AR 7 Attachment A - FY 2025 City of Pasadena Annual Comprehensive Financial Report (Final) (Unsecured for Internal Use) — Pasadena City Council, February 23, 2026 (part 1 of 2)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

PASADENAPASADENA

CALIFORNIA
A ttachment A
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FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

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CITY OF PASADENA, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
Year Ended June 30, 2025
MIGUEL MÁRQUEZ, CITY MANAGER
MATTHEW E. HAWKESWORTH, ACTING ASSISTANT CITY MANAGER/

DIRECTOR OF FINANCE

PREPARED BY THE DEPARTMENT OF FINANCE, CITY OF PASADENA Victor M. Gordo
Mayor
Tyron Hampton
Councilmember
District 1
Jessica C. Rivas
Vice Mayor
District 5
Rick Cole
Councilmember
District 2
Justin Jones
Councilmember
District 3
Gene Masuda
Councilmember
District 4
Steve Madison
Councilmember
District 6
Jason Lyon
Councilmember
District 7

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CITY OF PASADENA TABLE OF CONTENTS
Annual Comprehensive Financial Report | June 30, 2025 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 ................................................................................................................................................... 18 Statement of Activities ........................................................................................................................................................ 21 Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet .............................................................................................................................................................. 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .......................................................................................................................... 23 Statement of Revenues, Expenditures and Changes in Fund Balances ........................................................................ 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities .......................................................................................................................................... 25 Proprietary Fund Financial Statements
Statement of Net Position ............................................................................................................................................ 26 Statement of Revenues, Expenses and Changes in Net Position .................................................................................. 27 Statement of Cash Flows.............................................................................................................................................. 28 Fiduciary Fund Financial Statements
Statement of Net Position ............................................................................................................................................ 30 Statement of Changes in Net Position ......................................................................................................................... 31 Notes to the Basic Financial Statements ................................................................................................................................. 35

TABLE OF CONTENTS CITY OF PASADENA
ii Annual Comprehensive Financial Report | June 30, 2025 FINANCIAL SECTION (Continued)
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund ........................................................................................................................................................... 126 – Housing Successor Fund – Special Revenue Fund .................................................................................................... 128 Notes to Required Supplementary Information ................................................................................................................ 129 Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan ................................................... 130 Schedule of Plan Contributions – Miscellaneous Plan ....................................................................................................... 132 Schedule of Changes in Net Pension Liability and Related Ratios – Safety Plan ................................................................ 134 Schedule of Plan Contributions – Safety Plan ................................................................................................................... 136 Schedule of Changes in Net Pension Liability and Related Ratios – Fire and Police Retirement System ......................... 138 Schedule of Plan Contributions – Fire and Police Retirement System............................................................................... 140 Schedule of Fire and Police Retirement System Plan Investment Return ......................................................................... 141 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................................................... 142 Schedule of OPEB Plan Contributions ................................................................................................................................ 143 Supplementary Information
Nonmajor Governmental Funds
Combining Balance Sheet .......................................................................................................................................... 146 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................... 147 Special Revenue Funds
Combining Balance Sheet .......................................................................................................................................... 152 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.................................................... 154 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 ............................................................................................................................................... 156 Health Fund ........................................................................................................................................................ 157 Building Services Fund ........................................................................................................................................ 158 Sewer Construction and Maintenance Fund… ..................................................................................................... 159 Underground Utilities Fund ................................................................................................................................. 160 Transportation Fund ........................................................................................................................................... 161 Library Services Fund .......................................................................................................................................... 162 Parking Fund ....................................................................................................................................................... 163 Air Quality Improvement Fund ........................................................................................................................... 164 Housing and Community Development Fund ..................................................................................................... 165 Rent Stabilization Fund....................................................................................................................................... 166 Donated Funds ..................................................................................................................................................... 167

CITY OF PASADENA TABLE OF CONTENTS
Annual Comprehensive Financial Report | June 30, 2025 iii FINANCIAL SECTION (Continued)
Capital Projects Funds
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Project Management Fund – Capital Projects Fund ........................................................................................... 170 Combining Balance Sheet .......................................................................................................................................... 173 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 173 Permanent Funds
Combining Balance Sheet .......................................................................................................................................... 178 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 178 Nonmajor Enterprise Funds
Combining Statement of Net Position ........................................................................................................................ 184 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................. 185 Combining Statement of Cash Flows ......................................................................................................................... 186 Internal Service Funds
Combining Statement of Net Position ........................................................................................................................ 192 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................. 194 Combining Statement of Cash Flows ......................................................................................................................... 196 Fiduciary Funds
Combining Statement of Net Position – Pension (and Other Employee Benefit) Trust Funds ..................................... 204 Combining Statement of Changes in Net Position – Pension (and Other Employee Benefit) Trust Funds ................... 205 Combining Statement of Net Position – Custodial Funds .......................................................................................... 207 Combining Statement of Changes in Net Position– Custodial Funds ......................................................................... 207 Combined Successor Agency Funds
Combining Statement of Net Position – Private-Purpose Trust Funds ....................................................................... 212 Combining Statement of Changes in Net Position – Private-Purpose Trust Funds .................................................... 214 Discretely Presented Component Units
Combining Statement of Net Position ........................................................................................................................ 220 Combining Statement of Revenues, Expenses and Changes in Net Position .............................................................. 221 Rose Bowl Operating Company
Combining Statement of Net Position ........................................................................................................................ 222 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................................. 223

STATISTICAL SECTION
Financial Trends
Net Position by Component ...................................................................................................................................... 228 Changes in Net Position ............................................................................................................................................. 230 Fund Balances of Governmental Funds ..................................................................................................................... 234 Changes in Fund Balances of Governmental Funds ................................................................................................... 236

TABLE OF CONTENTS CITY OF PASADENA
iv Annual Comprehensive Financial Report | June 30, 2025 STATISTICAL SECTION (Continued)
Revenue Capacity
Assessed Value and Actual Value of Taxable Property ............................................................................................. 239 Direct and Overlapping Property Tax Rates .............................................................................................................. 240 Principal Property Taxpayers ..................................................................................................................................... 242 Property Tax Levies and Collections .......................................................................................................................... 243 Taxable Sales by Category… ....................................................................................................................................... 244 Electricity Sold by Type of Customer ......................................................................................................................... 246 Electricity Rates ......................................................................................................................................................... 248 Electricity Customers ................................................................................................................................................. 249 Debt Capacity
Ratios of Outstanding Debt by Type .......................................................................................................................... 250 Ratios of General Bonded Debt Outstanding ............................................................................................................ 254 Direct and Overlapping Debt… .................................................................................................................................. 257 Legal Debt Margin Information ................................................................................................................................. 258 Pledged Revenue Coverage – Governmental Activity Debt ...................................................................................... 260 Pledged Revenue Coverage – Business-type Activity Debt ....................................................................................... 261 Demographic and Economic Information
Demographic Statistics .............................................................................................................................................. 262 Principal Employers ................................................................................................................................................... 263 Operating Information
Full-time and Part-time City Employees by Function ................................................................................................ 264 Operating Indicators by Function .............................................................................................................................. 266 Capital Asset Statistics by Function ........................................................................................................................... 268

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

INTRODUCTORY

SECTION
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vii
Decemb
er 23, 2025
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, 2025 (fiscal year 2025) is hereby submitted in compliance with Section 907.5 of the City Charter.

Management assumes full responsibility fo r the completeness and reliability 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 objective is to provide re asonable 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 LSL, 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 fiscal year 2025 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 fiscal year 2025 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 compliance 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.

LETTER OF TRANSMITTAL CITY OF PASADENA
viii Annual Comprehensive Financial Report | June 30, 2025

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, se tting policies, passing ordinances, 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 2024 population of 140,631, 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 in cluded 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. Discretely presented component units are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the City and to differentiate their financial position, results of operations, and cash flows from those of the City. The Rose Bowl Operating Company, 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 b ooks, 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. An appropriated annual budget is legally adopted for the General Fund and Special Revenue Funds. 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 expend iture. The legal level of budgetary control (the level at which management may not rea ssign resources or overspend appropriations) is at the departmental level within each fund. Revenues are estimated annually and monitored on an ongoing basis to ensure there are adequate resources to cover expenditures.

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2025 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 struggle wi th persistent inflationary pressures, reaching levels not seen in decades. Since January, market volatility has increased, largely due to a series of Executive Orders on tariffs and trade issued by the President. Despite the Federal Rese rve’s efforts to ease monetary conditions by lowering the federal funds rate by 100 basis points over the fiscal year, from 5.5% to 4.5%, inflation hasn’t improved much compared to last year. To address continued economic uncertainty, the Fed made two more rate cuts in September and October, bringing the rate down to 4.0% The Federa l Reserve’s inflation target remains at 2.0%, but current inflation levels continue to exceed this goal.

The Federal Reserve maintains a cautious approach to intere st rates, aiming to stabilize inflation while avoiding significant impact on economic activity.

Despite Pasadena’s strong and diverse revenue and tax base, which continues to be a vital asset to the General Fund and the City’s overall economic stability, the City faced a sig nificant challenge with the Eaton Fire in January 2025.

In response to the fire and subsequent recovery effort s, the General Fund incurred $12 million in expenditures by the end of the fiscal year. The total estimated cost of the Eaton Fire, including recovery related expenses, is approximately $51 million. The City is actively pursuing reimbursement through FEMA, CalOES, insurance claims, and other available funding sources.

Ongoing discussions about changes and restrictions to federal funding could result in cuts to programs essential to Pasadena. Reduced funding may strain city programs, while delays in re covery efforts risk worsening affordability issues and further increasing displacement.

LOOKING FORWARD
City of Pasadena has a diverse economy that is not over-reliant on one industry or tax base. A solid mix of automotive dealers, general and consumer goods businesses, restaurants, and hotels provide a relati vely steady tax base. The City’s financial position remains stable; however, it is facing grow ing fiscal pressures. The City’s forecast shows a slowing of growth year-over-year in revenues, while infl ationary costs strain resources. The City continues to evaluate expenditures with an emphasis on cost containment and alignment with proj ected revenues. Throughout the year, department’s identify areas where cost escalation can be moderated through adjustments, efficiencies, or refinements while maintaining core services. In addition , staff regularly reviews and considers opportunities for revenue enhancements and cost mitigation, including fee and permit adjustments, improved cost recovery, and other methods that help offset rising se rvice delivery costs, such as organic waste collection, which is essential to avoid diverting limited resources from other critical and u nderfunded priorities such as police, fire, libraries, and parks.

In addition, the City’s response and recovery efforts following the Eaton Fire have introduced new challenges. These include supporting affected residents, meeting recovery -related regulatory requirements, addressing increased demand for housing, and investing in initiatives that strengthen the City’s emergency preparedness and long-term resilience.

LETTER OF TRANSMITTAL CITY OF PASADENA
x Annual Comprehensive Financial Report | June 30, 2025 General Fund Five-Year Forecast
FISCAL YEAR 2025 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 fiscal year 2025 accomplishments include:
• Adoption of a balanced budget for the thirteenth consecutive year, maintained an IRS Section 115 trust for future
pension obligations and other post-employment benefits, an d 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
$32.2M in local sales ta x revenue from Measure I and provided $10.7M (Measure J) to the Pasadena
Unified School District to protect and strengthen our public schools; • To
minimize the certain impact of the Eaton Fire on City revenues, worked in conjunction with Federal, State and local agencies and organizations to support people in need, maintain public health and safety, and implement
strategies to assist those displaced by the Fire;
• Continued
working towards developing the former Kaise r Permanente property at Lake and Villa in order to
provide needed health, mental health services, and affordable housing for our community; • Made significant progress on crucial Pasadena Water and Power’s (PWP) infrastructure projects while advanci
ng sustainability goals;
• Made substantial progress on affordable housing projects to address the widespread housing crisis; F Y 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Final Revised Budget Adopted Forecast Forecast Forecast Forecast Beginning Amount Available for Appropriations 18,086,075 16,215,712 4,342,571 4,465,569 937,512 (2,626,306) (10,069,734) Revenues
Tax Revenues 262,958,941 265,657,100 274,625,007 283,775,540 294,851,749 305,997,986 317,615,437 Other Revenues 66,399,883 58,630,086 57,570,513 58,953,162 60,387,510 61,858,374 63,366,702 Contributions/Svs. From Other Funds 20,140,438 30,272,305 30,640,438 34,601,061 37,043,365 39,617,879 42,325,266 Total Revenues 349,499,262 354,559,491 362,835,958 377,329,764 392,282,624 407,474,239 423,307,405 Expenses
Personnel 206,097,494 216,135,006 232,560,605 245,060,643 257,507,592 272,885,406 285,480,463 Debt Serv ice 11,619,669 12,318,397 12,323,128 12,317,139 11,290,184 11,288,643 11,287,860 Contributions To Other Funds 25,269,239 14,350,877 15,180,375 15,483,983 15,793,662 16,109,535 16,431,726 Other Expenses 112,156,731 107,425,486 104,852,317 107,996,056 111,255,004 114,634,082 118,138,441 Total Expenses 355,143,133 350,229,766 364,916,425 380,857,820 395,846,442 414,917,666 431,338,490 Operating Income/(Loss) (5,643,871) 4,329,725 (2,080,467) (3,528,057) (3,563,818) (7,443,427) (8,031,085) One-time reserv e funding 2,203,465
Total Income/(Loss) 122,998
Ending Amount Available for Appropriations 12,442,204 20,545,437 4,465,569 937,512 (2,626,306) (10,069,733) (18,100,819) Contributions to Capital Projects (341,750) (6,071,000) - - - - - Reserve for Capital & Other Funds 10,247,300 (10,131,867) - - - - - Reduction/(Contribution) to Policy Reserve (6,132,042) - - - - - -
Net Income/(Loss) with Reserve Contribution 16,215,712 4,342,570 4,465,569 937,512 (2,626,306) (10,069,733) (18,100,819) General Fund Five-Year Forecast

CITY OF PASADENA LETTER OF TRANSMITTAL
Annual Comprehensive Financial Report | June 30, 2025 xi • With the approval of Measure PL, authorizing $195 million in bonds, the City w ill continue advancing the Central Library’s assessment, mitigation plan, and se ismic retrofit, to ensure public safety, without disruption of library services to the community;
• The City continues its legacy land use planning for approximately 50 acres of reclaimed land at the core of the community following the relinquishment of the State Route 710 northern stub. Concurrently, development of a comprehensive vision for the 710 Stub area is underway, guided by input from the City Council appointed Reconnecting Communities 710 Advisory Group, the 710 City Council Ad Hoc Committee, the 710 Executive Committee, and other specialized committees to ensure a collaborative and transparent process;
• To keep residents informed about Pasadena’s progress toward citywide environmental and sustainability goals, the City of Pasadena launched a new Sustainability website in May 2025 (cityofpasadena.net/sustainability), which serves as a central hub for all environmental and su stainability programs and initiatives across city departments;
• Monitored State and Federal legislation on matters impacting or potentially impacting Pasadena and when necessary, took appropriate action supporting or opposing legislation; • Served over 6,040 individuals, including job seeker s or unemployed workers, via the One Stop Career Centers, provided a total of 46,136 services to individuals seeking workforce services, created 278 internal job referrals, 4,804 external job referrals, and 1,028 services provided to employers; • Launched the Rental Registry database to collect residential rental property information for over 27,000 covered rental units;
• Received the City’s first zero-emission battery electric bus (BEB) for the Pasadena Transit fleet; • Expanded the Shop Local Pasadena holiday campaign, supporting 25 small businesses across the City in acting as welcome stations for small business Saturday shoppers. In partnership with Public Affairs, the campaign featured 10 videos spotlighting local businesses and generated over 345,000 views. The campaign evolved into a year-round initiative aligned with heritage months, producing a total of 40 videos to d ate.

The Shop Local series has surpassed one million views and engaged more than 71 ,000 users across social platforms;
• Launched the City of Pasadena’s Deep Tech Campaign that visually represents Pasadena’s deep tech landscape to reinforce its value as a business destination and support business attraction, investment, and site selection efforts. Ads were deployed throughout Southern California including hotels, gyms, billboards, malls, airports, and train stations. Targeted media ads delivered 3.2 million impressions. The campaign also includes a new marketing brochure for business attraction efforts, conferences, and events; • With the $1.5M of Congressional Directed Spending funds secured by Congresswoman Chu, completed the pilot round of the Dine Out Pasadena program. Fourteen businesses received new and upgraded structures; • Ongoing efforts and coordination of the Pasadena Outreach Response Team (PORT)’s street-based initiative focused on engaging individuals experiencing chronic homelessness, seve re mental illness, substance use disorders, physical disabilities, and complex health conditions. This collaborative model continues to build trust with vulnerable populations, improve access to housing and health services, aims to achi eve reductions in emergency service utilization, and long-term housing stability; • Continued pursuit of both major and minor Public Works improvements to preserve and expand the City’s infrastructure and resources;

LETTER OF TRANSMITTAL CITY OF PASADENA
xii Annual Comprehensive Financial Report | June 30, 2025 • Enhanced Citywide mobility and accessibility by maintain ing critical infrastructure, upgrading curb ramps with ADA-compliant features, overseeing the design of traffic and bike-friendly improvements, and ensuring City facilities meet ADA standards through compliant doors and signage; • 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;
• Earned American Public Power Association’s prestigious Reliable Public Power Provider (“RP3”) “Diamond” designation for providing the highest degree of reliable and safe electric serv ices, the RP3 designation recognizes public power utilities that demonstrate proficiency in four key disciplines: reliability, safety, workforce development, and system improvement;
• Demonstrated ongoing support to PWP’s commitment to invest in renewable energy and sustainable water resources in an operationally and fiscally responsible manner, approv ed Power Purchase Agreements for the purchase of renewable energy and capacity, and supported rate actions to recover the water and electric systems' increased operating and capital costs; and • Launched the Clean Energy Tracker on PWP’s website to highlight progress toward key clean energy goals and milestones, reinforcing PWP’s commitment to achieving 100% carbon-free electricity by 2030.

The noted accomplishments listed above ar e just a sample of the hundreds of fiscal year 2025 accomplishments, which are listed by department in the fiscal year 2026 Adopted Operating Budget.

CONCLUSION
Under the leadership of the Mayor and City Council and through prudent financial management, the City of Pasadena has successfully navigated recent challenges, including the Eaton Fire. The City has continued to thrive, demonstrating resilience and responsiveness in times of crisis. The fiscal year 2025 ACFR reflects Pasadena’s ongoing commitment to delivering exemplary municipal services that honor the City’s history, culture, and unique character.

Respectfully submitted,
_______________________ ________________________
M a t t h e w E . H a w k e s w o r t h K a r i n S c h n a i d e r Assistant City Manager Director of Finance

Annual Comprehensive Financial Report | June 30, 2025 xiii (This page intentionally left blank)

CITY OF PASADENA
City Officia
ls

CITY COUNCIL
Mayor Victor M. Gordo
Vi
ce Mayor (District 5) Jessica C. Rivas
Councilmember (District 1) Tyron Hampton
Councilmember (District 2) Rick Cole
Councilmember (District 3) Justin Jones
Councilmember (District 4) Gene Masuda
Councilmember (District 6) Steve Madison
Councilmember (District 7) Jason Lyon

APPOINTED OFFICIALS
City Manager Miguel Márquez
City Attorney/City Prosecutor Michele Beal Bagneris
City Clerk Mark Jomsky

EXECUTIVE LEADERSHIP TEAM
Assistant City Manager Nicholas G. Rodriguez
Assistant City Manager Brenda E. Harvey-Williams
Acting Assistant City Manager/
Director of Finance Matthew E. Hawkesworth
Director of Housing James Wong
Director of Human Resources Tiffany Jacobs-Quinn
Director of Parks, Recreation &
Community Services Koko Panossian
Director of Libraries & Information Services Tim McDonald Chief Information Officer Phillip Leclair
Director of Planning and Community Development Jennifer Paige Chief of Police Eugene Harris
Director of Public Health Manuel Carmona
Director of Public Works Gregory De Vinck
Director of Transportation Joaquin Siques
General Manager of Water and Power David Reyes
Public Information Officer Lisa Derderian
Fire Chief Chad Augustin
Director of Rent Stabilization Helen Morales

OPERATING COMPANY EXECUTIVES
Chief Executive Officer,
Pasadena Center Operating Company Michael Ross
General Manager,
Rose Bowl Operating Company Jens Weiden
Executive Director/Chief Executive Officer,
Pasadena Community Access Corporation George Falardeau
xiv Annual Comprehensive Financial Report | June 30, 2025

CITY OF PASADENA

ORGANIZATION CHART
June 30, 2025
Citizens
of Pasadena
Pasadena Community
Access C
orporation

GEORGE FALARDEAU
Mayor &
City Council
Pasadena Center

Operating Company

MICHAEL ROSS
Rose Bowl
Operating Company
J

ENS WEIDEN
City Attorney /
City Prosecutor

MICHELE BEAL

BAGNERIS
City Manager
MIGUEL MÁRQUEZ City Clerk

MARK JOMSKY
Assistant
City Manager
BRENDA E.

ARVEY-WILLIAMS
Assistant
City Manager
MATTHEW E.

HAWKESWORTH
Acting
Assistant
City Manager

NICHOLA
S G.

RODRIGUEZ
Finance
MATTHEW E.

HAWKESWORTH
Fire

CHAD AUGUSTIN
Housing

JAMES WONG
Human Resources

TIFFANY JA COBS-QUINN
Parks, Recreation and
Community Services

KOKO PANOSSIAN
Information Technology

PHILLIP LECLAIR
Libraries &
Information Serv
ices

TIM MCDONALD
Planning & Community
Development

JENNIFER PAIGE
Police

EUGENE HARRIS
Public Health
MANUEL
CARMO
NA
Public Works

GREGORY DE
VINCK
Rent Stabilization
HELEN

MORALES
Transportation

JOAQUIN SIQUES

Water & Power

DAVID REYES
Annual Comprehensive Financial Report | June 30, 2025 xvAnnual Comprehensive Financial Report | June 30, 2025 xv 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, 2024
Executive Director/CEO
xvi Annual Comprehensive Financial Report | June 30, 2025

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

FINANCIAL

SECTION
xviii Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)

LSLCPAS.COM
I
NDEPENDENT AUDITORS’ REPORT
T
o the Honorable Members of the City Council
City of Pasadena, California
R
eport on the Audit of the Financial Statements
Opi
nions
W
e have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Pasadena, California, (hereafter, the City) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

B
asis for Opinions
W
e 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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

E
mphasis of Matter
C
hange in Accounting Principle
A
s described in Note 1 to the financial statements, in 2025, the City adopted new accounting guidance, GASB Statement No. 101, Compensated Absences. Our opinion is not modified with respect to this matter.

R
esponsibilities of Management for the Financial Statements M
anagement 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.

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

Audi
tors’ Responsibilities for the Audit of the Financial Statements Our
objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In
performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Ex
ercise professional judgment and maintain professional skepticism throughout the audit. • Ident
ify 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.
• Obt
ain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Ev
aluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Con
clude 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.

Re
quired Supplementary Information
Ac
counting principles generally accepted in the United States of America require that the management’s discussion and analysis , budgetary comparison information, and required pension and other post - employment benefits schedules as listed on the table of contents be presented to supplement the basic financial statements.
xx Annual Comprehensive Financial Report | June 30, 2025 T
o the Honorable Mayor and Members of the City Council
City of Pasadena, California
Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

S
upplementary Information
O
ur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with 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.

Ot
her Information
M
anagement 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.

I
n 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.

Ot
her Reporting Required by Government Auditing Standards I
n accordance with Government Auditing Standards, we have also issued our report dated December 23, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of inte rnal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

I
rvine, California
December 23 2025
Annual Comprehensive Financial Report | June 30, 2025 xxi xxii Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)
CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 1 MANAGEMENT’S DISCUSSION AND ANALYSIS
(Unaudited)

As management of the City of Pasadena (City or primary government), we offer this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2025 (fiscal year 2025). We encourage readers to consider the information presented here in conjunction with additional information that has been furnished in the letter of transmittal, which can be found on pages vii-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 financial 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 fisca l 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 18-21 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 objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds

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

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

2 Annual Comprehensive Financial Report | June 30, 2025 Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government’s near -term financing decisions. Both the governmental 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 31 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, the Housi ng Successor Fund, the General Debt Service Fund, and the Project Management Capital Projects Fund, all four of which are considered to be major funds. Data from the other 27 governmental funds are combined into a single, aggregated presentation. Individua l 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 on a basis generally consistent with Generally Accepted Accounting Principles (GAAP) . 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 22-25 of this report.

Proprietary Funds

Proprietary funds are utilized when a state of local government charges customers to recover its costs of providing services.

The City maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government -wide financial statements.

Proprietary funds statements are prepared using the economic resources measurement focus and accrual basis of accounting.

In addition to a Statement of Net Position and a Statement of Revenues, Expenses and Changes in Fund Bet Position, proprietary funds are also required to report a Statement of Cash Flows.

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 internally among the City’s various functions.

The City uses internal service funds to account for its computing and communication, building maintenance, fleet maintenance, fleet replace ment, benefits, workers’ compensation, general liability, and 311 call center services. Because each of these services pre dominantly 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 the government -wide financial statements, only in more detail.

The proprietary fund financial statements provide separate information for the Light and Power, 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 presentation in the proprietary fund financial statements. Individual fund data for the internal service funds i s provided in the form of combining statements elsewhere in this report. Data from the other two proprietary funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor proprietary funds (Refuse and Telecommunications) is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 26-29 of this report.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 3 Fiduciary Funds

Fiduciary funds are used to account for resources held for the benefits of parties outside the government. The City’s fiduciary funds are divided into three separate fund types: the Pension and Other Employee Benefit Trust Funds, the Custodial Funds, and the Private-Purpose Trust Funds. Fiduciary funds are not reflected in the government-wide financial statements, because the resources of those funds are not available to support the City’s own programs.

The Pension and Other Employee Benefit Trust Funds are used to report resources held in trust for retirees and beneficiaries covered by the Fire & Police Retirement System Fund, the City’s Deferred Compensation Plan, and the City’s Defined Contribution Plan. The Custodial Funds account for resources held by the City in a purely custodial capacity. Lastly, the Private- Purpose Trust Fund activities of the Successor Agency to the Pasadena Community Development Commission are reported with the City’s fiduciary funds . Individual fund data for each of these fiduciary funds is provided in the form of combining statements elsewhere in this report. These funds use the accrual basis of accounting and economic measurement focus.

The basic fiduciary fund financial statements can be found on pages 30-31 of this report.

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 35-124 of this report.

Other Information

In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information (RSI) concerning budgetary practices and budget-to-actual comparisons for the General Fund and the major special revenue funds. Additional RSI includes pension and Other Postemployment Benefits (OPEB) information on net pension and OPEB liabilities and plan contributions. RSI can be found on pages 126-143 of this report.

The combining statements referred to earlier in connection with 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 146-215 of this report. Combining statements of the discretely presented component units can be found on pages 220-223 of this report.

Statistical Section

The statistical section complements the financial statements and notes, offering a broader perspective on the City’s financial health and economic conditions. This section provides additional historical and demographic information of a wide variety of statistical data, such as multi -year trend data on financial and operational performance, economic indicators, population statistics, and other relevant information. The statistical section can be found on pages 227-269 of this report.

FINANCIAL HIGHLIGHTS
New Significant Accounting Standards Implemented

In fiscal year 2025, the City adopted two new statements of financial accounting standards issued by the Government Accounting Standards Board (GASB), Statement No. 101, Compensated Absences and GASB Statement No. 102, Certain Risk Disclosures.

The primary objective of GASB 101 is to update the recognition and measurement guidance for employee paid time off, aligning it under a unified recognition model to provide consistent and comparable information to financial statement users.

More information on the City’s compensated absences summary of significant accounting policies can be found under Note 1 on pages 48-49 of this report.

The primary objective of GASB 102 is to provide users of government financial statements with essential information about risks from certain concentrations and constraints that could affect a government's ability to meet its obligations or provide services.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

4 Annual Comprehensive Financial Report | June 30, 2025 City of Pasadena’s Net Position
(in millions)
2025 2024 $ Change % Change 2025 2024 $ Change % Change 2025 2024 $ Change % Change Capital assets:

Not being depreciated/amortized, net 176.3$ 183.3$ (7.0)$ -3.8% 124.9$ 98.0$ 26.9$ 27.5% 301.2$ 281.3$ 19.9$ 7.1% Being depreciated/amortized, net 430.4 391.9 38.5 9.8% 753.0 739.8 13.2 1.8% 1,183.4 1,131.6 51.7 4.6% Current and other assets 629.7 402.0 227.7 56.6% 644.6 572.4 72.2 12.6% 1,274.3 974.4 299.9 30.8% Total assets 1,236 977 259.2 26.5% 1,522 1,410 112.3 8.0% 2,759 2,387 371.5 15.6% Deferred outflows of resources 146.0 191.0 (45.0) -23.5% 25.2 33.9 (8.7) -25.6% 171.2 224.8 (53.6) -23.9% Current liabilities 168.8 112.8 56.1 49.7% 73.7 63.4 10.3 16.2% 242.6 176.2 66.3 37.6% Long-term debt* 383.9 181.0 202.9 112.1% 310.8 276.5 34.2 12.4% 694.7 457.5 237.1 51.8% Net pension liability 457.8 496.8 (39.0) -7.9% 91.8 97.8 (6.1) -6.2% 549.6 594.6 (45.0) -7.6% Other noncurrent liabilities 91.2 91.6 (0.4) -0.4% 16.7 11.4 5.2 45.5% 107.8 103.0 4.9 4.8% Total liabilities 1,102 882 163.5 18.5% 493 449 33.3 7.4% 1,595 1,331 197.0 14.8% Deferred inflows of resources 34.5 24.5 10.0 40.8% 11.5 9.0 2.6 29.0% 46.1 33.5 12.6 37.6% Net Position:

Net investment in capital assets 329.9 517.2 (187.3) -36.2% 541.2 545.2 (4.0) -0.7% 871.2 1,062.4 (191.2) -18.0% Restricted 298.5 87.6 210.9 240.8% 104.3 98.9 5.4 5.5% 402.8 186.5 216.3 116.0% Unrestricted (382.2) (343.2) (39.0) 11.4% 397.7 341.7 56.0 16.4% 15.4 (1.5) 16.9 -1126.7% Total net position 246.1$ 261.6$ (15.4)$ -5.9% 1,043.2$ 985.8$ 57.4$ 5.8% 1,289.4$ 1,247.4$ 42.0$ 3.4% * For both current and noncurrent portions
Total
Primary Government
Governmental
Activities
Business-type
Activities

GOVERNMENT-WIDE FINANCIAL ANALYSIS

The 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 exceeded liabilities and deferred inflows by $1,289.4 million at the close of the most recent fiscal year.

The largest portion of the City’s net position, $871.2 million, reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), net of accumulated depreciation/amortization and 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. Although 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.

An additional portion of the City’s net position, $402.8 million or 31.2% of the total net position, represents resources subject to externally imposed limitations for specific purposes. The remaining balance, $15.4 million or 1.2% of the total net position, is for unrestricted uses in accordance with finance-related legal requirements.

During fiscal year 2025, the City’s overall net position increased by $42 million, where approximately $15.4 million relates to the decrease in governmental activities, and $57.4 million to the increase in the City’s business-type activities. The decrease in the governmental activities reflects an increase in revenues against a higher increase in expenditures. The increase in business-type activities reflects is the continuance of strong trend in increased revenues over total expenditures.

Governmental Activities

The City’s governmental activities showed a relatively stable financial position in fiscal year 2025, with a decrease in net position by $15.4 million or 5.9%. However, the beginning net position was restated by $27 million to apply the cumulative effect of the adoption of GASB Statement No. 101, Compensated Absences, which was necessary to recognize the change in accounting principle. In addition, the beginning net position was restated by $2.7 million as a correction of an error.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 5 City of Pasadena’s Changes in Net Position
(in millions)

Governmental Activities Business-type Activities Total Primary Government 2025 2024 $ Change % Change 2025 2024 $ Change % Change 2025 2024 $ Change % Change Revenues:

Program Revenues:

Charges for services 100.3$ 88.8$ 11.5$ 12.9% 380.4$ 377.9$ 2.5$ 0.7% 480.7$ 466.7$ 13.9$ 3.0% Operating grants and contributions 90.6 77.5 13.1 16.9% 2.1 2.1 - 0.0% 92.7 79.6 13.1 16.5% Capital grants and contributions 22.9 20.9 2.0 9.5% 7.6 5.2 2.4 45.8% 30.5 26.1 4.4 16.7% General revenues:

Taxes:

Property taxes 90.5 87.3 3.2 3.7% - - - - 90.5 87.3 3.2 3.7% Sales taxes 80.5 81.3 (0.9) -1.1% - - - - 80.5 81.3 (0.9) -1.1% Utility users tax 33.1 32.0 1.1 3.3% - - - - 33.1 32.0 1.1 3.3% Transient occupancy tax 20.6 18.5 2.1 11.6% - - - - 20.6 18.5 2.1 11.6% Street light and traffic signal tax 9.0 9.3 (0.3) -3.3% - - - - 9.0 9.3 (0.3) -3.3% Business license tax 7.9 8.0 (0.1) -1.1% - - - - 7.9 8.0 (0.1) -1.1% Other taxes 17.2 15.6 1.6 10.4% 9.2 7.5 1.7 23.4% 26.4 23.0 3.4 14.6% Other revenues 44.8 42.2 2.6 6.1% 29.0 24.0 5.1 21.1% 73.8 66.2 7.6 11.5% Miscellaneous revenues 8.2 6.6 1.6 24.5% 6.5 2.9 3.6 125.4% 14.6 9.5 5.2 54.3% Total revenues 525.5 487.9 37.5 7.7% 434.8 419.6 15.3 3.6% 960.3 907.5 52.8 5.8% Expenses:

General government 101.6 82.0 19.5 23.8% - - - - - 82.0 (82.0) -100.0% Public safety 197.2 179.8 17.4 9.7% - - - - - 179.8 (179.8) -100.0% Transportation 73.1 58.8 14.3 24.3% - - - - - 58.8 (58.8) -100.0% Culture and leisure 59.1 55.2 3.9 7.1% - - - - - 55.2 (55.2) -100.0% Community development 72.4 64.9 7.5 11.5% - - - - - 64.9 (64.9) -100.0% Interest 6.1 6.2 (0.2) -2.9% - - - - 6.1 6.2 (0.2) -2.9% Electric - - - - 247.2 215.1 32.1 14.9% 247.2 215.1 32.1 14.9% Water - - - - 71.1 62.8 8.4 13.3% 71.1 62.8 8.4 13.3% Other expenses 26.7 27.5 (0.7) -2.6% 39.1 37.9 1.3 3.3% 65.9 65.3 0.5 0.8% Total expenses 536.3 474.5 61.8 13.0% 357.4 315.7 41.7 13.2% 893.7 790.2 103.5 13.1% Increase (decrease) in net position,
before transfers (10.8) 13.5 (24.2) -180.1% 77.4 103.8 (26.4) -25.4% 66.6 117.3 (50.7) -43.2% Transfers 19.6 14.7 4.9 33.1% (19.6) (14.7) (4.9) 33.1% - - - - Increase (decrease) in net position 8.8 28.2 (19.4) -68.7% 57.8 89.1 (31.3) -35.1% 66.6 117.3 (50.7) -43.2% 261.6 233.4 28.2 12.1% 985.8 893.8 92.0 10.3% 1,247.4 1,127.1 120.2 10.7% Restatement for a change in accounting principle (27.0) - (27.0) - (0.4) - (0.4) - (27.4) - (27.4) - Restatement for correction of an error 2.7 0.0 2.7 12313.6% - 2.9 (2.9) -100.0% 2.7 2.9 (0.2) -6.0% Net position, beginning of year, as restated 237.3 233.4 3.9 1.7% 985.4 896.7 88.7 9.9% 1,222.7 1,130.0 92.7 8.2% Net position, ending 246.1$ 261.6$ (15.4)$ -5.9% 1,043.2$ 985.8$ 57.4$ 5.8% 1,289.4$ 1,247.4$ 42.0$ 3.4% Net position, beginning of year, as previously
reported

$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
FY 2025 Program Revenues and Expenses -
Governmental Activities (in millions)
Program Revenues
Expenses
$0
$50
$100
$150
$200
$250
$300
FY 2025 Program Revenues and Expenses
- Business-type Activities (in millions)
Program Revenues
Expenses
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

6 Annual Comprehensive Financial Report | June 30, 2025 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Governmental Activities (Continued)

The revenue components of governmental activities increased by $ 37.5 million or 7.7% from prior year revenues, with the majority of the increase from charges for services, operating grants and contributions, property tax es, and transient occupancy tax revenue sources. These sources accounted for 57.5% of revenues.

