39,476$ -$ Supernationals 27,819 4,732 13,854 9,233 - Federal Agency Securities 420,614 92,758 117,397 183,316 27,143 Municipal Bonds 30,396 9,481 12,548 7,609 758 Certificate of Deposit 1,224 - 1,224 -
California Asset Management Program 81,074 81,074 - - - Money Market Funds 1 1 - - -
Commercial Paper Disc 14,541 14,541 - - - State Investment Pool 6,243 6,243 - - -
US Treasury 55,988 24,119 27,801 4,068 - Held by Bond Trustee:

Federal Agency Securities 11,694 - - 5,099 6,595 Money Market Funds 1,119 1,119 - - -
Held by Pension Section 115 Trustee:

Mutual Fund 12,192 12,192 - - -
Deferred Compensation Plan:

Mutual Funds 350,687 350,687 - - -
Total 1,090,152$ 620,326$ 186,530$ 248,801$ 34,496$ Remaining Maturity (in Months)
PAGE 193

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 55
(2) Cash and Investments (Continued)
Disclosures
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 Exempt
Corporate Bonds 76,560 $ A 13,590$ 4,379$ 58,591$ -$ -$ Supernationals 27,819 A 27,819 - - - - Federal Agency Securities 420,614 N/A - - - - 420,614 Municipal Bond 30,396 N/A 2,019 27,296 1,081 - - Certificate of Deposit 1,224 A - - - 1,224 - California Asset Management Program 81,074 N/A - - - 81,074 - Money Market Funds 1 N/A - - - 1 - Commercial Paper Disc 14,541 AA - - 14,541 - - State Investment Pool 6,243 N/A - - - 6,243 - US Treasury 55,988 N/A - - - - 55,988 Held by Bond Trustee:

Federal Agency Securities 11,694 A - - - - 11,694 Money Market Funds 1,119 A 1,119 - - - - Held by Pension Section 115 Trustee:

Mutual Fund 12,192 N/A - 12,192 - - -
Deferred Compensation Plan:

Mutual Fund 350,687 N/A - 350,687 - - -
To
tal 1,090,152$ 44,547$ 394,554$ 74,213$ 88,542$ 488,296$ Rating as of Year-End
Balance at
June 30, 2023
Concentration
of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California 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:

Investment Reported
Issuer Ty pe Amount
Federal Home Loan Bank Federal Agency Securities 221,600$ Federal Home Loan Mortgage Bank Federal Agency Securities 114,621 Federal Farm Credit Bank Federal Agency Securities 81,580 U.S. Treasury U.S. Tresury 55,989
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). The market value of the pledged securities in the collateral pool must equal at least 110% of the PAGE 194

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
56 Annual Comprehensive Financial Report | June 30, 2023 (2) Cash and Investments (Continued)
Disclosure
s Relating to Credit Risk (Continued)
total amount deposited by the public agenci es. 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.

The
City has no uncollateralized cash at June 30, 2023. As of June 30, 2023, the City’s deposits with fin ancial institutions
in excess of federal depository insurance limits were $59,900 held in accounts collateralized in accordance with California law described above.

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 re porting government.

California
Asset Management Program CAMP
CAMP is a program created through 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 total amount invested by all public agencies in CAMP was $1 5,900,000 ($15 .9 billion) as of June 30, 2023, respectively. Of the amount invested in CAMP, 29.1 percent were invested in medium-term and short-term notes and asset-backed securities at June 30, 2023. The average maturity of CAMP investments was 28 days to 52 days as
of
such dates.

Inve
stment 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 is a participant in the California Asset Mana gement Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and establish under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its Participants to invest certain proc eeds of debt issues and surplus funds. CAMP’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The City reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share in accordance with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, requirements. On June 30, 2023, the CAMP pool had an aver age maturity of 26 days and it exempt from the fair value hierarchy.

PAGE 195

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 57
(2) Cash and Investments (Continued)
The City has the following recurring fair value measurements as of June 30, 2023:

Measured by Fair Value
Not Subject to
Fair Value
Hierarchy 123 T otal
Corpora te Bonds -$ -$ 76,560$ -$ 76,560$
Supernationals - - 27,819 - 27,819
F
edera l Agency Securi ti es - - 420,614 - 420,614 Municipal Bond - - 30,396 - 30,396
C
er tificate of Deposit 1, 22 4 1,224
California Asset Management Program 81,074 - - - 81,074 Mo
ne y Ma rke t Funds 1 - - - 1
C ommer c ial P aper Disc - - 14,541 - 14,541
S
ta te Inves tment Pool 6,243 - - - 6,243
US Treasury - - 55,988 - 55,988
H
eld by Bond Trustee:

Federal Agency Securi ti es - - 11,694 - 11,694

Mone y Ma rket Funds 1,119 - - - 1,119
Held by OPEB Trustee:

Mutual Fund - - - - -
Held by P ension Sec tion 1 15 Tr ustee:

Mutual Fund - - 12,192 - 12,192
D
eferred Compens a ti on Pl a n:

Mutual Fund - - 350,687 - 350,687
Total 89,661$ -$ 1,000,491$ -$ 1,090,152$
Level
(Balance of page intentionally left blank)
PAGE 196

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
58 Annual Comprehensive Financial Report | June 30, 2023 (3) Accounts Receivable
As of June 30,
2023, accounts receivable is categorized as follows:

Special Revenue Capital Projects
Nonmajor
Housing Project Governmental Internal
General Successor Management Funds Service Funds Total
Governmental Activities:

Accounts receivable 3,892$ -$ 4,775$ 9,619$ 104$ 18,390$ Accrued revenue receivable 22,723 - 4 6,149 15 28,891 Interest receivable 390 9 - 589 120 1,108 Paramedics receivable 5,477 - - - - 5,477
Utility receivable 2,512 - - 949 - 3,461
34,994 9 4,779 17,306 239 57,328 Less: allowance for uncollectible
amounts (3,523) - - (221) - (3,744)
Total 31,471 9 4,779 17,085 239 53,583 Nonmajor
Light and Off-Street Enterprise
Power Water Parking Funds Total
Business-type Activities:

Accounts receivable 1$ 330$ 333$ 92$ 756$ Accrued revenue receivable 15,533 5,666 198 1 ,582 22,979 Interest receivable 868 281 42 63 1,254
Paramedics receivable - - - - -
Utility receivable 20,025 6,362 - 1,786 28,173
36,427 12,639 573 3,523 53,162
Less: allowance for uncollectible
amounts (6,243) (1,958) - (667) (8,868)
Total 30,184$ 10,681$ 573$ 2,856$ 44,294$ PAGE 197

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 59
(4) Notes Receivable – Primary Government
The
notes receivable in the governmental activities amounted to $106,836 at June 30, 2023. Due to the uncertainty of
their collectability at June 30, 2023, the City has recorded an allowance for uncollectible long-term receivables of $93,331,
resulting in a net balance of $13,505. $61,269 consisted of primarily Housing and Community Development loans,
which arose from the sale of land to project de velopers and other agencies, and the provision of loan assistance
under the City’s affordable housing programs, subj ect to approved redeve lopment plans. $27,217 consisted
of loans that the former re development 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 fund
ed 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%.

In
January 2009, Light and Power utiliz ed $80,000 of Reserves for Stranded Investment and in return received Subor
dinated Notes totaled $70,000 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 used to stabilize future energy costs. The balance of the notes as of June 30, 20 23 is $74.
(5) Due to and from Other Funds
Current
interfund receivable and payable balances at June 30, 2023 are as follows:

Due from Other Funds
Due to Other Funds General Fund
Nonmajor Governmental Funds 8,826$
Internal Service Funds 37,008
Total 45,834$
The
above balances are due to short-term payables between funds and negative cash balances at the end of the fiscal year.
(Balance of page intentionally left blank)
PAGE 198

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
60 Annual Comprehensive Financial Report | June 30, 2023 (6) Capital Assets
Primary
Government
Capital asset activity for the year ended June 30, 2023 is as follows:

Balance at
June 30, 2022 Balance at
Governmental Activities: Restated (1) Addi ti ons Deletions Transfers June 30, 2023 Capital assets, not being depreciated/amortized:

Land 87,321 $ 204$ -$ -$ 87,525$
Construction in progress 31,409 33,134 (1,144) (9,290) 54,109 Total capital assets, not being
depreciated/amortized 118,730 33,338 (1,144) (9,290) 141,634 Capital assets being depreciated/amortized:

Lease asset - land 54 - (54) -
-
Buildings and improve me nts 307,723 - - - 307,723 Lease asset - buildings 4,371 420 (407) - 4,384
Machi nery and equi pment 88,033 5,875 (1,691) 2,605 94,822 Lease asset - equi pment 715 431 - - 1,146 Subscription assets 7,537 1,753 - - 9,290 Infrastructure 333,327 - - 6,716 340,043
Total capital asse ts, be ing
depreciated/amortized 741,760 8,479 (2,152) 9,321 757,408 L e ss accumulate d de pre ciation/am ortization:

Lease asset - land (12) (4
2) 54 - -
Buildings and improve me nts (154,064) (5,660) - - (159,724) Lease asset - buildings (925) (962) 407 - (1,480)
Machi nery and equi pment (53,367) (6,756) 1,546 (31) (58,608)
Lease asset - equi pment (245) (298) - - (543) Subscription assets - (1,692) - - (1,692)
Infrastructure (126,533) (7,078) - - (133,611)
Total accumulate d de pre ciation/am ortization (335,146) (22,488) 2,007 (31) (355,658) Total capital asse ts, be ing
depreciated/amortized, net 406,614 (14,009) (145) 9,290 401,750 Govermental activites capital assets, net 525,344$ 19,329$ (1,289)$ - $ 543,384$ (1)
The beginning balance was restated to add the right-to-use subscription assets due to the implementation of GASB Statement No. 96, Subscription-Based Information Technology Arrangements (GASB 96).

PAGE 199

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 61
(6) Capital Assets (Continued)
Primary Govern
ment (Continued)
During the year, governmental activities received proceeds of $69 from the disposal of capital assets and incurred a net loss on disposal of $175.

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

General Government 6,481$
Public Safety 1,941
Transportation 2,023
Health 206
Culture and Leisure 1,944
Com munity De ve lopme nt 6,563
Computing and Communication 1,663
Building Mainte nance 10
Fleet Maintenance 1,488
Fleet Repair and Maintenance 76
Workers' Compensation 2
Ge ne ral L iability 79
311 Call Center - Citizen Service Center 12
Total 22,488$
During the year, governmental activiti es recognized $9,290 in subscription assets and $1,693 in accumulated amortization, or $7,597 in net subscription assets as a result of the implementation of GASB 96.

PAGE 200

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
62 Annual Comprehensive Financial Report | June 30, 2023 (6) Capital Assets (Continued)
Primary Government (Continued)
Balance at
June 30, 2022 Adjustments Balance at
Business-type Activities: Restated (1) (2) Addi ti ons Deletions Transfers June 30, 2023 Capital assets not being depreci ated/amortized:

Land 14,685$ -$ -$ -$ 1$ 14,686 $
Construction in progress 81,996 - 52,991 - (60,422) 74,565 Total capital assets, not bei ng
depreciated/amortized 96,681 - 52,991 - (60,421) 89,251 Capital assets being depreciated/amortized:

Buildings and improvements 142,289 - - (3,498) 1,028 139,819 Lease asset - buildings 2,239 564 2,149 - - 4,952 Utility lines, machine ry and e quipm ent 1,253,608 - 3,409 (23,030) 59,393 1,293,380 Lease asset - equi pment 32 - 12 (9) - 35
Subscripti on assets 5,814 - 1,010 - - 6,824
Total capital asse ts, being
depreciated/amortized 1,403,982 564 6,580 (26,537) 60,421 1,445,010 L ess accumulate d de preciation/am ortization:

Buildings and improvements (70,693) - (3,810) 3,346 - (71,157) Lease asset - buildings (958) (423) (1,386) - - (2,767) Utility lines, machine ry and e quipm ent (610,113) - (44,381) 21,019 - (633,475) Lease asset - equi pment (7) - (12) 2 - (17)
Subscripti on assets - - (1,586) - - (1,586)
Total accum ulate d
depreciation/amortization (681,771) (423) (51,175) 24,367 - (709,002) Total capital asse ts, being
depreciated/amortized, net 722,211 141 (44,595) (2,170) 60,421 736,008 Business-type activites capital assets, net 818,892$ 141$ 8,396$ (2,170)$ - $ 825,259$ (1) The beginning balance was restated to
add the subscription assets due to the implementation of GASB 96. (2) Lease asset - buildings was adjusted due to reevaluation for the year ended June 30, 2023.

PAGE 201

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 63
(6) Capital Assets (Continued)
Primary Government (Continued)
During the year, business-type activities received proceeds of $77 from the disposal of capital assets and incurred a loss
on disposal of $2,038.

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

Electric 37,850$
Water 10,326
Refuse 935
Pa
rking 1,886
T
elecommunication 178
To
tal 51,175$
During
the year, business-type activities recognized $6 ,825 in subscription assets and $1,586 in accumulated amortization or $5,239 in net subscription assets as a result of the implementation of GASB 96.

Fiduciary Funds – Private-Purpose Trust Fund
Balance at Balance at
Fiduciary Funds June 30, 2022 Additions Deletions June 30, 2023 Capital assets not depreciated:

Land 214$ - $ - $ 214$
Total cost of nondepreciable assets 214 - - 214
Capital assets, net 214$ - $ - $ 214$
PAGE 202

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
64 Annual Comprehensive Financial Report | June 30, 2023 (7) 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.

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 lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

As
lessor, the City has thirteen (13) applicable leases that qualify for reporting as of June 30, 2023. The lease terms range from 24 to 120 months for the intangible right-to-use land, land improvements, buildings, and infrastructure, respectively. Most of these leases incl ude periodic adjustments to the lease amounts at determined intervals. The fixed monthly lease payment ranges from $1 to $39, respectively, with the incremental borrowing rate ranging from

0.19% to 1.04%. For the year ended June 30, 2023, 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 leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

Changes in lease receivable for the year ended June 30, 2023, are as follows:

Balance at Balance at
June 30, 2022 Additions Deletions June 30, 2023
Governmental Activities:

Lease receivable 2,437$ 82$ (800)$ 1,719$ Deferred inflow of resources 2,383 80 (822) 1 ,641
Business-type Activities:

Lease receivable 1,300 327 (444) 1
,183
Deferred inflow of resources 1,288 327 (441) 1 ,174
PAGE 203

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 65
(7) Leases (Continued)
City as Les
sor (Continued)
During the year ended June 30, 2023, the City recognized the lease revenues and interest revenues as follows:

Governmental Business-type
Acti vi ti es Acti vi ti es
Amortization of deferred inflow of resources 822$ 433$ Short-term rental revenues 4,666 -
Total le ase re ve nue s 5,488$ 433$
Lease interest revenues 10$ 11$
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 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 useful life, which is the shorter of the lease 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 has seventeen (17) applicable leases that qualify for report ing as of June 30, 2023. During the fiscal year, the City entered into nine (9) lease agreements. The lease terms range from 9 to 108 months for the intangible right-to-use buildings and equipment. Most of these leases include periodic adjustments to the lease amounts at determined intervals. The fixed monthly lease payment ranges from $0.4 to $77 with the incremental borrowing rate ranging from 0.17% to 3.31%. For the year ended June 30, 2023, 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 leases and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with capital assets (see Note 6).

PAGE 204

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
66 Annual Comprehensive Financial Report | June 30, 2023 (7) Leases (Continued)
City as Les
see (Continued)
Changes in lease asset and lease liability for the year ended June 30, 2023 are as follows:

Balance at Balance at
June 30, 2022 Adjustments (1) Additions Deletions June 30, 2023 Governmental Activities:

Lease assets
Land 54$ -$ -$ (54) $ -$
Buildings 4,371 - 420 (407) 4,384
Equipment 715 - 431 - 1,146
Total lease assets 5,140 - 851 (461) 5,530
Accumulated amortization (1,183) - (1,301) 461 (2,023) Tot al le ase asse t s, ne t 3,957$ -$ (450) $ - $ 3,507$ Lease liability 4,024$ -$ 851 $ (1,234)$ 3,641$ Business-type Activities:

Lease assets
Buildings 2,239$ 564$ 2,149 $ - $ 4,952$ Equipment 32 - 11 (8) 35
Tot al le ase asse t s 2,271 564 2,160 (8) 4,987 Accumulated amortization (965) (423) (1,398) 2 (2,784) Tot al le ase asse t s, ne t 1,306$ 141$ 762$ (6)$ 2,203$ Lease liability 1,376$ 141$ 2,160$ (1,251) $ 2,426$ (1) Lease asset –
buildings was adjusted due to reevaluation for the fiscal year ended June 30, 2023.

During the year ended June 30, 2023, the City recognized the lease expenses and interest expenses as follows:

Governmental Business-type
Activities Activities
Amortization of lease assets 1,301 $ 1,398$
Other lease (non-GASB 87) expenses 955 464
Total le ase e xpe nse s 2,256$ 1,862$
Lease i nterest expens es 40$ 12$
Other l ease (non-GASB 87) i nterest expenses 78 49 Total le ase inte re st e xpe nse s 118$ 61$
PAGE 205

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 67
(7) Leases (Continued)
City
as Lessee (Continued)
As of June 30, 2023, the City had minimum principal and interest payment requirements for its leasing activities with a
remaining term in excess of one year, as follows:

Fiscal Year Principal Interest Total Payments
2024 992$ 96$ 1,088$
2025 595 71 666
2026 534 49 583
2027 484 27 511
2028 367 8 375
2029 - 2030 669 7 676
Total 3,641$ 258$ 3,899$
Fiscal Year Principal Interest Total Payments
2024 848$ 49$ 897$
2025 456 33 489
2026 470 16 486
2027 487 3 490
2028 165 - 165
Total 2,426$ 101$ 2,527$
Governmental Activities
Business-type Activities
(Balance
of page intentionally left blank)
PAGE 206

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
68 Annual Comprehensive Financial Report | June 30, 2023 (8) Subscription-Based Information Technology Arrangements (SBITA) A
Subscription-Based Information Technology Arrangement (SBITA) is defined as a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combinatio n with
tangible capital assets (the underlying IT assets), as specified in the contract for a period of greater than on e year
in an exchange or exchange-like transaction.

In May 2020, Governmental Accounting Standa rd Board (GASB) issued Statement No. 96, Subscription-Based Informati
on Technology Arrangements (SBITA) (GASB 96). GASB 96 provides guidance on the accounting an d financial
reporting for SBITA for government end users. The requirements GASB 96 are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. City of Pasadena adopted GASB 96 on the Annual Comprehensive Financial Report for the period of July 1, 2022, to June 30, 2023.

The City recognizes a SBITA liability and an intangible right-to-use asset in the government-wide financial statements.

The
City recognizes SBITA liabilities with an initial, individual value of $10 or more.

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

Key
estimate and judgements related to SBITA include how the City determines (1) the discount rate it uses to discou
nt the expected SBITA payments to present value, (2) SBITA term, and (3) SBITA payments. • The
City uses its estimated incremental borrowing rate as the discount rate for SBITA. • The
SBITA term includes the noncancellable period and periods covered by an option to extend if it is reasonably
certain that the government or SBITA vendor will exercise that option.

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

SBITA assets are reported with the other capital assets and SBITA liabilities are reported with long-term debt on the statement of net position.

All SBITAs were recognized as having an inception date as of July 1, 2022, or after. On June 30, 2023, the City has forty-eight (48) qualifying SBITAs under GASB 96.
• The SBITAs include a range of options to extend the SBITA term for a period of one to eight years with the final extension period ending June 30, 20

30. • The
City is required to make annual principal and in terest payments between $9 and $691. The City is utilizing
a range of incremental borrowing rates between 1.70%-3.30%.

PAGE 207

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 69
(8) Subscription-Based Information Technology Arrangements (SBITA) (Continued) The subscripti
on assets and subscription liability for the year ended June 30, 2023, are as follows:

Balance at
June 30, 2022 Balance at
Governmental Activities: Restated (1) Additions Deletions June 30, 2023 Subscription assets 7,537$ 1,753$ -$ 9,290$ Accumulated amortization - (1,692) - (1,692)
Total subscription assets, net 7,537$ 61$ - $ 7,598$ Subscription liability 6,052$ 1,733$ (1,968)$ 5,817$ Business-type Activities:

Subscription assets 5,814 $ 1,010$ -$ 6,824$ Accumulated amortization - (1,586) - (1,586)
Total subscription assets, net 5,814$ (576)$ -$ 5,238$ Subscription liability 5,086$ 1,011$ (1,327)$ 4,770$ (1) The beginning balance was restated due to the implementation of GASB 96.

SBITA principal
and interest payments to maturity are as follows:

Fiscal Year Principal Interest Total Payments
2024 2,233$ 158$ 2,391$
2025 1,352 101 1,453
2026 1,191 61 1,252
2027 743 25 768
2028 267 6 273
2029 - 2030 31 - 31
Total 5,817$ 351$ 6,168$
Fiscal Year Principal Interest Total Payments
2024 1,341$ 116$ 1,457$
2025 853 86 939
2026 821 64 885
2027 796 44 840
2028 516 25 541
2029 - 2030 442 16 458
Total 4,770$ 351$ 5,120$
Business-type Activities
Governmental Activities
PAGE 208

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
70 Annual Comprehensive Financial Report | June 30, 2023 (9) Deferred Inflows and Outflows
Primary Government
Deferred outflows on the government-wide statement of net position consist of the following at June 30, 2023:

Govermental Activities Balance at Balance at
June 30, 2022 Increase Decrease June 30, 2023
2015A Refunding COP Deferred Charges 3,844$ -$ (246)$ 3,598$ 2020A Refunding POB Deferred Charges 11,759 - (515) 11,244 2020B Refunding POB Deferred Charges 5,569 - (352) 5,217 GASB68 Contribution Subsequent to Measurement Date 54,426 58,726 (54,426) 58,726 GASB68 Net Difference on Pension Plan Investments - 64,621 - 64,621 GASB68 Change of Assumptions 2,069 36,010 (2,069) 36,010 GASB68 Difference in Experience 3,795 1,725 (3,795) 1,725 GASB75 Net Difference on Pension Plan Investments 173 147 (173) 147 GASB75 Change of Assumptions 8,321 5,330 (8,322) 5,329 GASB75 Difference in Experience 629 556 (629) 556 FPRS Net Difference on Pension Plan Investments 6,359 5,594 (6,359) 5,594 96,944$ 172,709$ (76,886)$ 192,767$
Business-type Activities Balance at Balance at
June 30, 2022 Increase Decrease June 30, 2023
1998 Electric Bonds Deferred Charges 108$ -$ (108)$ -$ 2008 Electric Bonds Deferred Charges 802 - (53) 749 2003 Water Bonds Deferred Charges 66 - (66) -
GASB68 Contribution Subsequent to Measurement Date 11,376 11,843 (11,376) 11,843 GASB68 Net Difference on Pension Plan Investments - 13,342 - 13,342 GASB68 Change of Assumptions - 6,812 - 6,812
GASB68 Difference in Experience 182 - (182) -
GASB75 Net Difference on Pension Plan Investments 43 38 (43) 38 GASB75 Change of Assumptions 2,086 1,375 (2,086) 1,375 GASB75 Difference in Experience 158 142 (158) 142
14,821$ 33,552$ (14,072)$ 34,301$
Deferred inflows on the
government-wide statement of net position consist of the following at June 30, 2023:

Governmental Activities
Balance at Balance at
June 30, 2022 Increase Decrease June 30, 2023
GASB68 Change of Assumptions 244$ 57$ (244)$ 57$ GASB68 Difference in Experience 2,808 7,887 (2,808) 7,887 GASB68 Net Difference on Pension Plan Investments 129,607 - (129,607) - GASB75 Change of Assumptions 19,124 17,201 (19,124) 17,201 GASB75 Difference in Experience 2,767 1,782 (2,767) 1,782 GASB87 Lease Related 2,383 80 (822) 1,641
156,933$ 27,007$ (155,372)$ 28,568$
PAGE 209

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 71
(9) Deferred Inflows and Outflows (Continued)
Primary Government (Continued)
Business-type Activities Balance at Balance at
June 30, 2022 Increase Decrease June 30, 2023
2019 Electric Bonds Deferred Gain 417$ -$ (200) $ 217$ 2021 Water Bonds Deferred Gain 1,629 - (149) 1
,480
GASB68 Change of Assumptions - - - -
GASB68 Difference in Experience 942 2,776 (942) 2
,776
GASB68 Net Difference on Pension Plan Investments 27,781 - (27,781) -

GASB75 Change of Assumptions 4,794 4,437 (4,794) 4,437 GASB75 Difference in Experience 694 459 (694) 4
59 G
ASB87 Lease Related 1,288 327 (441) 1
,174
37,545$ 7,999$ (35,001)$ 10,543$
In
accordance 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 313$
Public Safety 197
Health 970
Building Services 4
Transportation 62
Parking 1
Housing and Community Development 3,058
Project Management 1,651
Total unavailable revenues 6,256$
PAGE 210

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
72 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt
Primary Government
Changes in long-term debt for the year ended June 30, 2023 are as follows:

Restated (1) Due in
Balance at Balance at Due within More than
Governmental Activities: June 30, 2022 Additions Reductions June 30, 2023 One Year One Year Notes payable:

Notes from Di rect
Borrowings (Rose Bowl) 439$ - $ (17)$ 422$ 17$ 405$ Section 108 4,200 - (300) 3,900 300 3,600 Total Notes payable 4,639 - (317) 4,322 317 4,005 Pension bonds:
2015 Taxable Pension Obligation Bonds 4,880 - (1,340) 3,540 1,380 2,160 Bond Premiums/(Discount) (48) - 17 (31) - (31) 2020 Taxable Pension Obligation Bonds 128,000 - (1,015) 126,985 1,030 125,955 Total pension bonds 132,832 - (2,338) 130,494 2,410 128,084 Certificate s of participation:
2015 COP Series A Refunding 2008 COP 46,765 - (2,195) 44,570 2,310 42,260 Bond Premiums/(Discount) 4,101 - (263) 3,838 - 3,838 Total ce rtificate s of participation 50,866 - (2,458) 48,408 2,310 46,098 Loan payable 4,937 - (955) 3,982 971 3,011 Total governmental activities
long-term debt 193,274$ -$ (6,068)$ 187,206$ 6,008$ 181,198$ (1) The beginning balance was restated to add existing subscription assets due to the implementation of GASB 96.

PAGE 211

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 73
(10) Long-term Debt (Continued)
Primary
Government (Continued)
Restated (1) Due in
Balance at Balance at Due within More than
Business-type Activities: June 30, 2022 Reductions June 30, 2023 One Year One Year Revenue bonds:
2013A Electric Revenue Refunding Bonds 67,460$ (2,015)$ 65,445$ 2,015$ 63,430$ 2016A Electric Revenue Refunding Bonds 105,735 (3,170) 102,565 3,325 99,240 2017A Water Revenue Refunding Bonds 11,960 (610) 1 1,350 645 10,705
2019A Electric Revenue Refunding Bonds 6,430 (2,040) 4,390 2 ,145 2,245
2020A Water Revenue Refunding Bonds 28,380 (965) 2 7,415 1,000 26,415
2021A Water Revenue Refunding Bonds 22,325 (1,150) 21,175 1,150 20,025 Total Water and Power 242,290 (9,950) 232,340 10,280 222,060 2008 Paseo Colorado Taxable Revenue Bonds 20,400 (900) 1 9,500 900 18,600
Bond Premiums/(Discounts) 38,592 (1,850) 36,742 - 36,742
Total revenue bonds 301,282 (12,700) 288,582 11,180 277,402 Loan payable 1,932 (464) 1
,468 4
76 992
Total business-type activities long-term debt 303,214$ (13,164)$ 290,050$ 11,656$ 278,394$ (1) The beginning balance was restated to add existing subscription assets due to the implementation of GASB 96.

PAGE 212

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
74 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Discretely Presented
Component Units
Changes in discretely presented component units’ long-term debt for the year ended June 30, 2023 are as follows:

Restated (1) Additions Due in
Balance at Including Balance at Due within More than Discretely Presented Component Units June 30, 2022 Accretion Reductions June 30, 2023 One Year One Year Ce rtificate s of participation:
2006 COP (Conference Center Project) 5,578$ 272$ (5,850)$ -$ -$ -$ 2008 Refunding COP Series 2008A (Conference Center
Project) 134,720 - - 134,720 6,775 127,945 T otal ce rtificate s of participation 140,298 272 (5,850) 134,720 6,775 127,945 Revenue bonds:
2010A Revenue Bonds-Tax Exempt 24,866 1,691 - 26,557 - 26,557 2010B Revenue Bonds-Taxabl e Bui l d Ameri ca Bonds 106,660 - - 106,660 - 106,660 2010D Revenue Bonds-Taxable Recovery 7,400 - - 7,400 - 7,400 2016A Revenue Bonds-Partial Refunding 2010A Bonds 19,885 - (2,255) 17,630 4,310 13,320 2016A Bond Premium (Discount) 2,613 - (550) 2,063 - 2,063 2018A Revenue Bonds-Refunding / Tax Exempt
Fixed Rate 30,585 - - 30,585 - 30,585 2018B Revenue Bonds-Taxable 7,540 - (2,155) 5,385 665 4,720 2018AB Bond Premium/(Discount) 3,843 - (178) 3,665 - 3,665 Total revenue bonds (Rose Bowl renovation) 203,392 1,691 (5,138) 199,945 4,975 194,970 Total discretely presented component units
long-term debt 343,690$ 1,963$ (10 ,988)$ 334,665$ 11,750$ 322,915$ PAGE 213

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 75
(10) Long-term Debt (Continued)
Governmental
Activities:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2023
Detail of Long-Term Debt
Governmental Activities:

Notes payable:

Notes Payable-RBOC 1/15/2013 a 576 $ 2.10% 1/7/2043 422$ Notes Payable-Section 108 10/29/2015 c 6,000 variable 8/1/2035 3,900 Total Notes Payable 4,322$
Pension bonds:
2015 Unrefunded Taxable Pension Obligation Bonds 5/5/2015 b 119,460$ 2.82% to 3.47% 5/1/2025 3,540$ 2020 Taxable Pension Obligation Bonds 2/26/2020 b 131,805 1.60% to 3.10% 5/1/2045 126,985 Bond Premium (Discount) (31)
Total Pension Bonds 130,494$
Certificates of Participation:
2015 COP Series A Refunding 2008 COP 12/2/2015 d 55,350$ 3.00% to 5.00% 2/1/2038 44,570$ Bond Premium (Discount) 3,838
Total Certificates of Participation 48,408$
Loan Payable:
2020 Equipment Lease-Radio Equipment 1/15/2020 e 6,800$ 1.66% 1/15/2027 3,982$ Total Loan Payable 3,982$
Business-type Activities:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2023
Detail of Long-Term Debt
Business-type Activities:

Revenue bonds:
2008 Paseo Colorado Taxable Revenue Bonds 9/17/2008 f 28,800 variable 6/1/2038 19,500$ 2013A Electric Revenue Refunding Bonds 12/3/2013 i, j 80,485 4.25% to 5.00% 6/1/2043 65,445 2016A Electric Revenue Refunding Bonds 11/7/2016 k 119,440 4.00% to 5.00% 6/1/2046 102,565 2017A Water Revenue Refunding Bonds 3/13/2017 l 15,395 5.00% 6/1/2036 11,350 2019A Electric Revenue/ Refunding Bonds 8/1/2019 m 11,575 5.00% 8/1/2024 4,390 202
0A Water Revenue Refunding Bonds 12/1/2020 g 30,130 5.00% 6/1/2050 27,415 2021A Water Revenue Refunding Bonds 12/1/2021 h 22,480 5.00% 6/1/2051 21,175 Bond Premium (Discount) 36,742
Total Revenue Bonds 288,582$
Loan Payable:
2019 Equipment Lease-Parking System 4/1/2019 e 3,252,694 2.67% 4/1/2026 1,468$ Total Loan Payable 1,468$
PAGE 214

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
76 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Component Unit Activities:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2023
Detail of Long-Term Debt
Discretely Presented Component Units
Certificates of Participation:
2008 Refunding COP, Series 2008A
(Conference Center Project)
4/15/2008 CC2 134,720 variable 2/1/2035 134,720$
Total Certificates of Participation (PCOC) 134,720$
Revenue Bonds:
2010A Revenue Bonds-Tax Exempt Capital
Appreciation 11/18/2010 RB1 11,588 6.43% to 6.52% 3/1/2033 26,557$ 2010B Revenue Bonds-Taxable Build America Bonds 11/18/2010 RB1 106,660 7.00% to 7.15% 3/1/2043 106,660 2010D Revenue Bonds-Taxable Recovery Zone
Economic Development 11/18/2010 RB1 7,400 7.150% 3/1/2043 7,400 2016A Revenue Bonds-Partial Refunding 2010A
Bonds 10/5/2016 RB3 21,865 5.00% 4/1/2027 17,630
2016A Bond Premium (Discount) 2,063
2018A Revenue Bonds-(Refunding 2013A
Tax Exempt) 12/6/2018 RB2 30,585 5.00% 12/1/2042 30,585 2018B Revenue Bonds-(Refunding 2013B Taxable) 12/6/201 8 RB2 12,515 2.60% to 3.58% 12/1/2027 5,385 2018 AB Bond Premium (Discount) 3,665
Total Revenue Bonds (RBOC) 199,945$
a Refund 2006 Revenue Bonds
b Fire and Police Retirement
c Section 108 Note for Robinson Park Improvements
d Partially refund 2008 Certificates of Participation City Hall e Equipment Purchases, assets purchased collateralized debt f Refund 2000 Paseo Bonds
g Refund 2010A Water Revenue Bonds
h Refund 2011A Water Revenue Bonds and Capital Improvements to Water System iG T 5 I m p r o v e m e n t s
j Refund 2002 Electric Bonds and Capital Improvements to the Electric System k Refund 2008 Electric Bonds, repay Line of Credits and Capital Improvement to the Electric System l Refund 2007 Water Bonds
m Refund 2009 Electric Bonds and Capital Improvement to the Electric System CC1 Conference Center Improvements
CC2 Refund 2006B Certificates of Participation
RB1 Rose Bowl Stadium Renovation
RB2 Refund 2013 Rose Bowl Revenue Bonds
RB3 Partial refund 2010A Rose Bowl Revenue Bonds
Purpose of Debt:

PAGE 215

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 77
(10) Long-term Debt (Continued)
The annual
requirements to amortize as of June 30, 2023, are as follows:

Governmental Activities:

Year Ending
June 30 Principal Interest Principal Interest Principal Interest 2024 317 $ 125$ 2,410$ 3,845$ 2,310$ 1,991$ 2025 318 117 3,210 3,780 2,420 1,875 2026 318 108 3,305 3,686 2,545 1,754 2027 318 100 3,370 3,620 2,670 1,627 2028 319 91 3,445 3,548 2,800 1,494 2029-2033 1,599 308 18,460 16,495 16,225 5,250 2034-2038 1,010 67 25,255 13,445 15,600 2,214 2039-2043 122 8 49,135 8,381 - -
2044-2047 - - 21,935 1,071 - -
Bond Premium (Discount) - - (31) 3,838 - Total Payment 4,322$ 923$ 130,494$ 57,871$ 48,408$ 16,206$ Pension BondsNotes Payabl e Certi fi cates of Parti cipati on Year Ending
June 30 Principal Interest
2024 971$ 62$
2025 987 46
2026 1,004 29
2027 1,020 13
Total Payment 3,982$ 150$
Loan Payabl e
Business-
type Activities:

Year Ending
June 30 Principal Interest Principal Interest
2024 11,180 $ 11,169$ 476$ 36$
2025 11,705 10,650 489 23
2026 9,810 10,168 502 10
2027 10,175 9,725 - -
2028 10,655 9,264 - -
2029-2033 60,955 38,681 - -
2034-2038 64,945 24,472 - -
2039-2043 48,925 11,827 - -
2044-2048 19,955 2,933 - -
2049-2052 3,535 324 - -
Bond Pre m ium (Discount) 36,742 - - -
Total Payment 288,582$ 129,212$ 1,468$ 69$
Loan Payabl eRevenue Bonds
PAGE 216

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
78 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Disclo
sure Related to Long-term Debt under GASB 88
The City’s outstanding notes from direct borrowings related to government activities of $422 is payable to Rose Bowl Operati
ng Company, resulting from the refunding of revenue bonds activities in 2013 and does not have any special provision.

The
City’s outstanding Notes Payable – Section 108 relating to government activities are payable from the an nual allocation
of Community Development Block Grant Funds (CDBG).

In regard to the 2020AB and 2015B Pension Obligation Bo nds (POBs), the debt service payments are secured by revenue received by the General Fund.