The following categories illustrate the changes:

• Charges for services increased by $11.5 million or 12.9%, primarily due to the following categories: $1.8 million in planning and building related fees, $0.5 million in public works fees, $2.2 million in Fire cost recovery for reimbursement from the State for personnel and apparatuses for various fire incidents , $4.9 million in rental housing fee due to new fee for the Rent Stabilization Department, and $3.8 million in sewer charges due to a residential rate increase. There was a d ecrease of $4.2 million in E mergency Medical Services (EMS) cost recovery, primarily because the Department of Health Care Services reimbursement received last fiscal year was not available in the current fiscal year. The prior year reimbursement related to earlier participation in the Ground Emergency Medical Transportation Quality Assurance Fee (GEMT QAF) program , which the city no longer participates in. This decline was partially offset by $1.9 million increase in emergency ambulance fees revenue, driven largely by the City’s transition to the Public Provider -Ground Emergency Transportation (PP - GEMT) program.

• Operating grants and contributions increased by $13.1 million or 16.9%, primarily due to $3.7 million from FEMA for COVID -19 pandemic reimbursements, and $3.9 million increase from HUD for the rental assistance and supportive housing programs. Another contributing factor for an increase this year is due to a $3.4 million housing grant from the State of California and $3.2 million from Burbank-Glendale-Pasadena Regional Housing Trust.

• Capital grants and contributions increased by $2 million or 9.5%, primarily due to reimbursement-based funding and contributions received for Transportation from Los Angeles County Metro Transit Authority, Proposition A, and Measure A. The growth in capital grant revenue aligned with the corresponding rise in capital expenditures.

• Property tax increased by $3.2 million or 3.7%, due to rising appreciation of property value in Pasadena. New developments and improvements contributed to the increase in valuation.

• Sales tax decreased by $0.9 million or 1.1%, due to slower consumer spending. A contributing factor is due to inflation pressures and consumers cutting back on discretionary spending. Declines were seen in grocery and convenience stores, fuel-service stations, and autos-transportation sales, while there was an increase in apparel, specialty stores, electronic/appliance stores, and home furnishings. •
• Utility users tax increased by $1.1 million or 3.3%, primarily due to utility providers raising their rates due to inflation. New housing and commercial developments also contributed to the overall increase. There was a decline in traditional landline and cable usage of $1 million, but this was offset by an increase of $1 million due to higher volume of residential water usage.

• Transient occupancy tax increased by $2.1 million or 11.6%, due to higher hospitality activity, mainly due to events at the Rose Bowl and the housing of displaced residents as a result of the windstorm and wildfire that occurred in January 2025 (Eaton Fire). Another contributing factor is an improvement in short -term rental compliance, which captured a higher volume of rentals

• Other taxes increased by $1.6 million or 10.4%, primarily in motor vehicle in lieu tax due to State adjustments in vehicle license fee revenue, construction tax due to new development and improvements, and real property transfer tax based on higher assessed property value.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 7 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Governmental Activities (Continued)

• Other revenue increased by $2.6 million or 6.1% , primarily in investment earnings due to more favorable investment performance during the current fiscal year.

• Miscellaneous revenue increased by $1.6 million or 24.6%, mainly due to the sale of the Avon property in the amount of $2.1 million, $1 million insurance proceeds from the Eaton Fire, and $1.6 million in loan repayment for the Concord property. A decrease of $3.3 million in claim settlement due to a payment received in the prior year for excess liability coverage was offset with other miscellaneous revenue increases.

Charges for services

19.08%
Operating grants and
contributions

17.24%
Capital grants and
contributions

4.36%
Property taxes

17.22%
Sales taxes

15.31%
Utility users' taxes

6.30%
Transient occupancy taxes

3.93%
Street light and traffic
signal taxes

1.71%
Business license taxes

1.50%
Other taxes

3.27%
Motor vehicle in-lieu

5.00%
Other intergovernmental,
unrestricted

0.11%
Use of money - investment
earnings

1.82%
Net change in fair
value of investments

1.59%
Miscellaneous revenues

1.55%
Donated capital assets

0.01%
FY 2025 Revenues by Source - Governmental Activities
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

8 Annual Comprehensive Financial Report | June 30, 2025 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Governmental Activities (Continued)

The expense components of governmental activities grew by $61.8 million or 13%. The most significant increases are primarily due to increased labor costs as a result of new labor memorandums of understanding for fiscal year 2025, $12.6 million in additional labor and materials costs as a result of the Eaton Fire response and recovery , additional $6.8 million in litigation claims at a probable loss to the City, and additional $3 million for the expansion of the relatively new Rent Stabilization Department. The changes in expenses were general government increased by $19.5 million, public safety increased by $17.4 million, transportation increased by $14.3 million, culture and leisure increased by $3.9 million, and community development increased by $7.5 million. The other categories have a net decrease of $0.9 million.

• General government expense increased primarily due to the increase of $16.8 million in personnel, $3.1 million in services and supplies, and decrease $3 million in operating expense.

• Public safety expense increase d mainly due to increases of $10.4 million in personnel costs, $2.8 million in internal services charge expense, and $0.9 million in services and supplies and others.

• Transportation expense increased mainly due to increases of $7.6 million in capital project activity, $1.6 million in personnel costs, and $3 million in services and supplies.

• Culture and leisure expense increased mainly due to increases of $1.1 million in personnel costs and $1.1 million in services and supplies.

• Community development expense increased primarily due to the $2.9 million increase in personnel costs and $8.8 million increase in services and supplies. $3 million of this cumulative increase is due to the expansion and full-year staffing and operations in fiscal year 2025 of the relatively newly established Rent Stabilization Department.

• Other expense decreased mainly due to decreases of $1.2 million in personnel and $0.1 million in services and supplies. These increases were offset by other expense decreases.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 9 GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
Business-type Activities

Business-type activities increased the City’s net position by $57.4 million. Key elements of this year’s increase are as follows:

• Net income of the Light and Power, Water, Off -Street Parking, and nonmajor enterprise funds (Refuse and Telecommunications) were $37.7 million, $18.1 million, $0.4 million, and $1.6 million, respectively.

• Electric charges for services decreased by $12.7 million or 4.7% from the prior fiscal year , driven by a $7.4 million decrease in utility wholesale sales and a $5.4 million decrease in retail sales. Electric expenses increased by $32.1 million or 13.0% from the prior year due to the increase in fuel and energy cost s and customer and commercial expenses.

• Water charges for services increased by $11.2 million or 13.9% over the prior year mainly due to the increase in water sales. Water expenses increased by $8.4 million or 11.8% from the prior year primarily due to higher water purchases driven by increased usage, as well as higher administrative and general costs associated with the increased in water sales.

• Off-Street Parking charges for services increased by $0.3 million or 1.9%, primarily due to a slight increase in monthly parking permit revenue. Operating expenses increased $20 thousand or 0.2%, primarily due to an increase in other contract services and amortization expense.

• Nonmajor enterprise Refuse fund charges for services increased by $3.6 million or 28.4% from the prior fiscal year due to an increase in refuse collection fees during the fiscal year, with further schedule d increases. Operating expenses increased by $1.2 million or 4.9%, primarily due to an increase in internal service charges.

Charges for services

87.5%
Operating grants and
contributions

0.5%
Capital grants and
contributions

1.7%
Franchise taxes

2.1%
Use of money - investment
earnings

3.9%
Net change in fair value of
investments

2.8%
Miscellaneous revenues

1.5%
FY 2025 Revenue by Source - Business-type Activities
MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

10 Annual Comprehensive Financial Report | June 30, 2025 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS

Since the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements, the focus of the City’s governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing 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.

City of Pasadena’s Governmental Funds
Summary Statement of Revenues, Expenditures and
Changes in Fund Balances
(in millions)
2025 2024 $ Change % Change
Revenues:

Taxes 258.7$ 251.9$ 6.8$ 2.7% Licenses and permits 22.4 16.1 6.2 38.7% Intergovernmental 126.8 121.0 5.8 4.8% Charges for services 69.5 59.9 9.6 16.1% Fines and forfeitures 5.5 6.3 (0.9) -13.9% Investment earnings 8.8 7.2 1.7 23.1% Net change in fair value of investments 7.9 8.6 (0.6) -7.4% Lease revenues 0.4 4.9 (4.5) -90.9% Interest income from leases 0.0 0.0 (0.0) -50.0% Miscellaneous revenues 11.5 7.7 3.8 49.4% Contributions 2.7 1.6 1.1 70.3% Total revenues 514.2 485.2 29.0 6.0% Expenditures:

Current:

General government 90.6 72.7 18.0 24.8% Public safety 187.5 174.8 12.7 7.3% Transportation 53.8 45.4 8.3 18.3% Utility 0.0 0.0 0.0 3.4% Sanitation 6.0 6.4 (0.4) -6.4% Health 19.9 20.7 (0.8) -3.7% Culture and leisure 56.1 53.1 3.0 5.6% Community development 70.4 58.5 11.9 20.4% Capital outlay 54.5 66.7 (12.3) -18.4% Debt service:

Principal 7.0 6.0 0.9 15.8% Interest 5.8 6.0 (0.2) -3.3% Lease payments 1.2 1.4 (0.2) -12.2% Subscription payments 2.2 1.6 0.6 35.2% Interest on leases and subscriptions 0.2 0.1 0.0 29.5% Total expenditures 555.0 513.4 41.7 8.1% Excess (deficiency) of revenues over
(under) expenditures (40.8) (28.2) (12.6) 44.9% Other Financing Sources (Uses):

Issuance of debt 210.2 - 210.2 - Proceeds from sale of capital assets 2.1 - 2.1 - Issuance of financed purchase arrangements 0.0 0.0 (0.0) -78.7% Insurance recovery 1.0 - 1.0 - Transfers in 89.1 80.8 8.2 10.2% Transfers out (69.0) (65.7) (3.3) 5.1% Leases issued 0.8 0.1 0.7 810.0% Subscriptions issued 1.6 2.2 (0.6) -26.2% Total other financing sources (uses) 235.9 17.5 218.4 1249.0% Net change in fund balances 195.0 (10.7) 205.7 -1923.8% Fund balances, beginning of year 320.1 330.8 (10.7) -3.2% Fund balances, ending 515.2$ 320.1$ 195.0$ 60.9%

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 11 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued)

Governmental Funds report the difference 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 a 15% General Fund Emergency Contingency and a 5% General Fund Operating Reserve. On October 27, 2025, the City Council committed the full 15% ($51.3 million) to the Emergency Contingency Reserve and up to 5% ($17.1 million) to the Operating Reserve.

At the end of fiscal year 2025, the City’s governmental funds reported combined ending fund balances of $ 515.2 million, an increase of $ 195 million from the prior year. The nonspendable fund balance of $9 million represents assets generated by prepayments, permanent trust fund balances and receivables in funds, net of allowances. The restricted fund balance of $295.6 million represents resources that are subject to externally enforceable legal restrictions, such as the restrictions on the use of debt proceeds, special revenue funding, and capital improvement contracts. The committed fund balance of $170.9 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 $ 21.3 million designates the portion of fund balance that reflects the City’s intended use of resources. The unassigned fund balance of $ 18.3 million represents the residual amount after the nonspendable, restricted, committed, and assigned balances have been identified of total fund balance.

Total expenditures increased by $41.7 million or 8.1%. These expenditure categories increased: general government by $18 million, public safety by $12.7 million, community development by $11.9 million, transportation by $8.3 million, and culture and leisure by $3 million. These expenditure categories decreased: capital outlay decreased by $12.3 million, health by $0.8 million, and sanitation by $0.4 million. The other categories have a net increase of $1.2 million. Due to the implementation of GASB 87 and 96, lease and subscription payments, as well as the corresponding interest expenditures are presented under debt service. Prior to fiscal year 2022, these expenditures were presented within the governmental funds’ function.

• General government expenditure s increased mainly due to the $ 11 million increase in City’s contribution to the Pasadena Fire and Police Retirement System based on the agreement between the City and the retirement system, $1 million contribution to the CalPERS, $1.9 million in contract services, $1.2 million equipment rental expense related to the cost of operating emergency shelter during the 2025 Eaton Fire, $1.7 million in personnel costs, $0.7 million in general liability, and $0.5 million in debt issuance.

• Public safety expenditures increased due to a $2.8 million increase of internal service fund allocation (equipment maintenance and equipment replacement) and overall increase in personnel and benefit costs.

• Community development expenditures increase is due to a $3.3 million short-term construction loan to affordable housing developer, $3.5 million in affordable housing project costs, and a $3.5 million increase in Federal funding of affordable housing and other personnel costs.

• Transportation expenditures increased primarily due to $1.3 million in additional bus route services funded by the Los Angeles County Metropolitan Transportation Authority, along with a $3 million increase in debris removal costs.

Personnel expenses also rose by $2 million as a result of the Eaton Fire. In addition, a $0.7 million Proposition A Fund exchange with City of San Marino contributed to the overall increase, which was further driven by higher spending on other contractual services and supplies.

• Culture and leisure expenditures increased due to $1.3 million in higher personnel costs, a $1 million increase in other contractual services (of which $0.7 million was directly related to shelter services provided during the Eaton Fire), and a $0.7 million increase in internal services cost allocations.

• In fiscal year 2025, capital outlay decreased by $12.3 million, primarily due to a one-time $14 million land purchase in fiscal year 2024. Street expenditures also declined by $8 million as major projects , including the Citywide ADA Sidewalk Program, Lake Avenue Pedestrian Access, and Cordova Complete Street Maintenance, were completed in fiscal year 2024. Offsetting these decreases, the City invested approximately $9 million in fiscal year 2025 to purchase 15 fixed-route transit vehicles and 3 Dial-A-Ride vehicles to support and enhance public transit services.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

12 Annual Comprehensive Financial Report | June 30, 2025 City of Pasadena’s General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance (in millions)

2025 2024 $ Change % Change
Revenues:

Taxes 246.9$ 240.2$ 6.7$ 2.8% Licenses and permits 4.8 3.8 1.0 26.5% Intergovernmental 30.6 31.8 (1.2) -3.7% Charges for services 46.9 47.9 (1.0) -2.1% Fines and forfeitures 5.5 6.3 (0.9) -13.9% Investment earnings 3.5 3.0 0.5 16.0% Net change in fair value of investments 2.9 3.5 (0.6) -16.4% Lease revenues 0.2 1.0 (0.8) -81.5% Miscellaneous revenues 4.5 3.4 1.1 32.3% Total revenues 345.7 340.9 4.8 1.4% Expenditures:

Current:

General government 90.1 72.7 17.5 24.0% Public safety 185.8 171.7 14.1 8.2% Transportation 30.3 25.5 4.8 19.0% Culture and leisure 39.6 37.1 2.5 6.6% Community development 12.0 11.2 0.9 7.6% Capital outlay 4.8 14.8 (10.0) -67.5% Debt service:

Lease payments 0.9 1.0 (0.0) -5.0% Subscription payments 1.5 1.3 0.2 16.0% Interest - leases and subscriptions 0.1 0.1 0.0 20.8% Total expenditures 365.2 335.2 30.0 8.9% Excess (deficiency) of revenues over (under)
expenditures (19.5) 5.7 (25.2) -442.7% Other financing sources (uses):

Proceeds from sale of capital assets 2.1 - 2.1 n/a Insurance recoveries 1.0 - 1.0 n/a Transfers in 30.3 20.1 10.1 50.3% Transfers out (37.0) (33.9) (3.2) 9.3% Leases issued 0.1 0.1 0.0 53.7% Subscriptions issued 0.7 2.2 (1.5) -66.7% Total other financing sources (uses) (2.8) (11.4) 8.7 -75.7% Net change in fund balances (22.3) (5.8) (16.5) 287.2% Fund balances, beginning 158.9 164.6 (5.8) -3.5% Fund balances, ending 136.6$ 158.9$ (22.3)$ -14.0%

FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued)

Governmental Funds (Continued)

General Fund

The General Fund is the chief operating fund of the City. At the end of fiscal year 2025, the unassigned fund balance of the General Fund was $25.1 million, while the total fund balance decreased to $136.6 million, as compared to $158.9 million in the prior year. General Fund’s total fund balance therefore decreased by $22.3 million or 14%, during fiscal year 2025. As a measurement of the General Fund’s liquidity, it is useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance represents 6.88% of total General Fund expenditures, and total fund balance represents 37.4% of total General Fund expenditures.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 13 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued) Governmental Funds (Continued)
General Fund (Continued)

General Fund total revenues increased by $4.8 million or 1.4% mainly due to factors below:

• Taxes increased by $6.7 million or 2.8%. Property tax revenue rose by $3.1 million, driven by the 2% annual increase in assessed property values allowed under Proposition 13, along with additional gains from property sales and reassessments. The utility users tax increased by $1 million, reflecting recent water rate adjustments. The Transient Occupancy Tax grew by $2 million, as hotels operated at full capacity during the Eaton wildfire emergency when many residents were temporarily displaced. Constructi on tax increased by $1.4 million due to a major healthcare construction project currently underway.

• Licenses and permits increased by $1 million or 26.5%, mainly due to the same major healthcare construction.

• Miscellaneous revenue increased by $1.1 million or 32.3%, primarily due to the accrued interest payment received from the Concord Senior Housing developer.

• Intergovernmental revenues decreased by $1.2 million or 3.7%, primarily due to no funding received this fiscal year from the California Department of Water Resources and direct Federal grants, which resulted in a net decrease of $4.5 million. The California Department of Water Resources funding in the prior year was a one -time grant related to the COVID-19 pandemic, spanning over two years to assist customers’ utility bills. There was an increase of $2.1 million from FEMA in relation to COVID -19 funding and $1.1 million increase in Motor Vehicle in Lieu. Other intergovernmental revenues had slight increases.

• Charges for services decreased by $1 million or 2.1%, primarily due to a reduction in Police Department security charges, as overall requests for police security services declined.

General Fund total expenditures increased by $30 million or 8.9% primarily due to:

• General government expenditures increased by $17.5 million or 24.0% , as detailed in the Governmental Funds section above.

• Public safety increased by $14.1 million or 8.2%, primarily due to increase of internal service fund allocation (equipment maintenance and equipment replacement) and overall increase in personnel and benefit costs.

• Transportation expenditures increased by $4.8 million or 19.0%, primarily due to one-time $3 million increases in debris removal costs and $2 million in personnel expenditures related to the Eaton Fire.

• Culture and leisure increased by $2.5 million or 6.6%, and is attributable to the factors outlined in the preceding Governmental Funds section.

• Community development increased by $ 0.9 million or 7.6%, due to increased expenditures in personnel and consulting services.

• Capital outlay decreased by $10 million or 67.5%, and is attributable to the factors outlined in the preceding Governmental Funds section.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

14 Annual Comprehensive Financial Report | June 30, 2025 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS (Continued) Governmental Funds (Continued)
Housing Successor Fund

The Housing Successor Fund has a fund balance of $1.7 million, which is an increase of $1 million or 133.3% from the prior year. Total revenue increased by $0.1 million mainly from loan repayments, and total expenditures decreased by $0.4 million, primarily due to the Bridge Housing affordable housing project. For more information on Housing Successor notes receivable, refer to Note 4 on page 60 of this report.

Project Management Fund

The Project Management Fund reported a deficit fund balance of $7.5 million as of June 30, 2025, compared to a deficit of $1.4 million in the prior year. The $6.1 million increase in the deficit is primarily due to the recognition of $6.8 million in unavailable revenue. Of this amount, $5 million was billed to the Los Angeles County Metropolitan Transportation Authority, $1.5 million to Los Angeles County Parks, and $0.3 million in miscellaneous transportation grants.

These amounts represent grant reimbursements that were billed but not collected within the availability period for reimbursement-type grants (i.e., 90 days after fiscal year -end). While these funds are owed to the City and are expected to be collected, they were not recognized as available revenue in the current fiscal year due to timing.

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 and Power Fund at the end of the year amounted to $340.7 million and those for the Water, Off-Street Parking Fund, and nonmajor enterprise funds (Refuse and Telecommunications) amounted to $47.9 million, $4.4 million, and $4.6 million, respectively.

The total income before transfers and contributions for each fund was $47.3 million, $19.1 million, $1.5 million, and $2.2 million, respectively.

Light and Power operating revenues decreased by $12.8 million from prior year, primarily due to the decrease of $7.4 million in utility wholesales and $5.4 million in retail sales. Total operating expenses increased by $29.6 million to $237.6 million due to the increase in fuel and energy costs.

Water Fund operating revenues increased $11.2 million from prior year, primarily due to the increase in water sales.

Operating expenses increased by $8.6 million or 14.3% primarily due to an increase of $3.7 million in water purchased cost, $2.1 administrative and general expenses and $1.3 million customer and commercial expenses.

Off-Street Parking operating revenues increased by $0.3 million or 1.9%, primarily due to an increase in monthly parking permit revenues. Operating expenses increased by $0.3 million or 3.0% primarily due to an increase in other contract services and amortization expense.

Implementation of GASB 68 has resulted in showing a Net Pension Liability in the proprietary funds. At June 30, 2025, the Net Pension Liability is $ 61 million, $21.5 million, $1.1 million, and $8.1 million for Light and Power, Water, Off -Street Parking, and nonmajor enterprise funds, respectively.

Implementation of GASB 75 has resulted in showing a Net OPEB Liability in the proprietary funds. At June 30, 2025, the Net OPEB Liability is $8.6 million, $4.2 million, $0.06 million, and $2.2 million for Light and Power, Water, Off-Street Parking, and nonmajor enterprise funds, respectively.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 15

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets

As of June 30, 2025, the City of Pasadena’s investment in capital assets for its governmental and business -type activities totaled $1,484.7 million, net of accumulated depreciation and amortization. This represents an increase of $71.7 million, or approximately 5.1%, compared to the prior year. This investment includes land, buildings and improvements, machinery and equipment, infrastructure, construction -in-progress, right -to-use lease assets (GASB 87), right -to-use subscription assets (GASB 96), and other intangibl e assets. Infrastructure assets are typically immovable and include roads, bridges, drainage systems, and similar assets. The net increase included a $31.5 million increase in governmental activities and a $40.2 million increase in business-type activities.

City of Pasadena’s Capital Assets
(Net of Depreciation/Amortization, in millions)

2025 2024 2025 2024 2025 2024
Land and land rights 104.8$ 104.0$ 19.5$ 17.3$ 124.3$ 121.4$ Construction in progress 71.5 79.3 105.4 80.6 177.0 159.9 Buildings and improvements 148.4 143.7 78.1 68.5 226.5 212.2 Lease asset - buildings 2.8 2.0 11.3 6.4 14.1 8.4 Machinery and equipment 50.4 36.7 659.2 661.5 709.6 698.2 Lease asset - equipment 0.1 0.6 - 0.1 0.1 0.7 Subscription assets 8.5 6.8 4.4 3.3 12.9 10.1 Infrastructure 220.2 202.1 - - 220.2 202.1 Total 606.7$ 575.2$ 877.9$ 837.7$ 1,484.7$ 1,413.0$ Total Primary GovernmentGovernmental Activities Business-type Activities

Major capital asset activity during fiscal year 2025 included the following.

• Pasadena Water & Power (PWP) completed approximately $22.4 million in capital projects that advance the City’s long-term water and electric reliability goals. The most significant water project was the Parke Groundwater Well, which replaced the 104 -year-old Garfield Well. The $ 10 million project involved drilling a new 820 -foot-deep well, installing a submersible pump, and constructing new mechanical and electrical systems in Villa Parke. The well can supply water for nearly 2,800 households annually and supports long-term water sustainability and resiliency.

On the electric side, PWP completed over $7.4 million in system upgrades, including replacement of a critical transformer at Substation T7254 and junction and underground cable upgrades in the Evergreen area. These improvements enhance system reliability, reduce outage risk, and support the City’s undergrounding initiative.

For more information on PWP-related initiatives and goals, the PWP Annual Report is another resource for a financial overview of accomplishments, investments, infrastructure upgrades and services for residential and commercial customers. The PWP Annual Report can be accessed at https://pwp.cityofpasadena.net/annualreports/.

• The Department of Transportation invested in clean and accessible transit by acquiring 15 fixed-route transit vehicles totaling approximately $8.5 million and 3 Dial-A-Ride vehicles totaling approximately $0.4 million. These purchases support the City’s Zero-Emission Bus Rollout Plan and improve service reliability, particularly in high -demand areas such as Northwest Pasadena.

• The Pasadena Fire Department strengthened its emergency response capabilities with the acquisition of 2 Seagrave Capitol Cab fire engines totaling $2. 7 million. These units replaced aging reserve apparatus and support the department’s fleet modernization efforts.

• The Pasadena Police Department completed the implementation of a Cellular Site Simulator (CSS) system at a cost of $1.2 million. This advanced investigative tool enhances the department’s ability to locate mobile devices and supports critical public safety operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS CITY OF PASADENA

16 Annual Comprehensive Financial Report | June 30, 2025 CAPITAL ASSETS AND DEBT ADMINISTRATION (Continued)
Capital Assets (Continued)

• The City also transferred a parcel of land at 2825 E. Walnut Street, valued at $2.1 million, from the General Fund to PWP. Though not a legal title transfer, this accounting transaction reflects PWP’s operational control of the site, which is planned for future development of a water well, treatment plant, and EV charging infrastructure.

• Donated capital assets valued at approximately $71 thousand were added to the City’s inventory, including a forklift and a used vehicle. These assets were recorded at fair value and contributed to operational capacity without additional capital outlay.

• The City continues to advance a broad range of capital improvement projects supporting infrastructure, mobility, and community amenities. These include street construction and maintenance, parking facilities, traffic control systems, and park enhancements.

• In fiscal year 2025, approximately $32 million was invested in governmental capital projects. As of June 30, 2025, CIP balances totaled $71.5 million for governmental activities and $105.4 million for business-type activities.

Additional information on the City’s capital assets can be found in Note 6 on pages 61-64 of this report.

CITY OF PASADENA MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Comprehensive Financial Report | June 30, 2025 17 CAPITAL ASSETS AND DEBT ADMINISTRATION (Continued)
Long-Term Debt
During fiscal year 2025, the City issued $195 million in general obligation bonds (Series 2025) to fund the Central Library Renovation Project to address the seismic safety concerns for the historic library. The City also issued $98.2 million in Electric Revenue Refunding Bonds (Series 2024A) to refinance exi sting debt for PWP. At year-end, the City has several debt issues outstanding, including $310.3 million of revenue bonds, $210.1 million of general obligation bonds, $124.9 million of taxable pension bonds, $43.2 million of certificates of participation, $2.5 million of loans payable, and $3.7 million of notes payable.

Long-term debt increased by a net amount of $237.2 million as a result of the addition s of the electric revenue and general obligation bonds. The City was assigned an AAA issuer rating by Standard and Poor’s and an AA+ rating by Fitch Ratings.

City of Pasadena’s Outstanding Long-Term Obligations
(in millions)

Governmental Activities Business-type Activities
2025 2024 2025 2024 2025 2024
Long-term debt:

Notes payable 3.7$ 4.0$ -$ -$ 3.7$ 4.0$ Bonds payable 335.0 128.1 310.3 275.6 645.3 403.7 Certificates of participation 43.2 45.8 - - 43.2 45.8 Loan payable 2.0 3.0 0.5 1.0 2.5 4.0 Total long-term debt 383.9 181.0 310.8 276.5 694.7 457.5 Other long-term obligations:

Lease liability 3.2 2.7 11.9 6.7 15.0 9.4 Subscription liability 7.0 5.3 3.7 3.0 10.7 8.3 Total other long-term obligations 10.2 7.9 15.6 9.7 25.7 17.8 Total long-term obligations 394.1$ 189.0$ 326.3$ 286.3$ 720.4$ 475.2$ Total Primary Government

Additional information on the City’s long-term debt can be found in Note 10 on pages 73-84 of this report.

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 information provided in this report or requests for additional financial information should be addres sed to the office of the Director of Finance, 100 North Garfield Avenue, Room S348, Pasadena, California, 91101.

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
18 Annual Comprehensive Financial Report | June 30, 2025 Statement of Net Position
June 30, 2025

Discretely
Total Presented
Governmental Business-type Primary Component
Activities Activities Government Units
Assets:

Current assets:

Cash and investments 310,292$ 481,013$ 791,305$ 77,938$ Accounts receivable, net 72,342 53,425 125,767 15,208 Lease receivable 178 401 579 6,267 Notes receivable, net 3,024 - 3,024 - Prepaids and other assets 1,662 834 2,496 257 Due from component units 1,603 55 1,658 - Due from City - - - 343 Advances to component units 2,282 - 2,282 - Inventories 574 44,867 45,441 348 Deposits - - - 17 Property held for resale 1,434 - 1,434 9,041 Total current assets 393,391 580,595 973,986 109,419 Noncurrent assets:

Restricted - cash and investments 236,328 56,463 292,791 337 Due from City - - - 387 Lease receivable - 599 599 - Long-term prepaid and other assets - 6,918 6,918 - Capital assets:

Not being depreciated/amortized 176,310 124,901 301,211 5,734 Being depreciated/amortized, net 430,381 752,999 1,183,380 243,976 Total capital assets 606,691 877,900 1,484,591 249,710 Total noncurrent assets 843,019 941,880 1,784,899 250,434 Total assets 1,236,410 1,522,475 2,758,885 359,853 Deferred Outflows of Resources:

Accumulated decrease in fair value of
hedging derivatives - - - 4,042 Debt refunding related 17,832 642 18,474 16,786 Pension related 122,608 23,080 145,688 1,405 OPEB related 5,585 1,459 7,044 - Total deferred outflows of resources 146,025 25,181 171,206 22,233 (Continued)
Primary Government

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

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 19

Statement of Net Position (Continued)
June 30, 2025

Discretely
Total Presented
Governmental Business-type Primary Component
Activities Activities Government Units
Liabilities:

Current liabilities
Accounts payable and other accrued liabilities 63,799 43,282 107,081 23,374 Due to primary government - - - 2,486 Due to other governments 5 - 5 - Deposits 5,474 7,122 12,596 2,365 Advances - - - 100 Unearned revenue 14,118 8,871 22,989 16,361 Compensated absences 34,349 481 34,830 352 Insurance claims payable 27,844 - 27,844 - Long-term debt due within one year 18,690 10,642 29,332 16,726 Lease liability 1,194 2,197 3,391 257 Subscription liability 3,372 1,115 4,487 151 Total current liabilities 168,845 73,710 242,555 62,172 Noncurrent liabilities:

Compensated absences 10,151 - 10,151 222 Insurance claims payable 36,527 - 36,527 - Long-term debt 365,240 300,116 665,356 306,249 Lease liability 1,984 9,667 11,651 116 Subscription liability 3,645 2,590 6,235 125 Derivative instrument liability - - - 4,042 Long-term advances from primary government - - - 200 Net pension liability 457,815 91,772 549,587 3,791 Net OPEB liability 57,555 15,043 72,598 - Total noncurrent liabilities 932,917 419,188 1,352,105 314,745 Total liabilities 1,101,762 492,898 1,594,660 376,917 Deferred Inflows of Resources:

Debt refunding related - 4,008 4,008 2,756 Service concession agreement - - - 5 Lease related 167 972 1,139 6,268 Pension related 10,779 400 11,179 23 OPEB related 23,587 6,165 29,752 - Total deferred inflows of resources 34,533 11,545 46,078 9,052 Net Position (Deficit):

Net investment in capital assets 329,925 541,248 871,173 (13,759) Restricted:

Nonexpendable 1,434 - 1,434 - Expendable:

Community development 12,324 - 12,324 - Public safety 6,360 - 6,360 - Capital projects 1,417 - 1,417 - Debt service 210,635 56,463 267,098 429 Transportation 36,785 - 36,785 - Contribution to General Fund - 28,500 28,500 - Culture and literacy 4,873 - 4,873 - Other purposes 9,934 19,345 29,279 2,362 Air quality improvement 414 - 414 - Trust and loans 14,275 - 14,275 - Unrestricted (382,236) 397,657 15,421 7,085 Total net position (deficit) 246,140$ 1,043,213$ 1,289,353$ (3,883)$ Primary Government
The accompanying notes are an integral part of these financial statements.