In case of a default, the following is the course of action:

The
Trustee will, by written notice to the City and th e Paying Agent, declare immediately due and payable the principal and Accreted Value of the accrued interest on all Outstanding Bonds of such Series, whereupon the same become immediately due and payable with any further action or notice. (Balance of page intentionally left blank)
PAGE 217

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 79
(10) Long-term Debt (Continued)
Disclo
sure Related to Long-term Debt under GASB 88 (Continued) In regard to the 2015A Certificates of Participation, the City’s outstanding bonds from public offerings related to government
activities are payable from and secured by revenu e received by the City. In case of the City’s default, the following is the course of action:

The
Authority or its assignee, in addition to all other rights and remedies it may have at law, will have the option to do
the following:
(1) To terminate the Sublease in the manner provided in the Sublease on account of default by the City, and to retake
possession of the Lease Property. In the event of such termination, the City agrees to su rrender immediately
possession of the Lease Property, without let or hindrance, and to pay the Authority or its assignee all damages recoverable at law that the Authority or it s assignee may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to
any such retaking possession of th e Lease Property. Neither notice to pay rent nor to deliver up possession of the Lease Property given pursuant to law nor any proceeding in unlawful detainer, or otherwise, brought by the Authority or its assignee for the purpose of obtaining possession of the Leased Property nor the appointment of
a receiver upon initiative of the Authority or its a ssignee to protect the Authority’s or its assignee’s interest under
the Sublease shall of itself operate to terminate the Sublease, and no termination of the Sublease on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, unless and until the Authority or its a ssignee shall have given written notice to the City of the election on the
part
of the Authority or its assignee to terminate the Sublease. (2) Without
terminating the Sublease, (i) to collect each installment of rent as it becomes due and enforce any other term or provision of the Sublease to be kept or performed by the City and/or (ii) to exercise any and all rights to retake possession of the Lease Property. In the event the corporation or its assignee does not elect to terminate the
Sublease in the manner described in subparagraph (1) above, the City will remain liable and agrees to keep or
perform all covenants and conditions contained in the Sublease to be kept or performed by the City and, to pay
the rent to the end of the term of the Sublease or, in the event that the Lease Property is re-let, to pay any deficiency
in the rent that results th erefrom; and further agrees to pay sa id rent and/or the payment of rent under the Sublease (without acceleration), notwithstanding the fact that the Authority or its assignee may have received
in previous years or may receive thereafter in subsequent years rental in excess of the rental specified in
the Sublease and notwithstanding an y retaking of possession of the Leased Property by the Authority of its assignee or suit in unlawful detainer, or otherwise, brou ght by the Authority or its assignee for the purpose of obtaining
possession of the Leased Property. Should the Authority or its assignee elect to retake possession of the Lease Property as provided in the Sublease, the City irrevocably appoints the Authority or it assignee as the agent
and attorney-in-fact of the City to re-let the Lease Property, or any items thereof, from time to time, either
in the Authority’s or its assignee’s name or otherwise, upon such terms and conditions and for such use and
period as the Authority or its assignee may deem advisable and the Ci ty indemnifies and agrees to save harmless
the Authority or its assignee from any costs, loss or damage whatsoever arising out of, in connection with,
or incident to any retaking of possession of and re -letting of the Lease Property by the Authority or its assignee or its duly authorized agents in accordance with the provisions contained in the Sublease. The City agrees
that the terms of the Sublease constitute full and sufficient notice of the right of the Authority or its assignee
to re-let the Lease Property in the event of such reentry without effecting a surrender of the Sublease, and further agrees that no acts of the Authority or its assignee in effecting such re-letting with constitute a surrender of termination of the Sublease irrespective of the use or the terms for which such re-letting is made or
the terms and conditions of such re-letting, or otherwise, but that on the contrary, in the event of such default by
the City the right to terminate the Sublease will vest in the Authority or its assignee to be effected in the sole and
exclusive
manner described in subparagraph (1) above. The City further waives the right to rental obtained by the Authority or its assignee in excess of the rental specified in the Sublease and conveys and release such excess
to the Authority or
PAGE 218

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
80 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Disclosure Rel
ated to Long-term Debt under GASB 88 (Continued)
its assignee as compensation to the Auth ority or its assignee for its services in re-letting the Lease Property or any items thereof. The City further agrees to pay the Au thority or its assignee the cost of any alterations or repairs to the Lease Property or any items thereof necessary to place the Leased Property or any items thereof in conditions for re-letting immediately upon notice of the City of the completion and installation of such alterations or repairs.

The City waives any and all claims for damages caused or which may be caused by the Authority or its assignee in taking possession of the Leased Property as provided in the Sublease and all claims for the damages that may result from the destruction of or injury to the Leased Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be on about the Leased Property.

The Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code.

In addition to any default resulting from breach by the City of any agreement, condition, covenant or term of the Sublease, if( 1) the City’s interest in the Sublease or any part thereof be assigned, sublet or transferred without the written consent of the Authority (except as otherwise permitted by the Sublease), either voluntarily or by operation of law; or (2) the City or any assignee will file any petition or institute any proceeding under any act or acts, state of federal, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or if the City will make a general or any assignment for the benefit of its creditors; or (3) the City will abandon or vacate the Leased Property or any portion thereof (except as permitted by the Sublease); then in each and every such case the City will be deemed to be default under the Sublease.

Neither the City nor the Authority will be default in the performance of any of its obligations under the Sublease (except for the obligation to make Base Rental Payments pursuant to the Sublease) unless and until it will have failed to perform such obligation within 30 days after notice by the City or the Authority, as the case may be, to the other party properly specifying wherein it has failed to perform such obligation.

In regard to the Paseo Colorado Revenue Bonds 2008 Series, the City’s outstanding Lease Revenue bonds from public offering related to business-type parking activities are payable from and secured by revenue received by the City. In relation to the 2008 Paseo Colorado Revenue Bonds, the following is the remedy upon default:

The Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(a) Terminate the Lease in the manner provided in the Lease on account of default by the City, notwithstanding ay re-entry or re-letting of the Lease Premises and remo ve all persons in possession thereof and all personal property whosesoever situation upon the Leased Premises and place such personal property in storage in any warehouse or other suitable place in the County of Los Angeles, State of California, provided that the Leased Premises continue to be operated and maintained as a public off-street vehicular parking facility, subject to the provisions of the Development Agreements. In the event of such termination, the City agrees to surrender immediately possession of the Lease Premises, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, in cluding, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or its duly authorized agents in PAGE 219

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 81
(10) Long-term Debt (Continued)
Disclosure
Related to Long-term Debt under GASB 88 (Continued)
accordance with the provisions contained in the Lease. Neither notice to pay rent or to deliver up possession of the Lease Premises given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Leased Premises nor the appointment of a receiver upon initiative of the Authority to protect the Authority interest under the Lease, will of itself operate to terminate the Lease , and no termination of the Lease on account of default by the City will be or become effective by operation of law or acts of the parties to the Lease, or otherwise, unless and until the Authority gives written notice to the City and the Commission of the election on the part of the Authority to terminate the Lease. The City agrees that no surrender of the Lease Premises or of the remainder of the term of the Lease or any termination of the Lease will be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. (b) Without terminating the Lease, (i) to collect each installment of rent as it becomes due and enforce any other term or provision of the Lease to be kept or performed by the City or (ii) to exercise any and all rights of entry and re-entry upon the Leased Premises as provided. In the event the Authority does not elect to terminate the Lease in the manner provided for in the Lease, the City remains liable an d agrees to keep or perform all covenants and conditions in the Lease contained to be kept or performed by the City and , if the Leased Premises are not re-let, to pay the full amount of the rent annually to the end of the term of the Lease or, in the event that the Leased Premises are re-let, to pay any deficiency in rent that results therefrom; and further agrees to pay said rent and/or rent deficiency punctually at th e same time and in the same manner as provided in the Lease for the payment of rent under the Lease (without acceleration), notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years rental in excess of the rental specified in the Lease and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re=entry or obtaining possession of the Lease Premises. Should the Authority elect to re-enter as provided in the Lease, the City irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Leased Premises, or any part thereof, from time to time, either in the Auth ority’s name or otherwise, for use as public off-street vehicular parking facility upon such terms and conditi ons and for such period as the authority may deem advisable and, subject to the provisions of the Development Agreement, to remove all persons in possession thereof and all personal property whosesoever situate d in and upon the Leased Premises and to place such personal property in storage in any warehouse or other suitable place in the County of Los Angeles, State of California, for the account of and at the expense of the City, and the City exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Lease Premises and removal storage of such property by the Authority or its duly authorized agents in accordance with the provisions contained in the Lease; provided, however, that any such re-entry upon and re-letting of the Leased Premises its subject to the provisions of the Development Agreements. The City agrees that the terms of the Lease constitute full and sufficient notice of the right of the Authority to re-let the Leased Premises as provided in the Lease in the event of such re-entry without effecting a surrender of the Lease, and further agrees that no acts of the Authorit y in effecting such re-letting will constitute a surrender or termination of the Lease irrespective of the use or the term for which such re-letting or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate the Lease will vest in the Authority to be effected in the sole a nd exclusive manner provided for in the Lease. The City further waivers the right to any rental obtained by the Authority in exces s of the rental specified in the Lease
and conveys and releases such excess to the Authority as compensation to th e Authority for its services in re- letting the Leased Premises or any part thereof. The City further agrees to pay the Authority the cost of any alterations or additions to the Lease Premises or any part thereof necessary to place the Leased Premises or any part thereof in conditions for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.

PAGE 220

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
82 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Disclosure Related to Long-
term Debt under GASB 88 (Continued)
The City waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Lease Premises as provided in the Lease and all claims for damages that may result from the destruction of or injury to the Leased Premise s and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Lease Premises.

Each and all of the remedies given to the Authority under the Lease or by any law enacted are cumulative and the exercise of one right or remedy will not impair the right of the Authority to any or all other remedies, provided, however, that the Lease Premises continue to be operated and maintained as public off-street vehicular parking facility, subject to the provisions of the Development Agreement. The term “re-let” or “re- letting” as used in the Lease include, but not be limited to re-letting by means of the operation of the Leased Premises by the Authority. If any statute or rule of law validly limits the remedies given to the Authority under the Lease, the Authority nevertheless will be entitled to whatever remedies are allowable under any statute or rule of law.

In the event the Authority prevails in any action brought to enforce any of the terms and provisions of the Lease, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority to enforce any of the remedies available to the Authority under the Lease, whether or not a lawsuit has been filed and whether or not any lawsuit culminates in a judgment.
(c) If (1) the City’s interest in the Lease or any part thereof be assigned or transferred without the written consent of the Authority, wither voluntarily or by operation of law or otherwise, or if (2) any proceeding under the United States Bankruptcy Code or any federal or state bankru ptcy, insolvency or similar law or any law providing for the appointment of a receiver, liquidator, trustee or similar official of the City or all or substantially all of its assets is instituted by or with the consent of the City, or it instituted with its consent and is not permanently stayed or dismissed within sixty days, or it the City offe rs to the City’s’ creditors to effect a composition or extension of time to pay the City’s debts, or asks, seeks or prays for reorganization or to effect a plan of reorganization or for readjustment of the City’s debt s, or if the City makes a general assignment or any assignment for the benefit of the City’s creditors, or if (3) the City will abandon or vacate any part of the Leased Premises, then the City will be deemed to be default under the Lease.

In regard to the City’s outstanding bonds from public offerings related to business-type, activities (2017A, 2020A and 2021A Water Revenue Bonds and 2013A, 2016A and 2019A Electric Revenue Bonds) are payable from and secured by revenue received by the Utilities (Water and Power Funds).

In relation to the Electric Revenue Bonds course of action in case of the City’s default, the following is the course of action:

Upon the concurrence and continuation of and Event of Default the Bond Owners’ Committee or, if there is none, the Owners of 25% in aggregate Bond Obligation of Bonds then Outstanding may, by written notice to the City, declare the entire unpaid principal of the Bonds due and payable and, thereupon the entire unpaid principal of the Bonds will forthwith become due and payable. Upon any such declaration the City will forthwith pay to the Owners of the Bonds the entire unpaid principal of, premium, pledged for such purpose. If at any time after such a declaration and before the entry of a final judgement or decree in any suit, action or proceeding instituted on account of such default or before the completion of the enforcement of any other remedy under the Fiscal Agent Agreement, the principal of all Bonds that have matured or been called for redemption pursuant to any sinking fund provision and all arrears of interest have been paid and any other Events of Default which may have occurred have been remedied, then the Bonds Owners’ Committee or, if there is none, the Owners of 25% in aggregate Bonds Obligation of Bond then Outstanding may, by written notice of the City, resc ind of annual such declaration and its consequences. No such rescission or annulment will extend to or affect any subsequent default or impair any right consequent thereon.

PAGE 221

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 83
(10) Long-term Debt (Continued)
Disclosure
Related to Long-term Debt under GASB 88 (Continued)
In relation to the Water Revenue Bonds course of action in case of the City’s default, the following is the course of action:

Application of Pledged Revenues and Other Funds after Default; Acceleration. If an Event of Default shall occur and be continuing, the City shall immediately transfer to th e Trustee all Pledged Revenues held by it and received thereafter and the Trustee shall apply all Pledged Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of the Indenture (except as otherwise provided in the Indenture) as follows and in the following order:
(1) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and Parity Debt, including the costs and expenses of the Trustee and the Bondholders in declaring such Event of Default, and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of its counsel and other agents) incurred in and about the performance of its powers and duties under the Indenture;
(2) To the payment of the whole amount of Bond Obligation then due on the Bonds and Parity Debt (upon presentation of the Bonds and Parity Debt to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully pa id) subject to the provisions of the I ndenture, with interest on such Bond Obligation at the rate or rates of interest borne by the respective Bonds and Parity Debt, to the payment to the persons entitled thereto of all installments of interest then due and the unpaid principal or Redemption Price of any Bonds and Parity Debt which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue Bond Obligation and Parity Debt at the rate borne by the respective Bonds and Parity Debt, and, if the amount available shall not be sufficient to pay in full all the Bonds and Parity Debt due on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal or interest or Accreted Value (plus accrued interest) due on such date to the persons entitled thereto, without any discrimination or preference; and (3) To the extent not paid pursuant to clause (1) or (2) above, to any Credit Provider any amounts then due and owing.

In each and every such case during the continuance of such Event of Default, the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds at the time Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds contained to the contrary notwithstanding.

This provision, however, is subject to th e condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, the City shall pay to or shall deposit with the Trustee a sum sufficient to pay all principal on such Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, and the reasonable fees and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of th e Trustee, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of not less than a majority in aggregate amount of Bond Obligation of the Bonds at the time Outstanding, by written notice to the City and to the Trustee, may, on behalf of the Owners of all the Bonds, rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

PAGE 222

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
84 Annual Comprehensive Financial Report | June 30, 2023 (10) Long-term Debt (Continued)
Disclosure
Related to Long-term Debt under GASB 88 (Continued)
In regard to the Discretely Presented Component Units as it relates to the Rose Bowl Lease Revenue Bonds series, 2010ABD, 2016A, and 2018AB in case of default, the following is the course of action:

Upon the happening of any of the events & default, then it shall be lawful fo r the Authority or its assignee, subject to the terms of the Lease, with the consent of the Majority Holder, to (i) exercise any and all remedies available or granted to it under the Sublease or pursuant to law, to the extent not inconsistent with the remedies granted under the Sublease or (ii) by mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided in the Sublease. Upon the breach of any agreement, condition, covenant or term contained in the Sublease required to be observed or performed by the City, the Authority or its assignee may not exercise any rights of entry upon or repossession of the Leased Property.

In the event of such default, the Authority or its assignee must thereafter maintain the Sublease in full force and effect and may only recover rent and other monetary charges as they become due, all without terminating the City’s right to possession of the Leased Property, regardless of whether or not the City has abandoned the Leased Property; this shall be the sole and exclusive remedy available against the city under the sublease or otherwise. The Authority shall have no right upon an event of default under the su blease by the city to accelerate the rental payments, terminate the sublease or re-enter the leased property. (11) Derivative Instruments
Discretely Pres
ented Component Units
Pasadena Center Operating Company (PCOC)
Conference Center Variable Rate Demand Refunding Certificates of Participation – SWAP No. 2 On September
18, 2006, the City entered into an interest rate swap agreement with DEPFA Bank related to the $135,500 Conference Center Auction Rate Certificates Se ries 2006B. The objective was to effectively change the City’s Variable interest rate to a synthetic fixed rate of 3.536%. Under the terms of the swap, the City pays the counterparty the fixed rate of 3.536% and receives a floating rate equal to 64% of the one month LIBOR rate. The swap has a notional amount of $133,000 representing a hedge ratio of 98.7% and declines according to the schedule set forth in the contract until the final principal payment on the certificates in 2034.

Objective and Terms of Hedging Derivative Instruments
The following table
displays the objective and terms of PC OC’s hedging derivative instruments outstanding at June 30, 2023, along with the credit rating of the associated counterparty:

Cash Flow Notional Effective Maturity Counterparty
Hedge Objective Amount Date Date Term Credit Rati ng
Pay-fixed interest
rate swaps
Hedge of changes
in cash flows on
the 2008A COP's
$ 133,000 4/1/2011 2/1/2034
Pays 3.536%;
receive 64% of
LIBOR i ndex
Aa1/AA-

Note in 2011, due to its declining cr edit ratings, DEPFA was replaced by RBC as the counterparty for the swap.

Pursuant to GASB 64, the replacement did not require any change in accounting treatment.

PAGE 223

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 85
(11) Derivative Instruments (Continued)
Pasadena Center Operating Company (PCOC) (Continued)
On April 15, 2008, the City issued the 2008 Refunding Certif icates of Participation, Seri es 2008A in the amount of $134,720.

These certificates were issued to refund the City’s Certificates of Participation (Conference Center Project), Series 2006B and finance the cost of execution of the 2008A Certificates of Participation backed by a letter of credit from Bank of America. The final maturity on the 2008A COPs was extended by one year to 2035 in order to reduce the reserve requirement and consequently, reduce the size of the issue by approximately $800. The refunded certificates
are considered to be defeased and the liability has been removed from the component unit’s column of the
statement of net position and recorded as a deferred amount upon a refunding.

During the fiscal year ending June 30, 2011, PCOC entered into a new agreement to take advantage of a more advanta
geous interest rate adjustment mode than the 2008 Series Bonds previously had. As a result, the former derivative
instrument terminated and the new instrument has off-market term s. As a result, an up-front paymen t was
received. The up-front payment is reported as a borrowing. The borrowing is amortized over the life of th e swap
and amortizes using the effective interest method for the life of the swap with adjustments to interest expense durin
g each fiscal year. The original balance of the borrowing was $8,936. As of June 30, 2023, the balance was $3,
699.

The C categorizes its fair value measurements within the fair value hierarchy established by generally accepted acco
unting 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 significant other observable inputs. Level 3 inputs are significant unobservable inputs.

The Company has the following recurring fair value measurements as of June 30, 2023:

Beginning Accrued Ending
June 30 Balance Interest Payment Balance
2024 3,699$ 157 $ (635)$ 3
,221 $
2025 3,221 136 (601) 2,756
20 26 2,756 115 (564) 2,307
20 27 2,307 95 (522) 1,880
20 28 1,880 77 (477) 1,480
20 29 1,480 59 (428) 1,111
20 30 1,111 44 (374) 781
2031 781 30 (315) 496
2032 496 17 (251) 262
2033 262 8 (182) 88
20 34 88 1 (89) -

The
Company categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset or liability. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs.

The Company has the following recurring fair value measurements as of June 30, 2023:

Level
Measurements by Fair Value Level 1 2 3
Derivative instrument liability 4,432$ -$ 4,432$ -$ PAGE 224

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
86 Annual Comprehensive Financial Report | June 30, 2023 (11) Derivative Instruments (Continued)
Pasadena Center Operating Company (PCOC) (Continued)
Derivative Instrument Liability
The fair value balance and notional amount of the derivative instrument outstand ing at June 30, 2023, classified by
type, and the changes in fair value of such derivative instruments for the year then ended are as follows:

The fair values of the interest rate swaps were estimated using the zero-coupon method. This method calculates the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future net settlement on the swaps.

Credit risk: PCOC is exposed to credit risk on hedging derivative instruments to the extent that value of the swap is position from PCOC’s perspective. The aggregate fair va lue of hedging derivative instruments was negative as of June 30, 2023, and therefore PCOC had no credit risk exposure.

Interest rate risk: The purpose of the swap is to eliminate intere st rate risk on the associated hedged bonds and therefore the swap, in combination with related bonds does not create interest rate risk for PCOC.

Basis risk: PCOC is exposed to basis risk on its pay-fixed in terest rate swap because the variable-rate payments received by PCOC on these hedging deri vative instruments are based on a rate or index other than interest rates PCOC pays on its hedged variable-rate debt, which is typically remarketed every seven (7) days. As of June 30, 2023, the weighted-average interest rate on the PCOC’s hedged variable-rate debt is 2.818%, while 64 percent of LIBOR is

3.306%.

Termination risk: PCOC or its counterparty may terminate a derivative instrument if the other party fails to perform under the terms of the contract. The derivative contract uses the International Swap Dealers Association Master Agreement which includes standard termination events such as failure to pay and bankruptcy. In addition, PCOC may optionally terminate the agreement on any date. If at the time of a termination, PCOC may be required to make a termination payment to its counterparty. If PCOC had to terminate the Swap for any reason on June 30, 2023, the maximum exposure/loss would have been $8,338.

Rollover risk: PCOC is exposed to rollover risk on hedging derivative instruments that are hedges of debt that mature or may be terminated prior to the maturity of the hedged debt. When these hedging derivative instruments terminate prior to the maturity of the related debt, PCOC will be re-exposed to the risks being hedged by the hedging derivative instrument.

Cash Flow
Hedge Classification Amount Classification Amount Notional Pay-fixed interest
rate swaps Deferred Outflow $ (6,332) Liability $ 4,432 $ 133,000 Changes in Fair Value Fair Value at June 30, 2023
PAGE 225

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 87
(12) Fund Balance
Fund B
alances, Governmental Funds
On the
Governmental Balance Sheet, the fund balances are reported in the aggregate in the classifications defined by GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions . Fund balances by classification for the year ended June 30, 2023, are as follows:

Nonmajor
Housing Project General Governmental
General Fund Successor Management Debt Service Funds Total Fund Balances
Nonspendable:

Prepaid and other assets 811$ -$ -$ -$ 149$ 960$ Permanent fund principal - - - - 1,433 1,433 Notes receivable 13,505 - - - - 13,505 Total Nonspendable 14,316 - - - 1,582 15,898 Restricted for:

Air Quality Improvement - - - - 303 303 Notes receivable - - - - 61,269 61,269 Allowance for uncollectible long-
term receivables - - - - (61,269) (61,269) City Charter/Capital projects - - 521 - 6,754 7,275 Debt service - - - 5 1,852 1,857
Culture and literacy - - - - 3,322 3,322 Housing and Community Development
Housing funds - 1,021 - - 3,625 4,646
CDBG - - - - 16 16
Inclusionary Housing Trust - - - - 3,499 3,499
Rental Assistance programs - - - - 2, 120 2,120
Other purposes - - - - 551 551
Public Safety
Asset Forfeiture - - - - 2,922 2,922
Public Safety Augmentation - - - - 1,663 1,663 Other Public Safety Programs - - - - 266 266 Section 108 HUD Loan Security for
Robinson Park Recreation Center
Rehabilitation 400 - - - - 400
Section 115 Trust - Pension 12,196 - - - - 12,196 Transportation - - - - 40,139 40,139
Total Restricted 12,596$ 1,021$ 521$ 5$ 67,032 $ 81,175$ (Continued)
PAGE 226

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
88 Annual Comprehensive Financial Report | June 30, 2023 (12) Fund Balance (Continued)
Fund B
alances, Governmental Funds (Continued)
Nonmajor
Housing Project General Governmental
General Fund Successor Management Debt Service Funds Total Fund Balances, continued
Total from previous page 26,912$ 1,021$ 521 $ 5 $ 68,614 $ 97,073$ Committed to:

Public Safety 624 - - - - 624
Building Plan Check and Permit Services - - - - 11,747 11,747 Building Services - General Plan
Maintenance Fee and
Technology Fee 613 - - - 8,349 8,962 Capital Projects 12,000 - 571 - 8,849 21,420
Emergency Contingency 43,953 - - - - 43,953
Operating Reserve 14,651 - - - - 14,651
Libraries - - - - 13,742 13,742
Pasadena Center Capital
Improvement Trust - - - - 58 58 Transportation 144 - - - 4,342 4,486 Sewer Construction and
Maintenance - - - - 16,106 16,106 Underground Utilities - - - - 37,971 37,971 Total Committed 71,985 - 571 - 101,164 173,720 Assigned to:

General Government 45,267 - -
- - 45,267
Capital Projects 12,140 - 1,361 - - 13,501 Total Assigned 57,407 - 1,361 - - 58,768 Unassigned 8,307 - - - (7,050) 1,257 Total Fund Balance 164,611$ 1,021$ 2,453 $ 5 $ 162,728 $ 330,818$ PAGE 227

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 89
(13) Restricted Net Positi on – Stranded Investments
In 1998, the
City Council established a Reserve for Stranded Invest ment (Reserve) and imposed a Stranded Investment Surcharge (SIS) on all electr ic utility bills. The purpose of the Reserve for Stranded Investment was to create a fund to mitigate the potential impacts of open access to the energy market for Water and Power Department (PWP) customers and offset short- and long-term stranded energy costs associated with the Intermountain Power Project (IPP) and Palo Verde Nuclear Generating Station (PVNGS). Several sources of funding for the Reserve were identified in addition to the SIS and funding continued until June 30, 2002. At that time, it was determined that the Reserve was fully funded with no additional contributions required. Collection of the SIS was discontinued, and excess funds returned to PWP customers. All funds deposited into the Reserve, including investment earnings, were recorded as income during the year collected or realized.

In November 2006, the City Council a pproved the Stranded Investment Reserv e Utilization Plan (Plan). In January 2009, in accordance with the Plan an d a previously approved Prepayment Agreement (Agreement), PWP utilized approximately $80,000 of the reserve f unds to complete an economic defeasan ce of selected bonds for IPP. As authorized in the Agreement, the Intermountain Power Agency (IPA) issued approximately $70,000 of subordinated notes to PWP, the payments for which will offset a portion of the debt service associ ated with the economically- defeased bonds, thereby reducing the cost of energy purchased from IPP.

As of June 30, 2023, the Stranded Investment Reserve balance was $40,34 1. The details of the additions and subtractions, in the Reserve, that occurred during fiscal year 2023 are shown below:

Restricted Cash and Investment
Beginning balance 41,666$
Interest earni ngs 983
Market gain (l oss) (2,382)
Restricted cash and investment ending balance 40,267$
IPA Subordinated Notes
Balance at Balance at
June 30, 2022 Reduction June 30, 2023
Notes recei vable 1,440$ (1,366)$ 74$ Premium 674 (674) -
Total IPA subordinated notes 2,114$ (2,040)$ 74$ Restricted for Stranded Investments at June 30, 2023 40,341$ PAGE 228

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
90 Annual Comprehensive Financial Report | June 30, 2023 (14) Accumulated Fund Deficits
The following f
unds reported accumulated deficits in their respective fund balances/net position at June 30, 2023:

Due to
Operations
Due to GASB 68
Implementation
Due to GASB 75
Implementation
Due to GASB 96
Implementation
Total
Accumulated
Deficit
Governmental Activities:

Special Revenue Funds:

Health (6,901) $ -$ -$ -$ (6,901)$
Internal Service Funds:

Computing and Communications 12,167 (15,659) (2,499) (888) (6,879) Benefits (21,464) (77,770) (190) - (99,424)
Workers' Compensation (24,839) (10,470) (222) - (35,531) General Liability (13,855) (551) (127) (82) (14,615) 311 Call Center 619 (627) (158) (38) (204)
Management’s
plans for resolution of the accumulated fund deficits are as follows.

Health
The Health Fund
was established to account for grants for the provision of public health services which are restricted by grant award agreement as well as state health realignment funding requirements. The Pasadena Public Health Department continues its steadfast commitment to offering programs and services that ensure public safety and improve public health outcomes while ma intaining systems and controls for a financially sustainable operation. In fiscal year 2023, the Department ended the year with a shortfall largely attributable to COVID-19 pandemic response; however, the City requested FEMA reimbursement for pa ndemic-related expenses and is awaiting FEMA response.

To address continued fiscal challenges, the Department will continue to expedite processing of grant reimbursement requests, maintain monitoring of program and financial performance.

Computing and Communications
The Computing and
Communications Fund was established to historically track and fund the operations and lifecycle capital replacement of the City’s Department of Information Technology, which provides centralized IT support across all City departments. In fiscal year 2023, the deficit decreased compared to fiscal year 2022 primarily attributable to a positive increase from operations of over $3,500. On average, there remained a significant number of personnel vacancies due to resignations and internal promotions that kept personnel costs lower than expected, but revenues increased as well due to an increase of over 11% to the fixed rates charged to departments. However, this was offset in part by an increase in GASB 68 costs and the debut of GASB 96 costs, which combined increased by almost $2,700.

The deficit is being monitored by management, and an appropriate revenue recovery plan to gradually reduce the deficit is in place, as IT is solely funded by the fixed rates it charges to its cu stomer departments. To that end, for fiscal year 2024, fixed rates were increased by over 7% compared to fiscal year 2023 in an effort to keep pace with both personnel and inflationary cost increases to services and supplies. The continuing challenge in the coming years will be to maintain enough growth in revenues to keep pace with the costs needed to provide effective service, while also combatting any financial pressures that may impact the fund’s ability to absorb these increases.

PAGE 229

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 91
(14) Accumulated Fund Deficits (Continued)
Benefits
The Benefits Fund
was established to account for employee compensated absences, retirement, and health benefits.

A large deficit is likely to be shown in this fund at the end of each fiscal year, as the largest component represents a portion of the unfunded pension liability, and the second largest portion of the deficit reflects the total liability from accrued leave balances. Each year, the city reviews the rates charged to Departments to adjust to an appropriate recovery level and keep the deficit as low as possible or re duce it. The overall fiscal year 2023 fund balance deficit increased by $6,100. This is primarily a ttributable to revenue of $40,300 exceeded by expenses of $46,400. The expense increases are attributable to increased pensio n contributions, benefits, and compensation. To better manage the short-term costs and long-term liabilities associated with pensions and OPEB, the City set aside $10,500 into a Section 115 pension trust and $2,000 into a Section 115 OPEB trust in fiscal year 2018.

Workers’ Compensation
The City has
established a Workers’ Compensation Fund to provide benefits for potential claim and cost expenditures for workers’ compensation claims agains t the City. In addition to any monies held in this Fund, the City makes an annual appropriation based upon its estimate of claim and expense payments during the fiscal year. Management has reviewed the deficit, and is working to correct the situation through a combination of injury prevention programs, training programs, reduction of claim severity and claim frequency, return-to-work procedures, medical management and minimizing delays in all aspects of claims handling. An increase in rates charged to the Departments remains a part of the annual budget process. The City initiated the Carve Out program with Pasadena Police Officers Association (PPOA) and that program remains in effect through all of the current fiscal year. That program is focused on ensuring timely delivery of treatment that will: 1) expedite claim resolutions and 2) reduce costs and litigation. All of this will continue to reduce the negative fund balance.

General Liability
The City has
established a General Liability Fund to provide for the potential claim and cost expenditures for general liability claims against the City. In addi tion to any monies held in this fund, the City makes an annual appropriation based upon its estimate of claim and expense payments during the fiscal year. In fiscal year 2019, there was a deficit primarily attributable to lower rates charged to Departments. In fiscal years 2020 and 2021, the City increased rates to collect an additional $1,200 from Departments. Additi onally, in fiscal year 2020 the General Fund transferred $5,000 into this fund to help address increased claims and impr ove the deficit. In fiscal year 2023 a new allocation methodology was put in place to collect an additional $5,000 annually to cover increased settlements and self-insured retention amounts, as a result it reduced the deficit.
311 Call Center
The 311 Call
Center Fund will continue to report a deficien cy in fiscal years 2024 and 2025 due to the inclusion of GASB 68 and GASB 75. The 311 Call Center Fund receives direct revenue transfers from city departments to support the cost of service provided by the 311 Call Center oper ations. The fund is not structured, at this time, to collect additional revenue to cover the deficit caused by the inclusion of the GASB pronouncements. The Department is actively seeking a solution-based alternative with the Ci ty’s Department of Finance to address the deficit and restructure the 311 Call Center Fund by fiscal year 2026.

PAGE 230

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
92 Annual Comprehensive Financial Report | June 30, 2023 (15) Excess of Expenditures over Appropriations
The following funds reported
an excess of expenditures over appropriations at June 30, 2023:

Budget Actual
Variance with
Final Budget
Positive
(Negative)
General Fund:

General Government
Attorney 11,628$ 11,949$ (321)$ Public Safety
Fire 60,073 61,231 (1,158)
Capital Outlay 219 2,556 (2,337)
Debt Service
Lease payments - 644 (644)
Subscription payments - 447 (447)
Interest - leases and subscriptions - 33 (33)
Project Management Fund:

General Government - 225 (225)
Debt Service
Lease payments - 42 (42)
Subscription payments - 79 (79)
Health Fund:

Capital Outlay 5 193 (188)
Debt Service
Lease payments - 26 (26)
Subscription payments - 48 (48)
Interest - leases and subscriptions - 2 (2) Building Services Fund:

Debt Service
Subscription payments - 3 (3)
Sewer Construction and Maintenance Fund:

Debt Service
Subscription payments - 2 (2)
Transportation Fund:

Capital Outlay - 169 (169)
Debt Service
Lease payments - 49 (49)
Subscription payments - 27 (27)
Interest - leases and subscriptions - 1 (1) Library Services Fund:

Capital Outlay - 148 (148)
Debt Service
Lease payments - 149 (149)
Subscription payments - 50 (50)
Interest - leases and subscriptions - 3 (3) Parking Fund:

Debt Service
Lease payments - 9 (9)
Housing and Community Development Fund:

Debt Service
Lease payments - 315 (315)
Subscription payments - 69 (69)
Interest - leases and subscriptions - 15 (15)
Donated Funds:

Culture and Leisure 370 373 (3)
PAGE 231

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 93
(15) Excess of Expenditures over Appropriations (Continued) General Fund:

General Government –
Attorney
The City Attorney Department incurre d more litigation and outside legal service expense than the budgeted amount due to establishment of the Pasadena Rental Housing Board, complex employment and police litigation, and other matters.

Public Safety – Fire
The Fire Department’s incurred approximately $1,150 in personnel costs from an unbudgeted Recruitment Academy.

Capital Outlay
Capital Outlay expenditures in excess of appropriatio ns related to implementation of unbudgeted GASB implementations: GASB Statement No. 87, Leases for $506 and GASB Statement No. 96, Subscription-Based Information Technology Arrangements for $624. GASB Statement implementations are further discussed in the detailed notes. Additionally, the City made additional unbudgeted capital outlays including $1,000 for land and $206 for vehicle and equipment.
(16) Pledged Revenue
Pasadena Water and
Power has a number of outstanding debt issuances that are collatera lized by pledged electric and water revenues. The amount and term of the remainder of these outstanding debts are presented in Note 9. The purpose of the debt issuances was for the financing of ce rtain Light and Power and Water projects. For the current year, debt service payments as a percentage of the pledged gross revenue (net of certain expenses) are indicated in the table below. These percentages also approximate the re lationship of debt service of pledged revenues for the remainder of the term of these debts:

Debt Service as
Annual Amount of Pledged Annual Debt a Percentage of
Description of Pledged Revenue Revenue (net of expenses) Service Payments Pledged Revenue Light and Power revenues 67,863$ 15,712$ 23%
Water revenues 17,822 5,858 33%
PAGE 232

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
94 Annual Comprehensive Financial Report | June 30, 2023 (17) Transfers
Primary Government
The following is a
summary of transfers in and out for the year ended June 30, 2023:

General
Project Debt
General Management Service
Transfers Out Fund Fund Fund
General Fund -$ 8,299$ A 7,324$ B
Project Management Fund - - -
Nonmajor Governmental Funds - 19,945 D -
Light and Power Fund 18,000 F - -
Water Fund 1,894 - -
Off-Street Parking Fund - 55 -
Nonmajor Enterprise Funds 773 69 -
Internal Service Funds - 1,715 -
Total 20,667$ 30,083$ 7,324$
Transfers In
Primary Government
(A)
Transfers of $8,299 from General Fund to Project Management Fund mainly consist of:
• $4,363 for the improvement of Municipal buildings including $3,002 for fire station renovations; • $2,296 for various street improvements including $1,780 for sidewalk improvements; • $674 for the technology upgrade projects, including $642 for the police computer-aided dispatch; and records management system replacement project; and
• $600 for various transportation projects.
(B) Transfer of $7,324 from General Fund to General Debt Service Fund mainly consist of:
• $4,758 to pay pension obligation for Bonds Series 2020AB; • $1,506 to pay taxable pension obligation for Bonds Series 2015; and • $1,033 to pay for equipment purchase note payable.
(C) Transfers of $19,361 from General Fund to Nonmajor Governmental Funds mainly consist of:
• $12,213 to support the Library Services Fund;
• $4,101 to pay for 2015A Refunding COPs; and
• $1,227 to other housing funds.