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
20 Annual Comprehensive Financial Report | June 30, 2025

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CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 21

Statement of Activities
For the Fiscal Year Ended June 30, 2025

Discretely
Operating Capital Total Presented
Charges for Grants and Grants and Governmental Business-type Primary Component Functions/Programs Expenses Services Contributions Contributions Activities Activities Government Units Primary Government:

Governmental Activities:

General government 101,571$ 19,612$ 4,922$ -$ (77,037)$ -$ (77,037)$ -$ Public safety 197,231 21,881 5,046 - (170,304) - (170,304) - Transportation 73,125 19,978 21,425 20,426 (11,296) - (11,296) - Utility 30 - - - (30) - (30) - Sanitation 6,071 12,360 - 1,558 7,847 - 7,847 - Health 20,647 2,925 13,326 - (4,396) - (4,396) - Culture and leisure 59,139 2,044 1,440 907 (54,748) - (54,748) - Community development 72,404 21,487 44,443 - (6,474) - (6,474) - Interest 6,052 - - - (6,052) - (6,052) - Total governmental activities 536,270 100,287 90,602 22,891 (322,490) - (322,490) - Business-type Activities:

Electric 247,153 269,363 - 6,373 - 28,583 28,582 - Water 71,135 80,694 449 1,220 - 11,228 11,229 - Refuse 26,259 16,373 1,269 - - (8,617) (8,617) - Parking 12,671 13,302 363 - - 994 994 - Telecommunications 198 658 43 - - 503 503 - Total business-type activities 357,416 380,390 2,124 7,593 - 32,691 32,691 - Total primary government 893,686 480,677 92,726 30,484 (322,490) 32,691 (289,799) - Discretely Presented Component Units 103,830$ 80,520$ -$ 43$ (23,267) General revenues:

Taxes:

Property 90,486 - 90,486 - Sales 80,465 - 80,465 - Utility users 33,094 - 33,094 - Transient occupancy 20,648 - 20,648 12,348 Street light and traffic signal 8,963 - 8,963 - Construction 4,976 - 4,976 - Business license 7,883 - 7,883 - Franchise 2,606 9,204 11,810 - Other 9,600 - 9,600 4,700 Grants and contributions, unrestricted 598 - 598 123 Motor vehicle in-lieu, unrestricted 26,256 - 26,256 - Use of money - investment earnings 9,541 16,798 26,339 5,093 Use of property - interest income 3 11 14 4 Net change in fair value of investments 8,360 12,235 20,595 - Miscellaneous revenues 8,156 6,484 14,640 6,267 Donated capital assets 74 - 74 - - Total general revenues 311,709 44,732 356,441 28,535 Transfers 19,603 (19,603) - - Total general revenues and transfers 331,312 25,129 356,441 28,535 Change in net position 8,822 57,820 66,642 5,268 261,572 985,780 1,247,352 (8,928) Restatement for a change in accounting principle (26,985) (387) (27,372) (223) Restatement for correction of an error 2,731 - 2,731 - Net position (deficit), beginning, as restated 237,318 985,393 1,222,711 (9,151) Net position (deficit), ending 246,140$ 1,043,213$ 1,289,353$ (3,883)$ Program Revenues Primary Government
Net position (deficit), beginning, as previously
reported
Changes in Net Position
Net (Expenses) Revenues and

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

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
22 Annual Comprehensive Financial Report | June 30, 2025 Balance Sheet
Governmental Funds
June 30, 2025

Special Revenue Capital Projects Debt Service
Nonmajor Total
Housing Project General Governmental Governmental
General Successor Management Debt Service Funds Funds
Assets:

Cash and investments 66,983$ 1,667$ 1,109$ -$ 173,075$ 242,834$ Accounts receivable, net 40,349 8 11,755 - 19,126 71,238 Lease receivable - - - - 178 178 Notes receivable 7,868 27,031 - - 72,613 107,512 Allowance for uncollectible notes
receivable (4,845) (27,031) - - (72,613) (104,489) Due from other funds 36,226 - - - - 36,226 Due from component units 1,599 - - - - 1,599 Advances to component unit 2,282 - - - - 2,282 Prepaids and other assets 610 - - - 260 870 Restricted assets:

Cash and investments 14,274 - - - 3,776 18,050 Cash with fiscal agent - - - 210,635 7,644 218,279 Property held for resale - - - - 1,434 1,434 Total assets 165,346$ 1,675$ 12,864$ 210,635$ 205,493$ 596,013$ Liabilities:

Accounts payable and accrued
liabilities 19,421$ 2$ 10,715$ -$ 8,458$ 38,596$ Deposits 3,948 - - - 1,527 5,475 Due to other funds - - - - 8,645 8,645 Due to other governments 5 - - - - 5 Unearned revenue 2,716 - 2,878 - 8,523 14,117 Total liabilities 26,090 2 13,593 - 27,153 66,838 Deferred Inflows of Resources:

Unavailable revenues 2,654 - 6,795 - 4,380 13,829 Lease related - - - - 167 167 Total deferred inflows of resources 2,654 - 6,795 - 4,547 13,996 Fund Balances:

Nonspendable 5,915 - - - 1,694 7,609 Restricted 14,274 1,673 - 210,635 70,436 297,018 Committed 69,941 - - - 108,529 178,470 Assigned 21,331 - - - - 21,331 Unassigned 25,141 - (7,524) - (6,866) 10,751 Total fund balances 136,602 1,673 (7,524) 210,635 173,793 515,179 Total liabilities, deferred inflows of
resources and fund balances 165,346$ 1,675$ 12,864$ 210,635$ 205,493$ 596,013$

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

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 23

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025

Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances - governmental funds 515,179$
Capital assets 928,079
Accumulated depreciation (358,695)
Lease assets 5,664
Subscription assets 9,546
Accumulated amortization (8,165)
Capital assets, net 576,429
Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the statement of net position.

Deferred outflows - pension related 91,334
Deferred outflows - OPEB related 5,031
Deferred inflows - pension related (10,400)
Deferred inflows - OPEB related (21,246)
Total deferred outflows and inflows related to postemployment benefits 64,719 Unavailable revenues are not available to pay for current period expenditures and, therefore, are deferred in the funds. 13,829
The substance of an advanced refunding is reported as deferring the difference and amortizing it over future periods. 17,832
Long‐term liabilities and deferred inflows of resources are not due, payable, or available in the current period, and therefore, are not reported in the funds.

Notes payable (3,687)
General obligation bonds payable (195,000)
Pension bonds payable (124,905)
Certificates of participation (39,840)
Loan payable (2,024)
Financed purchase arrangements (37)
Compensated absences (1,591)
Lease liability (2,660)
Subscription liability (3,900)
Accrued interest payable on long-term debt, leases, and SBITA (1,555) Net OPEB liability (51,841)
Net pension liability (345,326)
Total long‐term liabilities (772,366)
Governmental funds report the effect of premiums, discounts, and refundings and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

Premium on certificates of participation refunding (3,312) Premium on general obligation bonds (15,126)
Total premiums and deferred items (18,438)
Internal service funds are used by management to charge the costs of certain activities, such as equipment management 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 governmental activities in the statement of net position. (151,044) Net position of governmental activities 246,140$
Capital assets used in governmental activities are not current financial resources and are therefore not reported in the governmental funds.

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

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
24 Annual Comprehensive Financial Report | June 30, 2025 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Fiscal Year Ended June 30, 2025

Special Revenue Capital Projects Debt Service
Nonmajor Total
Housing Project General Governmental Governmental
General Successor Management Debt Service Funds Funds
Revenues:

Taxes 246,913$ -$ -$ -$ 11,806$ 258,719$ Licenses and permits 4,792 - 488 - 17,074 22,354 Intergovernmental 30,620 - 12,994 - 83,187 126,801 Charges for services 46,850 4 76 - 22,599 69,529 Fines and forfeitures 5,455 - - - - 5,455 Investment earnings 3,471 122 - 6 5,217 8,816 Net change in fair value of investments 2,898 - - 959 4,067 7,924 Lease revenues 189 - - - 258 447 Interest income from leases - - - - 2 2 Miscellaneous revenues 4,481 184 28 - 6,825 11,518 Contributions 28 - 476 - 2,146 2,650 Total revenues 345,697 310 14,062 965 153,181 514,215 Expenditures:

Current:

General government 90,103 - - 541 4 90,648 Public safety 185,803 - - - 1,697 187,500 Transportation 30,292 - 1,808 - 21,654 53,754 Utility - - - - 30 30 Sanitation - - - - 5,993 5,993 Health - - - - 19,907 19,907 Culture and leisure 39,575 - - - 16,512 56,087 Community development 12,011 187 - - 58,180 70,378 Capital outlay 4,793 - 46,424 - 3,235 54,452 Debt service:

Principal 20 - - 4,215 2,720 6,955 Interest 4 - - 3,834 1,989 5,827 Lease payments 927 - 1 - 260 1,188 Subscription payments 1,536 - 72 - 543 2,151 Interest on leases and subscriptions 128 - 4 - 39 171 Total expenditures 365,192 187 48,309 8,590 132,763 555,041 Excess (deficiency) of revenues over
(under) expenditures (19,495) 123 (34,247) (7,625) 20,418 (40,826) Other Financing Sources (Uses):

Issuance of debt - - - 210,212 - 210,212 Proceeds from sale of capital assets 2,120 - - - - 2,120 Issuance of financed purchase arrangements 10 - - - - 10 Insurance recoveries 1,029 - - - - 1,029 Transfers in 30,272 833 29,845 8,043 20,062 89,055 Transfers out (37,046) - (1,730) - (30,221) (68,997) Leases issued 103 - - - 716 819 Subscriptions issued 730 - - - 886 1,616 Total other financing sources (uses) (2,782) 833 28,115 218,255 (8,557) 235,864 Net change in fund balances (22,277) 956 (6,132) 210,630 11,861 195,038 Fund balances, beginning of year 158,879 717 (1,392) 5 161,932 320,141 Fund balances, ending 136,602$ 1,673$ (7,524)$ 210,635$ 173,793$ 515,179$

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

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 25

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, 2025

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds 195,038$ 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 capital outlays exceeded depreciation/amortization expense in the current period.

Capital outlay 44,886$
Depreciation/amortization expense (21,710)
23,176
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (26)
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 6,609
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long‐term liabilities in the statement of net position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long‐term liabilities in the statement of net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

Issuance of general obligation bonds (195,000)
Issuance of financed purchase arrangement (10)
Leases issued (819)
Subscriptions issued (1,616)
Premium on general obligation bonds (15,212)
Principal paid on notes 318
Principal paid on pension bonds 3,210
Principal paid on certificates of participation 2,420
Principal paid on loan 987
Principal paid on financed purchase arrangement 20
(205,702)
Bond deferred charges and similar items are recorded as expenditures in governmental funds when debt is first issued, whereas these payments are deferred and amortized in the statement of activities.

This amount is the net offset of the difference. (1,113) Internal 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' compensation, general liability, and 311 call center, to individual funds. The net revenue (expense) of certain activities of internal service funds is reported with governmental activities. (1,170) 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 21 Amortization of bond premiums and discounts and deferred amounts of refunding 335 Compensated absences (219)
Net change in deferred (inflows) and outflows of resources - pension related (7,512) Net change in deferred (inflows) and outflows of resources - OPEB related (615) (7,990)
Change in net position of governmental activities 8,822$

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

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
26 Annual Comprehensive Financial Report | June 30, 2025 Statement of Net Position
Proprietary Funds
June 30, 2025

Governmental
Nonmajor Total Activities -
Light Off-Street Enterprise Enterprise Internal
and Power Water Parking Funds Funds Service Funds
Assets:

Current assets:

Cash and investments 404,374$ 49,388$ 6,256$ 20,995$ 481,013$ 67,458$ Accounts receivable, net 34,546 14,057 995 3,827 53,425 1,103 Due from component units - - - 55 55 4 Inventories 29,778 15,089 - - 44,867 574 Lease receivable - 18 327 56 401 - Prepaids and other assets 111 504 219 - 834 791 Total current assets 468,809 79,056 7,797 24,933 580,595 69,930 Noncurrent restricted assets:

Cash and investments 49,850 22 - - 49,872 - Cash with fiscal agent - 4,663 1,928 - 6,591 - Total noncurrent restricted assets 49,850 4,685 1,928 - 56,463 - Other noncurrent assets:

Deposit with Independent System Operator (ISO) 1,246 - - - 1,246 - Prepaid long-term assets 5,672 - - - 5,672 - Lease receivable - 63 306 230 599 - Capital assets, net of accumulated
depreciation/amortization 564,657 268,150 36,075 9,018 877,900 30,262 Total other noncurrent assets 571,575 268,213 36,381 9,248 885,417 30,262 Total noncurrent assets 621,425 272,898 38,309 9,248 941,880 30,262 Total assets 1,090,234 351,954 46,106 34,181 1,522,475 100,192 Deferred Outflows of Resources:

Bond refunding related 642 - - - 642 - Pension related 14,529 6,026 324 2,201 23,080 31,273 OPEB related 829 411 6 213 1,459 553 Total deferred outflows of resources 16,000 6,437 330 2,414 25,181 31,826 Liabilities:

Current liabilities:

Accounts payable and accrued liabilities 28,186 8,506 1,629 4,961 43,282 23,647 Deposits 1,097 129 209 5,687 7,122 - Insurance claims payable - - - - - 27,844 Due to other funds - - - - - 27,581 Unearned revenue 4,827 2,658 351 1,035 8,871 - Compensated absences 381 78 1 21 481 34,349 Revenue bonds 6,215 2,925 1,000 - 10,140 - Loan payable - - 502 - 502 - Lease liability 1,498 694 3 2 2,197 173 Subscription liability 929 168 - 18 1,115 1,413 Total current liabilities 43,133 15,158 3,695 11,724 73,710 115,007 Noncurrent liabilities:

Insurance claims payable - - - - - 36,526 Compensated absences - - - - - 8,560 Net pension liability 61,003 21,521 1,147 8,101 91,772 112,488 Net OPEB liability 8,596 4,187 65 2,195 15,043 5,713 Revenue bonds 217,732 65,784 16,600 - 300,116 - Loan payable - - - - - - Lease liability 6,172 3,491 - 4 9,667 345 Subscription liability 2,274 296 - 20 2,590 1,704 Total noncurrent liabilities 295,777 95,279 17,812 10,320 419,188 165,336 Total liabilities 338,910 110,437 21,507 22,044 492,898 280,343 Deferred Inflows of Resources:

Bond refunding related 2,826 1,182 - - 4,008 - Lease related - 94 599 279 972 - Pension related 252 104 6 38 400 379 OPEB related 3,514 1,725 26 900 6,165 2,340 Total deferred inflows of resources 6,592 3,105 631 1,217 11,545 2,719 Net Position:

Net investment in capital assets 322,368 192,235 17,969 8,675 541,247 24,737 Restricted:

Debt service 49,850 4,685 1,928 - 56,463 - Contribution/reimbursement to General Fund 28,500 - - - 28,500 - Other purposes 19,345 - - - 19,345 - Unrestricted 340,669 47,929 4,401 4,659 397,658 (175,781) Total net position (deficit) 760,732$ 244,849$ 24,298$ 13,334$ 1,043,213$ (151,044)$

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

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 27

Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2025

Governmental
Activities -
Nonmajor Total Internal
Light Off-Street Enterprise Enterprise Service
and Power Water Parking Funds Funds Funds
Operating Revenues:

Utilities 268,793$ 80,694$ -$ -$ 349,487$ -$ Off-street parking - - 13,301 - 13,301 - Refuse collection - - - 16,365 16,365 - Telecommunication - - - 658 658 - Computing and communication services - - - - - 23,475 Building maintenance - - - - - 17,471 Fleet maintenance - - - - - 19,627 Employee benefits - - - - - 46,800 Insurance - - - - - 36,521 311 Call Center - - - - - 1,159 Total operating revenues 268,793 80,694 13,301 17,023 379,811 145,053 Operating Expenses:

Utility production 117,479 32,801 - - 150,280 - Utility transmission and distribution 48,067 9,139 - - 57,206 - Utility commercial and general 35,585 16,135 - - 51,720 - Off-street parking - - 9,824 - 9,824 - Refuse collection - - - 25,442 25,442 - Telecommunications - - - 4 4 - Computing and communication services - - - - - 22,441 Building maintenance - - - - - 17,030 Fleet maintenance - - - - - 12,726 Benefits - - - - - 55,882 Insurance - - - - - 33,764 311 Call Center - - - - - 819 Depreciation/amortization 36,494 10,757 1,848 1,002 50,101 4,470 Total operating expenses 237,625 68,832 11,672 26,448 344,577 147,132 Operating income (loss) 31,168 11,862 1,629 (9,425) 35,234 (2,079) Nonoperating Revenues (Expenses):

Taxes - - - 9,204 9,204 - Intergovernmental - 267 - 228 495 - Investment earnings 14,063 1,702 384 650 16,799 729 Net change in fair value of investments 10,261 1,393 127 455 12,236 436 Miscellaneous revenues - - - - - - Gain (loss) on disposal of capital assets (85) (186) - - (271) (125) Noncompliance forfeitures - - - 1,044 1,044 - Lease revenues - 19 363 42 424 285 Interest income from leases - 2 7 1 10 1 Interest expense (9,241) (2,052) (998) - (12,291) (73) Interest expense on leases and subscriptions (203) (65) - (1) (269) 113 Other nonoperating revenues 1,304 6,146 31 - 7,481 - Total nonoperating revenues (expenses) 16,099 7,226 (86) 11,623 34,862 1,366 Income (loss) before transfers and contributions 47,267 19,088 1,543 2,198 70,096 (713) Capital contributions 6,373 953 - - 7,326 - Transfers in 12,157 - - 350 12,507 2,069 Transfers out (28,132) (1,894) (1,179) (904) (32,109) (2,526) Change in net position 37,665 18,147 364 1,644 57,820 (1,170) Net position (deficit), beginning, as previously reported 721,320 228,809 23,935 11,716 985,780 (124,261) Restatement for a change in accounting principle (285) (75) (1) (26) (387) (25,613) Restatement for correction of an error 2,032 (2,032) - - - - Net position (deficit), beginning of year, as restated 723,067 226,702 23,934 11,690 985,393 (149,874) Net position (deficit), ending 760,732$ 244,849$ 24,298$ 13,334$ 1,043,213$ (151,044)$

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

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
28 Annual Comprehensive Financial Report | June 30, 2025 Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2025

Governmental
Activities -
Nonmajor Total Internal
Light Off-Street Enterprise Enterprise Service
and Power Water Parking Funds Funds Funds
Cash Flows from Operating Activities:

Cash received from customers 270,907$ 77,605$ 13,644$ 15,533$ 377,689$ 150,619$ Cash payments to suppliers for goods and services (160,985) (41,860) (8,623) (9,600) (221,068) (40,528) Cash payments to employees for services (43,236) (18,546) (1,217) (12,515) (75,514) (82,986) Miscellaneous revenue 1,304 6,146 - - 7,450 109 Net cash provided by (used for) operating activities 67,990 23,345 3,804 (6,582) 88,557 27,214 Cash Flows from Noncapital Financing Activities:

Cash transfers in 12,157 - - 350 12,507 2,069 Cash transfers out (28,132) (1,894) (1,180) (904) (32,110) (2,526) Taxes received - - - 9,204 9,204 - Intergovernmental revenues - 267 - 228 495 - Nonoperating miscellaneous revenues - - 39 1,044 1,083 115 Net cash provided by (used for) noncapital financing activities (15,975) (1,627) (1,141) 9,922 (8,821) (342) Cash Flows from Capital and Related Financing Activities:

Acquisition and construction of capital assets (52,643) (24,453) (9) (3,731) (80,836) (12,868) Issuance of debt 98,230 - - - 98,230 - Underwriter discount (149) - - - (149) - Proceeds from sale of capital assets 10 5 - - 15 - Proceeds from lease activities - 19 - 44 63 - Payments on leases and subscriptions (2,494) (833) - (20) (3,347) (164) Capital contributions 3,487 1,495 - - 4,982 - Bond premiums received from bond refunding 14,365 - - - 14,365 - Cost of issuance of bonds (251) - - - (251) - Principal paid on debt (69,160) (2,860) (1,489) - (73,509) - Interest paid on debt (8,468) (2,857) (998) (1) (12,324) (41) Net cash used for capital and related financing activities (17,073) (29,484) (2,496) (3,708) (52,761) (13,073) Cash Flows from Investing Activities:

Proceeds from sale of investments 11,101 - - - 11,101 - Purchase of investments - (171) - - (171) - Investment earnings 12,552 1,492 384 650 15,078 729 Net change in fair value of investments 10,262 1,392 127 455 12,236 436 Net cash provided by (used for) investing activities 33,915 2,713 511 1,105 38,244 1,165 Net increase (decrease) in cash and cash equivalents 68,857 (5,053) 678 737 65,219 14,964 Cash and cash equivalents, beginning of year, as previously reported 348,365 57,540 7,506 20,258 433,669 52,494 Restatement for correction of an error 2,032 (2,032) - - - - Cash and cash equivalents, ending 419,254$ 50,455$ 8,184$ 20,995$ 498,888$ 67,458$ Reconciliation of cash and cash equivalents to amounts
reported on the Statement of Net Position:

Cash and investments 404,374$ 49,388$ 6,256$ 20,995$ 481,013$ 67,458$ Restricted:

Cash and investments 49,850 22 - - 49,872 - Cash with fiscal agent - 4,663 1,928 - 6,591 - Less non-cash equivalents (34,970) (3,618) - - (38,588) - Cash and cash equivalents, ending 419,254$ 50,455$ 8,184$ 20,995$ 498,888$ 67,458$

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

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 29

Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2025

Governmental
Activities -
Nonmajor Total Internal
Light Off-Street Enterprise Enterprise Service
and Power Water Parking Funds Funds Funds
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:

Operating income (loss) 31,168$ 11,862$ 1,628$ (9,425)$ 35,233$ (2,079)$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation and amortization 36,494 10,757 1,848 1,002 50,101 4,470 Miscellaneous and other revenue (loss) 1,304 6,146 - - 7,450 - (Increase) decrease in accounts receivable 1,312 (3,003) (369) (1,135) (3,195) 2,716 Increase (decrease) in allowance for uncollectible accounts (162) (85) - - (247) - (Increase) decrease in lease receivable - - 364 (286) 78 308 Increase (decrease) in due to other funds - - - (46) (46) 201 (Increase) decrease in due from component units - - - - - 697 (Increase) decrease in inventories (9,216) (3,992) - - (13,208) (170) (Increase) decrease in prepaids and other assets 583 (6) (18) - 559 257 Increase (decrease) in accounts payable and accrued liabilities 5,160 1,208 (13) 3,748 10,103 3,668 Increase (decrease) in unearned revenue - - 349 (265) 84 - Increase (decrease) in insurance claims payable - - - - - 8,000 Increase (decrease) in compensated absences 96 3 - (4) 95 3,513 Increase (decrease) in deposits payable 163 (21) - (472) (330) - Increase (decrease) in deferred inflows (35) 83 (15) 24 57 (479) (Increase) decrease in deferred outflows 5,908 1,495 195 1,022 8,620 9,793 Increase (decrease) in lease and subscription liability - - - 243 243 2,568 Increase (decrease) in net OPEB liability (492) (241) (7) (243) (983) (309) Increase (decrease) in net pension liability (4,293) (861) (159) (745) (6,058) (5,940) Total adjustments 36,822 11,483 2,175 2,843 53,323 29,293 Net cash provided by (used for) operating activities 67,990$ 23,345$ 3,803$ (6,582)$ 88,556$ 27,214$ Non-cash Operating Activity
Increase in compensated absenses due to
GASB 101 implementation 96 3 1 26 126 25,613 Non-cash Capital and Financing Activities
Loss on disposition of capital assets 88 203 - - 291 - Amortization of deferred charges (38) (149) - - (187) - Amortization of premiums (discounts) 1,206 644 - - 1,850 - Capital contributions 2,885 (542) - - 2,343 - Leases issued 4,287 2,309 12 - 6,608 537 Subscriptions issued 467 212 - 24 703 3,466

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

FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
30 Annual Comprehensive Financial Report | June 30, 2025 Statement of Net Position
Fiduciary Funds
June 30, 2025

Pension
(and Other
Employee Benefit) Private-Purpose
Trust Funds Custodial Funds Trust Funds
Assets:

Current assets:

Cash and cash equivalents 2,249$ 496$ 283$ Cash with fiscal agent - - 2,722 Short-term investments 2,091 - - Accounts receivable - 471 - Receivables for security transactions 682 - - Interest receivable 233 - - Notes receivable - - 515 Allowance for uncollectible notes receivable - - (515) Total current assets 5,255 967 3,005 Investments, at fair value:

Government and agencies 21,376 - - Mutual funds 428,658 - - Corporate obligations 9,022 - - Partnerships/joint ventures 5,231
Real estate 8,681 - - Alternatives - hedge fund 7,267
Corporate stocks 44,345 - - Total investments 524,580 - - Total assets 529,835 967 3,005 Liabilities:

Accounts payable and accrued liabilities 74 193 - Due to other governments - 579 35 Due to bondholders - 856 - Compensated absences 1 2 - Pending purchases 4,423 - - Total liabilities 4,498 1,630 35 Net Position (Deficit):

Restricted for other employee benefits 418,262 - - Restricted for pensions 107,075 - - Restricted for library equipment - 329 - Restricted for other purposes - (992) 2,970 Total net position (deficit) 525,337$ (663)$ 2,970$ The accompanying notes are an integral part of these financial statements.

CITY OF PASADENA FINANCIAL SECTION
(AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 31

Statement of Changes in Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2025

Pension
(and Other
Employee Benefit) Private Purpose
Trust Funds Custodial Funds Trust Funds
Additions:

Contributions:

Plan members 17,561$ -$ -$ Property taxes - - 6,380 Intergovernmental - 2,618 - Program revenue - - - Assessment revenue - 110 - Amounts collected for distribution 11,071 - - Gain/(loss) on disposition of property - - 2,491 Miscellaneous revenues - - 42 Total contributions 28,632 2,728 8,913 Net investment income:

Investment earnings 15,443 14 - Net change in fair value of investments 36,587 6 - Gross investment income 52,030 20 - Less investment expenses (491) - - Total net investment income 51,539 20 - Total additions 80,171 2,748 8,913 Deductions:

Benefits paid to participants 40,610 - - Contributions to City - 28 - Program expense - 3,117 - Interest expense - 51 - Statutory passthrough expenses - - 5,369 Administrative expenses 638 3 - County administrative expenses - - 1,011 Total deductions 41,248 3,199 6,380 Transfers:

Transfers in - - 12,899 Transfers out - - (12,899) Total transfers - - - Change in net position 38,923 (451) 2,533 Net position (deficit), beginning, as previously reported 486,325 (372) 437 Restatement for a change in reporting entity 91 - - Restatement for a change in accounting principle (2) (8) - Restatement for correction of an error - 168 - Net position (deficit), beginning, as restated 486,414 (212) 437 Net position (deficit), ending 525,337$ (663)$ 2,970$

The accompanying notes are an integral part of these financial statements. (This page intentionally left blank)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

NOTES TO THE BASIC

FINANCIAL STATEMENTS
(This page intentionally left blank)

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 35 Note Index

(1) Summary of Significant Accounting Policies .......................................................................................................... 36 (A) Reporting Entity ............................................................................................................................................................ 36 (B) Basis of Accounting and Measurement Focus .............................................................................................................. 41 (C) Major Funds, Internal Service Funds and Fiduciary Fund Types ................................................................................... 44 (D) Cash Equivalents ........................................................................................................................................................... 45 (E) Cash and Investments ................................................................................................................................................... 46 (F) Inventories .................................................................................................................................................................... 46 (G) Advances to Other Funds ............................................................................................................................................. 46 (H) Prepaids ........................................................................................................................................................................ 46 (I) Restricted Cash and Investments ................................................................................................................................. 47 (J) Property Held for Resale ............................................................................................................................................... 47 (K) Capital Assets ................................................................................................................................................................ 47 (L) Leases ........................................................................................................................................................................... 48 (M) Subscription-Based Information Technology Agreements (SBITA)............................................................................... 48 (N) Insurance Claims Payable ............................................................................................................................................. 48 (O) Compensated Absences................................................................................................................................................ 48 (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 ................................................................................................................................................................ 51 (U) Property Taxes .............................................................................................................................................................. 52 (V) Use of Estimates ........................................................................................................................................................... 52 (W) Interfund Activities ....................................................................................................................................................... 52 (X) Endowments ................................................................................................................................................................. 53 (Y) New and Future Accounting Pronouncements ............................................................................................................. 53 (2) Cash and Investments ........................................................................................................................................... 54 (3) Accounts Receivable ............................................................................................................................................. 59 (4) Notes Receivable – Primary Government .............................................................................................................. 60 (5) Due to and from Other Funds ............................................................................................................................... 60 (6) Capital Assets ........................................................................................................................................................ 61 (7) Leases ................................................................................................................................................................... 65 (8) Subscription-Based Information Technology Arrangements ................................................................................. 69 (9) Deferred Inflows and Outflows ............................................................................................................................. 71 (10) Long-Term Debt .................................................................................................................................................... 73 (11) Derivative Instruments ......................................................................................................................................... 85 (12) Fund Balance ......................................................................................................................................................... 88 (13) Net Position - Reserve for Working Capital ........................................................................................................... 89 (14) Accumulated Fund Deficits .................................................................................................................................... 90 (15) Excess of Expenditures over Appropriations ......................................................................................................... 93 (16) Pledged Revenue .................................................................................................................................................. 95 (17) Transfers ............................................................................................................................................................... 96 (18) Self-insurance ....................................................................................................................................................... 98 (19) Deferred Compensation Plan .............................................................................................................................. 101 (20) Pension Plans ...................................................................................................................................................... 102 (21) Other Postemployment Benefits (OPEB) ............................................................................................................. 114 (22) Commitments and Contingencies ........................................................................................................................ 119 (23) Restatement of Beginning Net Position or Fund Balances ................................................................................... 120 (24) Tax Abatements .................................................................................................................................................. 122 (25) Subsequent Events .............................................................................................................................................. 124

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

36 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies

The basic financial statements of the City of Pasadena, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. All amounts, unless otherwise indicated, are expressed in thousands of doll ars; 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 financial 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 statements as discrete presentations. Discretely presented component units are reported in a separate column in the government -wide 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 Author ity pursuant to the aforementioned resolution. The primary purpose of the Authority is to establish parking facilities for motor vehi cles within the City, 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 Authority. The Authority is reported as an enterprise fund and does not release a separate financial report.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 37 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting 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 Corporations 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 certificates of participation. T he PCIC is a non -profit organization with three directors: Chief Executive Officer, Secretary/Financial Officer, and Assistant Executive Officer/Assistant Secretary. PCIC's financial data and transactions are blended with the debt service and capital proje cts 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 r esponsibility 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 purpose s of the law and the Bond Pooling Act, including the financing of public capital improvements and the purchase of certain local obligations issued or incurred by the City, PCDC, or other public agencies or the sale of such local obligations or the issuance of bonds of the 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 whenever there are significant public benefits, as determined by the City or PCDC. PCDC ceased operation s as an entity on January 31, 2012, and the City became the successor agency to the PCDC to perform all of PCDC’s continuing obligations. PPFA’s financial data and transactions are blended with the debt service and capital projects funds. The PPFA does not release a separate financial report.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

38 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting Entity (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 who elected to transfer to the California Public Employees’ Retirement System (CalPERS) when the system closed. FPRS is managed by a five -member Retirement Board. Three of the members are appointed by the City Council. The other two members represent firefighter and police officials and are each appointed by their respective members. The accompanying financial statements include FPRS under the pension (and other employee benefit) trust fund. Additional information related to FPRS is included in the detailed notes on Pension Plans.

Successor Agency to PCDC (Successor Agency)
The Successor Agency to PCDC was created to serve, in a fiduciary capacity, as custodian for the assets and to wind down the affairs of the former Pasadena Community 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 Articl e XVIII, Section 1811 of the Charter establishes the PRHB, its composition, duties, authority, and oversight of the Pasadena Fair and Equitable Housing Charter Amendment.

In November 2023, City Council voted to turn PRHB into the Rent Stabilization Department. The PRHB’s financial data and transactions are blended as a special revenue fund . Additional information is available at https://www.cityofpasadena.net/commissions/pasadena -rental-housing-board.

Discretely Presented Component Units

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

Rose Bowl Operating Company (RBOC)
RBOC was incorporated on January 18, 1994, as a legally separate entity with the primary purpose of returning economic and civic value to the City by managing a world class stadium and 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 the 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 above, have been met. RBOC’s budget is reviewed and approved by the City Council. Separate compone nt unit financial statements 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.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 39 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting 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, exhibitions, trade shows, assemblies, cultural, educational, and rec reational programs, and for the use, benefit, and enjoyment of the public. PCOC was also established to supervise the activities of the Pasadena Convention and Visitors Bureau.

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

Pasadena Community Access Corporation Board (PCAC)
PCAC was created by the City Council in July 1983 and established on December 9, 1983, by Articles of Incorporation. The PCAC's primary purpose is to provide a means for individuals or groups to use cable telecommunications to communicate and share information. The PCAC board consists of eleven members. Seven are appointed from each Council district, one each by the Mayor and City Manager, two members, including one representing Pasadena City College (PCC) and another one representing Pasadena Unified School District (PUSD) with residency required except for the PCC and PUSD representative. The City can impose its will on PCAC through its ability to appoint a majority of its board members. PCAC’s budget is reviewed and approved by the City Council. The City provides support through the 1% Public, Education, and Government (PEG) allocation. Separate component unit financial statements of PCAC are issued and available upon request from Pasadena Community Access Corporation, 150 South Los Robles Avenue, Pasadena , 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 Authority). The Airport Authority 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 from each city, appointed by each city's respective city council, make up the nine members of the Airport Authority. There is no ongoing f inancial interest or responsibility by the participating governments. Additional information is available at www.hollywoodburbankairport.com.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

40 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting Entity (Continued)

Jointly Governed Organizations (Continued)

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.