PAGE 233

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 95
(17) Transfers (Continued)
Light
Nonmajor and Nonmajor Internal
Governmental Power Enterprise Service
Funds Fund Funds Funds Total
19,361$ C -$ -$ 219$ 35,203$
27 - 71 339 437
- 5,311 E - 13 25,270
- - - - 18,000
- - - - 1,894
- - 53 88 196
- - - 435 1,277
- - - - 1,715
19,388$ 5,311$ 123$ 1,095$ 83,992$ Transfers In
(D) Transfers of
$19,945 from Nonmajor Governmental Funds to Project Management Fund mainly consist of:
• $7,255 from Residential Development Impact Fund;
• $2,929 from Road Maintenance and Rehabilitation Account; • $2,780 from Community Development Block Grant Fund;
• $2,259 from Sewer Facility Charge Fund and Sewer Construction Management Fund; • $1,907 from Traffic Reduction Transportation Fund; and • $782 from Gas Tax Fund.
(E) Transfers of $5,311 from Nonmajor Governmental Funds to Light and Power Fund to pay for the underground utilities program expenses.
(F) Light and Power Fund contributed $18,000 to the General Fund; the amount transferred may be expended for any municipal purpose.

PAGE 234

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
96 Annual Comprehensive Financial Report | June 30, 2023 (18) Self-insurance
The City maintains
self-insurance and excess insurance programs for various lines of liability coverage. Liability claims are self-administered within the Self-Insured Retention (SIR). For the period of July 1, 2022 to June 30, 2023, excess liability insurance was purchased with limits of $25,000 in excess of $5,000 per occurrence SIR. Excess workers’ compensation insurance is at $4,000. Workers’ compensation claims for all City workers, including public safety, i.e., fire and police, are administered by a third-party administrator, Acclamation Insurance Management Services (AIMS).

The City maintains a few self-administered claims for dates of injury prior to July 1, 2012.

The City currently has twenty-three (23) workers’ compensation claims from prior years that exceeded the SIR. The breakdown of claims that exceeded the corresponding year’s SIR excess level is as follows:

Number of Existing
Workers’ Compensation
Claims
Retention
Amount
9 $ 500
8 250
1 100
5 5
0 Total 23
No workers’ compensation
injury incu rred since the SIR has been $3,000. City has received $3,185 in workers’ compensation excess recovery. The City is requesting $176 in workers’ compensation excess recovery currently.

The Civil Division of the Department of the City Attorney/City Prosecutor, prim arily using in-house civil attorneys, controls litigated liability claims. A claim is a demand seek ing damages allegedly arising out of a wrongful act for which the claimant asserts the City is responsible. During fiscal year 2023, t h e C i t y p a i d $ 7 , 8 9 2 i n c l a i m s a n d settlement payments. For new claims with alleged dates of loss within fiscal year 2023, the overall total incurred was $1,431. Liability against a public entity is mitigated by existing laws/statutes/codes, which provide certain immunities.

The City currently has approximately seven (7) active litig ation cases, each with rese rves estimated in excess of $2,000.

PAGE 235

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 97
(18) Self-insurance (Continued)
SIR losses and
administrative costs are reported in the General Liability and Workers’ Compensation internal service funds. losses incurred are reimbursed by departments over a period of time as part of an internal service assessment system. Legal expenses are reported in the City Attorney Department of the General Fund. A case reserve is established for each claim, monitored and adjusted by the Liability Division and the Workers’ Compensation Claims Supervisors, including expected litigation expenses and losses that will be paid by the City Treasurer.

Heliport and Aircraft coverage provides protection to th e City for liability arising out of its public safety/police helicopter operations and for the City’s leadership role on the LA Impact Team. The policy carries a per occurrence limit of $50,000 for Aircraft Hull and Liability, with an aggregate of $50,000. Coverages include: hull physical damage for the scheduled aircraft, damage done by the City’s aircraft to someone else’s hangar, and emergency landing. The policy also covers liability resulting from an error by pilot. In addition, the policy provides coverage for airport liability with a $50,000 per occurrence limit. The annual premium is apportioned between the City and LA Impact, since the policy carries hull coverage for LA Impact aircraft.

The City renewed property insurance on all its buildings, with a combined total scheduled insured value of $1,150,000. The policy includes coverage for fine arts, valuable papers, business personal property, business income, and extended business income or rental value. Policy limit s are $250,000 with a deductible of $25 for earthquake sprinkler leakage, $100 for flood, and $25 for any other covered loss. Exclusions include earthquake, collapse of buildings and nuclear hazard. During February and March 2023, various City properties incurred storm damages due to unprecedented rainfall. Claims were filed against the f iscal year 2023 policy in the process and pursuit of FEMA reimbursement. Coverage details for those claims are still being assessed.

The City’s property: power plant boiler and machinery polic y, with total insured valu e of $422,317. The program provides property and equipment brea kdown coverage for City’s power plant facilities an d machinery. The policy affords coverage for risks of loss or damage, including boiler explosion and machinery breakdown. Policy limits are $250,000 with deductibles of $750 per occurrence for all other property damage, and $1,500 per occurrence for machinery breakdown of GT1, GT3, and GT5. The City did not receive new claims under this policy for fiscal year 2023.

In an effort to protect the City’s assets and transfer po tential risk, the City also pur chases the following insurance policies: medical malpractice; pollution liability; terrorism – Chemical, Biologic al or Biochemical, Radiological or Nuclear (CBRN); auto physical damage; cyber liability; fiduciary, including a policy purchased for and by the Fire and Police Retirement System; and crime policies.

PAGE 236

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
98 Annual Comprehensive Financial Report | June 30, 2023 (18) Self-insurance (Continued)
Pasadena Cent
er Operating Company (PCO C) is entitled to indemnity from the City; however, PCOC purchases a Commercial General Liability Policy for general liability and employment practi ce coverage. The City manages the PCOC claims and tenders to the insurance carrier third party administrator. PCOC carries statutory workers’ compensation insurance with no retention. PCOC requires licensees to provide insurance or purchase Special Events Liability Insurance from PCOC. The City buys liability insurance on the parking structures at PCOC. PCOC buys separate liability insurance on the ice rink.

Rose Bowl Operating Company (RBOC) is entitled to indemnity from the City, and its losses are included in the City’s general liability self-insurance program and under the ex cess general liability policies. RBOC carries statutory workers’ compensation insurance with no retention. Br ookside Golf Course is also managed through RBOC. Major Rose Bowl tenants include the Pasadena Tournament of Roses, UCLA Football, Anschutz Entertainment Group, and the R.G. Canning Swap Meet. Tenants provide insurance, naming City of Pasadena as additional insured on their policies.

The claims liability reported in the General Liability and Workers’ Compensation Internal Service Funds is based on the requirements of GASB Statement No. 10 (Accounting and Financial Reporting for Risk Financing and Related Insurance Issues), which requires a liability for claims to be repo rted if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated, including incurred but not yet reported claims. As of June 30, 2023, General Liability claims payable amounted to $12,731 of which $10,62 2 is estimated to be paid within one year. Workers’ Compensation claims payable amounted to $41,132 of which $17,881 is estimated to be paid within one year.

Beginning Fiscal Year Claim Ending
Fiscal Year Liability in Estimates Payments Liability
2021-22 42,044$ 64,785$ (30,677)$ 76,153$ 2022-23 76,153 5,646 (16,936) 64,863
(19) Deferred Compensation Plan
For th
e benefit of its employees, the City has adopted a deferred compensation plan in accordance with Section 457 of the Internal Revenue Code. Generally, eligible employees may defer receipt of a portion of their salary until termination, retirement, death, or an unforeseeable emergency. As a result of changes under the Small Business Job Protection Act of 1996, all amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts must be held in a trust, custodial account, or annuity contract for the exclusive benefit of the employee participants and their beneficiaries.

The plan has a Plan Administrator and an oversight commi ttee. The five member committee is comprised of three elected City employees and two members of the csomm unity appointed by the City Council. The oversight committee members basically monitor the plan activity, pe rformance of investment options and ensure that the Plan Administrator carries out his duties and responsibilities. The Plan Administrator, the Director of Finance or his designee, is responsible for the day to day administration. The Plan Administ rator has authority to sign all legal agreements with approved plan providers, and ensures proper amounts are withheld, immediately transferred to the trust, and invested in accordance with participants’ directions.

As of June 30, 2023 the market value of the City’s deferred compensation plan assets amounted to $350,687.

PAGE 237

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 99
(20) Pension Plans
Each
full-time employee and each part-time employee (with 1,000 hours or more of service) of the City is a member of either the FPRS or CalPERS. Both plans are defined benefit pension plans and are described individually in the following notes.

Summary of Pension Plans
Net Pension
Liability
Pension
Expense
Deferred Outflows
Related to Pension
Deferred Inflows
Related to Pension
Pasadena Fire and Police Retirement Plan (FPRS) 18,573$ 4,709$ 5,594$ -$ CalPERS - Safety Plan 216,070 29,561 76,047 566 CalPERS - Miscellaneous Plan 340,674 37,805 117,031 10,154 Total Plans 575,317$ 72,075$ 198,672$ 10,720$ Pasade
na Fire and Police Retirement System (FPRS)
Plan Description
FPRS
(the System) is a single-employer defined benefit plan governed by a Retirement Board (Board) under provisions of the City Charter. The plan covers all fire and police personnel who were employed by the City prior to July 1, 1977, except for those who elected to transfer to CalPERS when FPRS closed to new member in June 2004. In June 2004, active members were provided a one-time opportunity to transfer from FPRS to CalPERS as provided by an agreement with the City. Once transferred to CalPERS, retirement benefits for all fire and police personnel employed thereafter are provided under CalPERS. The plan provides retirement, death, and disability benefits.

Copies of FPRS’s annual financial report may be obtained from the Pasadena Fire & Police Retirement System, 100 N.

Garfield Ave., Rm. S201 Pasadena, CA 91101-1726 or at https://www.cityofpasadena.net/commissions/fire-and- police-retirement-board/.

Cash and Investments
Unrestricted pooled cash 1,123$
Designated pooled cash 1,250
Cash with master custodian 255
Cash and cash equivalents 2,628
Short-term investments 4,877
Investments 102,663
Total investments 107,540
Total cash and investments 110,168$
PAGE 238

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
100 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
Pasadena Fire
and Police Retirement System (FPRS) (Continued)
Funding Policy
Section 1509.9
of the City Charter provides that the normal member cont ribution rates will provide an average annuity, at age 50, equal to 1/100 of the final compensation of members for each year of service according to tables adopted by the Board. The basic benefits otherwise funded by these contributions have now been fully funded by Contribution Agreement 16,900. Pursuant to the agreement, the City contributed $100,000 net proceeds from the issuance of pension bonds to FPRS on August 5, 1999. The net pr oceeds plus the existing assets of FPRS became sufficient to fully fund the basic benefits, the unfunded ba sic benefits, the 1919 benefits, and the cost-of-living adjustment (COLA) benefits. Contributions are recogn ized when due. Therefore, member contributions are suspended as long as basic benefits remain fully funded.

On October 20, 2011, the Board approved Amended and Restated Agreement No. 20,823 (“Agreement No. 20,823”).

Under this new agreement, the City’s minimum funding percentage schedule and reimbursement cap in Agreement No. 16,900 carried forward, and the City agreed to prov ide a contribution of $46,600 to the System through the issuance of pension obligation bonds. Agreement No. 20,823 provided that the annual required supplemental contribution would be actuarially calculated using an interest assumption of 6% and an inflation rate of 3% beginning with the June 30, 2012 valuation. Pursuant to this agreem ent, future annual valuations after June 30, 2012, shall adopt an assumed interest rate and inflation assumption based on analysis performed by the System’s actuary and after seeking input from the City and System’s investment consultant. Agreements No. 16,900 and No. 20,823 state that if the minimum funding deficit is greater than $3,000 in a year, the City will pay $3,000 to the System. Any remaining amount necessary to reach the minimum funding percentage will be phased in over a five-year period; however, no annual supplemental payment may exceed a reimbursement cap measured by the prior year’s payments for benefits other than the funded basic benefits.

As of June 30, 2023, the funded percentage of the System, calculated in accordance with Agreement No. 20,823 and Agreement No. 16,900, was 84.1%. As provided by Contribution Agreement No. 16,900, if the funded percentage is below the minimum funding percentage of 80% for fiscal year 2023, the City will reimburse the System in the following fiscal year subject to certain reimbursement limit s. Based on the June 30, 20 23 actuarial valuation, there was no funding deficiency below the funding requirem ent of 80% as of June 30, 2023. Thus, no required supplemental contribution is owed to the System by the City during fiscal year ended June 30, 2023.

The components of the net pension liability of the System as of June 30, 2023 are as follows:

T ot al Pe nsion L iability 122,950$
Beginning Fiduciary Net Position (FNP) 111,662$
Net Investment Income 5,013
Benefit Payments (11,954)
Administrative Expenses (344)
Plan Fiduciary Net Position 104,377
Ne t Pe nsion L iability/(A sse t) 18,573
Plan Fiduciary Net Position as a
Percentage of Total Pension Liability 84.9%
FPRS
PAGE 239

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 101
(20) Pension Plans (Continued)
Pasadena Fire
and Police Retirement System (FPRS) (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuarial valuations of
an ongoing plan involve estima tes of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and cost trends. Actuarially de termined amounts are subject to continual review or modification as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employers and plan members) and incl ude the types of benefits provided at the time of each valuation. Following the recommendation provided by the System’s Actuary on May 26, 2022, the Board later accepted the recommended assumptions for use in the preparation of the actuarial valuation for the year ended June 30, 2023.

Discount Rate 5.25%*
Inflation 2.50%
Sal ary Increases No acti ve empl oyees
Mortality
Expected Geometric Real Rate of Return
Large Cap US Equity 3.77%
Small Cap US Equity 4.45%
Foreign Equity 4.41%
Domestic Core Fixed Income 0.53%
Senior Bank Loans 1.64%
Short-Term Investment-Grade Bonds 0.05%
TIPS -0.24%
Risk Parity 3.38%
Real Estate 3.81%
Inactive employees or beneficiaries currently receiving benefits** 183 Inactive employees entitled to but not yet receiving benefits - Active empl oyees -
Total participants 183
** Alternativ e pay ee data for 23 Domestic Relations Order (DRO) agreements prov ided separately from employ ee-retiree for first time in 6/30/23 v aluation. Benefits for these alternativ e pay ee prev iously included in the corres ponding retiree's benefits . All DRO a greements provide benefits to the a lternative pay ees for the lifetime of the Sy stem's retiree.

Actuarial Assumptions
*
Disc ount Rat e r eflec t s assumed inv est ment ex pense of 1 5 basis point s. 10-year geometric expected real rates of return from
Board-approved actuarial valuations, as prepared by
Bartel Associates, LLC (June 30, 2013-2021) & Foster &
Foster, Inc. (June 30, 2023)
CalPERS 2000-2019 Experience Study,
Mortal i ty Improvement Scal e 80% Scal e MP-2021
PAGE 240

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
102 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
Pasadena Fire and Po
lice Retirement System (FPRS) (Continued)
Discount Rate
The discount r
ate of 5.25% was selected by the System actuary and approved by the Board to measure the June 30, 2023 TPL for accounting purposes. The discount rate is the expected real long-term rate of return, plus the inflation assumption of 2.50%, less assumed inve stment expenses of 15 basis points. Th e expected long-term real rate of return is compared at the 50% and 55% confidence levels of capital market assumptions. Based on the assumptions, the System's Fiduciary Net Position was projected to be available to make all projected future benefit payments. The discount rate used as of June 30, 2023 is the same as the discount rate of 5.25% used as of June 30, 2022.

Asset Class
Target Asset
Allocation
Large Cap US Equity 16.00%
Small Cap US Equity 4.00%
Foreign Equity 20.00%
Domestic Core Fixed Income 25.00%
TIPS 5.00%
Short-Term Investment-Grade Bonds 10.00%
Senior Bank Loans 5.00%
A lte rnative (Risk Parity) 5.00%
Real Estate 10.00%
Total Portfolio 100.00%
Changes in Pension Liability
AB C = B - A
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Asset/(Liability)
Balance at June 30, 2022 126,291$ 111,662$ (14,629)$ Changes Recogni zed for the
Measurement Period:

Service Cost - - -
Interest on the Total Pension Liability 6,316 - (6,316) Di fferences between Expected and Actual
Experience 482 - (482)
Contribution from Employer - - - Contribution from Employees - - - Net Investment Income - 5,013 5,013
Benefi t Payments (11,954) (11,954) -
Administrative Expense - (344) (344)
Change of Assumptions 1,815 - (1,815)
Net Change during 2022-23 (3,341) (7,285) (3,944)
Balance at June 30, 2023 122,950$ 104,377$ (18,573)$ Ending Fiduciary Net Position as a
Percentage of the Total Pension Liability 84.9%
Pension Expense 4,709$
Increase / (Decrease)
PAGE 241

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 103
(20) Pension Plans (Continued)
Pasadena Fire
and Police Retirement System (FPRS) (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rates Examining the sensitivity
of the net pen sion liability (NPL) to changes in the d iscount rate by a 1% decrease, from

5.25% to 4.25%, revealed an increase in the NPL by $9,5 21 to a total NPL of $28,094. Conversely, increasing the discount rate by 1%, from 5.25% to 6.25%, revealed a corr esponding decrease in the NPL of $8,347 to total NPL of $10,226 as of June 30, 2023.

Discount Rate -1%
(4.25%)
Current Discount
Rate (5.25%)
Discount Rate +1%
(6.25%)
N e t Pe nsion L iability (N PL ) 28,094 18,573 10,226 NPL Funded Percentage 78.8% 84.9% 91.1%
FPRS
Deferred Outfl
ows and Deferred Inflows of Resources Related to Pensions Deferred Outflows of
Resources
Deferred Inflows of
Resources
Net Deferred of
Resources
Projected versus Actual Earnings on
Investments 5,594$ -$ 5,594$
Total 5,594$ -$ 5,594$
FPRS
Measurement Period
ended June 30:

Deferred
Outflows/(Inflows) of
Resources
2024 1,181 $
2025 603
2026 3,704
2027 106
FPRS
PAGE 242

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
104 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
CalPERS Miscellaneous and
Safety Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan and
Safety Plan (Plans), agent multiple-employer defined bene fit pension plans administered by the California Public Employees’ Retirement System (CalPE RS), which acts as a common investme nt and administrati ve agent for its participating member employers. Benefit provisions unde r the Plans are established by State statute and City resolution. CalPERS issues public ly available reports that include a full de scription of the pen sion plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provide service retirement and disability benefits, annual cost of liv ing adjustme nts and death benefits to
plan members, who must be public employees and beneficiar ies. Benefits are based on years of credit ed service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan ar e applied as specified by the Public Employees’ Retirement Law.