Foothill Air Support Team (FAST)
On July 31, 2000, the cities of Monrovia, Arcadia, Azusa, Covina, West Covina, and Pasadena formed a Joint Powers Agreement (JPA) for police helicopter services known as the FAST. Currently, the cities of Alhambra, Arcadia, Covina, Glendora, Monrovia, Pasa dena, 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, operating, 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 term 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 yea r- 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.

Additional information is available at https://rosebowlaquatics.org.

Foothill Workforce Development Board (FWDB)
Developed 1998, 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 has 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 development 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 located at 1207 East Green Street in Pasadena and is funded through the Workforce Innovation and Opportunity Act (WIOA). Additional information is available at https://fwdbworks.org.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 41 (1) Summary of Significant Accounting Policies (Continued)

(A) Reporting Entity (Continued)

Jointly Governed Organizations (Continued)

Arroyo Verdugo Communities Joint Powers Authority (AVCJPA) The City is a party to, and administrator 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 Board of Directors. The JPA issues its own audited financial statements. Additional information is available at https://avcjpa.org.

(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 measurement 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, r evenues, expenses, gains, losses, assets, and liabilities are recognized in accordance with various GASB Statements.

Program revenues include: (1) charges to customers or applicants 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 cap ital 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

42 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

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

Government-wide Financial Statements (Continued)

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 t han as another financing source. Amounts paid to reduce long -term indebtedness of the City are reported as a reduction of the related liability, rather than as expenditures.

Fund Financial Statements

The underlying accounting system of the City is organized and operated based on separate funds, each of which is a separate accounting entity. The operations of each fund are accounted for with a separate set of self - balancing accounts that comprise its as sets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and how spending activities are cont rolled.

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

Governmental Funds

In the fund financial statements, 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 soon 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 the 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 underlying exchange transaction on which they are based takes place. Imposed non- exchange transactions are recognized as revenues in the period f or which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 43 (1) Summary of Significant Accounting Policies (Continued)

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

Governmental Funds (Continued)

In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is a measure of “available spendable resources.” Governmental fund operating statements present inc reases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current 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 reporting treatments are used to indicate 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 refl ected in nonspendable fund balance.

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

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

Proprietary Funds

The City’s enterprise and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting . Revenues are recognized when they are earned, and expenses are recognized when the related goods 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 noncurrent) associated with th eir activity are included on their balance sheets. Proprietary funds type operating statements present increases (revenues) and decreases (expenses) in total net position.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Light and Power Fund, Water Fund, Off -Street Parking Facilities Fund, and 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 dep reciation/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. Proceeds of long -term debt are recorded as a liability in the proprietary fund financial statements. Amounts pai d to reduce long -term liability of the proprietary funds are reported as a reduction of the related liability.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

44 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

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

Proprietary Funds (Continued)

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. The City has four custodial funds: (1) Lake/Washington Special Assessment District fund accounts for maintenance costs of the parking lot located at Lake Avenue and Washing Boulevard, (2) Library Equipment Replacement fund accounts for the library automated control system operated under joint agreement with the City of Glendale, (3) Workforce Innovation and Opportunity Act (WIOA) fund accounts for the administration of Workforce Innovation and Opp ortunity Act activities under the direction of the Foothill Workforce Development Board, and (4) Open Space Assessment District fund accounts for the receipt and disbursement of debt service activity related to the acquisition and improvement of the Annand ale Canyon Estates and adjacent property to be established as open space. Private-purpose trust funds account for receipt of incremental property tax and payment of enforceable obligations (debts) of the former redevelopment agency.

In the fund financial statements, fiduciary funds are presented using the accrual basis of accounting . Revenues are recognized when they are earned, and expenses are recognized when the related goods or services are delivered. In the fund financial statements, fiduciary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Fiduciary funds operating statements present increases (revenues) and decreases (expenses) in total net position.

Pension funds report net position restricted for pensions and changes in net position due to contributions, investment income, and benefit payments. Custodial funds report additions and deductions related to program revenues, assessment collections, and ot her pass -through transactions. Private -private purpose trust funds report additions and deductions related to tax collections, debt service payments, and other pass -through transactions.

Fiduciary funds are excluded from the government -wide financial statements because the resources they manage are not available to support the government's own programs. By their nature, the net position of fiduciary funds is restricted, as these funds are held in a trustee or agency capacity for others.

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.

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.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 45 (1) Summary of Significant Accounting Policies (Continued)

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 transfers 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.

The City reports the following major proprietary funds:

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

Water Fund – Accounts 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 services, building maintenance, fleet replacement, fleet repair and maintenance, employee benefits, workers’ compensation, general liability, and the 311-call center provide services 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 government s. The custodial funds account for monies received from agencies and financial activities for: (1) Lake/Washington Special Assessment District, (2) Library Equipment Replacement, (3) Workforce Innovation and Opportunity Act (WIOA), (4) Open Space Assessment District.

Private-Purpose Trust Funds – These funds account for monies held on behalf of others in a fiduciary capacity, typically pursuant to a formal trust agreement. 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 amounts 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

46 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(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 ar e reported at cost because they are not transferable, they have terms that are not affected by changes in market interest rates, and provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors.

Both realized and unrealized changes in fair value that occur during a fiscal year are recognized and recorded as net changes in fair value of investments . Investment earnings include net changes in fair 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 share 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 funds based on each fund’s average cash and investment balance, except for investment earnings associated with the following funds not legally required to receive pooled investm ent 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 Management, Workers’ Compensation, General Liability, Employment and Training, South Lake Business Improvement 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

There are three types of inventories: held for consumption in operations, those that are capitalized, and those held for resale. For the Water and Light and Power Fund ( enterprise funds), inventories held for consumption are valued at the lower of weighted average cost, while inventories held for resale are reported at the lower of cost or fair value.

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 record its prepaids. The prepaid assets recorded in the governmental funds do not reflect curre nt appropriable resources and, thus, an equivalent portion of fund balance is nonspendable.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 47 (1) Summary of Significant Accounting Policies (Continued)

(I) Restricted Cash and Investments

The City considers all cash and investments from bond proceeds in proprietary funds as restricted. The City is legally mandated under bond indentures to use these resources only for the purposes specified. Also included as restricted cash and investments are amounts accumulated in the Light and Power Fund for the purpose of meeting future contractual commitments, including the Stranded Investment Reserve (SIR) Utilization Plan (discussed further in the detailed notes), deferred compensation, and all cash an d investments belonging to employee benefit trust and custodial funds held by trustees.

(J) Property Held for Resale

Property held for resale represents land, structures, and their related improvements that were acquired for resale. This includes the properties acquired in accordance with the objective of the former Pasadena Community Development Commission (PCDC) project area.

On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 that provides for the dissolution of all redevelopment agencies in California. The bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the “successor 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 service concession agreements are reported at acquisition value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

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

Capital assets are depreciated or amortized using the straight -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 Equipment 4 to 10 years
Lease assets
Subscription assets
Subscription assets
Buildings and improvements 20 to 50 years
Machinery and equipment 2 to 20 years
Infrastructure 8 to 200 years
Lease assets
Subscription assets
Light and Power Fund Water Fund
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
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 useful life of the
underlying asset or the lease term
Shorter of the useful life of the
underlying asset or the subscription
term

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

48 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(L) Leases

Leases are financings of the right to use an underlying asset. In accordance with GASB Statement No. 87, Leases, parties to a lease agreement, the lessee and lessor, are required to recognize a lease liability and an intangible right-to-use lease asset (a capital asset hereinafter referred to as the lease asset), and a lease receivable and deferred inflow of resour ces, respectively. A general description 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 long -term effect of lease arrangements on a government’s resources are further discussed in the detailed notes.

(M) Subscription-Based Information Technology Agreements (SBITA)

In accordance with GASB Statement No. 96, Subscription-Based Information Technology Agreements (SBITA), a government should recognize a right -to-use subscription 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 present 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 amortization 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 c laims 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 year end, are recorded as liabilities in the workers’ compensation and general liability internal service fund s. The City records 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

In accordance with Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences, implemented in fiscal year 2025, the City recognizes a liability for compensated absences for leave that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled (for example, paid in cash to the employee) during or upon separation from employment. Based on the criteria listed, five types of leave qualify for liability recognition for compensated absences: vacation, floating holiday, management time- off, compensatory time-off, and sick leave. These five types of benefits, including the related Medicare tax, are classified as compensated absences.

The City applies a probability-based measurement approach to estimate the liability for compensated absences.

For vacation, floating holiday, management time -off, and compensatory time -off, the full accrued balance is recognized as a liability, as these ty pes of leave are used or ultimately paid out upon separation from employment. For sick leave, which is less likely to be fully utilized or paid, a liability for the estimated value of sick leave that will be used by employees as time off is included in the liability for compensated absences. The City applies a usage factor based on a three -year historical average of sick leave earned versus used. This approach ensures that only the portion of sick leave expected to result in a future outflow of resources is reported.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 49 (1) Summary of Significant Accounting Policies (Continued)

(O) Compensated Absences (Continued)

The liability for compensated absences is reported as incurred in the government -wide and propriety fund financial statements. Liabilities for compensated absences are accrued at fiscal year -end and reported in the appropriate funds based on the nature of the leave:
• Vacation, sick leave, and floating holiday are accrued in the Benefits internal service fund. • Management time-off and compensatory time-off are accrued in the respective departmental funds.

This methodology aligns with GASB 101’s objective to improve consistency and comparability in the recognition and measurement of compensated absences across governmental entities.

Vacation Leave

The City accounts for vacation leave in the Benefits internal service fund. The total outstanding vacation obligation is accrued at fiscal year-end and included under compensated absences in the Benefits internal service fund.

Eligible employees accumulate 8 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 two 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.

Floating Holiday

Floating holiday is accrued when a City -designated holiday falls on an employee’s regularly scheduled day off.

Between 1 to 3 days are also provided annually (depends on Memorandum of Understanding or Salary Resolution). These obligations are accounted for in the Benefits internal service fund and included in the year - end compensated absences accrual.

Management Time-Off

Management time-off is accounted for in the respective departmental funds. Eligible management employees receive five days of management time -off annually and may be granted between 5 to 10 additional days with department head or City Manager approval (dep ends on Memorandum of Understanding or Salary Resolution).

The related liability is accrued at fiscal year -end and reported under Compensated Absences in the applicable departmental funds.

Compensatory Time-Off

Compensatory time -off is also recorded in departmental funds. It is accrued when employees elect to bank overtime hours worked instead of receiving immediate cash compensation. The liability for unused compensatory time is accrued at year-end and included in compensated absences in the applicable departmental funds.

Sick Leave

Sick leave is accounted for in the Benefits internal service fund. The City recognizes a liability for sick leave when it is probable that the leave will result in a future outflow of resources. To estimate this liability, the City applies a usage-based approach: each employee’s accrued sick leave balance is multiplied by a usage factor derived from a three-year average of sick leave hours used divided by hours earned. This methodology ensures that only the portion of sick leave likely to be utilized or com pensated is reported as a liability, consistent with GASB 101 guidance.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

50 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(P) Net Pension Liability

Pension is a retirement plan the City provides to retired employees. Pension liabilities are primarily liquidated by the General Fund, Light and Power Fund, and Water Fund. For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office and are in accordance with the implementation 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 Benefits (OPEB)

OPEB are benefits (other than pensions) th e City provides to retired employees. OPEB liabilities are primarily liquidated by the General Fund, Light and Power Fund, and Water Fund. 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 a ctuary 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 r eported 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 Position and Items Previously Reported as Assets and Liabilities , respectively, the City recognizes deferred outflows and inflows of resources. 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 governmen t 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.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 51 (1) Summary of Significant Accounting Policies (Continued)

(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 -term loans, notes receivable, and property held for resale, unless the proceeds are restricted, committed or assigned. Also, amounts that must be maintained intac t legally or contractually, such as the principal of a permanent fund are reported within the nonspendable category.

• Restricted fund balance is the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors.

• Committed fund balance is the portion of fund balance that is subject to self -imposed constraints due to City Council resolutions, as they have the highest level of decision-making authority.

• Assigned fund balance is the portion of fund balance that is constrained by the City’s intent to utilize fund balance for a specific purpose. The authority to assign fund balance has been delegated by the City Council to the Finance Director through the Fund Balance Policy.

Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. In a governmental fund other than the General Fund, expenditures incurred for a specific purpose might exceed the amounts in the fund that are restricted, committed, and assigned to that purpose and a negative residual balance for that purpose may result.

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 fo r 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 goal 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 Fu nd 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

52 Annual Comprehensive Financial Report | June 30, 2025 (1) Summary of Significant Accounting Policies (Continued)

(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:

Lien January 1
Levy July 1 to June 30
Due November 1 - 1st installment
February 1 - 2nd installment
Collection December 10 - 1st installment
April 10 - 2nd 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 s ubject 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 del inquent unsecured taxes is the responsibility of the County of Los Angeles using the several means legally available.

(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 affect 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 y ear-end, collectability of its receivables, the valuation of property held for resale, the useful lives of the capital assets, the ultimate outcome of claims and judgments, and the valuation of pension and other 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 total government column. In the statement of activities, internal services funds transactions have been eliminated. However, transactions between governmental and business-type activities have not been eliminated.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 53 (1) Summary of Significant Accounting Policies (Continued)

(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 restriction s that were placed on the endowment when the donation to the City was made.

(Y) New and Future Accounting Pronouncements

The following Government Accounting Standards Board (GASB) pronouncement was effective for the fiscal year ended June 30, 2025:

GASB Statement No. 101, Compensated Absences

The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave. The model also will result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.

GASB Statement No. 102, Certain Risk Disclosures

This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 mon ths of the date the financial statements are issued.

If a government determines that those criteria for disclosure have been met for a concentration or constraint, it should disclose information in notes to financial statements in sufficient detail to enable users of financial statements to understand the n ature of the circumstances disclosed and the government’s vulnerability to the risk of a substantial impact. The disclosure should include descriptions of the following:

• The concentration or constraint,
• Each event associated with the concentration or constraint that could cause a substantial impact if the event had occurred or had begun to occur prior to the issuance of the financial statements,
• Actions taken by the government prior to the issuance of the financial statements to mitigate the risk.

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 Date
103 Financial Reporting Model Improvements 2026
104 Disclosure of Certain Capital Assets 2026

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

54 Annual Comprehensive Financial Report | June 30, 2025 (2) Cash and Investments

Primary Government (excluding the FPRS Employee Benefit Trust Fund’s Short -term investments and Investments, at fair value):

Cash and investments as of June 30, 2025, are classified in the accompanying financial statements as follows:

Investments 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 provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather 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 Authorized by State Law Policy Maturity of Portfolio in One Issuer Local Agency Bonds Yes 5 years None None
US Treasury Obligations Yes 5 years None None
US Agency Securities Yes 5 years None None
Banker's Acceptance Yes 180 days 40% 30%
Commercial Paper Yes 270 days 15% 10%
Negotiable Certificates of Deposit Yes 5 years 30% None Repurchase Agreement Yes 1 year None None
Reverse Repurchase Agreements Yes 92 days 20% of base value None Time Deposits Yes N/A 25% None
Medium Term Notes Yes 5 years 30% 5%
Mutual Funds Yes N/A 20% 10%
Money Market Mutual Funds Yes N/A 20% 10%
Mortgage Pass-Through Securities Yes 5 years 20% None
Corporate Bonds Yes 5 years 20% 10%
County Pooled Investment Fund Yes N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None None
JPA Pools (other investment pools) Yes N/A None None
Registered State Warrants Yes N/A None None
* Based on state law requirements or investment policy requirements, whichever is more restrictive.

Statement of net position:

Cash and investments 791,305$
Restricted cash and investments 292,791
Fiduciary funds:

Cash and cash equivalents 421,290
Total cash and investments 1,505,386$
Cash on hand 61$ Deposits with financial institutions 252 Investments 1,505,073 Total cash and investments 1,505,386$ Cash and investments as of June 30, 2025 consist of the following:

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 55 (2) Cash and Investments (Continued)

Investments Authorized by Debt Agreements

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

Maximum
Authorized Inves tment Type Maturity
US Treas ury Obligations None
US Agency Securities None
Banker's Acceptance 360 days
Commercial Paper 270 days
Money Market Mutual Funds N/A
Inves tment Contracts 20-30 years
Pre-refunded Municipal Bonds None
Repurchas e Agreements 1 year
Local Agency Inves tment 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 sensitivity of the fair values of the City’s investments (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 98,603$ 30,970$ 20,156$ 47,477$ -$ Supernationals 31,724 4,440 - 27,284 - Federal Agency Securities 451,127 146,884 11,262 276,020 16,961 Municipal Bonds 66,509 10,921 11,144 41,777 2,667 California Asset Management Program 120,273 120,273 - - - Money Market Funds 3,287 3,287 - - - Commercial Paper Disc 7,290 7,290 - - - State Investment Pool 1,401 1,401 - - - US Treasury 67,498 48,677 18,821 - - Held by Bond Trustee:

Federal Agency Securities 42,718 2,347 3,199 30,025 7,147 Money Market Funds 4,239 4,239 - - - US Treasury 177,868 32,905 30,026 114,937 - Held by Pension Section 115 Trustee:

Mutual Fund 14,274 14,274 - - - Deferred Compensation Plan:

Mutual Funds 418,262 418,262 - - - Total 1,505,073$ 846,170$ 94,608$ 537,520$ 26,775$ Remaining Maturity (in Months)

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

56 Annual Comprehensive Financial Report | June 30, 2025 (2) Cash and Investments (Continued)

Disclosures Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (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 98,603$ A 12,825$ 9,969$ 75,809$ -$ -$ Supernationals 31,724 A 31,724 - - - - Federal Agency Securities 451,127 N/A - - - - 451,127 Municipal Bond 66,509 N/A 2,936 63,573 - - - California Asset Management Program 120,273 N/A - - - 120,273 - Money Market Funds 3,287 N/A - - - 3,287 - Commercial Paper Disc 7,290 AA - - 7,290 - - State Investment Pool 1,401 N/A - - - 1,401 - US Treasury 67,498 N/A - - - - 67,498 Held by Bond Trustee:

Federal Agency Securities 42,718 A - - - - 42,718 Money Market Funds 4,239 A 4,239 - - - - US Treasury 177,868 177,868
Held by Pension Section 115 Trustee:

Mutual Fund 14,274 N/A - 14,274 - - - Deferred Compensation Plan:

Mutual Fund 418,262 N/A - 418,262 - - - Total 1,505,073$ 51,724$ 506,078$ 83,099$ 124,961$ 739,211$ Rating as of Year-End

Concentration of Credit Risk

The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. 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 Type Amount
Federal Home Loan Bank Federal Agency Securities 199,676$ U.S. Treasury Notes U.S. Tresury 170,212
Federal Farm Credit Bank Federal Agency Securities 135,611 Federal Home Loan Mortgage Bank Federal Agency Securities 88,198 U.S. Treasury U.S. Tresury 49,440
Federal National Mortgage Association Federal Agency Securities 40,440

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover 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 investments, other than th e following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under s tate law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of th e

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 57 (2) Cash and Investments (Continued)

Disclosures Relating to Credit Risk (Continued)

total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

The City has no uncollateralized cash at June 30, 2025. As of June 30, 2025, the City’s deposits with financial institutions in excess of federal depository insurance limits w ere $ 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 reporting 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 comp rised of finance directors and treasurers of California public agencies. The total amount invested by all public agencies in CAMP was $22.2 billion as of June 30, 2025. Of the amount invested in CAMP, 36.2% were invested in medium-term and short-term notes and asset-backed securities at June 30, 2025.

The average maturity of CAMP investments was 28 days to 52 days as of such dates.

Investment in State Investment Pool

The City is a voluntary participant in the Local Agency Investment Fund (LAIF) 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 provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is ba sed on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

Fair Value Hierarchy

The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset or liability. Level 1 input s 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 Management 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 proceeds of debt issu es 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 GASP 79 requirements. On June 30, 2025, the CAMP pool had an average maturity of 26 days and it exempt from the fair value hierarchy.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

58 Annual Comprehensive Financial Report | June 30, 2025 (2) Cash and Investments (Continued)

The City has the following recurring fair value measurements as of June 30, 202 5:

Measure by Fair Value
Not Subject to Fair
Value Hierarchy 2 Total
Corporate Bonds -$ 98,603$ 98,603$ Supernationals - 31,724 31,724 Federal Agency Securities - 451,127 451,127 Municipal Bond - 66,509 66,509 California Asset Management Program 120,273 - 120,273 Money Market Funds 3,287 - 3,287 Commercial Paper Disc - 7,290 7,290 State Investment Pool 1,401 - 1,401 US Treasury - 67,498 67,498 Held by Bond Trustee:

Federal Agency Securities - 42,718 42,718 Money Market Funds 4,239 - 4,239 US Tresury - 177,868 177,868 Held by Pension Section 115 Trustee:

Mutual Fund - 14,274 14,274 Deferred Compensation Plan:

Mutual Fund - 418,262 418,262 Total 129,200$ 1,375,873$ 1,505,073$ Level

(Balance of page intentionally left blank)

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 59 (3) Accounts Receivable

As of June 30, 2025, accounts receivable is categorized as follows:

Capital Nonmajor Internal
Housing Project Governmental Service
General Successor Management Funds Fund Total
Governmental Activities:

Accounts receivable 5,122$ -$ 11,711$ 11,335$ 155$ 28,323$ Accrued revenue
receivable 28,842 - 44 5,436 801 35,124 Interest receivable 1,069 8 - 1,490 147 2,714 Paramedics receivable 7,433 - - - - 7,433 Utility receivable 1,850 - - 992 - 2,842 44,316 8 11,755 19,253 1,103 76,436 Less: allowance for
uncollectible amounts (3,967) - - (127) - (4,094) Total 40,349$ 8$ 11,755$ 19,126$ 1,103$ 72,342$ Nonmajor
Light and Off-Street Enterprise
Power Water Parking Funds Total
Business-type Activities:

Accounts receivable 37$ 179$ 435$ 21$ 672$ Accrued revenue
receivable 19,057 9,128 487 2,470 31,142 Interest receivable 2,929 552 73 180 3,735 Utility receivable 14,505 4,759 - 1,404 20,668 36,528 14,618 995 4,075 56,217 Less: allowance for
uncollectible amounts (1,982) (561) - (248) (2,792) Total 34,546$ 14,057$ 995$ 3,827$ 53,425$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

60 Annual Comprehensive Financial Report | June 30, 2025

(4) Notes Receivable – Primary Government

The notes receivable in the governmental activities amounted to $107,512 at June 30, 2025. Due to the uncertainty of their collectability at June 30, 2025, the City has recorded an allowance for uncollectible long-term receivables of $104,488, resulting in a net balance of $3,024.

Housing and Community Development loans were $72,613 which arose from the sale of land to project developers and other agencies, and the provision of loan assistance under the City’s affordable housing programs, subject to approved redevelopment plans.

Housing Successor loans were $27,031 consisting of loans that the former redevelopment agency made to assist the development of affordable rental housing projects and the purchase of homes by homebuyers. These loans are secured by trust deeds and were funded with redevelopment low-moderate income housing set-aside funds. These notes have various terms, including maturities ranging from 5 to 45 years and interest rates ranging from 1.5% to 11%.

The remaining balance notes receivable balance, $7,868, is related to the sale of the Concord property located at 275 Cordova Steet for which collection efforts are underway in the next 50 years.

(5) Due to and from Other Funds

Current interfund receivable and payable balances at June 30, 2025 are as follows:

Due from Other Funds
Due to Other Funds General Fund
Nonmajor Governmental Funds 8,645$
Internal Service Funds 27,581
Total 36,226$

The above balances are due to short-term payables between funds and negative cash balances at the end of the fiscal year.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 61 (6) Capital Assets

Primary Government

Capital asset activity for the year ended June 30, 2025 is as follows:

Balance at Balance at
Governmental Activities: June 30, 2024 Adjustments* Additions Deletions Transfers June 30, 2025 Capital assets, not being
depreciated/amortized:

Land* 104,022$ 2,337$ 551$ (2,120)$ -$ 104,790$ Construction in progress* 79,314 279 29,385 (390) (37,068) 71,520 Total capital assets, not being
depreciated/amortized 183,336 2,616 29,936 (2,510) (37,068) 176,310 Capital assets being
depreciated/amortized:

Leased buildings 4,454 - 1,648 (712) 20 5,410 Leased equipment 1,478 - 127 (802) - 803 Subscription assets* 11,529 108 5,320 (1,959) - 14,998 Buildings and improvements* 308,331 117 143 (36) 10,051 318,606 Machinery and equipment 100,067 - 20,579 (6,283) 1,658 116,021 Infrastructure 342,924 - - - 25,359 368,283 Total capital assets, being
depreciated/amortized 768,783 225 27,817 (9,792) 37,088 824,121 Less accumulated depreciation/amortization:

Leased buildings (2,504) - (1,123) 679 15 (2,933) Leased equipment (878) - (324) 801 - (401) Subscription assets* (4,708) (32) (3,739) 1,959 - (6,520) Buildings and improvements (164,665) - (5,530) 22 - (170,173) Machinery and equipment (63,333) - (8,169) 5,910 - (65,592) Infrastructure (140,825) - (7,296) - - (148,121) Total accumulated
depreciation/amortization (376,913) (32) (26,181) 9,371 15 (393,740) Total capital assets, being
depreciated/amortized, net 391,870 193 1,636 (421) 37,103 430,381 Govermental activites
capital assets, net 575,206$ 2,809$ 31,572$ (2,931)$ 35$ 606,691$ *The prior year adjustments reflect the addition of previously omitted housing properties and a restatement of a right-to-use subscription asset.

The transfer is from business-type activities due to an existing lease building's allocation change.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
62 Annual Comprehensive Financial Report | June 30, 2025 (6) Capital Assets (Continued)
Primary Government (Continued)
During the year, governmental activities received proceeds of $380 from the disposal of capital assets and incurred a net loss on disposal of $53.

The City reports the donated capital assets. These are recorded at estimated fair value at the time of donation. In fiscal year 2025, the City received $71 in donated assets, including one forklift and one used vehicle, which were added to the capital asset records under governmental activities.

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

Community development 643$
Culture and leisure 1,953
General government 8,846
Health 198
Public safety 3,509
Transportation 11,031
Total 26,180$
Depreciation and amortization of capital assets held by the City’s internal service funds are charged to the various functions based on their usage of the assets.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 63 (6) Capital Assets (Continued)

Primary Government (Continued)

Balance at Balance at
Business-type Activities: June 30, 2024 Adjustments Additions Deletions Transfers June 30, 2025 Capital assets not being
depreciated/amortized:

Land and rights 17,341$ -$ 2,120$ -$ -$ 19,461$ Construction in progress 80,629 - 78,120 - (53,309) 105,440 Total capital assets, not being
depreciated/amortized 97,970 - 80,240 - (53,309) 124,901 Capital assets being
depreciated/amortized:

Leased buildings 10,595 - 6,614 (2) (20) 17,187 Leased equipment 42 - - (32) - 10 Subscription assets* 5,026 2,955 704 (458) - 8,227 Buildings and improvements 141,184 - 1,511 (88) 12,029 154,636 Machinery and equipment 1,339,641 - 1,563 (57,337) 41,280 1,325,147 Total capital assets, being
depreciated/amortized 1,496,488 2,955 10,392 (57,917) 53,289 1,505,207 Less accumulated
depreciation/amortization:

Leased buildings (4,149) - (1,727) 29 (15) (5,862) Leased equipment (30) - (6) 31 - (5) Subscription assets (1,728) - (1,304) 302 (1,092) (3,822) Buildings and improvements (72,654) - (3,955) 37 - (76,572) Machinery and equipment (678,163) - (43,111) 55,327 - (665,947) Total accumulated
depreciation/amortization (756,724) - (50,103) 55,726 (1,107) (752,208) Total capital assets, being
depreciated/amortized, net 739,764 2,955 (39,711) (2,191) 52,182 752,999 Business Type Activites
capital assets, net 837,734$ 2,955$ 40,529$ (2,191)$ (1,127)$ 877,900$ * The beginning balance has been adjusted to reflect a restatement of prior-period Power right-to-use subscription asset.

The transfer is to governmental activities due to an existing lease building's allocation change.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

64 Annual Comprehensive Financial Report | June 30, 2025

(6) Capital Assets (Continued)

Primary Government (Continued)

During the year, business-type activities received proceeds of $21 from the disposal of capital assets and incurred a loss on disposal of $292.

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

Electric 36,494$
Water 10,757
Refuse 808
Parking 1,848
Telecommunication 194
Total 50,101$

Fiduciary Funds – Private-Purpose Trust Fund

Balance at Balance at
Fiduciary Funds June 30, 2024 Additions Deletions June 30, 2025 Capital assets not depreciated:

Land 104$ -$ (104)$ - Total cost of nondepreciable assets 104 - (104) - Capital assets, net 104$ -$ (104)$ -$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 65 (7) Leases

A lease is defined as a contractual agreement that conveys control 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 15 applicable leases that qualify for reporting as of June 30, 202 5. During the fiscal year, the City entered into one new lease agreement. The lease terms range from 36 to 120 months for the intangible right- to-use land, land improvements, buildings, and infrastructure. Most of these leases include periodic adjustments to the lease amounts at determined intervals. The fixed annualized lease payments range from $1 to $513, respectively, with the incremental borrowing rate ranging from 0.28% to 2.9%. For the year ended June 30, 2025, the City received an immaterial amount of variable and other payments from these lease arrangements.

The City monitors changes in circumstances that would require a remeasurement of its lease s 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, 2025 are as follows:

Balance at Balance at
June 30, 2024 Additions Deletions June 30, 2025
Governmental Activities:

Lease receivable 960$ -$ (782)$ 178$ Deferred inflow of resources 899 - (732) 167 Business-type Activities:

Lease receivable 1,095 285 (380) 1,000 Deferred inflow of resources 1,111 285 (424) 972

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

66 Annual Comprehensive Financial Report | June 30, 2025

(7) Leases (Continued)

City as Lessor (Continued)

During the year ended June 30, 2025, the City recognized the lease revenues and interest revenues as follows:

Governmental Business-type
Activities Activities
Amortization of deferred inflow of resources 732$ 424$ Lease interest revenues 3 10

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 government -wide financial statements. The City recognizes lease liabilities with an initial, individual value of $10 or more.

At the commencement of a lease, the City initially measures the lease liability 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 le ase 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 34 applicable leases that qualify for reporting as of June 30, 202 5. During the fiscal year, the City entered into 10 new lease agreements. The lease terms range from 33 to 100 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 annualized lease payments range from $0 to $877 with the incremental borrowing rate ranging from 0.2% to 3.31%. For the year ended June 30, 2 025 the City paid an immaterial amount of variable and other payments from these lease arrangements.

The City monitors changes in circumstances that would require a remeasurement of its lease s 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).

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 67 (7) Leases (Continued)

City as Lessee (Continued)

Changes in lease assets and lease liability for the year ended June 30, 2025 are as follows:

Balance at Balance at
June 30, 2024 Adjustments (1) Additions Deletions Transfers (2) June 30, 2025 Governmental Activities:

Lease assets
Buildings 4,454$ -$ 1,648$ (712)$ 20$ 5,410$ Equipment 1,478 - 127 (802) - 803 Total lease assets 5,932 - 1,775 (1,514) 20 6,213 Accumulated amortization (3,382) - (1,447) 1,480 15 (3,334) Total lease assets, net 2,550$ -$ 328$ (34)$ 35$ 2,879$ Lease liability 2,716$ 423$ 1,356$ (1,317)$ -$ 3,178$ Business-type Activities:

Lease assets
Buildings 10,595$ -$ 6,614$ (2)$ (20)$ 17,187$ Equipment 42 - - (32) - 10 Total lease assets 10,637 - 6,614 (34) (20) 17,197 Accumulated amortization (4,179) - (1,733) 60 (15) (5,867) Total lease assets, net 6,458$ -$ 4,881$ 26$ (35)$ 11,330$ Lease liability 6,725$ -$ 6,608$ (1,469)$ -$ 11,864$

(1) The adjustments pertain to additions to existing leases that were extended or had allocation changes. (2) The transfers are between governmental and business-type activities due to a lease building’s allocation change.

During the year ended June 30, 202 5, the City recognized lease amortization expenses and interest expenses as follows:

Governmental Business-type
Activities Activities
Amortization of lease assets 1,447$ 1,733$ Other lease (non-GASB 87) expenses 987 489 Total lease expenses 2,434$ 2,222$
Lease interest expenses 58$ 113$ Other lease (non-GASB 87) interest expenses 46 23 Total lease interest expenses 104$ 136$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

68 Annual Comprehensive Financial Report | June 30, 2025 (7) Leases (Continued)

City as Lessee (Continued)

As of June 30, 2025, the City had minimum principal and interest payment requirements for its leasing activities with a remaining term in excess of one year, as follows:

Lease Payable Principal and Interest Requirements to Maturity Fiscal Year Principal Interest Total Payments
2026 1,194$ 48$ 1,242$
2027 1,048 26 1,074
2028 699 8 707
2029 232 1 233
2030 5 - 5
Total 3,178$ 83$ 3,261$
Fiscal Year Principal Interest Total Payments
2026 2,197$ 232$ 2,429$
2027 2,848 181 3,029
2028 2,573 126 2,699
2029 2,368 75 2,443
2030 1,878 24 1,902
Total 11,864$ 638$ 12,502$
Governmental Activities
Business-type Activities

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 69 (8) Subscription-Based Information Technology Arrangements

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 combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of greater than one year in an exchange or exchange-like transaction.

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.

Key estimate and judgements related to SBITA include how the City determines (1) the discount rate it uses to discount 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.

On June 30, 2025, the City has seventy-two (72) 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, 2030.
• The City is required to make annual principal and interest payments that range from $5 to $1,032. The City is utilizing a range of incremental borrowing rates between 0.0%‐4.0% • The total combined value of the subscription liability is $10,722 and the total combined value of the short - term subscription liability is $4,487.
• The combined value of the right-to-use asset, as of June 30, 2025 is $23,225 with accumulated amortization of $10,341.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

70 Annual Comprehensive Financial Report | June 30, 2025 (8) Subscription-Based Information Technology Arrangements (Continued)

The right-to-use SBITA asset and SBITA liability for the year ended June 30, 202 5, are as follows:

Balance at
June 30, 2024 Additions Deletions
Balance at
June 30, 2025
Governmental Activities
Subscription assets 11,529$ 5,428$ (1,959)$ 14,998$ Accumulated amortization (4,708) (3,771) 1,959 (6,520) Total subscription assets, net 6,821$ 1,657$ -$ 8,478$ Subscription liability 5,309$ 5,385$ (3,676)$ 7,017$ Business-type Activities
Subscription assets 5,026$ 3,659$ (458)$ 8,227$ Accumulated amortization (1,728) (2,396) 302 (3,822) Total subscription assets, net 3,299$ 1,263$ (156)$ 4,406$ Subscription liability 3,002$ 2,566$ (1,863)$ 3,705$

SBITA principal and interest payments to maturity are as follows:

Fiscal Year Principal Interest Total Payments
2026 3,356$ 182$ 3,538$ 2027 2,647 95 2,742 2028 768 24 792 2029 203 5 208 2030 43 1 44 Total 7,017$ 307$ 7,324$ Fiscal Year Principal Interest Total Payments
2026 1,046$ 98$ 1,144$ 2027 1,121 68 1,189 2028 899 38 937 2029 602 14 616 2030 37 1 38 Total 3,705$ 219$ 3,924$ Governmental Activities
Business-type Activities

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 71 (9) Deferred Inflows and Outflows

Primary Government

Deferred outflows on the government-wide statement of net position consists of the following at June 30, 2025:

Governmental Activities Balance at Balance at
June 30, 2024 Increase Decrease June 30, 20250
2015A Refunding COP Deferred Charges 3,351$ -$ (246)$ 3,104$ 2020A Refunding POB Deferred Charges 10,729 - (515) 10,214 2020B Refunding POB Deferred Charges 4,865 - (352) 4,514 GASB68 Contribution Subsequent to Measurement Date 63,143 63,893 (63,143) 63,893 GASB68 Net Difference on Pension Plan Investments 61,249 22,975 (61,249) 22,975 GASB68 Change of Assumptions 23,661 10,160 (23,661) 10,160 GASB68 Difference in Experience 14,237 25,580 (14,237) 25,580 GASB75 Net Difference on Pension Plan Investments 53 - (53) - GASB75 Change of Assumptions 6,125 - (956) 5,169 GASB75 Difference in Experience 486 - (70) 416 FPRS Net Difference on Pension Plan Investments 3,082 - (3,082) - 190,981$ 122,608$ (167,564)$ 146,025$

Business-type Activities Balance at Balance at
June 30, 2024 Increase Decrease June 30, 2025
2008 Electric Bonds Deferred Charges 695$ -$ (53)$ 642$ GASB68 Contribution Subsequent to Measurement Date 12,917 13,603 (12,917) 13,603 GASB68 Net Difference on Pension Plan Investments 13,010 4,071 (13,010) 4,071 GASB68 Change of Assumptions 4,067 2,257 (4,067) 2,257 GASB68 Difference in Experience 1,444 3,149 (1,444) 3,149 GASB75 Net Difference on Pension Plan Investments 13 - (13) - GASB75 Change of Assumptions 1,584 - (233) 1,351 GASB75 Difference in Experience 126 - (18) 108 33,856$ 23,080$ (31,755)$ 25,181$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

72 Annual Comprehensive Financial Report | June 30, 2025 (9) Deferred Inflows and Outflows (Continued)

Primary Government (Continued)

Deferred inflows on the government-wide statement of net position consists of the following at June 30, 2025:

Governmental Activities
Balance at Balance at
June 30, 2024 Increase Decrease June 30, 2025
GASB68 Change of Assumptions -$ -$ -$ -$ GASB68 Difference in Experience 4,230 1,289 (4,230) 1,289 GASB75 Change of Assumptions 15,048 3,731 - 18,779 GASB75 Difference in Experience 4,329 455 - 4,784 GASB75 Net Difference on Pension Plan Investments - 24 - 24 GASB87 Lease Related 899 - (732) 167 FPRS Net Difference in Experience - 9,490 - 9,490 24,506$ 14,989$ (4,962)$ 34,533$

Business-type Activities Balance at Balance at
June 30, 2024 Increase Decrease June 30, 2025
2019 Electric Bonds Deferred Gain 17$ -$ (17)$ -$ 2021 Water Bonds Deferred Gain 1,331 - (149) 1,182 2013A Electric Bonds Deferred Gain - 2,932 (106) 2,826 GASB68 Difference in Experience 1,498 400 (1,498) 400 GASB75 Change of Assumptions 3,891 1,018 - 4,909 GASB75 Difference in Experience 1,119 131 - 1,250 GASB75 Net Difference on Pension Plan Investments 6 - 6 GASB87 Lease Related 1,111 243 (382) 972 8,967$ 4,730$ (2,152)$ 11,545$

In accordance with revenue recognition requirements, the following revenues have been deferred on the governmental fund statements , because the related cash was not available at year -end. The breakdown by fund is as follows:

Fund Name Amount
General 2,654$
Project Management 6,795
Public Safety 213
Health 1,400
Sewer Construction and Maintenance 38
Transportation 364
Parking 1
Air Quality Improvement 48
Housing and Community Development 2,153
Rent Stabilization 163
Total unavailable revenues 13,829$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 73 (10) Long-Term Debt

Primary Government

Changes in long-term debt and other liabilities for the year ended June 30, 2025 are as follows:

Due in
Balance at Balance at Due Within More Than
Governmental Activities: June 30, 2024 Additions Reductions June 30, 2025 One Year One Year Notes payable:

Notes from Direct Borrowings
(Rose Bowl) 405$ -$ (18)$ 387$ 18$ 369$ Section 108 3,600 - (300) 3,300 300 3,000 Total Notes Payable 4,005 - (318) 3,687 318 3,369 General Obligation Bond
2025 Taxable General Obligation Bonds - 195,000 - 195,000 11,500 183,500 Bond Premium 2025 General Obligation Bonds - 15,212 (86) 15,125 - 15,125 Total General Obligation Bonds - 210,212 (86) 210,125 11,500 198,625 Pension bonds:
2015 Taxable Pension Obligation Bonds 2,160 - (2,160) - - - Bond Premiums/(Discount) (14) - 14 - - - 2020 Taxable Pension Obligation Bonds 125,955 - (1,050) 124,905 3,305 121,600 Total Pension Bonds 128,101 - (3,196) 124,905 3,305 121,600 Certificates of participation:
2015 COP Series A Refunding 2008 COP 42,260 - (2,420) 39,840 2,545 37,295 Bond Premiums/(Discount) 3,575 - (263) 3,312 - 3,312 Total Certificates of Participation 45,835 - (2,683) 43,152 2,545 40,607 Loan payable 3,011 - (987) 2,024 1,003 1,021 Subscription liability 5,309 5,385 (3,676) 7,017 3,372 3,645 Lease liability 2,716 1,779 (1,317) 3,178 1,194 1,984 Financed Purchase Arrangements 47 10 (20) 37 19 18 Total governmental activities long-term liabilities 189,023$ 217,386$ (12,283)$ 394,125$ 23,256$ 370,869$

Due in
Balance at Balance at Due Within More Than
Business-type Activities: June 30, 2024 Additions Reductions June 30, 2025 One Year One Year Revenue bonds:
2013A Electric Revenue Refunding Bonds 63,430$ -$ (63,430)$ -$ -$ -$ 2016A Electric Revenue Refunding Bonds 99,240 - (3,485) 95,755 3,665 92,090 2017A Water Revenue Refunding Bonds 10,705 - (670) 10,035 705 9,330 2019A Electric Revenue Refunding Bonds 2,245 - (2,245) - - - 2020A Water Revenue Refunding Bonds 26,415 - (1,045) 25,370 1,080 24,290 2021A Water Revenue Refunding Bonds 20,025 - (1,145) 18,880 1,140 17,740 2024A Electric Revenue Refunding Bonds - 98,230 - 98,230 2,550 95,680 Total Water and Power 222,060 98,230 (72,020) 248,270 9,140 239,130 2008 Paseo Colorado Taxable Revenue Bonds 18,600 - (1,000) 17,600 1,000 16,600 Bond Premiums/(Discounts) 34,892 14,211 (4,718) 44,385 - 44,385 - Total revenue bonds 275,552 112,441 (77,738) 310,255 10,140 300,116 Loan payable 992 - (489) 502 502 - Subscription liability 3,002 2,566 (1,863) 3,705 1,115 2,590 Lease liability 6,725 6,608 (1,469) 11,864 2,197 9,667 Total business-type activities long-term liabilities 286,271$ 121,615$ (81,559)$ 326,327$ 13,954$ 312,373$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

74 Annual Comprehensive Financial Report | June 30, 2025 (10) Long-Term Debt (Continued)

Discretely Presented Component Units

Changes in discretely presented component units’ long-term debt and other liabilities for the year ended June 30, 2025 are as follows:

Additions Due in
Balance at Including Balance at Due Within More Than
Discretely Presented Component Units: 6/30/2024 * Accretion Reductions June 30, 2025 One Year One Year Certificates of participation:
2008 Refunding COP Series 2008A (Conference Center
Project) 127,945$ -$ (7,480)$ 120,465$ 8,260$ 112,205$ Total Certificates of Participation 127,945 - (7,480) 120,465 8,260 112,205 Revenue Bonds:
2010A Revenue Bonds-Tax Exempt 28,363 1,929 - 30,292 - 30,292 2010B Revenue Bonds-Taxable Build America Bonds 106,660 - (106,660) - - - 2010D Revenue Bonds-Taxable Recovery 7,400 - - 7,400 - 7,400 2016A Revenue Bonds-Partial Refunding 2010A Bonds 13,320 - (4,705) 8,615 5,130 3,485 2016A Bond Premium (Discount) 1,513 - (550) 963 - 963 2018A Revenue Bonds-Refunding / Tax Exempt Fixed
Rate 30,585 - - 30,585 - 30,585 2018B Revenue Bonds-Taxable 4,720 - (915) 3,805 1,165 2,640 2018AB Bond Premium/(Discount) 3,487 - (178) 3,309 - 3,309 2024 Rose Bowl Lease Revenue Refunding Bonds (Tax-
Exempt) - Serial Bond - 62,807 (545) 62,262 1,550 60,712 2024 Rose Bowl Lease Revenue Refunding Bonds (Tax-
Exempt) CAB Bond - 41,397 - 41,397 - 41,397 2024 Bond Premium/(Discount) - 9,868 (422) 9,446 - 9,446 Total Revenue Bonds (Rose Bowl Renovation) 196,048 116,001 (113,975) 198,074 7,845 190,229 Loan payable (PCOC) 2,500 - (218) 2,282 225 2,057 Subscription liability* 1,756 76 (1,557) 275 125 150 Lease liability* 437 263 (265) 435 163 272 Total discretely presented component units long-
term liabilities 328,686$ 116,340$ (123,495)$ 321,531$ 16,618$ 304,913$ * The beginning balance has been restated to reflect the addition of PCOC and PCAC, which was previously omittted.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 75 (10) Long-Term Debt (Continued)

Governmental Activities:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2025
Detail of Long-Term Debt
Governmental Activities:

Notes payable
Notes Payable-RBOC 1/15/2013 a 576 2.10% 1/7/2043 387$ Notes Payable-Section 108 10/29/2015 c 6,000 variable 8/1/2035 3,300 Total Notes Payable 3,687$
General Obligation Bond
2025 Taxable General Obligation Bonds 4/29/2025 m 195,000 5.00% 9/1/2054 195,000$ Bond Premium 2025 General Obligation Bonds 4/29/2025 m 15,212 5.00% 8/1/2035 15,125 Total General Obligation Bonds 210,125$
Pension bonds:2015 Unrefunded Taxable Pension Obligation Bonds 5/5/2015 b 119,460 2.82% to 3.47% 5/1/2025 -$ 2020 Taxable Pension Obligation Bonds 2/26/2020 b 131,805 1.60% to 3.10% 5/1/2045 124,905$ Total Pension Bonds 124,905$
Certificates of Participation:
2015 COP Series A Refunding 2008 COP 12/2/2015 d 55,350 3.00% to 5.00% 2/1/2038 39,840$ Bond Premium (Discount) 3,312
Total Certificates of Participation 43,152$
Loan Payable:
2020 Equipment Lease-Radio Equipment 1/15/2020 e 6,800 1.66% 1/15/2027 2,024$ Total Loan Payable 2,024$
Financed Purchase Arrangements:
2024 EV Purchases 5/2/2024 l 47 variable 9/30/2026 37$ Total Financed Purchase Arrangements 37$

Business-type Activities:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2025
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 17,600$ 2016A Electric Revenue Refunding Bonds 11/7/2016 i 119,440 4.00% to 5.00% 6/1/2046 95,755 2017A Water Revenue Refunding Bonds 3/13/2017 j 15,395 5.00% 6/1/2036 10,035 2020A Water Revenue Refunding Bonds 12/1/2020 g 30,130 5.00% 6/1/2050 25,370 2021A Water Revenue Refunding Bonds 12/1/2021 h 22,480 5.00% 6/1/2051 18,880 2024A Electric Revenue Refunding Bonds 7/30/2024 k 98,230 5.00% 6/1/2055 98,230 Bond Premium (Discount) 44,385
Total Revenue Bonds 310,255$
Loan Payable:
2019 Equipment Lease-Parking System 4/1/2019 e 3,252,694 2.67% 4/1/2026 502$ Total Loan Payable 502$

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

76 Annual Comprehensive Financial Report | June 30, 2025 (10) Long-Term Debt (Continued)

Component Unit Activities:

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 i Refund 2008 Electric Bonds, repay Line of Credits and Capital Improvement to the Electric System j Refund 2007 Water Bonds
k Refund 2013A Electric Bonds
l Leased vehicles purchases
m Central Library Project
CC1 Refund 2006B Certificates of Participation
CC2 Civic Auditorium Project
RB1 Rose Bowl Stadium Renovation
RB2 Refund 2013 Rose Bowl Revenue Bonds
RB3 Partial refund 2010 Rose Bowl Revenue Bonds
Purpose of Debt:

Final
Principal
Issue Original Coupon Payment Outstanding at
Date Purpose Amount Interest Rate Date June 30, 2025
Detail of Long-Term Debt
Discretely Presented Component Units
Certificates of Participation
2008 Refunding COP, Series 2008A (Conference
Center Project)
4/15/2008 CC1 134,720 variable 2/1/2035 120,465 Total Certificates of Participation (PCOC) 120,465$
Revenue Bonds
2010A Revenue Bonds-Tax Exempt Capital
Appreciation
11/18/2010 RB1 11,588 6.43% to 6.52% 3/1/2033 30,292
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
8,615
2016A Bond Premium (Discount) 963
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)
12/6/2018 RB2 12,515 2.60% to 3.58% 12/1/2027 3,805
2018 AB Bond Premium (Discount) 3,309
2024 Lease Revenue Refunding Serial Bond
(Refunding 2010B Tax Exempt)
11/20/2024 RB3 61,665 5.00% 6/1/2040
62,262
2024 Lease Revenue Refunding CAB Bond
(Refunding 2010B Tax Exempt)
11/20/2024 RB3 41,397 5.00% 6/1/2048
41,397
2024 Bond Premium (Discount) 9,446
Total Revenue Bonds (RBOC) 198,074$
Loan Payable:

Civic Auditorium Capital Improvement 6/5/2024 CC2 2,500 3.00% 6/5/2034 2,282$ Total Loan Payable 2,282$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 77 (10) Long-Term Debt (Continued)
The annual requirements to amortize as of June 30, 2025, are as follows:

Governmental Activities:

Year Ending
June 30 Principal Interest Principal Interest Principal Interest Principal Interest 2026 318$ 108$ 11,500$ 9,750$ 3,305$ 3,686$ 2,545$ 1,754$ 2027 318 100 5,000 9,175 3,370 3,620 2,670 1,627
2028 319 91 3,350 8,925 3,445 3,548 2,800 1,494
2029 319 81 3,515 8,758 3,525 3,471 2,940 1,354
2030 319 72 3,690 8,582 3,600 3,390 3,090 1,207
2031-2035 1,604 205 21,415 39,949 23,260 15,440 13,870 3,938 2036-2040 415 20 27,330 34,033 32,075 11,901 11,925 966 2041-2045 75 3 34,880 26,502 52,325 5,189 - - 2046-2050 - - 44,510 16,846 - - - -
2051-2054 - - 39,810 4,999 - - -
Bond Premium (Discount) - - 15,125 - - - 3,312 - Total Payment 3,687$ 680$ 210,125$ 167,519$ 124,905$ 50,245$ 43,152$ 12,340$ Pension BondsNotes Payable Certificates of ParticipationGeneral Obligation Bonds Year Ending
June 30 Principal Interest Principal Interest
2026 1,003$ 29$ 19$ -$
2027 1,021 13 18 -
Total Payment 2,024$ 42$ 37$ -$
Loan Payable Finance Purchase Arrangements
Business-type Activities:

Year Ending
June 30 Principal Interest Principal Interest
2026 10,140 $ 12,168 $ 502$ 10$
2027 10,525 11,705 - -
2028 11,025 11,223 - -
2029 11,535 10,720 - -
2030 12,000 10,197 - -
2031-2035 67,080 42,285 - -
2036-2040 61,985 26,909 - -
2041-2045 47,090 13,843 - -
2046-2050 21,140 5,806 - -
2051-2055 13,350 1,674 - -
Bond Premium (Discount) 44,385 - - -
Total Payment 310,255$ 146,530$ 502$ 10$
Loan PayableRevenue Bonds
-

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

78 Annual Comprehensive Financial Report | June 30, 2025 (10) Long-Term Debt (Continued)

New Debt Issuance

2025 Taxable General Obligation Bonds

On April 29, 2025, the city issued the General Obligation Bonds (Central Library Project), Series 2025 in the amount of $195,000 at a premium to provide funds for various improvements to the City’s central library building, including an earthquake retrofit. The General Obligation Bond bears an interest rate of 5.0% and will be payable on March 1 and September 1 of each year, commencing on September 1, 2025 with bond terms maturing through the year 2054.

The initial issuance premium on the Series 2025 Bond is reported as an addition to long-term debt and is amortized using the straight-line amortization method over the life of the bonds.

Proceeds of bonds issued 195,000$
Premium 15,212
Available Amounts from Fiscal Agent 320
Cost of Issuance (320)
Underwriter's Discount (218)
Net Proceeds 209,993$

2024A Electric Revenue Refunding Bonds

On July 30, 2024, the City issued the Electric Revenue/Refunding Bonds, Series 2024A (2024A Revenue Bonds) in the amount of $98,230 to refund the 2013A Electric Revenue Bonds, finance the costs of acquisition and construction of certain capital improvements to the Electric System, make an additional deposit to the Parity Reserve Fund and pay the costs of issuance of the 2024A Revenue Bonds. The rate of interest is 5.0% payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2025. Principal is payable in annual inst allments ranging from $1,600 to $5,965 commencing August 1, 2025, and ending August 1, 2054. The realized debt service savings of $10.06 million and a present value savings of $7.40 million. The true interest cost of the financing was 3.63%.

Disclosure Related to Long-Term Debt under GASB 88

The City’s outstanding notes from direct borrowings related to government activities of $387 is payable to Rose Bowl Operating 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 annual allocation of Community Development Block Grant Funds (CDBG).

In regard to the 2025 General Obligation Bonds (GO) the debt service payments are secured solely from ad valorem property taxes levied by the City and collected by the County of Los Angeles.

In regard to the 2020AB and 2015B Pension Obligation Bonds (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 the 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.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 79

(10) Long-Term Debt (Continued)

Disclosure 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 revenue 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 surrender 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 its assignee may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising ou t of, in connection with, or incident to any such retaking possession of the 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 assignee 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 assignee 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 therefrom; and further agrees to pay said rent and/o r 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 S ublease and notwithstanding any retaking of possession of the Leased Property by the Authority of its assignee or suit in unlawful detainer, or otherwise, brought by the Authority or its assignee for the purpose of obtaining possession of the Leased Proper ty. 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 City 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

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

80 Annual Comprehensive Financial Report | June 30, 2025 (10) Long-Term Debt (Continued)

Disclosure Related to Long-Term Debt under GASB 88 (Continued)

assignee in excess of the rental specified in the Sublease and conveys and release such excess to the Authority or its assignee as compensation to the Authority or its assignee for its services in re -letting the Lease Property or any items thereof. The City further agrees to pay the Authority 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 i ts 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 remove 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, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or its duly authorized agents in

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 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 termination 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 P remises 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 and 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 furthe r agrees to pay said rent and/or rent deficiency punctually at the 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 Authority’s name or otherwise, for use as public off -street vehicular parking facility upon such terms and conditions and for such period as the authority may deem advisable and, subject to the pro visions of the Development Agreement, to remove all persons in possession thereof and all personal property whosesoever situated 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 s uch 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 Authority 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 and exclusive manner provided for in the Lease. The City further waivers the right to any rental obtained by the Authority in excess of the rental specified in the Lease and conveys and releases such excess to the Authority as compensation to the 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

82 Annual Comprehensive Financial Report | June 30, 2025 (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 t o the Leased Premises 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 r ule 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 bankruptcy, 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 offers 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 debts, 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 2016A and 20 24A 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, rescind of annual such declaration and its consequences. N o such rescission or annulment will extend to or affect any subsequent default or impair any right consequent thereon.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 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 the 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 r eceived 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 paid) subject to the provisions of the Indenture, 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 t o 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 declar e 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 the 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 Bo nds 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 the 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

84 Annual Comprehensive Financial Report | June 30, 2025 (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, 2010AD, 2016A, 2018AB and Series 2024 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 for 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 sublease by the city to accelerate the rental payments, terminate the sublease or re-enter the leased property.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 85 (11) Derivative Instruments

Discretely Presented Component Unit

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 Series 2006B. The objective was to effectively change the City’s Variable interest rate to a sy nthetic 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 PCOC’s hedging derivative instruments outstanding at June 30, 2025, along with the credit rating of the associated counterparty:

Cash Flow Notional Effective Maturity Counterparty
Hedge Objective Amount Date Date Term Credit Rating
Pay-fixed interest
rate swaps
Hedge of changes
in cash flows on
the 2008A COP's
$ 118,750 4/1/2011 2/1/2034
Pays 3.536%;
receive 64% of
LIBOR index
Aa1/AA-

Note in 2011, due to its declining credit 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

86 Annual Comprehensive Financial Report | June 30, 2025 (11) Derivative Instruments (Continued)

Pasadena Center Operating Company (PCOC) (Continued)

Objective and Terms of Hedging Derivative Instruments (Continued)

On April 15, 2008, the City issued the 2008 Refunding Certificates of Participation, Series 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, redu ce the size of the issue by approximately $800 thousand.

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 advantageous interest rate adjustment mode than the 2008 Series Bonds previously had. As a result, the former derivative instrument terminated and t he new instrument has off -market terms. As a result, an upfront payment was received. The upfront payment is reported as a borrowing. The borrowing is amortized over the life of the swap and amortizes using the effective interest method for the life of the swap with adjustments to interest expense during each fiscal year. The original balance of the borrowing was $8.9 million. As of the year ended June 30, 2025, the balance was $2.8 million.

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, 202 5:

Beginning Accrued Ending
June 30 Balance Interest Payment Balance
2026 2,756$ 115$ (564)$ 2,307$ 2027 2,307 95 (522) 1,880 2028 1,880 77 (477) 1,480 2029 1,480 59 (428) 1,111 2030 1,111 43 (374) 780 2031 780 29 (315) 494 2032 494 17 (251) 260 2033 260 8 (182) 86 2034 86 1 (87) -

The Company has the following recurring fair value measurements as of June 30, 202 5:

Level
Measurements by fair value level
1 2
3 Derivative instrument liability
$
4,042
-
$

4,042
$

-
$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 87 (11) Derivative Instruments (Continued)

Pasadena Center Operating Company (PCOC) (Continued)

Derivative Instrument Liability

The fair value balance and notional amount of the derivative instrument outstanding at June 30, 202 5, 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 value of hedging derivative instruments was negative as of June 30, 2025, and therefore PCOC had no credit risk exposure.

Interest rate risk: The purpose of the swap is to eliminate interest 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 interest rate swap because the variable -rate payments received by PCOC on these hedging derivative 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 7 days. As of June 30, 202 5, the weighted-average interest rate on the PCOC’s hedged variable -rate debt is 1.75067%, while 64 percent of LIBOR - BBA Fallback is 2.8344%.

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 terminatio n 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, 2025, the maximum exposure/loss would have been $7,003.

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
$ (1,509)
Liability
$ 4,042
$ 118,750
Changes in Fair Value
Fair Value on June 30, 2025

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

88 Annual Comprehensive Financial Report | June 30, 2025 (12) Fund Balance

Fund Balances, 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, 2025, are as follows:

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

Prepaid and other assets 610$ -$ -$ -$ 260$ 870$ Permanent fund principal - - - - 1,434 1,434 Notes receivable 3,023 - - - - 3,023 Total Nonspendable 5,915 - - - 1,694 7,609 Restricted for:

Air Quality Improvement - - - - 414 414 Notes receivable - - - - 72,613 72,613 Allowance for uncollectible long-
term receivables - - - - (72,613) (72,613) City Charter/Capital projects - - - - 1,417 1,417 Debt service - - - 210,635 7,537 218,172 Culture and literacy - - - - 4,873 4,873 Housing and Community Development
Housing funds - 1,673 - - 3,594 5,267 CDBG - - - - 41 41 Inclusionary Housing Trust - - - - 3,810 3,810 Rental Assistance programs - - - - 3,445 3,445 Property held for resale - - - - 1,434 1,434 Other purposes - - - - 726 726 Public Safety
Asset Forfeiture - - - - 3,573 3,573 Public Safety Augmentation - - - - 2,404 2,404 Other Public Safety Programs - - - - 383 383 Section 115 Trust - Pension 14,274 - - - - 14,274 Transportation - - - - 36,785 36,785 Total Restricted 14,274 1,673 - 210,635 70,436 297,018 Committed to:

Public Safety 1,198 - - - - 1,198 Building Services - - - - 25,093 25,093 Parks, Recreation & Neighborhood
Services 48 - - - - ** 48 Public Works 86 - - - - 86 Capital Projects - - - - 7,436 7,436 Emergency Contingency 51,293 - - - - 51,293 Operating Reserve 17,098 - - - - 17,098 Libraries - - - - 13,993 13,993 Pasadena Center Capital
Improvement Trust - - - - 109 109 Transportation 172 - - - 4,853 5,025 Surplus Land Act Compliance 46 - - - - 46 Sewer Construction and
Maintenance - - - - 19,057 19,057 Underground Utilities - - - - 37,988 37,988 Total Committed 69,941 - - - 108,529 178,470 Assigned to:

General Government 8,457 - - - - 8,457 Capital Projects 12,874 - - - - 12,874 Total Assigned 21,331 - - - - 21,331 Unassigned 25,141 - (7,524) - (6,866) 10,751 Total Fund Balances 136,602$ 1,673$ (7,524)$ 210,635$ 173,793$ 515,179$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 89 (13) Net Position - Reserve for Working Capital

In 1998, the City Council established a Reserve for Stranded Investment (Reserve) and imposed a Stranded Investment Surcharge (SIS) on all electric utility bills. The purpose of the Reserve for Stranded Investment was to create a fund to mitigate the poten tial 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). S everal 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 w as 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 approved the Stranded Investment Reserve Utilization Plan (Plan). In January 2009, in accordance with the Plan and a previously approved Prepayment Agreement (Agreement), PWP utilized approximately $80 million of the reserve funds to complete an economic defeasance of selected bonds for IPP. As authorized in the Agreement, the Intermountain Power Agency (IPA) issued approximately $70 million of subordinated notes to PWP, the payments for which will offset a portion of the debt service associated with the economically defeased bonds, thereby reducing the cost of energy purchased from IPP. The IPA notes were paid off in fiscal year 2024.

In June 2025, the City Council approved dissolving the Stranded Investment Reserve to establish a Reserve for Working Capital to meet current working capital needs, ensuring service continuity and rate stability. Working Capital consists of the following: operating, debt service, capital expenditure, general fund transfer, energy service charges, transmission services charges and contingency.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

90 Annual Comprehensive Financial Report | June 30, 2025 (14) Accumulated Fund Deficits

The following funds reported accumulated deficits in their respective fund balances/net position at June 30, 2025:

Due to
Operations
Due to GASB 68
Implementation
Due to GASB 75
Implementation
Due to GASB 96
Implementation
Due to GASB 101
Implementation
Total
Accumulated
Deficit
Governmental Activities:

Capital Project Fund:

Project Management (7,524)$ -$ -$ -$ -$ (7,524)$ Special Revenue Funds:

Health (5,730) - - - - (5,730) Rent Stabilization (1,133) - - - - (1,133) Internal Service Funds:

Computing and Communication Services 11,869 (14,971) (2,453) (1,621) (117) (7,293) Benefits (39,829) (75,100) (194) - (28,972) (144,095) Workers' Compensation (28,563) (10,948) (291) - (7) (39,809)

Management’s plans for resolution of the accumulated fund deficits are as follows:

Project Management

The Project Management Fund was established to account for all capital improvement projects, except those involving utilities and special assessment districts where revenues are received from grants by other governments, private properties and through transfers from other City funds. The negative fund balance is primarily attributed to the recognition of unavailable rev enue of $6.8 million for fiscal year 2025 . This amount represents grant reimbursements that were billed but not collected through the availability period for reimbursement type grants (i.e. 90 days after fiscal year end year). This amount is owed to the Ci ty and is expected to be collected; however, due to the timing of reimbursement, they were not recognized as available revenue in the current fiscal year. The Department of Finance is working with the Department of Transportation and the Department of Public Works to improve the timeliness of all billings.

Health

The Health Fund was established to account for grants for the provision of public health services which are restricted by grant award agreements 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 maintaining systems and controls for a financially sustainab le operation. In fiscal year 2025, the Department ended with an excess of revenues over expenditures but maintains an accumulated deficit largely attributable to COVID -19 pandemic response; although the City requested FEMA reimbursement for pandemic-related expenses and demonstrated supporting documentation, FEMA did not fully reimburse the Department for all public health and safety efforts. To address continued fiscal challenges, the Department will continue to expedite the processing of grant reimbursement requests, maintain monitoring of program and financial performance.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 91 (14) Accumulated Fund Deficits (Continued)

Rent Stabilization

The Rent Stabilization Fund was established to implement the provisions of the Pasadena Fair & Equitable Housing City Charter Article XVIII (City Charter Article XVIII). City Charter Article XVIII was approved by voters as a ballot measure in November 202 2. The charter article established the Pasadena Rental Housing Board (PRHB) which is responsible for enforcing rent stabilization laws and provides counseling to assist landlords and tenants with navigating the new rent stabilization ordinance (RSO). In addition, the Department supports an appointed Board to fulfill its policy development functions. In October 2023, the PRHB requested to be incorporated into the City as a city department to expedite the implementation of the voter -approved objectives by using existing city infrastructure and processes. In November 2023, City Council voted to turn PRHB into the Rent Stabilization Department. The Rent Stabilization fund generates revenue to offset its expenses by collecting a rental housing fee for each rental unit that falls under the RSO. The rental housing fee is collected after invoices are generated from the Department’s rental registry. The rental registry came online in September 2024 with the intent of collecting revenue for two fiscal years of op erations from its first registration cycle because of a delayed launch. During this inaugural rental registration cycle, the Department determined that the estimated number of rental units from which the rental housing fee was calculated was an overestima tion and incorrect. This thereby caused a revenue shortfall leading to a negative fund balance. Management has adjusted the subsequent rental housing fee to resolve the negative fund balance.

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 2025, the deficit increased compared to fiscal year 2024 primarily attributable to an increase in GASB 96 costs of over $970. While there were a significant number of personnel vacancies due to retirements and internal promotions that kept personnel costs lower, there were also increases in operational cos ts for equipment replacement and support services that offset this in part. 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 customer departments. To that end, for fiscal year 2026, fixed rates were increased by 9.3% compared to fiscal year 2025 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.

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 reduce it. The overal l fiscal year 2025 fund balance deficit increased by $36,066. This is primarily attributable to increased expenses including pension contributions, benefits, and compensation as well as the implementation of the new standard, GASB 101, a change in the measurement of compensated absences. 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

92 Annual Comprehensive Financial Report | June 30, 2025 (14) Accumulated Fund Deficits (Continued)

Workers’ Compensation

The City has established a dedicated Workers’ Compensation Fund to manage the financial exposure associated with employee injury claims. This Fund serves as a critical risk financing mechanism, ensuring the City can meet its obligations related to workers’ compensation while maintaining fiscal responsibility.

In addition to the reserves held within the Fund, the City makes an annual budgetary appropriation, aligning funding levels with projected claim liabilities and administrative costs for the fiscal year. Recognizing the current deficit position of the Fund, Risk Management has implemented a comprehensive mitigation strategy aimed at reducing both the frequency and severity of claims. These efforts include:

• Injury prevention initiatives and targeted safety training; • Return-to-work programs to minimize lost time and associated costs; • Enhanced medical management to ensure timely and appropriate care; • Streamlined claims handling to reduce delays and improve outcomes.