The Plan provisions and benefits in effect at June 30, 2023, are summarized as follows:

Hire date Prior to January 1, 2013 Hire date Prior to January 1, 2013 Benefit formula 2.5% @ 55 Benefit formula 3% @ 55
Benefit vesting schedule 5 years service Benefit vesting schedule 5 years service Benefit payments monthly for life Benefit payments monthly for life Reti rement age 50 Reti rement age 50
Mont hly be ne fit s, as a % of e ligible
compensation 2.00% to 2.50%
Mont hly be ne fit s, as a % of e ligible
compensation 2.40% to 3.00%
Required employee contribution rates 7.680% Required employee contribution rates 9.850% Required employer contribution rates* 35.450% Required employer contribution rates 55.070% *As a percentage of projected payroll
Miscellaneous Safety
Employees Covered
At the measurement date June 30, 2022, the following employees were covered b y the benefit terms of the plan:

Miscellaneous Safety
Inactive employees or
beneficiaries currently receiving
benefits 1,779 429
Inactive employees entitled to but
not yet receiving benefits 1,132 157
Active employees 1,399 355
Total 4,310 941
PAGE 243

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive
Financial Report | June 30, 2023 105
(20) Pension Plans (Continued)
CalPERS Misce
llaneous and Safety Plans (Continued)
Contribution Description
Section 2
0814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determ ined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the diffe rence between the actuarially determined rate and the contribution rate of employees. Employer contribution ra tes may change if plan contracts are amended. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer- Paid Member Contributions or situations where members are paying a portion of the employer contribution. The City made contributions to the Miscellaneous and Safety Plans during the fiscal year ended June 30, 2023 of $43,316 and $27,252, respectively.

Net Pension Liability
The City’s net
pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

The total pension liabilities in the June 30, 2022 actuarial valuations were determined using the following actuarial assumptions:

Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuari al Cost Method Entry Age Actuarial Cost Method Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Servi ce
Mortality Rate Table (1) Derived using CalPERS' Membership Data for all Funds Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on
purchasin g power applie s, 2.30% thereafter
A ctuarial A ssumptions
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience St udy for the period from 2001 to 2019. Pre- retirement and Post- retirement mortality rates include using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be fo und on the CalPERS website.

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

The stress test results are presented in a detailed report called GASB Crossover Testing Report that can be obtained at CalPERS’ website under the GASB 68 section.

PAGE 244

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
106 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
CalPERS Misce
llaneous and Safety Plans (Continued)
Long-term Expected Rate of Return
The long-term expecte
d rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

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

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

Asset Class (1)
Assumed Asset
Allocation Real Return (1,2)
Global Equity - Cap-Weighted 30.00% 4.54%
Global Equity - Non-Cap-Weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-Backed Securities 5.00 0.50
Investment Grade Corporates 10.00 1.56
High Yeild 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage (5.00) (0.59)
(1) An expe cte d inflation of 2.30% use d for this peri od. (2) Figure s are base d on the 2021 A sse t L iability Manage m e nt Study.

Sour
ce: CalPERS Annual Comprehensive Financial Report, Fiscal Year Ended June 30, 2022 PERF B & PERF C – Long-Term Expected Real Rates of Return by Asset Class PAGE 245

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30
, 2023 107
(20) Pension Plans (Continued)
CalPERS Miscellaneous and Safety Plans (Continued)
Changes in Net Pension Liability
Miscellaneous
AB C = B - A
Total Pension Liability
Plan Fiduciary Net
Position
Net Pension
Asset/(Liability)
Balance at June 30, 2021,
Measurement Date (MD) 1,244,126$ 1,066,101$ $ (178,025) Changes Recognized for the
Measurement Period 2021-22:

Service Cost 22,198 - (22,198)
Interest on the Total Pension Liability 85,888 - (85,888) Di fferences between Expected and
Actual Experience (12,307) - 12,307
Changes of Assumption 35,296 - (35,296)
Plan to Plan Resource Movement - - -
Contribution from Employers - 40,242 40,242
Contribution from Employees - 9,288 9,288 Net Investment Income - (80,440) (80,440)
Benefit Payments, including
Refunds of Employee Contribution (66,929) (66,929) - Administrative Expense - (664) (664)
Net Changes 64,146 (98,503) (162,649)
Balance at June 30, 2022, MD 1,308,272$ 967,598$ (340,674)$ Pension Expense 37,805$
Increase/(Decrease)
Safety
AB C = B - A
Total Pension Liability
Plan Fiduciary Net
Position
Net Pension
Asset/(Liability)
Balance at June 30, 2021,
Measurement Date (MD) 741,784$ 632,114$ (109,670)$ Changes Recognized for the
Measurement Period 2021-22:

Service Cost 14,423 - (14,423)
Interest on the Total Pension Liability 51,956 - (51,956) Differences between Expected and
Actual Experience (643) - 643
Changes of Assumption 22,619 - (22,619) Net Plan to Plan Resource Movement - - -
Contribution from Employers - 25,199 25,199
Contribution from Employees - 5,015 5,015
Net Investment Income - (47,866) (47,866)
Benefit Payments, including Refunds of
Employee Contribution (35,966) (35,966) -
Administrative Expense - (393) (393)
Net Changes 52,389 (54,011) (106,400)
Balance at June 30, 2022, MD 794,173$ 578,103$ (216,070)$ Pension Expense 29,561$
Increase/(Decrease)
PAGE 246

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
108 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
CalPERS Miscellaneous and S
afety Plans (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rates The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate
of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:

Discount Rate -1%
(5.90%)
Current Discount
Rate (6.90%)
Discount Rate +1%
(7.90%)
Plan Net Pension Liability 506,856$ 340,674$ 202,750$ Discount Rate -1%
(5.90%)
Current Discount
Rate (6.90%)
Discount Rate +1%
(7.90%)
Plan Net Pension Liability 329,222$ 216,070$ 123,709$ Miscellaneous
Safety
Subsequent Events (as measur
ement period is from July 1, 2021 through June 30, 2022) On July 12, 20
21, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Th is study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

PAGE 247

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30
, 2023 109
(20) Pension Plans (Continued)
CalPERS Miscellaneous and
Safety Plans (Continued)
Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense
systematically over time.

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

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

Net difference between projected
and actual earnings 5 year straight-line amortization
Al l other amounts Strai ght-l i ne amorti zati on over the expected average remai ni ng service l ifetime (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement peri od
The EARSL for the Miscellane ous Plan for t h
e measurement period ending June 30, 2022 is 3.4 years, which was obtained by dividing the total service years of 14,755 (the sum of remaining service lifetimes of the active employees) by 4,330 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future serv ice is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

The EARSL for the Safety Plan for the measurement period ending June 30, 2022 is 4.8 years, which was obtained by dividing the total service years of 4,486 (the sum of remaining service lifetimes of the active employees) by 941 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to zero. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

PAGE 248

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
110 Annual Comprehensive Financial Report | June 30, 2023 (20) Pension Plans (Continued)
CalPERS Miscellaneous and
Safety Plans (Continued)
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of June 30, 2023, the
City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources Change s of A ssumption 24,916$ -$ 17,907$ (56)$ 42,823$ (56)$ Di fferences between Expected and
Actual Experience - (10,154) 1,725 (510) 1,725 (10,664) Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
48,800 - 29,163 - 77,963 -
Contributions Subsequent to the
Meas urement Date 43,316 - 27,252 - 70,568 -
Total 117,032$ (10,154)$ 76,047$ (566)$ 193,079$ (10,720)$ Miscellaneous Safety Total
The amounts above are net of ou tflows
and inflows recogn ized in the fiscal year 2022-23 measurement period expense. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Measurement Period
ended June 30
Deferred
Outflows/(Inflows) of
Resources
Measurement Period
ended June 30:

Deferred
Outflows/(Inflows) of
Resources
2023 13,491$ 2023 10,485$
2024 13,437 2024 9,119
2025 5,971 2025 6,710
2026 30,663 2026 21,915
Thereafter - Thereafter -
Defined Contribution Plan
(PARS)
The City provides pension benefits for employees not covered by CalPERS or FPRS through the PARS. This is a defined contribution plan created in accordance with Internal Revenue Code Sections 401(a) and 501. CalPERS issues publicly available reports that include a full description of the pe nsion plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website, at www.calpers.ca.gov.

In a defined contribution plan, ben
efits depend solely on amounts contributed to the plan plus investment earnings.

Employees are eligible to participate from the date of employment. On October 29, 2012, the City adopted a Salary Resolution for the Non-Represented Non-Management em ployees requiring the covered employees to contribute the full 7.5% of their earnings effective December 31, 2012. Prior to the adoption of the Salary Resolutions, the plan agreement required the City to contri bute an amount equal to 4.0% of the employees’ earnings and the covered employee contributed 3.5%. The City contributions for each employee were fully vested.

The City’s payroll for employees covered by PARS for the year ended June 30, 2023 was $4,854. The covered employees made the total required 7.5% contributions of $364.

PAGE 249

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 3
0, 2023 111
(21) Other Postemployment Benefits (OPEB)
The City of Pasadena provides a direct subsidy to retire es of the City who are members of the California Public Employees’ Retirement System or the Pasadena Fire and Police Pension System. As such, the OPEB plan is not separately audited and does not issue its own report.

Benefit provisions are established and amended through negotiations between the City and the respective unions.

Two different levels of subsidy toward the purchase of medical insurance from CalPERS under the Public Employees’ Medical and Hospital Care Act (PEMHCA) are offered. These are currently at $151 or $149 per month depending on the bargaining unit or the unrepresented group the employee was a member.

At the June 30, 2023 actuarial valuation, the following current and former employees were covered by the benefit terms:

Inactive plan members or beneficiaries currently receiving benefits 721 Active plan members 1,582
2,303
Plan Description
Eligibility. The plan i
s an agent multiple-employer plan which provides benefits under PEMHCA to individuals who retire with the City and begin to collect a monthly benefit under one of the retirement plans sponsored by the City.

Employees who terminate under service retirement or disability retirement and certain survivors of Safety members who die in active service are eligible.

Service Retirement: Employees retiring directly from active status receive medical benefits commencing at retirement. Employee must be age 50 (or 52 if a “new member” as defined in the Public Employees’ Pension Reform Act of 2013) or older with 5 or more years of service.

Disability Retirement: Employees retiri ng directly from active status due to disability receive medical benefits commencing at retirement. Employees are eligible for Industrial Disability retirement at hire and for Non-Industrial Disability retirement after 5 years of CalPERS service.

Pre-retirement Death:

Safety Employees
Industrial: Survivor receives medical benefits commencing immediatel y.

Non-Industrial: Survivor receives medical benefits immediately if death occurs after member reaches age 50 with 5 years of service.

Miscellaneous Employees Survivor receives medical benefits immediately if death occurs after member reaches age 50 with 5 years of service.

Dependent Eligibility: Dependents are not eligible for benefits.

Survivor Eligibility: Survivors are eligible for benefits if the retiree elected a form of coverage providing for continued pension payments to the retiree.

Benefits:

Medical Benefit: Eligible retirees are provided a subsidy for medical benefits through PEHMCA. For the calendar year 2023, this monthly amount is $151.00 for certain classes of employees and $128.35 for remaining employees.

PAGE 250

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
112 Annual Comprehensive Financial Report | June 30, 2023 (21) Other Postemployment Benefits (OPEB) (Continued)
Contributions
The City contributes the minimum amount allowed under Government Code Section 22825 of the PEMHCA enacted by CalPERS pursuant to State Law. The City’s required monthly contributions for calendar years 2023 and 2022 were $151.00 or $149. 00, respectively. The statutory contribution will be indexed by the medical CPI each year. The required contribution is based on pay-as-you-go financin g requirements. Retirees must contribute any premium amounts in excess of the City contribution. In fiscal year 2018, the City set aside $2,000 in a Section 115 trust account, which was recognized as a reduction to the OPEB liability. The City has not made any additional contribution since the initial funding and during fiscal year ended June 30, 2023. As of June 30, 2023, the fair value of the OPEB Section 115 trust account was $2,310.

Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated July 1, 2022, based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal – level percentage of Salary method Actuarial Assumptions:

Discount Rate 4.13% as of July 1, 2023 and 4.09% as of July 1, 2022 Inflation 2.80% per annum
Payroll Increases 2.80% per annum, plus salary merit increases Merit Increases Merit increases from th e most recent CalPERS pension plan valuation.The benefits are not payroll related but each individual’s projected cost is allocated over their lifetime as a level-percentage of pay.

Healthcare Trend Rate The current health care trend rate starts at an initial rate of

6.25%,decreasing to an ultimate rate of 4.50%.

Investment Rate of Return 5.0% per annum
Disability According to the disability rates under the 2022 CalPERS experience study.

Turnover Rate According to the termination rates under the 2022 experience study for the CalPERS pension plan
Retirement Age According to the retirement rates under the 2022 CalPERS experience study. According to the following retirement tables:

Miscellaneous Tier 1: 2.7% @ 55
Miscellaneous Tier 2: 2.0% @ 62
Fire Tier 1: 3.0% @ 55
Fire Tier 2: 2.7% @ 57
Police Tier 1: 3.0% @ 55
Police Tier 2: 2.7% @ 57
Mortality Rate The plan does not have sufficient data to have credible experience.

Therefore, mortality assumptions are set to reflect general population trends based upon Pub-2010 Mortality tables and the most recent generational projection scale MP-2022 released by the Society of Actuaries (SOA) for future mortality improvements.

PAGE 251

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30
, 2023 113
(21) Other Postemployment Benefits (OPEB) (Continued)
Net OPEB Liability (Continued)
Pre-retirement Turnover According to the rates under the 2022 experience study for the CalPERS pension plan
[Rates have been updated to the CalPERS 2017 experience study from the 2014 experience study for the pension plan]
Participation Rates 60% of eligible active employees are assumed to elect medical coverage at retirement. Future retirees are assumed to elect similar coverage as current retirees. Actual plan coverage is used for current retirees.

Spouse Coverage 50% of future retirees are assumed to elect coverage for their spouse.

Male spouses are assumed to be 3 years older than female spouses.

Actual spouse coverage and spouse ages are used for current retirees.

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long- term expected rate of return by weighting the expected fu ture real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of June 30, 2023 are summarized in the following table:

Assets Class Target Allocation
Long-term Expected
Gross Rate of Return
Equities 30.00% 7.70%
Fixed Income 65.00% 4.00%
Cash 5.00% 2.40%
Total 100.00% 5.00%
Long-term expected rate of return is 5.00%.

PAGE 252

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
114 Annual Comprehensive Financial Report | June 30, 2023 (21) Other Postemployment Benefits (OPEB) (Continued)
Changes in the OPEB Liability
AB C = A - B
Total OPEB Liability
Plan Fiduciary Net
Position
Net OPEB
(Asset)/Liability
Balance at June 30, 2022 74,648$ 2,215$ 72,433$ Changes recognized for the
Measurement Period:

Service Cost 3,623 - 3,623
Interest 3,141 - 3,141
Difference between expected and
actual experience (397) - (397)
Changes of Assumptions (419) - (419)
Contribution - Employer - 2,997 (2,997)
Net Investment Income - 101 (101)
Benefit Payments, Net (2,997) (2,997) -
Administrative Expenses - (6) 6
Net Changes 2,951 95 2,856
Balance at June 30, 2023 77,599$ 2,310$ 75,289$ Increase (Decrease)
(Balance of page intentionally left blank)
PAGE 253

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30
, 2023 115
(21) Other Postemployment Benefits (OPEB) (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City, calculated using the discount rate of 4.13%, as well as what the net OPEB would be if it were calculated using a d iscount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
1% Decrease Current Discount Rate 1% Increase
(3.13%) (4.13%) (5.13%)
Net OPEB Liability 86,986$ 75,289$ 65,881 $ Sensitivity of the Net
OPEB Liability to Changes in Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
1% Decrease
Current Healthcare
Cost Trend Rates 1% Increase
(5.25% decreasing
to 3.50%)
(6.25% decreasing to

4.50%)
(7.25% decreasing to

5.50%)
Net OPEB Liability 63,596$ 75,289$ 90,334$
OPEB Expense and Defe
rred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $6,175. As of fiscal year ended June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB form the following sources:

Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Change s of A ssumptions 699$ (2,241)$
Di fference between expected and actual experi ence 6,705 (21,638) Net difference between projected and actual earning on OPEB plan investments 184 - Total 7,588$ (23,879)$
The $7,587 reported as deferred outflows of resources and $23,879 reported as deferred inflows related to OPEB will be recognized as OPEB expense as follows:

Fiscal Year
Ended June 30
Deferred
Outflows/(Inflows) of
Resources
2024 (1,211) $
2025 (1,919)
2026 (1,879)
2027 (1,964)
2028 (1,966)
Thereafter (7,352)
Total (16,291)$
PAGE 254

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
116 Annual Comprehensive Financial Report | June 30, 2023 (22) Commitments and Contingencies
Primary Government
“Take or Pay” Contracts
The City’s electric operation has entered into various
long term “Take or Pay” contracts to provide for current and future electric generating capacity and transmission of ener gy for City customers. The Ci ty is obligated to pay the amortized cost of indebtedness regardless of the ability of the contracting agency to provide electricity and/or transmission, as applicable. Th e original indebtedness will be amortized by adding the financing costs to pur chase energy over the life of the contract. The contracts expire at various times through fiscal year 2036. The total commitment under these contracts as of June 30, 2023 is $104,309.

Additional financial information on the SCPPA may be obtained by contacting the City of Pasadena Department of Water and Power at 150 South Los Robles, Suite 200, Pasadena, CA 91101.

Stranded Investments
In response to California Assembly Bill 1890 (“AB1890”), the City chose to open its market to competition on January
1, 2000. The City has long-term contracts with IPA and SCPPA, most of which obligate the City to purchase power and/or services at cost, which was projected to be higher than market in a deregulated environment. As a result, the City was faced with a “stranded investment” with a net present value estimated to be $40,341 in 2023. The City has implemented the approved Stranded Invest ment Utilization Plan by direct defe asance of the debt service of IPP outstanding bonds and mitigation of variable energy costs.

Additional information related to IPA and SCPPA is available online from Water and Power Department’s website or may be obtained by contacting the department at 150 South Los Robles, Suite 200, Pasadena, CA 91101.

Lawsuits and Claims
A number of suits and claims are pending against the
City arising in the normal course of operations. In the opinion of management, the results of such legal actions will not have a material adverse effect on the financial position or results of operations of the City.