As part of the City’s long -term risk control strategy, departmental chargeback rates are reviewed and adjusted annually to reflect actual and anticipated claims experience, promoting accountability and cost containment across all departments. A key component of the City’s risk mitigation efforts is the Carve -Out Program initiated with the Pasadena Police Officers Association (PPOA). This program is designed to expedite medical treatment, reduce litigation, and accelerate claim resolution —ultimately lowering overall claim costs. The program remains active through the current fiscal year and has demonstrated positive outcomes. Building on this success, the City is expanding the Carve -Out Program to include three additional bargaining units, with the same focus on timely treatment and cost reduction. Engagement with the remaining bargaining units is planned for Fiscal Years 2026 and 2027, as part of a phased implementation strategy. These collective efforts reflect the City’s commitment to proactive risk management, financial sustainability, and the health and safety of its workforce.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 93 (15) Excess of Expenditures over Appropriations
The following funds reported an excess of expenditures over appropriations at June 30, 2025:

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

General Government
Finance 15,336$ 15,478$ (142)$
Human Resources 5,659 5,676 (17)
Nondepartmental 33,515 37,737 (4,222)
Public Safety
Fire 68,690 72,880 (4,190)
Police 108,589 112,923 (4,334)
Transportation
Public Works 17,716 22,131 (4,415)
Debt Service
Principal - 20 (20)
Interest - 4 (4)
Lease payments - 927 (927)
Subscription payments - 1,536 (1,536)
Interest on leases and subscriptions - 128 (128) Project Management Fund:

Debt Service
Lease payments - 1 (1)
Subscription payments - 72 (72)
Interest on leases and subscriptions - 4 (4)
Public Safety Fund:

Capital Outlay 872 1,050 (178)
Debt Service
Subscription payments - 218 (218)
Interest on leases and subscriptions - 2 (2)
Health Fund:

Capital Outlay - 12 (12)
Debt Service
Lease payments - 27 (27)
Subscription payments - 24 (24)
Interest on leases and subscriptions - 2 (2)
Building Services Fund:

Capital Outlay 86 90 (4)
Debt Service
Lease payments - 2 (2)
Subscription payments - 3 (3)
Sewer Construction and Maintenance Fund:

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

Debt Service
Lease payments - 54 (54)
Subscription payments - 26 (26)
Interest on leases and subscriptions - 3 (3)
Library Services Fund:

Debt Service
Lease payments - 147 (147)
Subscription payments - 90 (90)
Interest on leases and subscriptions - 6 (6)
Parking Fund:

Debt Service
Interest - 6 (6)
Lease payments - 9 (9)
Housing and Community Development Fund:

Capital Outlay - 1,030 (1,030)
Debt Service
Lease payments - 21 (21)
Subscription payments - 76 (76)
Interest on leases and subscriptions - 7 (7)
Rent Stabilization Fund:

Capital Outlay 90 985 (895)
Debt Service
Subscription payments - 104 (104)
Interest on leases and subscriptions - 19 (19)

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

94 Annual Comprehensive Financial Report | June 30, 2025 (15) Excess of Expenditures over Appropriations (Continued)

General Fund:

General Government - Finance
The Department of Finance’s fluctuation from budget is in part due to an excess of unbudgeted outside printing expenditures related to voting guides; these outside printing expenditures are offset by program revenues.

General Government – Human Resources
The Department of Human Resource’s fluctuation from budget of $17 is in part due to the excess in personnel expenditures as previously vacant positions were filled; these amounts were offset by budget savings in consultant services and training costs as tasks were reassigned to City staff.

General Government – Nondepartmental
The fluctuation from budget is primarily due to $4,036 in unbudgeted expenditures related to the City’s response to the January 2025 Windstorm and Wildfire.

Public Safety – Fire
The Fire Department’s fluctuation from budget includes $4,009 in unbudgeted personnel expenditures due to the Fire Department’s response to the January 2025 Windstorm and Wildfiire, backfill and overtime as a result of a higher -than-normal rate of injuries which resulted in employees working on a light duty capacity, and supporting multiple full -time employees through Paramedic School and the 2025 Recruit Academy.

Additionally, and excess of $14 6 fleet equipment maintenance due to the upkeep of maintaining an aging equipment inventory.

Public Safety – Police
The Police Department’s fluctuation from budget includes $2,622 in unbudgeted personnel expenditures in part for the Police Department’s response to the January 2025 Windstorm and Wildfiire , excess of $1,34 1 in fleet equipment maintenance due to the upkeep of maintaining an aging equipment inventory , and excess of $432 in outside event costs.

Transportation – Public Works
The fluctuation from budget is primarily due to an additional $1,817 in unbudgeted personnel costs in part due to the Department’s response to the January 2025 Windstorm and Wildfiire, $532 in utility costs due to increases in usage and overall rate charges and an increase of $2,227 in other contract services for street tree administration division due to the Department’s response to the January 2025 Windstorm debris cleanup efforts.

Debt Service
Debt service expenditures in excess of appropriations related to fourth -year recording of unbudgeted GASB Statement No. 87, Leases, for $927 and third -year recording of unbudgeted GASB Statement No. 96, Subscription-Based Information Technology Arrangements, for $1,536. The budget was originally adopted with the expenditures reflected in the various functional categories (e.g., general government, public safety, transportation), and not under debt service. When GASB 87 and GASB 96 are applied, the City record ed lease liabilities and subscription liabilities similar to debt. Therefore, the principal and interest lease and subscription payments are routed through debt service expenditure accounts under debt service category. GASB Statement information is further discussed in the detailed notes.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 95 (15) Excess of Expenditures over Appropriations (Continued)

Other Governmental Funds:

Capital Outlay
Capital outlay expenditures in excess of appropriations are partly related to the fourth -year recording of unbudgeted GASB Statement No. 87, Leases, and third-year recording of unbudgeted GASB Statement No. 96, Subscription-Based Information Technology Arr angements. When the City enters into a lease for a capital asset, GASB requires the recognition of a lease asset and lease liability. This treatment applies for SBITA as well, where GASB requires the recognition of a subscription asset and subscription liability. The initial recognition of the right-to-use asset for governmental funds is recorded as a capital outlay in the amount of the net present value of the future payments of the lease or subscription over the life of its term.

Debt Service
Debt service expenditures in excess of appropriations related to fourth -year recording of unbudgeted GASB Statement No. 87, Leases and third-year recording of unbudgeted GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The budget was originally adopted with the expenditures reflected in the various functional categories (e.g., general government, public safety, transportation), and not under debt service. When GASB 87 and GASB 96 are applied, the City recorded lease l iabilities and subscription liabilities similar to debt. Therefore, the principal and interest lease and subscription payments are routed through debt service expenditure accounts under debt service category. GASB Statement information is further discussed in the detailed notes.

(16) Pledged Revenue

Pasadena Water and Power has a number of outstanding debt issuances that are collateralized by pledged electric and water revenues. The amount and term of the remainder of these outstanding debts are presented in Note 10.

The purpose of the debt issuances was for the financing of certain 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. Th ese percentages also approximate the relationship of debt service of pledged revenues for the remainder of the term of these debts:

Annual Amount of Pledged Annual Debt Debt Service as
Revenue (net of expenses) Service Payments a Percentage of Description of Pledged Revenue (in thousands) (in thousands) Pledged Revenue Light and Power Revenues $81,726 $77,628 95%
Water Revenues 24,321 5,717 24%

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
96 Annual Comprehensive Financial Report | June 30, 2025 (17) Transfers
Primary Government
The following is a summary of transfers in and out for the year ended June 30, 2025:

General
Housing Project Debt
General Successor Management Service
Transfers Out Fund Fund Fund Fund
General Fund -$ 833$ 8,086$ A 8,043$ B
Project Management Fund - - - -
Nonmajor Governmental Funds 48 - 17,942 D -
Light and Power Fund 28,132 F - - -
Water Fund 1,894 - - -
Off-Street Parking Fund - - 1,020 -
Nonmajor Enterprise Funds 198 - 271 -
Internal Service Funds - - 2,526 -
Total 30,272$ 833$ 29,845$ 8,043$
Transfers In
Primary Government
(A) Transfers of $8,086 from General Fund to Project Management Fund mainly consist of:
• $6,281 for various street improvements including $3,995 for resurfacing improvements; • $1,102 for the improvement of Municipal buildings including $891 for fire station renovations; • $475 for the technology upgrade projects, including $205 for the police mobile command center. (B) Transfer of $8,043 from General Fund to General Debt Service Fund mainly consist of:
• $4,754 to pay pension obligation for Bonds Series 2020AB; • $2,231 to pay taxable pension obligation for Bonds Series 2015; and • $1,033 to pay for equipment purchase note payable.
(C) Transfers of $20,002 from General Fund to Nonmajor Governmental Funds mainly consist of:
• $12,623 to support the Library Services Fund;
• $4,299 to pay for 2015A Refunding COPs;
• $1,434 to Other Housing Fund; $1,267 to Health Fund; and • $379 to Transportation’s Proposition C Fund.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 97 (17) Transfers (Continued)

Light
Nonmajor and Nonmajor Internal
Governmental Power Enterprise Service
Funds Fund Funds Funds Total
20,002$ C -$ -$ 82$ 37,046$ - - 298 1,432 1,730 60 12,157 E - 14 30,221 - - - - 28,132 - - - - 1,894 - - 53 106 1,179 - - - 435 904 - - - - 2,526 20,062$ 12,157$ 350$ 2,069$ 103,632$ Transfers In

(D) Transfers of $17,942 from Nonmajor Governmental Funds to Project Management Fund mainly consist of:
• $3,843 from Transportation’s Prop C Fund including $3,719 for the purchase of vehicles and buses; • $3,605 from Road Maintenance and Rehabilitation Fund for various street resurfacing improvements and ADA improvements;
• $3,388 from Sewer Facility Charge Fund and Sewer Construction Management Fund for sewer system related projects.
• $1,869 from Gas Tax Fund for various street improvement projects including $811 for street resurfacing and ADA improvements and $626 for street lighting;
• $1,002 from Residential Development Impact Fund for various park improvement projects; • $843 from Community Development Block Grant Fund for various sidewalk improvement projects; • $834 from Safe Clean Water Grant for various water improvement projects; • $621 from Charter Capital Fund for various transit projects including $298 for ADA transitions and $259 for parking lot improvements;
• $597 from Transportation Sales Tax Fund for various projects including $279 for the hydrogen fueling station and $273 for the purchase of Dial-A-Ride vehicles; • $498 from Building Services for Hale Building interior improvements; • $280 from Library Services Fund; and $234 from Traffic Reduction Fund for various street and crosswalk improvements.

(E) Transfers of $12,157 from Nonmajor Governmental Funds to Light and Power Fund to pay for the underground utilities program and air quality improvement expenses.

(F) Light and Power Fund contributed $28,132 to the General Fund; the amount transferred may be expended for any municipal purpose.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

98 Annual Comprehensive Financial Report | June 30, 2025 (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, 2024 to June 30, 2025, excess liability insurance was purchased with limits of $25 million in excess of $5 million per occurrence SIR. Excess workers’ compensation insurance is at $3 million. Workers’ compensation claims for all City workers, including public safety, i.e., fire and police, are admin istered 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 -one (21) 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
(in thousands)
1 $750
17 500
3 250
Total 21

No workers’ compensation injury was incurred since the SIR has been $3 million. City has received $3.6 million in workers’ compensation excess recovery. The City is requesting $515 thousand in workers’ compensation excess recovery currently.

The Civil Division of the Department of the City Attorney/City Prosecutor, primarily using in -house civil attorneys, controls litigated liability claims. A claim is a demand seeking damages allegedly arising out of a wrongful act for which the claimant ass erts the City is responsible. During fiscal year 2025, the City paid $3.1 million in claims and settlement payments. For new claims with alleged dates of loss within fiscal year 2025, the overall total incurred was $2.6 million. Liability against a public entity is mitigated by existing laws/statutes/codes, which provide certain immunities. The City currently has approximately five (5) active litigation cases, each with reserves estimated in excess of $2 million.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 99 (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 the 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 million fo r Aircraft Hull and Liability, with an aggregate of $50 million. 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 resulti ng from an error by pilot. In addition, the policy provides coverage for airport liability with a $50 million 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 $1.35 billion. The policy includes coverage for fine arts, valuable papers, business personal property, business income, and extended business income or rental value. Policy limits are $250 million with an “all risk” deductible of $25 thousand and varying deductibles for specific perils. Exclusions include earth movement, including earthquake, nuclear hazard, and military action. A claim was filed on t his policy pertaining to the Eaton Fire in January 2025. The claim is still open and actively pending resolution.

The City’s property: power plant boiler and machinery policy, with total insured value of $464.1 million. The program provides property and equipment breakdown coverage for City’s power plant facilities and machinery. The policy affords coverage for risks of loss or damage, including boiler explosion and machinery breakdown. Policy limits are $250 million with deductibles of $750 thousand per occurrence for all other property damage, and $1.5 million per occurrence for machinery breakdown of GT1, GT2, GT3, GT4, and GT5. The City did not have new claims under this policy for fiscal year 2025.

In an effort to protect the City’s assets and transfer potential risk, the City also purchases the following insurance policies: medical malpractice; pollution liability; terrorism – Chemical, Biological 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.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

100 Annual Comprehensive Financial Report | June 30, 2025 (18) Self-insurance (Continued)

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 excess general liability policies. RBOC carries statutory workers’ compensation insurance with no retention. Brookside 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 and RBOC as additional insured parties on their policies.

Pasadena Center Operating Company (PCOC) is entitled to indemnity from the City; however, PCOC purchases a commercial general liability policy for general liability and employment practice coverage. The City manages the PCOC claims and tenders to the insur ance 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.

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 reported 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, 2025, general liability claims payable amounted to $17 million, of which $10.4 million is estimated to be paid within one year. Workers’ compensation claims payable amounted to $47 .3 million, of which $17.5 million is estimated to be paid within one year.

Beginning Claims and Changes Claim Ending
Fiscal Year Liability in Estimates Payments Liability
2023-24 64,864$ 7,663$ (16,157)$ 56,370$ 2024-25 56,370 24,494 (16,493) 64,370 (in thousands)

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 101 (19) Deferred Compensation Plan

For the 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 a mounts 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 committee. The five -member committee is comprised of three elected City employees and two members of the community appointed by the City Council. The oversight committee members basically monitor the plan activity, performance of investment options and ensure that the Plan Administrator carries out his duties and responsibilities. The Plan Administrator, the Director of Finance , or their designee, is responsible for the day -to-day administration. The Plan A dministrator 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, 2025, the fair value of the City’s deferred compensation plan assets amounted to $418,117.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

102 Annual Comprehensive Financial Report | June 30, 2025 (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) 1,962$ 2,180$ -$ 9,490$ CalPERS - Safety Plan 220,590 37,254 62,127 241 CalPERS - Miscellaneous Plan 327,035 52,855 83,561 1,448 Total Plans 549,587$ 92,289$ 145,688$ 11,179$

Pasadena 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 pe rsonnel 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, 199 S. Los Robles Avenue, Suite 580 , CA 91101 or at https://www.cityofpasadena.net/commissions/fire-and-police- retirement-board/.

Cash and Investments
Unrestricted pooled cash 215$
Designated pooled cash 1,250
Cash with master custodian 784
Cash and cash equivalents 2,249
Short-term investments 2,091
Investments 106,318
Total investments 108,409
Total cash and investments 110,658$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 103 (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 contribution 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 ba sic 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 basic benefits, the 1919 benefits, and the cost -of-living adjustment (COLA) benefits. Contributions are recognized when due. Therefore, member contribu tions 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 provide 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 agreement, future annual valuations after June 30, 2012, shall adopt an assumed interest rate and inflation assumption based on analysis performed by the System’s act uary 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 nec essary 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, 2025, the funded percentage of the System, calculated in accordance with Agreement No. 20,823 and Agreement No. 16,900, was 92.5%. As provided by Contribution Agreement No. 16,900, if the funded percentage is below the minimum funding percentage of 80% for fiscal year 202 5, the City will reimburse the System in the following fiscal year subject to certain reimbursement limits. Based on the June 30, 202 5 actuarial valuation, the funding deficiency was $0, or 0%, below the funding requirement of 8 0% as of June 30, 202 5. Thus, no required supplemental contribution is owed to the System by the City during fiscal year ended June 30, 202 5.

The components of the net pension liability of the System as of June 30, 202 5 are as follows:

Total Pension Liability 109,039$
Beginning Fiduciary Net Position (FNP) 98,628$
Concord Loan Payment 11,071
Net Investment Income 9,521
Benefit Payments (11,753)
Administrative Expenses (390)
Plan Fiduciary Net Position 107,077$
Net Pension Liability/(Asset) 1,962
Plan Fiduciary Net Position as a
Percentage of Total Pension Liability 98.2%

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

104 Annual Comprehensive Financial Report | June 30, 2025 (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 estimates 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 determined 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 me mbers) and include the types of benefits provided at the time of each valuation. Following the recommendation provided by the System’s Actuary on May 26, 202 4, the Board later accepted the recommended assumptions for use in the preparation of the actuarial valuation for the year ended June 30, 2025.

Discount Rate 5.25%*
Inflation 2.50%
Salary Increases Varies by entry age and service
Mortality
Expected Geometric Real Rate of Return
Global Equity Large Cap US Equity 3.77%
Small Cap US Equity 4.45%
Foreign Equity 4.41%
Domestic Core Fixed Income 0.53%
Domestic Equity Senior Bank Loans 1.64%
Short-Term Investment-Grade Bonds 0.05%
TIPS TIPS 0.00%
Risk Parity 2.64%
Hedge Funds Real Estate 3.81%
Inactive employees or beneficiaries currently receiving benefits** 160 Inactive employees entitled to but not yet receiving benefits - Active employees -
Total participants 160
** Alternative payee data for 23 Domestic Relations Order (DRO) agreements provided separately from employee-retiree for first time in 6/30/25 valuation. Benefits for these alternative payee previously included in the corresponding retiree's benefits. All DRO agreements provide benefits to the alternative payees for the lifetime of the System's retiree.

Actuarial Assumptions
* Discount Rate reflects assumed investment expense of 15 basis points. 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, 2025)
CalPERS 2000-2019 Experience Study,
Mortality Improvement Scale 80% Scale MP-2021

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 105 (20) Pension Plans (Continued)
Pasadena Fire and Police Retirement System (FPRS) (Continued) Discount Rate
The discount rate of 5.25% was selected by the System actuary and approved by the Board to measure the June 30, 2025 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 investment expenses of 15 basis points. The 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, 2025 is the same as the discount rate of 5.25% used as of June 30, 2024.

Asset Class
Target Asset
Allocation
Large Cap US Equity 20.00%
Small Cap US Equity 5.00%
Foreign Equity 15.00%
Domestic Core Fixed Income 28.00%
TIPS 0.00%
Short-Term Investment-Grade Bonds 10.00%
Senior Bank Loans 5.00%
Alternative (Risk Parity) 7.00%
Real Estate 10.00%
Total Portfolio 100.00%
Changes in Pension Liability
A B C = B - A
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Asset/(Liability)
Balance at June 30, 2024 115,342$ 98,630$ (16,712)$ Changes Recognized for the
Measurement Period:

Service Cost - - -
Interest on the Total Pension Liability 5,746 - (5,746) Differences between Expected and Actual
Experience (770) - 770
Contribution from Employers - - - Contribution from Employees - - - Concord Loan Payment - 11,071 11,071
Net Investment Income - 9,521 9,521
Benefit Payments (11,753) (11,755) (2)
Administrative Expense - (390) (390)
Change of Assumptions 474 - (474)
Net Change during 2024-25 (6,303) 8,447 14,750
Balance at June 30, 2025 109,039$ 107,077$ (1,962)$ Ending Fiduciary Net Position as a
Percentage of the Total Pension Liability 98.2%
Pension Expense 2,180$
Increase / (Decrease)

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

106 Annual Comprehensive Financial Report | June 30, 2025 (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 pension liability (NPL) to changes in the discount rate by a 1% decrease, from

5.25% to 4.25%, revealed an increase in the NPL by $7,873 to a total NPL of $ 9,835. Conversely, increasing the discount rate by 1%, from 5.25% to 6.25%, revealed a corresponding decrease in the NPL of $ 3,036 to total net pension asset of $(4,998) as of June 30, 2025.

Discount Rate -1%
(4.25%)
Current Discount
Rate (5.25%)
Discount Rate +1%
(6.25%)
Net Pension Liability/(Asset) 9,835 1,962 (4,998) NPL Funded Percentage 91.60% 98.20% 104.90%
FPRS

Deferred Outflows 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 -$ 9,490$ 9,490$ Total -$ 9,490$ 9,490$ FPRS

Fiscal Year Ended June 30:

Deferred
Outflows/(Inflows) of
Resources
2026 295$
2027 (3,303)
2028 (3,408)
2029 (3,074)
2030 -
Thereafter -
Total (9,490)$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 107 (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 benefit pension plans administered by the California Public Employees’ Retirement Syste m (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding 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 living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full -time employment. 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 B asic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan provisions and benefits in effect at June 30, 2025, 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 3.0% @ 55
Benefit vesting schedule 5 years service Benefit vesting schedule 5 years service Benefit payments monthly for life Benefit payments monthly for life Retirement age 50 Retirement age 50
Monthly benefits, as a % of eligible
compensation 2.00% to 2.50%
Monthly benefits, as a % of eligible
compensation 2.40% to 3.00%
Required employee contribution rates -7.890% Required employee contribution rates -10.610% Required employer contribution rates* 35.980% Required employer contribution rates 57.780% *As a percentage of projected payroll
Miscellaneous Safety

Employees Covered

As of June 30, 2025, the following employees were covered by the benefit terms of the plan:

Inactive employees or
beneficiaries currently receiving
benefits 1,913 480
Inactive employees entitled to but
not yet receiving benefits 1,407 164
Active employees 1,450 375
Total 4,770 1,019

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

108 Annual Comprehensive Financial Report | June 30, 2025 (20) Pension Plans (Continued)

CalPERS Miscellaneous and Safety Plans (Continued)

Contribution Description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a cha nge 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 a n additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts ar e 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, 2025 of $45,413 and $29,524 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, 2024, using an annual actuarial valuation as of June 30, 202 3 rolled forward to June 30, 202 4 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, 202 4 actuarial valuations were determined using the following actuarial assumptions:

Actuarial Methods and Assumptions Used to Determine Total Pension Liability

Actuarial Cost Method Entry Age Actuarial Cost Method
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
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 purchasing power applies, 2.30% thereafter Actuarial Assumptions
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions . Mortality ratesincorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Discount Rate

The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributi ons 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. Theref ore, 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.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 109 (20) Pension Plans (Continued)

CalPERS Miscellaneous and Safety Plans (Continued)

Long-Term Expected Rate of Return

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

In determining the long -term expected rate of return, CalPERS took into account both short -term and long -term market return 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 expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management Study.

Source: CalPERS Annual Comprehensive Financial Report, Fiscal Year Ended June 30, 2024 PERF B & PERF C – Long‐Term Expected Real Rates of Return by Asset Class

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

110 Annual Comprehensive Financial Report | June 30, 2025 (20) Pension Plans (Continued)

CalPERS Miscellaneous and Safety Plans (Continued)

Changes in Net Pension Liability

Miscellaneous
A B C = B - A
Total Pension Liability
Plan Fiduciary Net
Position
Net Pension
Asset/(Liability)
Balance at June 30, 2024 1,356,342$ 1,008,779$ $ (347,563) Changes Recognized for the
Measurement Period 2023-24:

Service Cost 23,477 - (23,477) Interest on the Total Pension Liability 92,851 - (92,851) Changes of Benefit Terms - - - Differences between Expected and
Actual Experience 14,689 - (14,689) Changes of Assumption - - - Plan to Plan Resource Movement - - - Contribution from Employers - 45,412 45,412 Contribution from Employees - 11,620 11,620 Net Investment Income - 95,334 95,334 Benefit Payments, including
Refunds of Employee Contribution (74,210) (74,210) - Administrative Expense - (821) (821) Net Changes 56,807 77,335 20,528 Balance at June 30, 2025 1,413,149$ 1,086,114$ (327,035)$ Pension Expense 52,855$
Increase/(Decrease)

Safety
A B C = B - A
Total Pension Liability
Plan Fiduciary Net
Position
Net Pension
Asset/(Liability)
Balance at June 30, 2024 837,780$ 607,433$ (230,347)$ Changes Recognized for the
Measurement Period 2023-24:

Service Cost 15,802 - (15,802) Interest on the Total Pension Liability 57,603 - (57,603) Changes of Benefit Terms - - - Differences between Expected and
Actual Experience 9,682 - (9,682) Changes of Assumption - - - Net Plan to Plan Resource Movement - - - Contribution from Employers - 29,546 29,546 Contribution from Employees - 6,148 6,148 Net Investment Income - 57,645 57,645 Benefit Payments, including Refunds of
Employee Contribution (41,051) (41,051) - Administrative Expense - (494) (494) Net Changes 42,036 51,794 9,758 Balance at June 30, 2025 879,816$ 659,227$ (220,590)$ Pension Expense 37,254$
Increase/(Decrease)

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 111 (20) Pension Plans (Continued)

CalPERS Miscellaneous and Safety 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 June 30, 2025, 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 503,561$ 327,035$ 180,417$ Discount Rate -1%
(5.90%)
Current Discount
Rate (6.90%)
Discount Rate +1%
(7.90%)
Plan Net Pension Liability 343,771$ 220,590$ 119,884$ Miscellaneous
Safety

Subsequent Events (as measurement period is from July 1, 2023 through June 30, 2024)

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

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

112 Annual Comprehensive Financial Report | June 30, 2025 (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 expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

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

Net difference between projected
and actual earnings 5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period

The EARSL for the Miscellaneous Plan for the measurement period ending June 30, 202 4 is 3.3 years, which was obtained by dividing the total service years of 15,152 (the sum of remaining service lifetimes of the active employees) by 4, 631 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

The EARSL for the Safety Plan for the measurement period ending June 30, 2024 is 5.0 years, which was obtained by dividing the total service years of 5,002 (the sum of remaining service lifetimes of the active employees) by 997 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 113 (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, 2025, 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 Changes of Assumption 4,152$ -$ 8,482$ -$ 12,634$ -$ Differences between Expected and
Actual Experience 13,153 (1,448) 15,384 (241) 28,537 (1,689) Net Difference between Projected
and Actual Earnings on Pension
Plan Investments 17,005 - 10,013 - 27,018 - Contributions Subsequent to the
Measurement Date 49,251 - 28,247 - 77,498 - Total 83,561$ (1,448)$ 62,127$ (241)$ 145,688$ (1,689)$ Miscellaneous Safety Total

The amounts above are net of outflows and inflows recognized in fiscal year 2025 expense. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Fiscal Year ended
June 30
Deferred
Outflows/(Inflows) of
Resources
Fiscal Year ended
June 30
Deferred
Outflows/(Inflows) of
Resources
2026 8,786$ 2026 8,798$
2027 31,906 2027 24,004
2028 (2,545) 2028 2,088
2029 (5,285) 2029 (1,251)
2030 - 2030 -
Thereafter - Thereafter - Total 32,862$ Total 33,639$
Miscellaneous Safety

Defined Contribution Plan (PARS)

The City provides pension benefits for employees not covered by CalPERS or FPRS through the Public Agency Retirement Services (PARS) Alternate Retirement System. This is a defined contribution plan created in accordance with Internal Revenue Code Sections 401(a) and 501, and administered by Phase II Systems. In a defined contribution plan, benefits 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 employees 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 contribute 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, 2025 was $ 5,785. The covered employees made the total required 7.5% contributions of $433.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

114 Annual Comprehensive Financial Report | June 30, 2025 (21) Other Postemployment Benefits (OPEB)

The City of Pasadena provides a direct subsidy to retirees 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 $158.00 or $157.00 per month depending on the bargaining unit or the unrepresented group the employee was a member.

At the June 30, 2025 actuarial valuation, the following current and former employees were covered by the benefit terms:

Inactive plan members or beneficiaries currently receiving benefits 730 Active plan members 1,862
2,592

Plan Description

Eligibility. The plan is 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 retiring 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 immediately.

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 202 5, this monthly amount is $15 8.00 for certain classes of employees and $150.10 for remaining employees.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 115 (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 2025 and 2024 were $158.00 or $15 7.00, respectively. The statutory contribution will be indexed by the medical CPI each year. The required contribution is based on pay -as-you-go financing requirements. Retirees must contribute any premium amounts in excess of the City contribution. In fiscal year 2018, the C ity set aside $2 million 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, 202 5. As of June 30, 202 5, the fair value of the OPEB Section 115 trust account was $2,704.

Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 202 5 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated July 1, 2024, based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal – level percentage of Salary method

Actuarial Assumptions

Discount Rate 5.20% as of June 30, 2025 and 4.21% as of June 30, 2024 Inflation 2.80% per annum
Payroll Increases 2.80% per annum, plus salary merit increases Merit Increases Merit increases from the 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 8.00%, decreasing to an ultimate rate of 4.50%.

Investment Rate of Return 5.0% per annum
Disability According to the disability rates under the 2021 CalPERS experience study.

Turnover Rate According to the termination rates under the 2021 experience study for the CalPERS pension plan
Retirement Age According to the retirement rates under the 2021 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 -2021 released by the Society of Actuaries (SOA) for future mortality improvements.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

116 Annual Comprehensive Financial Report | June 30, 2025 (21) Other Postemployment Benefits (OPEB) (Continued)

Net OPEB Liability (Continued)

Pre-retirement Turnover According to the rates under the 2021 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 deve loped for each major asset class. These ranges are combined to produce the long - term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 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, 202 5 are summarized in the following table:

Assets Class Target Allocation
Long-term Expected
Gross Rate of Return
Equities 30.00% N/A
Fixed Income 65.00% N/A
Cash 5.00% N/A
Total 100.00% 5.60%
Long-term expected rate of return is 5.00%.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 117 (21) Other Postemployment Benefits (OPEB) (Continued)

Changes in the OPEB Liability

A B C = A - B
Total OPEB Liability
Plan Fiduciary Net
Position
Net OPEB
(Asset)/Liability
Balance at June 30, 2024 80,513$ 2,502$ 78,011$ Changes recognized for the
Measurement Period:

Service Cost 4,565 - 4,565 Interest 3,506 - 3,506 Difference between expected and
actual experience (1,359) - (1,359) Changes of Assumptions (8,276) - (8,276) Contribution - Employer - 3,648 (3,648) Net Investment Income - 208 (208) Benefit Payments, Net (3,648) (3,648) - Administrative Expenses - (6) 6 Net Changes (5,212) 202 (5,414) Balance at June 30, 2025 75,301$ 2,704$ 72,597$ Increase (Decrease)

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

118 Annual Comprehensive Financial Report | June 30, 2025 (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 5.20%, as well as what the net OPEB would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 202 5:

1% Decrease Current Discount Rate 1% Increase
(4.20%) (5.20%) (6.20%)
Net OPEB Liability 81,695$ 72,598$ 64,957$

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, 2025:

1% Decrease
Current Healthcare Cost
Trend Rates 1% Increase
(7.00% decreasing to

3.50%)
(8.00% decreasing to

4.50%)
(9.00% decreasing to

5.50%)
Net OPEB Liability 62,736$ 72,598$ 84,866$

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB

For the fiscal year ended June 30, 202 5, the City recognized OPEB expense of $4,490. As of fiscal year ended June 30, 2025, 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
Changes of Assumptions 6,520$ (23,687)$ Difference between expected and actual experience 524 (6,034) Net difference between projected and actual earning on OPEB plan investments - (31) Total 7,044$ (29,752)$

The $7,044 reported as deferred outflows of resources and $29,752 reported as deferred inflows related to pensions will be recognized as pension expense as follows:

Fiscal Year
Ended June 30
Deferred
Outflows/(Inflows) of
Resources
2026 (2,971)$
2027 (3,056)
2028 (3,058)
2029 (3,041)
2030 (3,710)
Thereafter (6,872)
Total (22,708)$

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 119 (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 energy for City customers. The City is obligated to pay the amortized cost of indebtedness regardless of the ability of the contra cting agency to provide electricity and/or transmission, as applicable. The original indebtedness will be amortized by adding the financing costs to purchase energy over the life of the contract. The contracts expire at various times through fiscal year 20 36.

Additional information related to the “Take or Pay” contracts 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 specific purposes and are subject to audit by the grantor agencies. City management is of the opinion that adjustments, if any, resulting from such audits will not be significant.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
120 Annual Comprehensive Financial Report | June 30, 2025 (23) Restatement of Beginning Net Position or Fund Balances During fiscal year 20 25, implementation of GASB 101 and seven corrections resulted in adjustments to and restatements of beginning net position and fund balance, as follows:

Nonmajor
Enterprise
Housing and Computing and
Community Light Off-Street Communication Building
Health Development and Power Water Parking Refuse Services Maintenance Net position or fund balances at beginning of
year, as previously reported (6,766)$ 11,883$ 721,320$ 228,809$ 23,935$ 8,786$ (6,739)$ 1,518$ GASB Implementation:

GASB 101, first year implementation - - (285) A (75) A (1) A (26) A (83) A (20) A Error Correction:

Program revenue 365 B (365) B - - - - - -
Electrical work for Water Fund - - 2,032 C (2,032) C - - - - 401(a) Defined Contribution - - - - - - - -
South Bay WIB - - - - - - - -
Actuarial report (GASB 68) - - - - - - - -
Rental property purchases - - - - - - - -
Land purchase - - - - - - - -
Net position or fund balances at beginning of
year, as restated (6,401)$ 11,517$ 723,067$ 226,702$ 23,934$ 8,760$ (6,822)$ 1,498$ Special Revenue Major Enterprise
Reporting Units Affected by Adjustments to and Restatements of Beginning Balances Internal Service Funds
(A) Restatement of beginning net position in various funds:

Beginning fiscal year 2025, i n accordance with Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences, the City recognizes a liability for compensated absences for leave that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used a s time off or settled (for example, paid in cash to the employee) during or upon separation from employment. Based on the c riteria listed, five types of leave qualify for liability recognition for compensated absences: vacation, floating holiday, management time -off, compensatory time -off, and sick leave. These five types of benefits, including the related Medicare tax, are classified as compensated absences.

As a result, the beginning net position decreased across various funds including proprietary funds, fiduciary funds and the government-wide long term debt fund for a total restatement of $27,380. (B) Restatement of beginning fund balance in Health and Housing and Community Development Funds:

In fiscal year 202 5, it was discovered that grant monies approved to be split between Health and Housing and Community Development Funds, in fiscal year 2024, were fully allocated to Housing and Community Development Fund.