Other
Certain federal and state revenues are received for specif ic purposes and are subject to audit by the grantor
agencies. City management is of the op inion that adjustments, if any, resulting from such audits will not be significant.

PAGE 255

CITY OF PASADENA FINANCIAL SECTION NOTES TO TH E BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual
Comprehensive Financial Report | June 30, 2023 117
(23) Restatement of Beginning Net Position
A
prior period adjustment of $791 was made to reduce the net position of the Refuse fund due to a reinstatement of deposits payable related to residential and commercial bins erroneously recognized as revenue in the prior fiscal year.

Government-wide
Statements
Business-type
Activities
Nonmajor
Enterprise Funds
Net position at beginning of year, as previously reported 879,222$ 18,936$ Restatement:

Res ource, recovery a nd recycl i ng
reinstatement of deposit balance (791) (791)
Net pos i ti on a t begi nni ng of yea r, a s res ta ted 878,431$ 18,145$ Fund Statements
Enterprise Funds
(24) Subsequent Events
Subse
quent events were evaluated through the date of the audit report.

Acquisition of Property in Partnership with Los Angeles County On
April 24, 2023, Council authorized City Manager to enter into an agreement on behalf of City of Pasadena with Kaiser
Foundation Health Plan, Inc., to purchase a property located at 450 N. Lake Ave, Pasadena. On November 6, 2023, the City of Pasadena took formal ownership of the 2.5-acre site. The cost of this acquisition was $12,000. This project will be in partnership with Los Angeles County, wi th the County contributing $6,0 00 to the purchase price.

The
property will be transformed into a community services site, offering affordable housing, mental health care services,
and outpatient services.

PAGE 256
(This page intentionally left blank)
PAGE 257

REQUIRED SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT | FISCAL YEAR ENDED JUNE 30, 2023 PAGE 258

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
120 Annual Comprehensive Financial Report | June 30, 2023 (This page intentionally left blank)
PAGE 259

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 121 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
For the Fiscal Year Ended June 30, 2023
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Taxes:

Property 76,276$ 76,276$ 81 ,292$ 5,016$ Sales 70 ,645 75,681 75,733 52
Utilit y users' 27,200 27,200 32,790 5,590
Tra ns i ent occupanc y 17,037 18,637 18,675 38 Other 20,823 14,187 25,768 11,581
Licenses and per mits 3,475 3,475 3,731 256 Inter gov ernmental 22,651 30,040 71,161 41,121 Charges for s ervices 34,953 33,813 35,822 2,009 Fines and forfeitures 5,121 5,121 5,372 251 Inv estment earnin gs6 81 681 2,127 1,446 Net chan ge in fair v alue of inv estments - - (640) (640) Lea
se revenues 995 995 1,349 354
Interest - leases (as lessor ) - - 2 2
Miscellaneous revenues 2,817 2,848 3,226 378 Contributions 33 33 33 -
Total revenues 282,707 288,987 356 ,441 67,454 Expenditures:

General government:

Attorne y 10,461 11,628 11,949 (321)
Cl e r
k 3,332 3,332 3,131 201
Council 3,136 3,136 2,763 373
Ma nager 6,122 6,422 5,895 527
Finance 13,883 13,883 13,733 150
Human Resources 4,817 4,817 4,728 89
Nonde partmental 15,574 16,503 16,170 333
Public safety:

Fire 58 ,046 60,073 61,231 (1,158)
P olic
e 9 4,898 95,335 94,891 444
Transportation:

Trans porta tion 23,098 24,329 24,290 39
P ublic Wor ks - - - -
Culture and leisure:

Pa rks, Recreation & Communit y 23,148 22,794 21,860 934 Nonde partmental 11,244 13,844 11,559 2,285 Community development:

Plannin g & Permittin g 9,701 9,518 8,683 835 Capital outlay 61 219 2,556 (2,337)
Debt Service:

Interest 10 10 3 7
Lease pay ments - - 644 (644)
Subscri ption payments - - 447 (447)
Inte
rest - leases and subscriptions - - 33 (33) 277,531 285,843 284 ,566 1,277 Excess (deficiency) of revenues over (under)
expenditures 5,176 3,144 71,875 68,731
Other financing sources (uses):

Tr ansfer s in 2 0,715 20,715 20,667 (48)
Tra
ns fers out (30,443) (35,203) (35,203) -
Tr ansfer s t o c omponent unit - - (67) (67) Leas
es issued - - 506 506
Subscri pt ions issued - - 617 617
Total other financing sources (uses) (9,728) (14,488) (13,480) 1,008 Net change in fund balances (4,552) (11,344) 58,395 69,739 Fund balances at be ginnin g of yea r 106,216 106,216 106 ,216 - Fund balances at end of year 101,664$ 94,872$ 164,611$ 69,739$ Budget
PAGE 260

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
122 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Successor Fund
For the Fiscal Year Ended June 30, 2023
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Cha rges for s ervi ces -$ -$ 7$ 7$
Inv estment earnin gs- - 92 92
M isc ellaneous r ev enues 1 1 8 118 289 171
Total revenues 118 118 388 270
Expenditures:

Current:

Communi ty develo pment 282 1,338 1,260 78
Total expenditures 282 1,338 1,260 78
Net change in fund balances (164) (1,220) (872) 348
Fund balance at beginning of year 1,893 1,893 1,893 - Fund balance at end of year 1,729$ 673$ 1,021$ 348$ Budget
PAGE 261

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 123 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Project Management Fund
For the Fiscal Year Ended June 30, 2023
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Inter gov ernmental -$ 15,356$ 10,504$ (4,852)$ Cha rges for s ervi ces - 100 3 4 (66)
L
ease revenues - (138) 4 23 561
Miscellaneous revenues - - 56 56
Contributions - 481 6
77 196
Total revenues - 15,799 11,694 (4,105)
Expenditures:

Current:

General gov ernment - - 225 (225)
Tr
ans portation 6,441 6,441 5,716 725
Capital out la y 1,151 50,653 36,321 14,332
Debt service:

Leas e payments - - 42 (42)
S
ubscri ption payments - - 79 (79)
To
tal expenditures 7,592 57,094 42,383 14,711
Excess (deficiency) of revenues
over (under) expenditures (7,592) (41,295) (30,689) 10,606 Other financing sources (uses):

Transfers in - 29,645 30,083 438
Transfers out - 30 (437) (467)
L
eases issued - - 11 11
Subscri pt ions issued - - 98 98
Total other financing sources - 29,675 29,755 80
Net change in fund balances (7,592) (11,620) (934) 1 0,686 Fund balance at beginning of year 3,387 3,387 3,387 - Fund balance (deficit) at end of year (4,205)$ (8,233)$ 2,453$ 10,686$ Budget
PAGE 262

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
124 Annual Comprehensive Financial Report | June 30, 2023 (This page in
tentionally left blank)
PAGE 263

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 125 City of Pasadena
Notes to the Required Supplementary Information
Year Ended June 30, 2023
Budgets
and Budgetary Data
The City Council is required to adopt an annual budget resolution by June 30 of each fiscal year. The budgets are adopted on a basis that does not differ materially from GAAP.

An appropriated annual budget is legally adopted for the General and Special Revenue Governmental Funds.

Annual appropriated
budgets are not adopted for Debt Service Funds because bond indentures are used as the method for adequate budgetary control. Some Capital Projects Funds have annual appropriated budgets. Control over some projects is maintained by means of an annual budget; others through a project- length capital improvement budget. This project-length budget authorizes total expenditures over the duration of a construction project, rather than year by year.

The City maintains budgetary controls to ensure co mpliance w ith legal provisions embodied in the
appropriated budget approved by the City Council. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is the department level and within a single fund. The City Manager may authorize transfers of appropriations within a department so long as it is within a single fund. Supplemental appropriations during th e year must be approved by the City Council. All unencumbered appropriations lapse at the end of the fiscal year. In order to be an encumbered appropriation there must be either an approved purchase order or contract in force as of June 30.

PAGE 264

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
126 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Changes in the Net Pension Liability and Related Ratios CalPERS Pension Plans – Miscellaneous
Last Ten Fiscal Years1
Fiscal year ended June 30, 2023 June 30, 2022 June 30, 2021 Measurement period ended June 30, 2022 June 30, 2021 June 30, 2020 Total Pe nsion L iabilit y:

Service cost 22,198$ 19,876$ 19,566$
Inte re st on total pe nsion liabilit y 85,888 84,480 81,859 Changes of benefits - - -
Changes of assumptions 35,296 - -
Di fference between expected and actual experi ence (12,307) (2,425) (3,982) Benefit payments, including refunds of
employee contributions (66,929) (63,657) (61,336)
Ne t Change in Total Pe nsion L iability 64,146 38,274 36,107 Total Pe nsion L iabilit y - Be ginning of Ye ar 1,244,126 1,205,852 1,169,745 Total Pe nsion L iabilit y - E nd of Ye ar (a) 1,308,272$ 1,244,126$ 1,205,852$ Plan Fiduciary Net Position:

Contributions - employer 40,242$ 38,235$ 35,786$ Contributions - employee 9,288 9,265 8,895
Net investment income (80,440) 199,471 42,242
Benefit payments, including refunds of
employee contributions (66,929) (63,657) (61,336)
Net plan to plan resource movement - - -
Administrative expense (664) (883) (1,211)
Other mi scel l aneous i ncome/(expense) - - -
Net Change in Plan Fiduciary Net Position (98,503) 182,431 24,376 Plan Fiduciary Net Position - Beginning of Year 1,066,101 883,670 859,294 Plan Fiduciary Net Position - End of Year (b) 967,598$ 1,066,101$ 883,670$ Net Pension Liability - Ending (a)-(b) 340,674$ 178,025$ 322,182$ Plan fiduciary net position as a percentage of the
total pe nsion liabilit y 73. 96% 85.69% 73.28%
Covered payroll 119,630$ 119,505$ 116,645$
Net pension liability as percentage of
covered payroll 284.77% 148.97% 276.21%
NOTES TO SCHEDULE:

Benefit Changes:

Changes in A ssumptions:

From fiscal year June 30, 2015 to June 30, 2016:

For fiscal years ended 2016 and 2017:

The re we re no significant change s in assum ptions.

For fiscal years ended 2017 and 2018:

The discount rate was reduced from 7.65% to 7.15%.

For fiscal years ended 2019, 2020, 2021 and 2022:

The re we re no significant change s in assum ptions.

For fiscal year ended 2023:

The discount rate was reduced from 7.15% to 6.90%.
1 GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. Additional years w ill be adde d as they be com e available in the future .

There were no changes in benefits.

PAGE 265

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 127 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 19,270$ 19,070$ 18,793$ 16,452$ 16,519$ 17,349$ 79,379 76,249 74,168 72,632 70,708 68,656
- - - - - -
- (7,443) 59,447 - (16,682) -

5,492 (3,023) (11,333) (13,975) (14,488) -
(58,915) (55,364) (51,700) (49,269) (46,871) (44,239) 45,226 29,489 89,375 25,840 9,186 41,766
1,124,519 1,095,030 1,005,655 979,815 970,629 928,863 1,169,745$ 1,124,519$ 1,095,030$ 1,005,655$ 979,815$ 970,629$ 31,375$ 27,112$ 24,681$ 22,252$ 19,683$ 18,058$ 8,841 8,824 8,904 8,659 8,503 10,977
53,458 66,083 80,076 3,807 16,554 111,123
(58,915) (55,364) (51,700) (49,269) (46,871) (44,239) - (2) - - 1 -
(589) (1,219) (1,065) (449) (829)
2 (2,314) - - - -
34,172 43,120 60,896 (15,000) (2,959) 95,919
825,122 782,002 721,106 736,106 739,065 643,146 859,294$ 825,122$ 782,002$ 721,106$ 736,106$ 739,065$ 310,451$ 299,397$ 313,028$ 284,549$ 243,709$ 231,564$

73.46% 73.38% 71.41% 71.71% 75.13% 76.14%
112,848$ 111,573$ 107,546$ 105,292$ 102,406$ 103,617$ 275.11% 268.34% 291.06% 270.25% 237.98% 223.48%
PAGE 266

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
128 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Contributions
CalPERS Pension Plans – Miscellaneous
Last Ten Fiscal Years1
Fiscal year ended 2023 2022 2021
Actuarially determined contribution 2 40,242$ 38,235 $ 35,786 $ Contributions i n relati on to the actuarially
determined contribution (43,316) (38,235) (35,786) Contribution deficiency (excess) (3,074)$ -$ -$ Covered payroll 126,652$ 119,630$ 119,505$ Contributions as a percentage
of covered payroll 34.20% 31.96% 29.95%
Notes to Schedule:

Valuation date 6/30/2020 6/30/2019 6/30/2018
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age
Asset valuation method Fair value Fair value Fair value Inflation 2.50% 2.50% 2.625%
Amorti zati on method3
Salary incre ase s4
Investment rate of return5 7.00% 7.00% 7.25%
Retirement age6
Mortality 7
NOTES TO SCHEDULE:
1 2
3 L e ve l pe rce ntage of payroll, close d.
4 Depending on age, service, and type of employment.
5 Net of pension plan investment expense, including inflation 6 The probabilitie s of re tire m e nt are base d on the most re ce nt CalPERS Expe rie nce Study adopte d by the CalPERS Board. 7 GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. A dditional ye ars will be adde d as the y be com e available in the future .

Employers are assumed to make contributions equal to the actuarily determined contributions. However, some employers may choose to make additional contributions towards their unfunded liab ility. E mploye r contributions for such plans e xce e d the actuarially de te rmine d cont ributions.

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

PAGE 267

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 129 2020 2019 2018 2017 2016 2015
31,375$ 27,112$ 24,681$ 22,252$ 19,683$ 18,058$ (31,375) (27,112) (24,681) (22,252) (19,683) (18,058) -$ -$ -$ -$ -$ -$
116,645$ 112,848$ 111,573$ 107,546$ 105,292$ 102,406$

26.90% 24.03% 22.12% 20.69% 18.69% 17.63%
6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Entry age Entry age Entry age Entry age Entry age Entry age Fair value Fair value Fair value Fair value 15 Ye ar 15 Ye ar Smoothed Smoothed
Market Method Market Method

2.625% 2.75% 2.75% 2.75% 2.75% 2.75%

7.25% 7.38% 7.50% 7.50% 7.50% 7.50%
PAGE 268

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
130 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Changes in the Net Pension Liability and Related Ratios CalPERS Pension Plans – Safety
Last Ten Fiscal Years1
Fiscal year ended June 30, 2023 June 30, 2022 June 30, 2021 Measurement period June 30, 2022 June 30, 2021 June 30, 2020 Total Pe nsion L iability:

Service cost 14,423$ 13,227$ 13,264$
Interest on total pension liabil ity 51,956 50,130 47,906 Changes of benefit terms - - -
Changes of assumptions 22,619 - -
Di fference between expected and actual experi ence (643) 7 77 1,038
Benefit payments, i ncluding refunds of
employee contributions (35,966) (32,147) (29,518)
N e t Change in T otal Pe nsion L iability 52,389 31,986 32,690 Total Pe nsion L iability - Be ginning of Y e ar 741,784 709,798 677,108 Total Pe nsion L iability - End of Y e ar (a) 794,173$ 741,784$ 709,798$ Plan Fiduciary Net Position:

Contributions - employer 25,199$ 23,384$ 21,823$ Contributions - employee 5,015 4,734 4,617
Net investment income (47,866) 118,090 24,676
Benefit payments, i ncluding refunds of
employee contributions (35,966) (32,147) (29,518)
Net plan to plan resource movement - - -
Administrative expense (393) (
518) (
702)
Other miscellaneous income/(expense) - - -
Net Change in Plan Fiduciary Net Position (54,011) 113,543 20,896 Plan Fiduciary Net Position - Beginning of Year 632,114 518,571 497,675 Plan Fiduciary Net Position - End of Year (b) 578,103$ 632,114$ 518,571$ Ne t Pe nsion L iability - Ending (a)-(b) 216,070$ 109,670$ 191,227$ Plan fiduciary net position as a percentage of the
total pe nsion liability 72.79% 85.22% 73.06%
Covered payroll 48,883$ 47,997$ 47,457$
Net pension l iabili ty as percentage of
covered payroll 442.01% 228.49% 402.95%
NOTES TO SCHEDULE:

Be
nefit Changes:

Changes in A ssumptions:

From fiscal year June 30, 2015 to June 30, 2016:

For fiscal years ended 2016 and 2017:

There were no significant changes in assumptions.

For fiscal years ended 2017 and 2018:

The discount rate was reduced from 7.65% to 7.15%.

For fiscal years ended 2019, 2020, 2021 and 2022:

There were no significant changes in assumptions.

For fiscal year ended 2023:

The discount rate was reduced from 7.15% to 6.90%.
1 There were no changes in benefits.

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. A dditional ye ars will be added as they be come available in the future.

PAGE 269

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 131 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 12,764$ 12,757$ 12,324$ 10,509$ 10,702$ 11,182$ 45,654 43,215 41,004 39,394 37,307 35,798 - - - - - -
- (995) 36,547 - (9,888) -
4,034 2,172 (7,057) (634) (8,455) -
(26,877) (24,941) (22,654) (20,871) (19,143) (16,924) 35,575 32,208 60,164 28,398 10,523 30,056 641,533 609,325 549,161 520,763 510,240 480,184 677,108$ 641,533$ 609,325$ 549,161$ 520,763$ 510,240$ 19,187$ 16,542$ 15,279$ 13,026$ 12,027$ 10,533$ 4,383 4,197 4,056 3,804 3,764 4,226 30,716 37,156 44,323 2,093 8,834 59,052 (26,877) (24,941) (22,654) (20,871) (19,143) (16,924) - (1) - - - -
(336) (685) (589) (245 ) (452) -
1 (1,301) - - 684 -
27,074 30,967 40,415 (2,193) 5,714 56,887 470,601 439,634 399,219 401,410 395,696 338,809 497,675$ 470,601$ 439,634$ 399,219$ 401,410$ 395,696$ 179,433$ 170,932$ 169,691$ 149,942$ 119,353$ 114,544$

73.50% 73.36% 72.15% 72.70% 77.08% 77.55%
46,444$ 44,887$ 41,528$ 41,142$ 41,013$ 34,243$ 386.34% 380.81% 408.62% 364.45% 291.01% 334.50%
PAGE 270

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
132 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Contributions
CalPERS Pension Plans – Safety
Last Ten Fiscal Years1
Fiscal year ended 2023 2022 2021
Actuarially determined contribution 2 25,199$ 23,384$ 21,823$ Cont ribut ions in re lation t o the actuarially
determined contribution (27,252) (23,384) (21,823)
Contribution deficiency (excess) (2,053)$ -$ -$
Covered payroll 51,234$ 48,883$ 47,997$
Contributions as a percentage
of covered payroll 53.19% 47.84% 45.47%
Notes to Schedule:

Valuation date 6/30/2020 6/30/2019 6/30/2018
Actuarial cost method Entry age Entry age Entry age
A sse t valuat ion m e thod Fair value Fair value Fair value Inflation 2.50% 2.50% 2.625%
Amorti zati on method3
Salary incre ase s4
Investment rate of return5 7.00% 7.00% 7.25%
Retirement age6
Mort alit y7
Methods and Assumptions Used to
Determine Contribution Rates:

NOTES TO SCHEDULE:
1 2
3 L e ve l pe rce ntage of payroll, close d.
4 Depending on age, service, and type of employment.
5 Net of pension plan investment expense, including inflation 6 7
GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. Additional years will be added as they become available in the future.