As a result, Health Fund’s beginning fund balance increased by $365 and Housing and Community Development Fund’s beginning fund balance decreased by $365.
(C) Restatement of beginning net position in Light and Power Fund and Water Fund, both enterprise funds under proprietary type funds:

In fiscal year 2025, it was discovered that Light and Power Fund provided electrical work to Water Fund during fiscal years 2019 through 2023 was not reimbursed in the years when services were rendered. As a result, Light and Power Fund’s beginning net po sition increased by $2,032 and Water Fund’s beginning net position decreased by $2,032.

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 121 (23) Restatement of Beginning Net Position or Fund Balances (Continued)

Workforce
Fleet 401(a) Fire & Police Innovation and Long-
Fleet Repair and Workers' Defined Retirement Opportunity Term Capital Replacement Maintenance Benefits Compensation General Liability Contribution System Act (WIOA) Debt Assets 27,147$ 3,192$ (108,029)$ (37,152)$ (4,043)$ -$ 98,630$ 56$ (487,860)$ 546,334$ (2) A (3) A (25,492) A (5) A (8) A - (2) A (8) A (1,372) A - - - - - - - - - - - - - - - - - - - - - - - - - - 91 D - - - - - - - - - - - 168 E - - - - - - - - - - (2) F - - - - - - - - - - 613 G - - - - - - - - - 2,120 H 27,145$ 3,189$ (133,521)$ (37,157)$ (4,051)$ 91$ 98,628$ 216$ (489,234)$ 549,066$ Fiduciary Government-wideInternal Service Funds
Reporting Units Affected by Adjustments to and Restatements of Beginning Balances

(D) Restatement of beginning net position in 401(a) Defined Contribution Fund, an Employee Benefit Trust Fund, under fiduciary type fund:

In fiscal year 2025, it was discovered that the 401(a) Defined Contribution Fund has not previously been reported in the City’s financial statements. As a result, the beginning net position for fiduciary funds increased by $91.

(E) Restatement of beginning net position in Workforce Innovation and Opportunity Act (WIOA), a custodial fund under fiduciary type fund:

In fiscal year 202 5, it was discovered that a fiscal year 2022 accounts payable accrual was not reversed in the year processed and paid, fiscal year 2023. As a result, the beginning net position for fiduciary funds increased by $168.

(F) Restatement of beginning net position in government-wide Long-Term Debt Fund:

In fiscal year 2025, it was discovered that the beginning net position liability at July 1, 2024 did not match the ending net position liability at June 30, 2024 on the third -party prepared actuarial report for GASB 68. As a result, the net position of the government-wide long-term debt fund decreased by $2.

(G) Restatement of beginning net position in government-wide Capital Asset Fund:

In fiscal year 2025, it was discovered that real properties, purchased with the intent to use as rental properties, were not recorded as capital assets in the years they were acquired. As a result, the net position of the government-wide capital asset fund increased by $613.

(H) Restatement of beginning net position in government-wide Capital Asset Fund:

In fiscal year 2025, it was discovered real property located at 2825 E. Walnut Street was not recorded as a capital asset in the year that it was acquired, fiscal year 2024. As a result, the net position of the government -wide capital asset fund increased by $2,120.

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

122 Annual Comprehensive Financial Report | June 30, 2025 (24) Tax Abatements

The City of Pasadena approves tax abatements (waivers or reductions of tax) for business license and construction tax, as authorized under Pasadena Municipal Code (PMC), for the physically disabled, first -time businesses, First Source Hiring program , a ffordable housing, and various other construction projects. The tax abatements are approved to promote economic development, promote local hiring, attract and retain businesses, and revitalize underdeveloped areas.

Business License Tax Abatements

Pursuant to Chapter 5.12.010 and 5.12.020 of the PMC, no license tax shall be collected from a blind person who makes application for the following:

• Eligible for state aid and applies for a license to sell, peddle, or otherwise deal in any goods, wares, or merchandise produced or manufactured by California Industries for the Blind, the sale of which goods, wares, or merchandise is not prohibited by law; or
• A blind person who operates vending stands licensed pursuant to Sections 6900 et seq. of the Government Code; and
• Submits proof of written evidence of such eligibility as required by 5.12.030, from one of the following:
o California Rehabilitation Department: or
o The Bureau of Vocational Rehabilitation; or
o Another state department or bureau having authority to certify to the eligibility.

Pursuant to Chapter 5.12.050 of the PMC, no license tax shall be collected from a physically disabled person who makes application and meets the following conditions:

• Has served full time in the armed forces of the United States in time of national emergency or state military emergency or during any campaign or expedition of the armed forces; and • Has been honorably discharged or released from the armed forces; and • Is a qualified elector of the state; and
• Is physically unable to obtain a livelihood by manual labor; and • Is self-employed and carrying on a business as a:
o Solicitor or peddler of goods, wares or merchandise not prohibited by law, or o Driver or operator of a vehicle used to carry passengers or goods, baggage or freight, who has complied with all the laws and ordinances pertaining thereto, or o Private patrolman, watchman, private policeman, detective or investigator who has complied with all laws and ordinances pertaining thereto, or
o Of a distributor or poster of signs or handbills who has complied with all laws and ordinances pertaining thereto; and
• Submits the proof of disability as required by Section 5.12.60. Proof of physical disability shall be evidenced by a certificate stating the applicant is physically unable to perform manual labor signed by any one of the following:
o A physician or surgeon in the employ of the United States; or o The health officer of the city; or
o The chief surgeon of the Pasadena Emergency Center

CITY OF PASADENA FINANCIAL SECTION NOTES TO THE BASIC FINANCIAL STATEMENTS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 123 (24) Tax Abatements (Continued)

Reduced Business License Tax

First year businesses in Pasadena may be subject to a Reduced Business License Tax, as defined in the agreement dated 01/12/2015, authorized and signed by the City Manager. It is also noted on the Schedule of Taxes, Fees, and Charges (note no. 5) and approved annually. To qualify for the reduced tax, the business must meet all the following criteria:

• Be in a commercial or industrial zoned area (defined in PMC Chapter 17); and • Have five or fewer employees; and
• Have received a 2012 North American Industry Classification System (NAICS) designation in categories 23, 31, 32, 33, 51, or 54.

Construction Tax Abatement

Pursuant to Chapter 4.32 Construction Tax, of the PMC, construction projects are assessed a fee for Construction Tax at a rate of 1.5% of the construction valuation. Section 4.32.50 (A) of the Municipal Code allows exempt or partially exempt from the Construction Tax fee to be applied to the following:

• Pasadena's First Source Hiring program:
o Pursuant to Chapter 14.80.10 of the PMC, the Pasadena’s First Source Hiring program encourages and, in some cases, requires (mandatory for developers receiving financial assistance from the City) construction developers to hire locally for skilled and unskilled labor. The initiative of the program is to create job opportunities, incentivize development, and stimulate the local economy by hiring within the community. To qualify for this program, the private construction projects must cost more than $50,000. Voluntary participants are eligible for a rebate up to 50% of the salary and benefits paid to each Pasadena resident or up to 75% of the total const ruction tax paid, whichever is less.
• Affordable housing projects:
o Residential units affordable to very low, low or moderate-income households may be fully or partially exempt from the construction tax as defined in Section 17.80.020 of the PMC. • Small residential projects:
o Remodeling projects under 250 sq. ft. or valued under $20,000 o Reroofing projects valued at $5,000 or less for a single-family residence o Seismic retrofit projects for single-family homes
• Research and development projects:
o Construction in areas zoned for Research and Development (Office or Non -Office) may qualify for exemptions as defined in Chapter 17 of the PMC
• Hotels or motels:
o Which are converted to residences which are rented or sold to persons or families of low or moderate income, as defined in (Health and Safety Code Section 50093) pursuant to a Hotel Conversion Permit
• Wood-framed multiple-family buildings which are retrofitted pursuant to Chapter 14.08 of the PMC

NOTES TO THE BASIC FINANCIAL STATEMENTS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

124 Annual Comprehensive Financial Report | June 30, 2025 (24) Tax Abatements (Continued)

Tax exemptions approved in fiscal year 2025:

Exemption Type
No. of
Accounts
Exemption
Amount Justification for exemption or abatement
Business License Tax 4 0.9$ Subject to Business License Tax Exemption pursuant to Pasadena Municipal Code

5.12.050 under physically disabled section.

Business License Tax 1 0.2 Subject to reduced Business License Tax rate for first year businesses as defined in the agreement dated 01/12/2015, authorized and signed by the City Manager.

Construction Tax 2 34.8 Subject to partial exemption of Construction Tax pursuant to Pasadena Municipal Code

4.32.050 under Affortable Housing project.

Total tax abatement 35.9$

(25) Subsequent Events

Subsequent events were evaluated through the date of the audit report.

Lawsuit against Federal Government

In October 2025, C ity of Pasadena, alongside 28 other local governments, filed a lawsuit challenging the Trump administration’s attempt to impose unlawful and unrelated conditions on federal emergency and disaster preparedness funds. The conditions would force local governments to adopt the administration’s political agenda or risk losing critical funding. These funds help fund fire department staffing, port and transit security, counterterrorism and hazard mitigation projects.

Lawsuit against University of California, Los Angeles

On October 30, 2025, City of Pasadena and the Rose Bowl Operating Company (RBOC) have filed a lawsuit against the University of California Board of Regents, acting on behalf of University of California, Los Angeles (UCLA), for allegedly breaching a long-standing agreement requiring the university to play its home football games at the Rose Bowl Stadium through 2044. The lawsuit, filed in Los Angeles County Superior Court, seeks to enforce the lease and prevent UCLA from terminating the agreement early.

Standby Bond Purchase Agreement Extension

In October 2025, City of Pasadena extended its Standby Bond Purchase Agreement (SBPA) with BMO Bank beyond the original expiration date of December 16, 2025. This agreement supports approximately $17.6 million in variable rate bonds issued for the Paseo Colorado Parking Facilities.

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

REQUIRED

SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

126 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual General Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Taxes:

Property 87,460$ 87,460$ 87,221$ (239)$ Sales 76,586 76,586 79,389 2,803 Utility users 34,060 34,060 33,094 (966) Transient occupancy 19,300 19,300 20,648 1,348 Street light and traffic signal 8,750 8,750 8,963 213 Business license 7,200 7,200 7,883 683 Construction 3,500 3,500 4,976 1,476 Franchise 2,974 2,974 2,606 (368) Other 2,300 2,300 2,133 (167) Licenses and permits 5,239 5,239 4,792 (447) Intergovernmental 24,824 28,393 30,620 2,227 Charges for services 45,145 47,581 46,850 (731) Fines and forfeitures 6,620 7,015 5,455 (1,560) Investment earnings 2,297 2,297 3,471 1,174 Net change in fair value of investments - - 2,898 2,898 Lease revenues - - 189 189 Miscellaneous revenues 3,349 5,077 4,481 (596) Contributions 28 28 28 - Total revenues 329,632 337,760 345,697 7,937 Expenditures:

General government:

Attorney 12,334 14,534 14,369 165 Clerk 3,543 3,543 3,340 203 Council 3,473 3,473 3,236 237 Manager 10,047 12,551 10,267 2,284 Finance 15,336 15,336 15,478 (142) Human Resources 5,659 5,659 5,676 (17) Nondepartmental 22,444 33,515 37,737 (4,222) Public safety:

Fire 67,459 68,690 72,880 (4,190) Police 107,477 108,589 112,923 (4,334) Transportation:

Transportation 8,451 9,621 8,161 1,460 Public Works 17,549 17,716 22,131 (4,415) Culture and leisure:

Parks, Recreation & Community 27,192 27,442 27,227 215 Nondepartmental 12,738 12,738 12,348 390 Community development:

Planning & Permitting 7,427 10,523 9,652 871 Housing 2,747 3,173 2,359 814 Capital outlay 426 5,436 4,793 643 Debt service:

Principal - - 20 (20) Interest - - 4 (4) Lease payments - - 927 (927) Subscription payments - - 1,536 (1,536) Interest on leases and subscriptions - - 128 (128) 324,302 352,539 365,192 (12,653) Excess (deficiency) of revenues
over (under) expenditures 5,330 (14,779) (19,495) (4,716) Budget

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 127

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual (Continued) General Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Other Financing Sources (Uses):

Proceeds from sale of capital assets - 2,120 2,120 - Issuance of financed purchase arrangements - - 10 10 Insurance recoveries - - 1,029 1,029 Transfers in 20,140 30,272 30,272 - Transfers out (26,669) (38,981) (37,046) 1,935 Leases issued - - 103 103 Subscriptions issued - - 730 730 Total other financing sources (uses) (6,529) (6,589) (2,782) 3,807 Net change in fund balances (1,199) (21,368) (22,277) (909) Fund balances, beginning of year 158,879 158,879 158,879 - Fund balances, ending 157,680$ 137,511$ 136,602$ (909)$ Budget

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

128 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Housing Successor Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Charges for services -$ -$ 4$ 4$ Investment earnings - - 122 122 Miscellaneous revenues 118 118 184 66 Total revenues 118 118 310 192 Expenditures:

Current:

Community development 260 1,303 187 1,116 Total expenditures 260 1,303 187 1,116 Excess (deficiency) of revenues over (under)
expenditures (142) (1,185) 123 1,308 Other Financing Sources (Uses):

Transfers in - 833 833 - Total other financing sources (uses) - 833 833 - Net change in fund balances (142) (352) 956 1,308 Fund balance, beginning of year 717 717 717 - Fund balance, ending 575$ 365$ 1,673$ 1,308$ Budget

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 129

City of Pasadena
Notes to the Required Supplementary Information
Year Ended June 30, 2025

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. Capital projects funds do not 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 compliance with 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 the 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.

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

130 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Changes in the Net Pension Liability and Related Ratios CalPERS Pension Plans – Miscellaneous
Last Ten Fiscal Years

Fiscal year ended June 30, 2025 June 30, 2024 June 30, 2023 June 30, 2022 Measurement period ended June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 Total Pension Liability:

Service cost 23,477$ 21,945$ 22,198$ 19,876$ Interest on total pension liability 92,851 89,150 85,888 84,480 Changes of benefits - 1,175 - - Changes of assumptions - - 35,296 - Difference between expected and actual experience 14,689 7,405 (12,307) (2,425) Benefit payments, including refunds of
employee contributions (74,210) (71,605) (66,929) (63,657) Net Change in Total Pension Liability 56,806 48,070 64,146 38,274 Total Pension Liability - Beginning of Year 1,356,342 1,308,272 1,244,126 1,205,852 Total Pension Liability - End of Year (a) 1,413,148$ 1,356,342$ 1,308,272$ 1,244,126$ Plan Fiduciary Net Position:

Contributions - employer 45,413$ 44,612$ 40,242$ 38,235$ Contributions - employee 11,620 9,808 9,288 9,265 Net investment income 95,334 59,078 (80,440) 199,471 Benefit payments, including refunds of
employee contributions (74,210) (71,605) (66,929) (63,657) Net plan to plan resource movement - - - Administrative expense (821) (712) (664) (883) Other miscellaneous income/(expense) - - - - Net Change in Plan Fiduciary Net Position 77,335 41,181 (98,503) 182,431 Plan Fiduciary Net Position - Beginning of Year 1,008,779 967,598 1,066,101 883,670 Plan Fiduciary Net Position - End of Year (b) 1,086,114$ 1,008,779$ 967,598$ 1,066,101$ Net Pension Liability - Ending (a)-(b) 327,034$ 347,563$ 340,674$ 178,025$ Plan fiduciary net position as a percentage of the
total pension liability 76.86% 74.37% 73.96% 85.69%
Covered payroll 148,877$ 141,362$ 126,652$ 119,630$ Net pension liability as percentage of
covered payroll 219.67% 245.87% 268.98% 148.81%

Notes to Schedule:

Benefit Changes:

Changes in Assumptions:

For fiscal year ended 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, 2022, 2023, and 2024:

There were no significant changes in assumptions.

For fiscal year ended 2025:

The discount rate was reduced from 7.15% to 6.90%.

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 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 131

June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 19,566$ 19,270$ 19,070$ 18,793$ 16,452$ 16,519$ 81,859 79,379 76,249 74,168 72,632 70,708 - - - - - - - - (7,443) 59,447 - (16,682) (3,982) 5,492 (3,023) (11,333) (13,975) (14,488) (61,336) (58,915) (55,364) (51,700) (49,269) (46,871) 36,107 45,226 29,489 89,375 25,840 9,186 1,169,745 1,124,519 1,095,030 1,005,655 979,815 970,630 1,205,852$ 1,169,745$ 1,124,519$ 1,095,030$ 1,005,655$ 979,815$ 35,786$ 31,375$ 27,112$ 24,681$ 22,252$ 19,683$ 8,895 8,841 8,824 8,904 8,659 8,503 42,242 53,458 66,083 80,076 3,807 16,554 (61,336) (58,915) (55,364) (51,700) (49,269) (46,871) - - (2) - - 1 (1,211) (589) (1,219) (1,065) (449) (829) - 2 (2,314) - - - 24,376 34,172 43,120 60,896 (15,000) (2,959) 859,294 825,122 782,002 721,106 736,106 739,065 883,670$ 859,294$ 825,122$ 782,002$ 721,106$ 736,106$ 322,182$ 310,451$ 299,397$ 313,028$ 284,549$ 243,709$

73.28% 73.46% 73.38% 71.41% 71.71% 75.13%
119,505$ 116,645$ 112,848$ 111,573$ 107,546$ 105,292$ 269.60% 266.15% 265.31% 280.56% 264.58% 231.46%

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

132 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Contributions
CalPERS Pension Plans – Miscellaneous
Last Ten Fiscal Years

Fiscal year ended 2025 2024 2023 2022
Actuarially determined contribution2 45,413$ 44,612$ 40,242$ 38,235$ Contributions in relation to the actuarially
determined contribution (49,251) (44,612) (40,242) (38,235) Contribution deficiency (excess) (3,838)$ -$ -$ -$ Covered payroll 148,877$ 141,362$ 126,652$ 119,630$ Contributions as a percentage
of covered payroll 33.08% 31.56% 31.77% 31.96%
Notes to Schedule:

Valuation date 6/30/2022 6/30/2021 6/30/2020 6/30/2019
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Asset valuation method Fair value Fair value Fair value Fair value Inflation 2.300% 2.500% 2.50% 2.50%
Amortization method 3
Salary increases4
Investment rate of return5 6.80% 7.00% 7.15% 7.00%
Retirement age6
Mortality7

Notes to Schedule:
1 2
Level percentage of payroll, closed.
3 Depending on age, service, and type of employment.
4 Net of pension plan investment expense, including inflation 5 The probabilities of retirement are based on the most recent CalPERS Experience Study adopted by the CalPERS Board. 6 Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

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

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 133

2021 2020 2019 2018 2017 2016
35,786$ 31,375$ 27,112$ 24,681$ 22,252$ 19,683$ (35,786) (31,375) (27,112) (24,681) (22,252) (19,683) -$ -$ -$ -$ -$ -$ 119,505$ 116,645$ 112,848$ 111,573$ 107,546$ 105,292$

29.95% 26.90% 24.03% 22.12% 20.69% 18.69%
6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 Entry age Entry age Entry age Entry age Entry age Entry age Fair value Fair value Fair value Fair value Fair value 15 Year Smoothed
Market Method

2.625% 2.625% 2.75% 2.75% 2.75% 2.75%

7.25% 7.25% 7.38% 7.50% 7.50% 7.50%

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

134 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Changes in the Net Pension Liability and Related Ratios CalPERS Pension Plans – Safety
Last Ten Fiscal Years

Fiscal year ended June 30, 2025 June 30, 2024 June 30, 2023 June 30, 2022 Measurement period June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 Total Pension Liability:

Service cost 15,801$ 14,775$ 14,423$ 13,227$ Interest on total pension liability 57,604 54,851 51,956 50,130 Changes of benefit terms - 228 - - Changes of assumptions - - 22,619 - Difference between expected and actual experience 9,682 12,540 (643) 777 Benefit payments, including refunds of
employee contributions (41,051) (38,786) (35,966) (32,147) Net Change in Total Pension Liability 42,036 43,608 52,389 31,986 Total Pension Liability - Beginning of Year 837,781 794,173 741,784 709,798 Total Pension Liability - End of Year (a) 879,817$ 837,781$ 794,173$ 741,784$ Plan Fiduciary Net Position:

Contributions - employer 29,545$ 27,763$ 25,199$ 23,384$ Contributions - employee 6,148 5,270 5,015 4,734 Net investment income 57,645 35,508 (47,866) 118,090 Benefit payments, including refunds of
employee contributions (41,051) (38,786) (35,966) (32,147) Net plan to plan resource movement - - - Administrative expense (494) (425) (393) (518) Other miscellaneous income/(expense) - - - - Net Change in Plan Fiduciary Net Position 51,793 29,330 (54,011) 113,543 Plan Fiduciary Net Position - Beginning of Year 607,433 578,103 632,114 518,571 Plan Fiduciary Net Position - End of Year (b) 659,226$ 607,433$ 578,103$ 632,114$ Net Pension Liability - Ending (a)-(b) 220,590$ 230,348$ 216,070$ 109,670$ Plan fiduciary net position as a percentage of the
total pension liability 74.93% 72.51% 72.79% 85.22%
Covered payroll 59,153$ 57,589$ 51,234$ 48,883$ Net pension liability as percentage of
covered payroll 372.91% 399.99% 421.73% 224.35%

Notes to Schedule:

Benefit Changes:

Changes in Assumptions:

For fiscal year ended 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, 2022, 2023, and 2024:

There were no significant changes in assumptions.

For fiscal year ended 2025:

The discount rate was reduced from 7.15% to 6.90%.

There were no changes in benefits.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 135

June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 13,264$ 12,764$ 12,757$ 12,324$ 10,509$ 10,702$ 47,906 45,654 43,215 41,004 39,394 37,307 - - - - - - - - (995) 36,547 - (9,888) 1,038 4,034 2,172 (7,057) (634) (8,455) (29,518) (26,877) (24,941) (22,654) (20,871) (19,143) 32,690 35,575 32,208 60,164 28,398 10,523 677,108 641,533 609,325 549,161 520,763 510,240 709,798$ 677,108$ 641,533$ 609,325$ 549,161$ 520,763$ 21,823$ 19,187$ 16,542$ 15,279$ 13,026$ 12,027$ 4,617 4,383 4,197 4,056 3,804 3,764 24,676 30,716 37,156 44,323 2,093 8,834 (29,518) (26,877) (24,941) (22,654) (20,871) (19,143) - - (1) - - - (702) (336) (685) (589) (245) (452) - 1 (1,301) - - 684 20,896 27,074 30,967 40,415 (2,193) 5,714 497,675 470,601 439,634 399,219 401,410 395,696 518,571$ 497,675$ 470,601$ 439,634$ 399,219$ 401,410$ 191,227$ 179,433$ 170,932$ 169,691$ 149,942$ 119,353$

73.06% 73.50% 73.36% 72.15% 72.70% 77.08%
47,997$ 47,457$ 46,444$ 44,887$ 41,528$ 41,142$ 398.41% 378.10% 368.04% 378.04% 361.06% 290.10%

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

136 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Contributions
CalPERS Pension Plans – Safety
Last Ten Fiscal Years

Fiscal year ended 2025 2024 2023 2022 2021
Actuarially determined contribution2 29,545$ 27,763$ 25,199$ 23,384$ 21,823$ Contributions in relation to the actuarially
determined contribution (28,247) (27,763) (25,199) (23,384) (21,823) Contribution deficiency (excess) 1,298$ -$ -$ -$ -$ Covered payroll 59,153$ 57,589$ 51,234$ 48,883$ 47,997$ Contributions as a percentage
of covered payroll 47.75% 48.21% 49.18% 47.84% 45.47%
Notes to Schedule:

Valuation date 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Actuarial cost method Entry age Entry age Entry age Entry age Entry age Asset valuation method Fair value Fair value Fair value Fair value Fair value Inflation 2.30% 2.50% 2.50% 2.50% 2.625%
Amortization method3
Salary increases4
Investment rate of return5 6.80% 7.00% 7.15% 7.00% 7.25% Retirement age6
Mortality7
Methods and Assumptions Used to
Determine Contribution Rates:

Notes to Schedule:
1 2
Level percentage of payroll, closed.
3 Depending on age, service, and type of employment.
4 Net of pension plan investment expense, including inflation 5 6
Employers are assumed to make contributions equal to the actuarily determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

The probabilities of 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.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 137

2020 2019 2018 2017 2016
19,187$ 16,542$ 15,279$ 13,026$ 12,027$ (19,187) (16,542) (15,279) (13,026) (12,027) -$ -$ -$ -$ -$ 47,457$ 46,444$ 44,887$ 41,528$ 41,142$

40.43% 35.62% 34.04% 31.37% 29.23%
6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013
Entry age Entry age Entry age Entry age Entry age
Fair value Fair value Fair value 15 Year 15 Year
Smoothed Smoothed
Market Method Market Method

2.625% 2.75% 2.75% 2.75% 2.75%

7.25% 7.38% 7.50% 7.50% 7.50%

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

138 Annual Comprehensive Financial Report | June 30, 2025

Fire and Police Retirement System
Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Fiscal Years

Fiscal year ended June 30, 2025 June 30, 2024 June 30, 2023 June 30, 2022 Measurement period June 30, 2025 June 30, 2024 June 30, 2023 June 30, 2022 Total Pension Liability:

Interest on total pension liability 5,746$ 6,133$ 6,316$ 6,947$ Differences between expected and actual experience (770) (1,994) 482 164 Changes of assumptions 474 503 1,815 4,400 Changes of benefits - - - - Benefit payments, including refunds of
employee contributions (11,753) (12,250) (11,954) (12,072) Net Change in Total Pension Liability (6,303) (7,608) (3,341) (561) Total Pension Liability - Beginning of Year 115,342 122,950 126,291 126,852 Total Pension Liability - End of Year (a) 109,039$ 115,342$ 122,950$ 126,291$ Plan Fiduciary Net Position:

Contributions - employer* 11,071$ 601$ -$ -$ Contributions - employee - - - - Net investment income 9,521 6,220 5,013 (10,656) Benefit payments, including refunds of
employee contributions (11,753) (12,250) (11,954) (12,072) Administrative expense (390) (318) (344) (343) Net Change in Plan Fiduciary Net Position 8,449 (5,747) (7,285) (23,071) Plan Fiduciary Net Position - Beginning of Year 98,628 104,377 111,662 134,733 Plan Fiduciary Net Position - End of Year (b) 107,077$ 98,628$ 104,377$ 111,662$ Net Pension Liability - Ending (a)-(b) 1,962$ 16,714$ 18,573$ 14,629$ Plan fiduciary net position as a percentage of the
total pension liability 98.20% 85.51% 84.89% 88.42%

NOTES TO SCHEDULE:
1 * A loan payment was provided to the City in April 2024 for the carrying loan. The City transferred 93%, or $601,463, to the system per Amended Agreement NO. 20,823.

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.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 139

June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 7,335$ 7,600$ 7,781$ 8,832$ 9,272$ 9,644$ (1,798) 438 1,862 1,261 (3,081) (2,098) - - - 2,189 - - - - - - - - (12,506) (12,773) (12,824) (12,815) (13,118) (13,448) (6,969) (4,735) (3,181) (533) (6,927) (5,902) 133,821 138,556 141,737 142,270 149,197 155,099 126,852$ 133,821$ 138,556$ 141,737$ 142,270$ 149,197$ -$ 23,137$ -$ -$ -$ -$ - - - - - - 22,355 3,394 5,923 6,656 12,512 50 (12,506) (12,773) (12,824) (12,815) (13,118) (13,448) (327) (321) (257) (272) (300) (302) 9,522 13,437 (7,158) (6,431) (906) (13,700) 125,211 111,774 118,932 125,363 126,269 139,969 134,733$ 125,211$ 111,774$ 118,932$ 125,363$ 126,269$ (7,881)$ 8,610$ 26,782$ 22,805$ 16,907$ 22,928$ 106.21% 93.57% 80.67% 83.91% 88.12% 84.63%

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

140 Annual Comprehensive Financial Report | June 30, 2025

Fire and Police Retirement System
Schedule of Plan Contributions
As of June 30, for the Last Ten Fiscal Years

Contractually Actual Contribution as
Fiscal Year Required Fiscal Year Deficiency Covered a Percentage of Ending Contribution* Contribution (Excess) Payroll Payroll 2025 -$ -$ -$ n/a n/a 2024 - - - n/a n/a 2023 - - - n/a n/a 2022 - - - n/a n/a 2021 - - - n/a n/a 2020 3,478 23,137 (19,659) n/a n/a 2019 - - - n/a n/a 2018 - - - n/a n/a 2017 - - - n/a n/a 2016 - - - n/a n/a

NOTE TO SCHEDULE:
* 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.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 141

Fire and Police Retirement System
Schedule of Plan Investment Returns
As of June 30, for the Last Ten Fiscal Years

Fiscal year ended 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Measurement period June 30, 2025 June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 Annual money-weighted rate of
return, net of investment expense 9.70% 6.40% 5.00% -8.60% 19.00% 2.80% 5.50% 5.60% 10.70% 0.40%

NOTE TO SCHEDULE:

Source: June 30, 2025 GASB 67 plan actuarial information prepared by System Actuary, Foster & Foster, Inc.

REQUIRED SUPPLEMENTARY INFORMATION FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)

142 Annual Comprehensive Financial Report | June 30, 2025

Schedule of Changes in the Net OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years1

Fiscal year ended 2025 2024 2023 2022 2021 2020 2019 2018 Total OPEB Liability
Service cost 4,565$ 3,683$ 3,623$ 4,917$ 4,254$ 3,567$ 3,217$ 3,178$ Interest on the total OPEB liability 3,506 3,293 3,141 2,181 2,365 2,561 2,596 2,448 Differences between expected and actual experience (1,359) (5,359) (397) 874 (553) (7,576) - - Changes in assumptions (8,276) 4,415 (419) (26,576) 2 6,723 11,111 3,664 (988) Changes in benefit terms - - - - - - - - Benefit payments (3,648) (3,119) (2,997) (2,833) (2,678) (2,815) (2,612) (2,391) Net change in Total OPEB Liability (5,212) 2,913 2,951 (21,437) 10,111 6,848 6,865 2,247 Total OPEB liability - beginning 80,513 77,600 74,649 96,086 85,975 79,127 72,262 70,015 Total OPEB liability - ending (a) 75,301$ 80,513$ 77,600$ 74,649$ 96,086$ 85,975$ 79,127$ 72,262$ Plan Fiduciary Net Position
Contribution - employer 3,648$ 3,119$ 2,997$ 2,833$ 2,678$ 2,815$ 2,612$ 4,391$ Net investment income 208 203 101 (301) 312 101 133 2 Benefit payments (3,648) (3,119) (2,997) (2,833) (2,678) (2,815) (2,612) (2,391) Administrative expense (6) (12) (6) (5) (6) (11) (9) - Net change in plan fiduciary net position 202 191 95 (306) 306 90 124 2,002 Plan fiduciary net position - beginning 2,502 2,311 2,216 2,522 2,216 2,126 2,002 - Plan fiduciary net position - ending (b) 2,704$ 2,502$ 2,311$ 2,216$ 2,522$ 2,216$ 2,126$ 2,002$ Net OPEB Liability/(Assets) - ending (a) - (b) 72,597$ 78,011$ 75,289$ 72,433$ 93,564$ 83,759$ 77,001$ 70,260$ Plan fiduciary net position as a percentage of the
total OPEB liability 3.59% 3.11% 2.98% 2.97% 2.62% 2.58% 2.69% 2.77% Covered - employee payroll 204,522$ 198,951$ 177,866$ 160,024$ 167,502$ 164,102$ 134,734$ 130,809$ Net OPEB Liability as percentage of covered-
employee payroll 35.5% 39.2% 42.3% 45.3% 55.9% 51.0% 57.2% 53.7%

NOTES TO SCHEDULE:
2 Adjusted FY 2022 'Changes of assumptions'.
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.

CITY OF PASADENA FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 143

Schedule of OPEB Plan Contributions
As of June 30, for the Last Ten Fiscal Years1

2025 2024 2023 2022 2021 2020 2019 2018
Contractually determined contribution 3,648$ 3,119$ 2,997$ 2,833$ 2,678$ 2,815$ 2,612$ 4,391$ Contribution in relation to the
contractually determined
contributions (3,648) (3,119) (2,997) (2,833) (2,678) (2,815) (2,612) (4,391) Contribution deficiency/(excess) $ - $ - -$ -$ -$ -$ -$ -$ Covered employee payroll $ 204,522 $ 198,951 177,866$ 160,024$ 167,502$ 164,102$ 134,734$ 130,809$

1.78% 1.57% 1.68% 1.77% 1.60% 1.72% 1.94% 3.36%Contributions as a percentage of covered employee payroll

NOTE TO SCHEDULE:
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.

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FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

SUPPLEMENTARY

INFORMATION

SUPPLEMENTARY INFORMATION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
146 Annual Comprehensive Financial Report | June 30, 2025 Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025

Special Capital Debt Service
Revenue Projects Fund Permanent
Funds Funds 2015 Series A Funds Total
Assets:

Cash and investments 162,080$ 8,747$ -$ 2,248$ 173,075$ Accounts receivable 18,964 141 - 21 19,126 Lease receivable 178 - - - 178 Prepaids and other assets 260 - - - 260 Notes receivable 72,613 - - - 72,613 Allowance for doubtful accounts (72,613) - - - (72,613) Restricted assets:

Cash and investments 3,776 - - - 3,776 Cash with fiscal agent 107 - 7,537 - 7,644 Property held for resale 1,434 - - - 1,434 Total assets 186,799$ 8,888$ 7,537$ 2,269$ 205,493$ Liabilities, deferred inflows of resources and
fund balances:

Liabilities:

Accounts payable and accrued liabilities 8,423$ 35$ -$ -$ 8,458$ Deposits 1,527 - - - 1,527 Due to other funds 8,645 - - - 8,645 Unearned revenue 8,523 - - - 8,523 Total liabilities 27,118 35 - - 27,153 Deferred Inflows of Resources:

Unavailable revenues 4,380 - - - 4,380 Lease related 167 - - - 167 Total deferred inflows of resources 4,547 - - - 4,547 Fund Balances:

Nonspendable 260 - - 1,434 1,694 Restricted 60,756 1,417 7,537 726 70,436 Committed 100,984 7,436 - 109 108,529 Unassigned (6,866) - - - (6,866) Total fund balances 155,134 8,853 7,537 2,269 173,793 Total liabilities, deferred inflows of resources
and fund balances 186,799$ 8,888$ 7,537$ 2,269$ 205,493$

CITY OF PASADENA SUPPLEMENTARY INFORMATION
(AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comp
rehensive Financial Report | June 30, 2025 147
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2025
Special Capital Debt Service
Revenue Projects Fund Permanent
Funds Funds 2015 Series A Funds Total
Revenues:

Taxes 11,806$ -$ -$ -$ 11,806$
Licenses and permits 17,074 - - - 17,074
Intergovernmental 83,187 - - - 83,187
Charges for services 21,515 1,084 - - 22,599
Investment earnings 4,883 264 - 70 5,217
Net change in fair value of investments 3,278 176 5 67 46 4,067 Lease revenues 258 - - - 2 58
Interest income from leases 2 - - - 2
Miscellaneous revenues 6,823 2 - - 6,825
Contributions 1,353 793 - - 2,146
Total revenues 150,179 2,319 567 116 153,181 Expenditures:

Current:

General government - - 4 - 4
Public safety 1,697 - - - 1,697
Transportation 21,654 - - - 21,654
Utility 30 - - - 30
Sanitation 5,993 - - - 5,993
Health 19,907 - - - 19,907
Culture and leisure 16,512 - - - 16,512
Community development 58,144 36 - - 58,180
Capital outlay 3,235 - - - 3,235
Debt service:

Principal retirement 300 - 2,420 - 2,720
Interest 114 - 1,875 - 1,989
Lease payments 260 - - - 26 0
Subscription payments 543 - - - 543
Interest on leases and subscriptions 39 - - - 39
Total expenditures 128,428 36 4, 299 - 132,763
Excess (deficiency) of revenues over
(under) expenditures 21,751 2,283 (3,732) 116 20,418 Other Financing Sources (Uses):

Transfers in 15,763 - 4,299 - 20,062
Transfers out (28,350) (1,871) - - (30,221) Leases issued 716 - - - 716
Subscriptions issued 886 - - - 886
Total other financing sources (uses) (10,985) (1,871) 4,299 - (8,557) Net change in fund balances 10,766 412 5 67 116 11,861 Fund balances, beginning of year 144,368 8,441 6,970 2,153 161,932 Fund balances, ending 155,134$ 8,853$ 7,537$ 2,269$ 173,793$ (This page intentionally left blank)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

SPECIAL

REVENUE FUNDS
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CITY OF PASADENA SUPPLEMENTARY INFORMATION NONMAJOR GOVERNMENTAL FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annu
al Comprehensive Financial Report | June 30, 2025 151

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 services 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 Fu nd – to account for revenue received from 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 a pproved by voters, state gasoline tax, sales 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 Services 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.

Rent Stabilization Fund - to account for revenue received from annual Rent Registry registrations as a result of Measure H which was approved by voters in the November 2022 General Municipal Election. The funds are restricted to implementing the provisions of the Pasadena Fair and Equitable Housing Charter Amendment (Article XVIII) which includes rent control and just cause eviction protections.

Donated Funds – to account for principal and interest on funds donated to the City for expressed and expendable purposes.

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
152 Annual Comprehensive Financial Report | June 30, 2025 Combining Balance Sheet
Nonmajor Governmental Funds
Special Revenue Funds
June 30, 2025
Sewer
Construction
Public Building and Underground
Safety Health Services Maintenance Utilities
Assets:

Cash and investments 9,056$ -$ 2
7,303$ 17,776$ 36,665$
Accounts receivable 682 4,801 238 1,419 1,392 Lease receivable - 1
78 - - -
Prepaids and other assets - 3 -
- -
Notes receivable - - -
- -
Allowance for uncollectible long-term
receivables - - - - -
Restricted assets:

Cash and investments - - - - -
Cash with fiscal agent - 1
07 - - -
Property held for resale - - -
- -
Total assets 9,738$ 5,089$ 27,541$ 19,195$ 38,057$ Liabilities, deferred inflows of resources
and fund balances:

Liabilities:

Accounts payable and accrued liabilities 38$ 776$ 817$ 76$ 69$ Deposits -
7 8
94 - -
Due to other funds - 6
,965 -
- -
Unearned revenue 3,127 1,504 7
37 24 -
Total liabilities 3,165 9,252 2,448 100 69 Deferred Inflows of Resources:

Unavailable revenues 213 1,400 - 38 -

Lease related - 1
67 - - -
Total deferred inflows of resources 213 1,567 - 38 -

Fund Balances:

Nonspendable - 3 -
- -
Restricted 6,360 - -
- -
Committed - - 25,093 19,057 37,988
Unassigned - (5,733) - - -
Total fund balances (deficit) 6,360 (5,730) 25,093 19,057 37,988 Total liabilities, deferred inflows of resources
and fund balances 9,738$ 5,089$ 27,541$ 19,195$ 38,057$

CITY OF PASADENA SUPPLEMENTARY INFORMATION NONMAJOR GOVERNMENTAL FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 153

Housing and
Library Air Quality Community Rent Donated
Transportation Services Parkin g Improvement Development Stabilization Funds Total 36,243$ 14,151$ 4,832$ 416$ 10,104$ -$ 5,534$ 162,080$ 4,834 146 160 51 4,404 802 35 18,964 - - - - - - - 178 114 - - - 143 - - 260 - - - - 72,613 - - 72,613 - - - - (72,613) - - (72,613) - - - - 3,776 - - 3,776 - - - - - - - 107 - - - - 1,434 - - 1,434 41,191$ 14,297$ 4,992$ 467$ 19,861$ 802$ 5,569$ 186,799$ 3,928$ 303$ 139$ 4$ 2,104$ 92$ 77$ 8,423$ - 1 - - 6 - 619 1,527 - - - - - 1,680 - 8,645 - - - - 3,131 - - 8,523 3,928 304 139 4 5,241 1,772 696 27,118 364 - - 49 2,153 163 - 4,380 - - - - - - - 167 364 - - 49 2,153 163 - 4,547 114 - - - 143 - - 260 36,785 - - 414 12,324 - 4,873 60,756 - 13,993 4,853 - - - - 100,984 - - - - - (1,133) - (6,866) 36,899 13,993 4,853 414 12,467 (1,133) 4,873 155,134 41,191$ 14,297$ 4,992$ 467$ 19,861$ 802$ 5,569$ 186,799$

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
154 Annual Comprehensive Financial Report | June 30, 2025 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Special Revenue Funds
For the Fiscal Year Ended June 30, 2025
Sewer
Construction
Public Building and Underground
Safety Health Services Maintenance Utilities
Revenues:

Taxes -$ 1
,076$ -$ -$ 7 ,457$
Licenses and permits - 2
,185 1
1,476 - -

Intergovernmental 3,799 15,118 121 1,558 - Charges for services - 4
82 2
,611 12,342 -
Investment earnings 142 5 811 511 1,309 Net change in fair value of investments 90 - 5
56 3
44 905
Lease revenues - 2
58 - - -
Interest income from leases - 2 -
- -
Miscellaneous revenues - 2
38 7 1 - -
Contributions - - -
- -
Total revenues 4,031 19,364 15,646 14,755 9,671 Expenditures:

Current:

Public safety 1,697 - - - - Transportation - - - - - Utility - - - - 30
Sanitation - - - 5,993 - Health - 1
9,907 -
- -
Culture and leisure - - -
- -
Community development - - 1
2,629 - -
Capital outlay 1,050 12 90 - - Debt service:

Principal retirement - - - - - Interest - - - - -
Lease payments - 2
7 2 - -
Subscription payments 218 24 3 2 -
Interest on leases and subscriptions 2 2 - - - Total expenditures 2,967 19,972 12,724 5,9 95 30 Excess (deficiency) of revenues over (under)
expenditures 1,064 (608) 2
,922 8
,760 9,641
Other Financing Sources (Uses):

Transfers in 60 1,267 - - - Transfers out (214) - (
489) (4,222) (12,183)
Leases issued - 1
2 11 - -
Subscriptions issued 641 - -
- -
Total other financing sources (uses) 487 1,279 (478) (4,222) (12,183) Net change in fund balances 1,551 671 2,444 4,538 ( 2,542) Fund balances (deficit), beginning of year,
as previously reported 4,809 (6,766) 22,649 14,519 40,530 Restatement for correction of an error -
3 65 -
- -
Fund balances (deficit), beginning of year, as restated 4,809 (6,401) 22,649 14,519 40,530 Fund balances (deficit), ending 6,360$ (5,730)$ 25,093$ 19,057$ 37,988$

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 155

Housing and
Library Air Quality Community Rent Donated
Transportation Services Parking Improvement Development Stabilization Funds Total -$ 3,264$ 9$ -$ -$ -$ -$ 11,806$ - 2 3,304 - 107 - - 17,074 24,408 33 - 183 37,967 - - 83,187 1,077 10 124 - - 4,869 - 21,515 1,244 424 142 12 193 (59) 149 4,883 854 299 99 - 68 (40) 103 3,278 - - - - - - - 258 - - - - - - - 2 1,226 - 7 - 5,281 - - 6,823 - 92 - - - - 1,261 1,353 28,809 4,124 3,685 195 43,616 4,770 1,513 150,179 -
- - - - - - 1,697 18,355 - 3,247 52 - - - 21,654 - - - - - - - 30 - - - - - - - 5,993 - - - - - - - 19,907 - 16,115 - - - - 397 16,512 - - - - 41,716 3,799 - 58,144 - - - 68 1,030 985 - 3,235 - - - - 300 - - 300 - - 6 - 108 - - 114 54 147 9 - 21 - - 260 26 90 - - 76 104 - 543 3 6 - - 7 19 - 39 18,438 16,358 3,262 120 43,258 4,907 397 128,428 10,371 (12,234) 423 75 358 (137) 1,116 21,751 379 12,623 - - 1,434 - - 15,763 (10,072) (280) (7) (40) (843) - - (28,350) - - - - - 693 - 716 - - - - - 245 - 886 (9,693) 12,343 (7) (40) 591 938 - (10,985) 678 109 416 35 949 801 1,116 10,766 36,221 13,884 4,437 379 11,883 (1,934) 3,757 144,368 - - - - (365) - - - 36,221 13,884 4,437 379 11,518 (1,934) 3,757 144,368 36,899$ 13,993$ 4,853$ 414$ 12,467$ (1,133)$ 4,873$ 155,134$

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
156 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Public Safety Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Intergovernmental 2,88 4$ 4,171$ 3,799$ (372)$ Investment earnings 91 91 142 51
Net change in fair value of investments - - 90 90 To
tal revenues 2,975 4,262 4,031 (231)
Expenditures:

Current:

Public safety 3,359 4,348 1,697 2,651
Capital outlay 145 872 1,050 (178)
Debt service:

Subscription payments - - 218 (218)
Interest on leases and subscriptions - - 2 (2)
Total expenditures 3,504 5,220 2,967 2,253
Excess (deficiency) of revenues
over (under) expenditures (529) (
958) 1
,064 2,022
Other Financing Sources (Uses):

Transfers in - - 60 60
T
ransfers out - - (214) (214)
Subscriptions issued - - 641 641
Total other financing sources (uses) - - 487 487 Net change in fund balances (529)
(958)
1,551 2,509
Fund balance, beginning of year 4,809 4,809
4,809 -
Fund balance, ending 4,280$ 3,851$ 6,360$ 2,509$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 157 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Health Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Taxes 1,050$ 1,050$ 1,076$ 26$ Licenses and permits 2,536 2,536 2,185 (351) Intergovernmental 15,196 15,482 15,118 (364) Charges for services 623 623 482 (141) Investment earnin gs- - 5 5 Lease revenues - - 258 258 Interest income from leases - - 2 2 Miscellaneous revenues 389 389 238 (151) Total revenues 19,794 20,080 19,364 (716) Expenditures:

Current:

Health 21,199 21,485 19,907 1,578 Capital outlay - - 12 (12) Debt service:

Lease payments - - 27 (27) Subscription payments - - 24 (24) Interest on leases and subscri ptions - - 2 (2) Total expenditures 21,199 21,485 19,972 1,513 Excess (deficiency) of revenues
over (under) expenditures (1,405) (1,405) (608) 797 Other Financing Sources (Uses):

Transfers in 1,267 1,267 1,267 - Leases issued - - 12 12 Total other financing sources 1,267 1,267 1,279 12 Net change in fund balances (138) (138) 671 809 Fund balances (deficit), beginning,
as previously reported (6,766) (6,766) (6,766) - Restatement for correction of an error - - 365 365 Fund balances (deficit), beginning, as restated (6,766) (6,766) (6,401) 365 Fund balance (deficit), ending (6,904)$ (6,904)$ (5,730)$ 1,174$ Budget

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
158 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Building Services Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Licenses and permits 9,526 $ 9,526$ 11,476$ 1,950$ Intergovernmental 807 807 121 (686)
Charges for services 2,000 2,000 2,611 611
Investment earnings 541 541 811 270
Net change in fair value of investments - - 556 556 Miscellaneous revenues 54 54 71 17
Total revenues 12,928 12,928 15,646 2,718
Expenditures:

Current:

Community development 13,979 13,892 12,629 1,263 Capital outlay - 86 90 (4)
Debt service:

Lease payments - - 2 (2)
Subscription payments - - 3 (3)
Total expenditures 13,979 13,978 12,724 1,254 Excess (deficiency) of revenues
over (under) expenditures (1,051) (1,050) 2,922 3,972 Other Financing Sources (Uses):

Transfers out - - (489) (489)
Subscriptions issued - - 11 11
Total other financing sources (uses) - - (478) (478) Net change in fund balances (1,051) (1,050) 2,444 3,494 Fund balance, beginning of year 22,649 22,6 49 22,649 - Fund balance, ending 21,598$ 21,599$ 25,093$ 3,494$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 159 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Sewer Construction and Maintenance Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Intergovernmental -$ 1,500$ 1,558$ 58$ Charges for services 12,396 12,396 12,342 (54) Investment earnings 305 305 511 206 Net change in fair value of investments - - 344 344 Total revenues 14,201 14,201 14,755 554 Expenditures:

Current:

Sanitation 6,354 6,354 5,993 361 Debt service:

Subscription payments - - 2 (2) Total expenditures 6,354 6,354 5,995 359 Excess (deficiency) of revenues
over (under) expenditures 7,847 7,847 8,760 913 Other Financing Sources (Uses):

Transfers out - (4,510) (4,222) 288 Total other financing sources (uses) - (4,510) (4,222) 288 Net change in fund balances 7,847 3,337 4,538 1,201 Fund balance, beginning of year 14,519 14,519 14,519 - Fund balance, ending 22,366$ 17,856$ 19,057$ 1,201$ Budget

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
160 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Underground Utilities Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Taxes 5,800$ 5,800$ 7,457$ 1,657$ Investment earnings 1,009 1,009 1,309 300 Net change in fair value of investments - - 905 905 Total revenues 6,809 6,809 9,671 2,862 Expenditures:

Current:

Utility 30 30 30 - Total expenditures 30 30 30 - Excess (deficiency) of revenues
over (under) expenditures 6,779 6,779 9,641 2,862 Other Financing Sources (Uses):

Transfers out (7,048) (7,248) (12,183) (4,935) Total other financing sources (uses) (7,048) (7,248) (12,183) (4,935) Net change in fund balances (269) (469) (2,542) (2,073) Fund balance, beginning of year 40,530 40,530 40,530 - Fund balance, ending 40,261$ 40,061$ 37,988$ (2,073)$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 161 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Transportation Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Intergovernmental 22,850 $ 24,10 4$ 24,408$ 304$ Charges for services 1,044 1,044 1,077 33 Investment earnings 982 982 1,244 262 Net change in fair value of investments - - 854 854 Miscellaneous revenues 974 974 1,226 252 Total revenues 25,850 27,104 28,809 1,705 Expenditures:

Current:

Transportation 19,407 20,273 18,355 1,918 Debt service:

Lease payments - - 54 (54) Subscription payments - - 26 (26) Interest on leases and subscriptions - - 3 (3) Total expenditures 19,407 20,273 18,438 1,835 Excess (deficiency) of revenues
over (under) expenditures 6,443 6,831 10,371 3,540 Other Financing Sources (Uses):

Transfers in 379 379 379 - Transfers out (97) (6,652) (10,072) (3,420) Total other financing sources (uses) 282 (6,273) (9,693) (3,420) Net change in fund balances 6,725 55 8 678 120 Fund balance, beginning of year 36,221 36,221 36,221 - Fund balance, ending 42,946$ 36,779$ 36,899$ 120$ Budget

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
162 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Library Services Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Taxes 3,170$ 3,170$ 3,264$ 94$ Licenses and permits 2 2 2 - Intergovernmental - 33 33 - Charges for services 7 7 10 3 Investment earnings 338 338 424 86 Net change in fair value of investments - - 299 299 Contributions 36 44 92 48 Total revenues 3,553 3,594 4,124 530 Expenditures:

Current:

Culture and leisure 16,784 16,725 16,115 610 Debt service:

Lease payments - - 147 (147) Subscription payments - - 90 (90) Interest on leases and subscriptions - - 6 (6) Total expenditures 16,784 16,725 16,358 367 Excess (deficiency) of revenues
over (under) expenditures (13,231) (13,131) (12,234) 897 Other Financing Sources (Uses):

Transfers in 12,623 12,623 12,623 - Transfers out - - (280) (280) Total other financing sources (uses) 12,623 12,623 12,343 (280) Net change in fund balances (608) (508) 109 617 Fund balance, beginning of year 13,884 13,884 13,884 - Fund balance, ending 13,276$ 13,376$ 13,993$ 617$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 163 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Parking Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Taxes 10$ 10$ 9$ (1)$ Licenses and permits 4,129 4,129 3,304 (825) Charges for services 120 120 124 4 Investment earnings 105 105 142 37 Net change in fair value of investments - - 99 99 Miscellaneous revenues - - 7 7 Total revenues 4,364 4,364 3,685 (679) Expenditures:

Current:

Transportation 6,369 6,389 3,247 3,142 Debt service:

Interest - - 6 (6) Lease payments - - 9 (9) Total expenditures 6,369 6,389 3,262 3,127 Excess (deficiency) of revenues
over (under) expenditures (2,005) (2,025) 423 2,448 Other Financing Sources (Uses):

Transfers out (7) (37) (7) 30 Total other financing sources (uses) (7) (37) (7) 30 Net change in fund balances (2,012) (2,062) 416 2,478 Fund balance, beginning of year 4,437 4,437 4,437 - Fund balance, ending 2,425$ 2,375 $ 4,853 $ 2,478 $ Budget

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
164 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Air Quality Improvement Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Intergovernmental 170 $ 170$ 183$ 13$
Investment earnings 6 6 1 2 6
T
otal revenues 176 176 195 19
Expenditures:

Current:

Transportation 172 172 52 120
Capital outlay 208 208 68 140
Total expenditures 380 380 120 260
Excess (deficiency) of revenues over (under)
expenditures (204) (204) 7
5 279
Other Financing Sources (Uses):

Transfers out (40) (40) (40) -
T
otal other financing sources (uses) (40) (40) (40) -
N
et change in fund balances (244) (244) 3
5 279
Fund balance, beginning of year 379 379 379 -
Fund balance, ending 135$ 135$ 414$ 279$
Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 165

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Housing and Community Development Fund
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Licenses and permits 91$ 91$ 107$ 16$ Intergovernmental 33,127 39,796 37,967 (1,829) Charges for services 1 1 - (1) Investment earnings 78 78 193 115 Net change in fair value of investments - - 68 68 Miscellaneous revenues 5,511 5,511 5,281 (230) Total revenues 38,808 45,477 43,616 (1,861) Expenditures:

Current:

Community development 42,775 54,402 41,716 12,686 Capital outlay - - 1,030 (1,030) Debt service:

Principal retirement 300 300 300 - Interest 140 140 108 32 Lease payments - - 21 (21) Subscription payments - - 76 (76) Interest on leases and subscriptions - - 7 (7) Total expenditures 43,215 54,842 43,258 11,584 Excess (deficiency) of revenues
over (under) expenditures (4,407) (9,365) 358 9,723 Other Financing Sources (Uses):

Transfers in 3,000 3,000 1,434 (1,566) Transfers out - - (843) (843) Total other financing sources (uses) 3,000 3,000 591 (2,409) Net change in fund balances (1,407) (6,365) 949 7,314 Fund balance, beginning of year,
as previously reported 11,883 11,883 11,883 - Restatement for correction of an error - - (365) (365) Fund balance, beginning of year, as restated 11,883 11,883 11,518 (365) Fund balance, ending 10,476$ 5,518$ 12,467$ 6,949$ Budget

SPECIAL REVENUE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
166 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Rent Stabilization Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Charges for services -$ -$ 4,869$ 4,869$
Investment earnings (loss) - -
(59) (59)
Net change in fair value of investments - -
(40) (40)
Total revenues - - 4,770 4,770
Expenditures:

Current:

Community development 4,815 4,875 3,799 1,076 Capital outlay 90 9 0 985 (895)
Debt service:

Subscription payments - - 104 (104)
Interest on leases and subscri ptions - - 19 (19) Total expenditures 4,905 4,965 4,907 58
Excess (deficiency) of revenues
over (under) expenditures (4,905) (4,965) (137)
4,828
Ot
her Financing Sources (Uses):

Leases issued - - 693 693
Subscriptions issued - - 245 245
Total other financing sources (uses) - - 938 938 N
et change in fund balances (4,905) (4,965) 801 5,766 Fund balance, beginning of year (1,934) (1,934) (1,934) - Fund balance, ending (6,839)$ (6,899)$ (1,133)$ 5,766$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 167 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Donated Funds
For the Fiscal Year Ended June 30, 2025

Variance with
Final Budget
Positive
Adopted Final Actual (Negative)
Revenues:

Investment earnin gs1 02$ 102$ 149$ 47$ Net change in fair value of investments - - 103 103 Contributions 750 750 1,261 511 Total revenues 852 852 1,513 661 Expenditures:

Current:

Culture and leisure 436 436 397 39 Total expenditures 436 436 397 39 Excess (deficiency) of revenues
over (under) expenditures 416 416 1,116 700 Net change in fund balances 416 416 1,116 700 Fund balance, beginning of year 3,757 3,757 3,757 - Fund balance, ending 4,173$ 4,173$ 4,873$ 700$ Budget

(This page intentionally left blank)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

CAPITAL PROJECT
FUNDS

CAPITAL PROJECTS FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
170 Annual Comprehensive Financial Report | June 30, 2025 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Project Management Fund
For the Fiscal Year Ended June 30, 2025
Variance with
Final Budget
Positive
Adopted Final Actual (Ne gative)
Revenues:

Licenses and permits -$ -$ 488$ 488$
Intergovernmental - 26,683 12,994 (13,689)
Charges for services - (150) 76 226
Miscellaneous revenues - - 28 2 8
Contributions - 765 476 (289)
Total revenues - 27,298 1 4,062 (13,236)
Expenditures:

Current:

Transportation 8,311 8,311 1,808 6 ,503
Capital outlay 910 53,607 46,424 7,183
Debt service:

Lease payments - - 1 (1)
Subscription payments - - 72 (72)
Interest on leases and subscriptions - - 4 (4)
Total expenditures 9,221 61,918 4 8,309 13,609
Excess (deficiency) of revenues
over (under) expenditures (9,221) (34,620) (34,247) 373 Other Financing Sources (Uses):

Transfers in - 25,248 2 9,845 4,597
Transfers out - - (1,730) (1,730)
Total other financing sources - 25,248 2 8,115 2,867 Net change in fund balances (9,221) (9,372) (6,132) 3,240 Fund balance, beginning of year (1,392) (1,392) (1,392) - Fund balance (deficit), ending (10,613)$ (10,764)$ (7,524)$ 3,240$ Budget

CITY OF PASADENA FINANCIAL SECTION SPECIAL REVENUE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 171

NONMAJOR GOVERNMENTAL FUNDS

CAPITAL PROJECTS FUNDS

Capital projects funds are used to account for the acquisition or construction of major capital facilities by the City, other than those financed by proprietary funds.

Charter Capital Projects Fund – to account for certain resources identified by the City Council for the acquisition, construction, replacement or repair of municipal improvements where disbursements other than specific municipal improvement projects can be authorized only by a vote of the people.

New Development Impact Fund – to account for fees received from developers of commercial and industrial facilities to be used to fund capital projects, which are made necessary in whole or in part by new development.

Residential Development Impact Fund – to account for fees received from developers of residential facilities to be used to develop park or recreational facilities.

10% Green Fee Capital Projects Fund – to account for capital improvements related to the development of the Arroyo Seco.

Funding comes from 10% of the gross receipts generated from green fees at the Brookside Golf Course, which are submitted to the capital project fund.

Capital Public Art Fund – to account for fees collected to be used for public art projects.

Traffic Reduction and Transportation Improvement Fee Fund – to account for fees assessed on new fee for new industrial, office, retail, and residential development, to ensure that the transportation improvements identified in the Mobility Element necessary to address the impact of new development on the Ci ty’s transportation system are equitably shared by all new development.

CAPITAL PROJECTS FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
172 Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)

CITY OF PASADENA FINANCIAL SECTION CAPITAL PROJECTS FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)
Annual Comprehensive Financial Report | June 30, 2025 173 Combining Balance Sheet
Nonmajor Governmental Funds
Capital Projects Funds
June 30, 2025
10% Traffic
Charter New Residential Green Fee Capital Reduction
Capital Develo pment Develo pment Ca pital Public Trans portation Projects Im pact Im pact Pro jects Art Im provement Total Assets:

Cash and investments 1,416$ 273 $ 3,438 $ 80 $ 956 $ 2,584 $ 8,747 $ Accounts receivable 1 4 104 1 9 22 141 Total assets 1,417$ 277 $ 3,542 $ 81 $ 965 $ 2,606 $ 8,888 $ Liabilities and fund balances:

Accounts payable and
accrued liabilities -$ - $ 15 $ - $ 20 $ - $ 35 $ Total liabilities - - 15 - 20 - 35 Fund Balances:

Restricted 1,417 - - - - - 1,417 Committed - 277 3,527 81 945 2,606 7,436 Total fund balances 1,417 277 3,527 81 945 2,606 8,853 Total liabilities and fund balances 1,417$ 277 $ 3,542 $ 81 $ 965 $ 2,606 $ 8,888 $

Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Capital Projects Funds
For the Fiscal Year Ended June 30, 2025

10% Traffic
Charter New Residential Green Fee Capital Reduction
Capital Develo pment Develo pment Ca pital Public Trans portation Projects Im pact Im pact Pro jects Art Im provement Total Revenues:

Charges for services -$ - $ - $ - $ - $ 1,084 $ 1,084 $ Investment earnin gs5 9 8 114 2 29 52 264 Net change in fair value of investments 31 6 80 2 20 37 176 Miscellaneous revenues - - - - 2 - 2 Contributions - - 793 - - - 793 Total revenues 90 14 987 4 51 1,173 2,319 Expenditures:

Current:

Community development - - - - 36 - 36 Total expenditures - - - - 36 - 36 Excess (deficiency) of revenues over (under)
expenditures 90 14 987 4 15 1,173 2,283 Other Financin
g Sources (Uses):

Transfers out (621) (14) (1,002) - - (234) (1,871) Total other financing sources (uses) (621) (14) (1,002) - - (234) (1,871) Net change in fund balances (531) - (15) 4 15 939 412 Fund balances, beginning of year 1,948 277 3,542 77 930 1,667 8,441 Fund balances, ending 1,417$ 277 $ 3,527 $ 81 $ 945 $ 2,606 $ 8,853 $

CAPITAL PROJECTS FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
174 Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

PERMANENT
FUNDS
(This page intentionally left blank)

CITY OF PASADENA FINANCIAL SECTION PERMANENT FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 177

NONMAJOR GOVERNMENTAL FUNDS

PERMANENT FUNDS

Permanent funds are used to account for resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the City’s programs.

Vroman Art Bequest Fund – for purchase of books on art and works of art for the Pasadena Public Library.

Singer Trust Fund – for maintenance of Singer Park.

Noble Award Fund – for purchase of medals to award persons rendering notable service in promoting the beauty or general welfare of Pasadena.

Pasadena Center Capital Improvement Trust Fund – for capital improvements.

Cox Trust Fund – for purchase of literary classics.

Jankos Trust Fund – for purchase of books and materials for the purpose of self-improvement, career development, and agriculture.

Hudson Family Trust Fund – for the purchase of any type of library material for the Lamanda Park Branch of the Pasadena Public Library.

M. A. Berger Trust Fund – for support and maintenance of the Pasadena Public Library’s business and economic collections.

PERMANENT FUNDS FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
178 Annual Comprehensive Financial Report | June 30, 2025 Combining Balance Sheet
Nonmajor Governmental Funds
Permanent Funds
June 30, 2025
Pasadena
Center Capital
Vroman Art Sin ger Noble Im provement
Bequest Trust Award Trust
Assets:

Cash and investments 7$ 5
1$ 7$ 5
04$
Accounts receivable - 1 - 5
T
otal assets 7$ 5
2$ 7$ 5
09$
Fund Balances:

Nonspendable 5$ 2
4$ 1$ 4
00$
Restricted 2 28 6 -
Commi
tted - - - 1
09 T
otal fund balances 7$ 5
2$ 7$ 5
09$
Combining
Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Permanent Funds
For the Fiscal Year Ended June 30, 2025
Pasadena
Center Capital
Vroman Art Singe r Noble Improvement
Bequest Trust Award Trust
Revenues:

Investment earnings 1$ 2$ 1$ 1
5$
Ne
t change in fair value of investments - 1 - 1 1
T
otal revenues 1 3 1 26
N
et change in fund balances 1 3 1 26
Fund
balances, beginning 6 49 6 4
83 F
und balances, ending 7$ 5
2$ 7$ 5
09$

CITY OF PASADENA FINANCIAL SECTION PERMANENT FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 179

Hudson M. A.

Cox Jankos Famil y Berger
Trust Trust Trust Trust Total
5$ 31$ 123$ 1,520$ 2,248$ - - 1 14 21 5$ 31$ 124$ 1,534$ 2,269$ 4$ 25$ 100$ 875$ 1,434$ 1 6 24 659 726 - - - - 109 5$ 31$ 124$ 1,534$ 2,269$

Hudson M. A.

Cox Jankos Family Berge r
Trust Trust Trust Trust Total
-$ 1$ 4$ 46$ 70$ - - 3 31 46 - 1 7 77 116 - 1 7 77 116 5 30 117 1,457 2,153 5$ 31$ 124$ 1,534$ 2,269$

PERMANENT FUNDS FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
180 Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

NONMAJOR

ENTERPRISE FUNDS

PERMANENT FUNDS FINANCIAL SECTION CITY OF PASADENA
(AMOUNTS EXPRESSED IN THOUSANDS)
182 Annual Comprehensive Financial Report | June 30, 2025 (This page intentionally left blank)

CITY OF PASADENA FINANCIAL SECTION NONMAJOR ENTERPRISE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 183

NONMAJOR ENTERPRISE FUNDS

Enterprise funds are used to account for City operations that are financed and operated in a manner similar to private business enterprises, where the costs of providing these services to the general public on a continuing basis are financed or recovered primarily through user charges.

Refuse Collection Fund – to account for the operations of the City's refuse collection program, a self-supporting activity, which renders services on a user charge basis to residents and businesses.

Telecommunications Fund – to account for revenues received for the use of the fiber optic system excess capacity by private sector firms and used to repay the loan, which funded its construction, as well as fees for setting up wireless facilities on City- owned property.

NONMAJOR ENTERRPRISE FUNDS FINANCIAL SECTION CITY OF PASADENA (AMOUNTS EXPRESSED IN THOUSANDS)
184 Annual Comprehensive Financial Report | June 30, 2025 Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2025
Refuse Tele-
Collection communications Total
Assets:

Current assets:

Cash and investments 18,366$ 2,629$ 20,995$
Accounts receivable, net 3,785 42 3,827
Due from component units 46 9 55
Lease receivable - 5
6 56
Total current assets 22,197 2,736 24,933
Noncurrent assets:

Lease receivable - noncurrent - 2
30 2
30 C
apital assets 17,177 2,859
20,036
Less: accumulated depreciation/amortization (9,517) (1,501) (11,018) Capital assets, net 7,660 1,358 9,018
Total noncurrent assets 7,660 1,588 9,248
Total assets 29,857 4,324 34,181
Deferred Outflows of Resources:

Pension related 2,201 - 2
,201
OP
EB related 213 - 2
13 T
otal deferred outflows of resources 2,414 - 2
,414
L
iabilities:

Current liabilities:

Accounts payable and accrued liabilities 4,961 - 4
,961
D
eposits 5,687 - 5
,687
Un
earned revenue 214 821 1,035
Compensated absences 21 - 2
1 L
ease liability 2 - 2

Subscription liability 18 - 1
8 T
otal current liabilities 10,903 821 11,724
Noncurrent liabilities:

Net pension liability 8,101 - 8
,101
N
et OPEB liability 2,195 - 2
,195
L
ease liability 4 - 4

Subscription liability 20 - 2
0 T
otal noncurrent liabilities 10,320 - 1 0,320
T
otal liabilities 21,223 821 22,044
D
eferred Inflows of Resources:

Lease related - 2
79 2
79 Pension related 38 - 3
8 OP
EB related 900 - 9
00 To
tal deferred inflows of resources 938 279 1,217
N
et Position:

Net investment in capital assets 7,615 1,060 8,675 Unrestricted 2,495 2,164 4,659
Total net position 10,110$ 3,224$ 13,334$

CITY OF PASADENA FINANCIAL SECTION NONMAJOR ENTERPRISE FUNDS (AMOUNTS EXPRESSED IN THOUSANDS)

Annual Comprehensive Financial Report | June 30, 2025 185

Combining Statement of Revenues, Expenditures and Changes in Net Position Nonmajor Enterprise Funds
For the Fiscal Year Ended June 30, 2025

Refuse Tele-
Collection communications Total
Operating Revenues:

Pasadena City CouncilFebruary 23, 2026

Pasadena City Council
February 23, 2026