Employers are assumed to make contri butions equal to the actuarily determi ned contri butions. However, some empl oyers may choose to make addi tional contributi ons towards their unfunded l iabili ty. Empl oyer contri butions for such plans exceed the actuarially de te rm ine d contributions.

The probabilities of retirement are based on the most recent CalPERS Experience Study adopted by the CalPERS Board.

Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

PAGE 271

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 133 2020 2019 2018 2017 2016 2015
19,187$ 16,542$ 15,279$ 13,026$ 12,027$ 10,533$ (19,187) (16,542) (15,279) (13,026) (12,027) (10,533) -$ -$ -$ -$ -$ -$
47,457$ 46,444$ 44,887$ 41,528$ 41,142$ 41,013$

40.43% 35.62% 34.04% 31.37% 29.23% 25.68%
6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Entry age Entry age Entry age Entry age Entry age Entry age Fair value Fair value Fair value 15 Year 15 Year 15 Year Smoothed Smoothed Smoothed
Market Method Market Method Market Method

2.625% 2.75% 2.75% 2.75% 2.75% 2.75%

7.25% 7.38% 7.50% 7.50% 7.50% 7.50%
PAGE 272

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
134 Annual Comprehensive Financial Report | June 30, 2023 Fire and Police Retirement System
Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Fiscal Years1
Fiscal year ended June 30, 2023 June 30, 2022 June 30, 2021 Measurement period June 30, 2023 June 30, 2022 June 30, 2021 Total Pe nsion L iability:

Interest on total pension liability 6,316$ 6,947$ 7,335$ Di fferences between expected and actual experience 482 164 (1,798) Changes of assumptions 1,815 4,400 -
Changes of benefits -
Benefit payments, including refunds of
empl oyee contri buti ons (11,954) (12,072) (12,506) N e t Change in Total Pe nsion L iability (3,341) (561) (6,969) Total Pe nsion L iability - Be ginning of Ye ar 126,291 126,852 133,821 T
otal Pe nsion L iability - End of Ye ar (a) 122,950$ 126,291$ 126,852$ Plan Fiduciary Net Position:

Contributions - employer -$ -$ -$
Contributions - employee - - -
N e t inve stme nt income 5,013 (10,656) 22,355
Benefit payments, including refunds of
empl oyee contri buti ons (11,954) (12,072) (12,506) Administrative expense (344) (343) (327)
Net Change in Plan Fiduciary Net Position (7,285) (23,071) 9,522 Plan Fiduciary Net Position - Beginning of Year 111,662 134,733 125,211 Plan Fiduciary Net Position - End of Year (b) 104,377$ 111,662$ 134,733$ N e t Pe nsion L iability - Ending (a)-(b) 18,573$ 14,629$ 2 (7,881)$ Plan fiduciary net position as a percentage of the
total pe nsion liability 84.89% 88.42% 106.21%
NOTES TO SCHEDULE:
1 2
Changes of Assumptions: Fiscal years ended 2019 through 2022 had no significant changes of assumptions. June 30, 2018 assumption changes of $2,189,000 for change in the discount rate, from 6.50% in 2017 to 5.75% in 2018, and inflation rate, from

3.00% in 2017 to 2.75% in 2018. June 30, 2015 assumption changes of $1,895,000 for change in base mortality rates, $8,301,000 for change in mortality improvements scale, and ($7,055,000) for change in the discount rate.

As adjusted after the fiscal year 2022 GASB 68 report was performed.

GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. Additional years will be added as they become available in the future.

PAGE 273

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 135 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 7,600$ 7,781$ 8,832$ 9,272$ 9,644$ 9,162$ 438 1,862 1,261 (3,081) (2,098) (3,075)
- - 2,189 - - 3,141
- - - - - -
(12,773) (12,824) (12,815) (13,118) (13,448) (13,645) (4,735) (3,181) (533) (6,927) (5,902) (4,417)
138,556 141,737 142,270 149,197 1
55,099 159,516
133,821$ 138,556$ 141,737$ 142,270$ 149,197$ 155,099$ 23,137$ -$ -$ -$ -$ -$
- - - - -
-
3,394 5,923 6,656 12,512 50 5,683 (12,773) (12,824) (12,815) (13,118) (13,448) (13,645) (321) (257) (2
72) (300) (302) (273)
13,
437 (7,158) (6,431) (906) (13,700) (8,235)
111,774 118,932 125, 363 126,269 139,969 148,204 125,211$ 111,774$ 118,932$ 125,363$ 126,269$ 139,969$ 8,610$ 26,782$ 22,805$ 16,907$ 22,928$ 15,130$

93.57% 80.67% 83.91% 88.12% 84.63% 90.24%
PAGE 274

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
136 Annual Comprehensive Financial Report | June 30, 2023 Fire and Police Retirement System
Schedule of Plan Contributions
As of June 30, for the Last Ten Fiscal Years1
Contractually Actual Contribution as
Fiscal Year Required Fiscal Year Deficiency Covered a Percentage of Ending Contribution* Contribution (Excess) Payroll Payroll 2023 -$ -$ -$ n/a n/a
2022 - - - n/a n/a
2021 - - - n/a n/a
2020 3,478 3,478 - n/a n/a
2019 - - - n/a n/a
2018 - - - n/a n/a
2017 - - - n/a n/a
2016 - - - n/a n/a
2015 - - - n/a n/a
2014 1,164 1,164 - n/a n/a
NOTES TO SCHEDULE:
1 * Contractually required contributions are based on Board-adopted assumptions for use in preparing the valuation, and as required by applicable Contribution Agreements with the City.

GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal ye ar e nde d June 30, 2015. A dditional ye ars will be adde d as the y be com e available in the future.

PAGE 275

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 137 Fire and Police Retirement System
Schedule of Plan Investment Returns
As of June 30, for the Last Ten Fiscal Years1
Fiscal year ended 2023 2022 2021 2020 2019 2018 2017 2016 2015

5.00% -8.60% 19.00% 2.80% 5.50% 5.60% 10.70% 0.40% 3.70% Annual money-weighted rate of return,
net of investment expense
NOTE TO SCHEDULE:

S
ource is the June 30, 2023 GASB 67 plan actuarial information prepared by System Actuary, Foster & Foster, Inc. 1 GASB Statement No. 68, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2015. Additional years will be added as they become available in the future.

PAGE 276

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
138 Annual Comprehensive Financial Report | June 30, 2023 Schedule of Changes in the Net OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years1
Fiscal year ended 2023 2022 2021 2020 2019 2018
Total OPEB Liability
Service cost 3,623 $ 4,917 $ 4,254 $ 3,567 $ 3,217 $ 3,178$ Inte re st on the tot al OPEB liabilit y 3,141 2,181 2,365 2,561 2,596 2,448 Differences between expected and actual experience (397) 874 (553) (7,576) - - Changes in assumptions (419) (26,576) 2 6,723 11,111 3,664 (988) Changes in benefit terms - - - - - -
Benefit payments (2,997) (2,833) (2,678) (2,815) (2,612) (2,391) N e t change in T otal OPE B L iabilit y 2,951 (21,437) 10,111 6,848 6,865 2,247 Total OPEB liability - beginning 74,649 96,086 85,975 79,127 72,262 70,015 T ot al OPE B liability - e nding (a) 77,600$ 74,649 $ 96,086 $ 85,975 $ 79,127 $ 72,262 $ Plan Fiduciary Net Position
Contribution - employer 2,997$ 2,833 $ 2,678 $ 2,815 $ 2,612 $ 4,391$ Net investment i ncome 101 (301) 312 101 133 2
Benefit payments (2,997) (2,833) (2,678) (2,815) (2,612) (2,391) Administrative expense (6) (5) (6) (11) (9) -
Net change in plan fiduciary net position 95 (306) 306 90 124 2,002 Plan fiduciary net position - beginning 2,216 2,522 2,216 2,126 2,002 - Plan fiduciary net position - ending (b) 2,311$ 2,216 $ 2,522 $ 2,216 $ 2,126 $ 2,002$ N e t OPE B L iabilit y/(A sse t s) - ending (a) - (b) 75,289$ 72,433 $ 93,564 $ 83,759 $ 77,001 $ 70,260 $ Plan fiduciary net position as a percentage of the
total OPEB liability 2.98% 2.97% 2.62% 2.58% 2.69% 2.77% Covered - employee payroll 177,866$ 160,024$ 167,502 $ 164,102 $ 134,734 $ 130,809 $ N e t OPE B L iabilit y as pe rce nt age of cove re d- employee payroll 42.3% 45.3% 55.9% 51.0% 57.2% 53.7%
NOTES TO SCHEDULE:
1 GASB Statement No. 75, whi ch requi res ten years of hi story for thi s schedul e, was i mpl emented during fiscal year ended June 30, 2018. Additional years will be added as they become available in the future.
2 Adjusted FY 2022 'Changes of assumptions'.

PAGE 277

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 139 Schedule of OPEB Plan Contributions
As of June 30, for the Last Ten Fiscal Years1
2023 2022 2021 2020 2019 2018
2,997$ 2,833 $ 2,678 $ 2,815 $ 2,612 $ 4,391 $ 2 (2,997) (2,833) (2,678) (2,815) (2,612) (4,391) -$ - $ - $ - $ - $ - $
177,866$ 160,024 $ 167,502$ 164,102$ 134,734 $ 130,809 $

1.68% 1.77% 1.60% 1.72% 1.94% 3.36%
Covered empl oyee payrol l
Contributions as a percentage of
covered employee payroll
Contractually determined contribution
Contribution in relation to the contractually
determined contributions
Contribution deficiency/(excess)
NOTES TO SCHEDULE:
2 Updated Fiscal Year 2018 amounts
1 GASB Statement No. 75, which requires ten years of history for this schedule, was implemented during fiscal year ended June 30, 2018. Additional years will be added as they become available in the future.

PAGE 278
(This page intentionally left blank)
PAGE 279

SUPPLEMENTARY INFORMATION
ANNUAL COMPREHENSIVE FINANCIAL REPORT | FISCAL YEAR ENDED JUNE 30, 2023 PAGE 280

FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
142 Annual Comprehensive Financial Report | June 30, 2023 Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Special Capital Debt Service
Revenue Pro jects Fund Permanent
Funds Funds 2015 Series A Funds Total
Assets:

Pool ed ca s h a nd i nves tments 147,008$ 10,599$ -$ 2,033$ 159,640$ Ac counts r ec eiv able 1 6 ,975 101 - 9 17,085
L ease r ec eiv able 7 1 6 - - - 716
Prepaids and other assets 149 - - - 149
Not es r ec eiv able 6 1,269 - - - 61,269
Allowance for doubtful accounts (61,269) - - - (61,269) Restricte
d assets:

Cash and investments 2,645 - - - 2,645
Cash with fiscal a gent 73 - 6,754 - 6,827
Total assets 167,566 10,700 6,754 2,042 187,062 Liabilities, deferred inflow of resources and
fund balances:

Liabilities:

Accounts payable and accrued liabilities 6,369 - - - 6,369 De posits 1,356 - - - 1,356
Due to other funds 8,826 - - - 8,826
Unea rned revenue 2,798 - - - 2,798
Total liabilities 19,349 - - - 19,349
Deferred inflows of resources:

Unav ailable r ev enues 4,292 - - - 4,292
Lea se rela ted 693 - - - 693
Total deferred inflow of resources 4,985 - - - 4,985 Fund balances/(deficit):

Nons pendable 149 - - 1,433 1,582
Restricted 57,731 1,851 6,754 551 66,887
Commi tted 92,257 8,849 - 58 101,164
Unassi gned (6,905) - - - (6,905)
Total fund ba
lances 143,232 10,700 6,754 2,042 162,728
Total liabilities, deferred inflow of resources and
fund balances 167,566$ 10,700$ 6,754$ 2,042$ 187,062$ .

PAGE 281

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2023 143 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
Special Capital Debt Service
Revenue Pro jects Fund Permanent
Funds Funds 2015 Series A Funds Total
Revenues:

Taxes 11,040$ -$ -$ -$ 11,040$
Licenses and per mits 13,337 - - - 13,337
Inter governmental 77,053 - - - 77,053
Cha rges for serv ices 11,837 59 - - 11,896
Inv estment earnin gs2 ,142 257 - 30 2,429
Net chan ge in fair v alue of inv estments (672) (183) (131) (12) (998) L
ease revenues 3,419 - - - 3,419
Interest - leases (as lessor ) 4 - - - 4
M iscellaneous r ev enues 3,033 15 - - 3,048 Contributions 817 - - - 817
Total revenues 122,010 148 (131) 1 8 122,045
Expenditures:

Current:

General government - 6 4 - 10
P ublic safety 3,217 - - - 3,217
Trans portation 17,324 141 - - 17,465
Utilit y 135 - - - 135
Sanitation 5,886 - - - 5,886
Health 18,944 - - - 18,944
Culture and leisure 14,851 - - - 14,851
Communi ty develo pment 43,151 18 - - 43,169
Capital outla y 1,419 - - - 1,419
Debt service:

Pri ncipa l reti rement 300 - 2,195 - 2,495
Interest 124 - 2,101 - 2,225
Leas e payments 548 - - - 548
Subscri ption payments 199 - - - 199
Inter est - leases and subsc r i ptions 21 - - - 21 Total expenditures 106,119 165 4,300 - 110,584
Excess (deficiency) of revenues over
(under) expenditures 15,891 (17)
(4,431) 18 11,461
Other financing sources (uses):

Transfers in 15,287 - 4,101 - 19,388
Transfers out (16,099) (9,171) - - (25,270) L
eases issued 321 - - - 321
Subscri pt ions issued 1 7 2 - - - 172
Total other financing sources (uses) (319) (9,171) 4,101 - (5,389) Ne
t change in fund balances 15,572 (9,188) (330) 1 8 6,072 Fund balances at beginning of year 127,660 19,888 7,084 2,024 156,656 Fund balances at end of year 143,232$ 10,700$ 6,754$ 2,042$ 162,728$ .

PAGE 282
(This page intentionally left blank)
PAGE 283

SPECIAL REVENUE FUNDS
ANNUAL COMPREHENSIVE FINANCIAL REPORT | FISCAL YEAR ENDED JUNE 30, 2023 PAGE 284
(This page intentionally left blank)
PAGE 285

CITY OF PASADENA SUPPLEMENTARY INFORMATION NONMAJOR GOVERNMENTAL FUNDS Annual Comprehensive Financial Report | June 30, 2023 147

NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenue s that are legally restricted to expenditure for particular purposes. 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. If that occurs, amount assigned to other purposes in that fund should be reduced to eliminate the deficit.

If the remaining deficit eliminates all other assigned amounts in the fund, or if there are no amounts assigned to other purposes, the negative residual amount should be classified as unassigned fund balance.

Public Safety Fund – to account for revenue received from State AB3229 funds, the 1/2-cent sales tax approved by the voters in November 1993, money received by the Police Department from forfeited cash and other tangible property seized under the Federal Comprehensive Crime Control Act of 1984 and grants received from the Homeland Security Grant Program.

Health Fund – to account for all grants received for
the provision of health serv ices which are restricted by grant award agreements.

Building Services Fund – to account for fees collected and restricted to the operations of the Permit Center.

Sewer Construction and Maintenance Fund – to account for revenue received from sewer use and storm drain charges restricted for the construction and maintenance of the City's sewer system. This includes the use of revenue derived from a special parcel tax (Measure W) approved by voters for im proving water quality, recapturing, treating, and recycling stormwater in Los Angeles County.

Underground Utilities Fund – to a ccount for revenue received fr om the underground surtax on sales of electric energy restricted for the extension, conversion, replacement and repair of underground utility lines.

Transportation Fund – to account for the use of revenue derived from the 1/2-cent sales tax approved by voters, state gasoline tax, s
ales tax collected for bikeways and pedestrian facilities, and State AB2928 traffic congestion relief, all of which are restricted for construction, maintenance, preservation and rehabilitation of the City’s street and road system.

Library Fund – to account for the operations of the City's public libraries and the library special tax approved by the voters on June 22, 1993 and restricted for Library use.

Parking Fund – to account for revenue derived from on-off street parking, zoning credits, parking and business improvement tax, parking space rental and leases, and on-street parking meters. These funds are restricted for use in the various enterprise zones of the City.

Air Quality Improvement Fund – to account for the use of revenue derived from a fee added to the motor vehicle registration fee for reducing air pollution in accordance with the California Government Code (AB2766).

Housing and Community Development Fund – to account for the use of Community Development Block Grant and other U.S.

Department of Housing and Urban Development programs restricted for housing and community development.

Donated Funds – to account for principal and interest on funds donated to the City for expressed and expendable purposes.

PAGE 286

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
148 Annual Comprehensive Financial Report | June 30, 2023 Combining Balance Sheet
Nonmajor Governmental Funds
Special Revenue Funds
June 30, 2023
Sewer
Construction
Public Building and Under ground
Safety Health Services Maintenance Utilities
Assets:

Cash and investments 4 ,262$ - $ 21,683$ 15 ,616$ 36 ,897$ Acc ounts r eceiv able 8 1 5 4,649 89 657 1,141 L ease r eceiv able - 716 - - -
Prepaids and other assets - 4 - - - Notes r eceiv able - - - - -
Allowanc e for uncollec tible long-ter m
receivables - - - - - Restricted assets:

Cash and investments - - - - - Cash with fiscal a gent - 73 - - -
Total assets 5,077 5,442 21,772 16,273 38,038 Liabilities, deferred inflow of resources
and fund balances:

Liabilities:

Acc ounts pay able and ac cr ued liabilities 2 8 1,035 811 167 67 Deposits - 2 728 - -
Due to other funds - 8,826 - - -
Unearned revenue - 817 133 - - Total liabilities 28 10,680 1 ,672 167 67 Deferred inflows of resources: