2. Acceptance of the FY 2024-25 Audited Financial Statements — Piedmont City Council, January 20, 2026 (part 1 of 2)

City of Piedmont

COUNCIL AGENDA REPORT
DATE: January 20, 2026
TO: Mayor and Council
FROM: Rosanna Bayon Moore, City Administrator
SUBJECT: Consideration of Acceptance of the FY 2024-25 Audited Financial Statements

RECOMMENDATION
Review and accept the City’s independent auditor’s reports for FY 2024-25:
a) Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025
b) Measure BB Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025
c) Measure F Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025
d) Parking Citation Processing for the Year Ended June 30, 2025 e) Appropriations Limit Calculation as of June 30, 2026 f) Letter Communicating with Those Charged with Governance g) SLFRF Award Examination for the Year Ended June 30, 2025

BACKGROUND
The City’s independent auditor, Badawi & Associates, has completed the audit of the City’s financial statements and provided the auditor’s reports for the fiscal year ended June 30, 2025.

Badawi & Associates was selected through a formal procurement process, and this is the second year of a multi-year contract.

The Finance Department is responsible for the preparation and fair presentation of the financial statements in accordance with Generally Accepted Accounting Principles (GAAP) applicable to governmental entities. The Audit Committee, consisting of Mayor Betsy Smegal Andersen and Vice Mayor Conna McCarthy, met with audit partner Ahmed Badawi and City staff on January 12, 2026, to review the audited financial statements and discuss the auditor’s report on internal controls.

The Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025 includes the following sections: Independent Auditor’s Report; Management’s Discussion and Analysis; Basic Financial Statements by fund type; Notes to the Basic Financial Statements; and Required Supplemental Information.

DISCUSSION
The audit covers the City’s general purpose financial statements and the Measure B, Measure BB, and Measure F sales tax special revenue funds. The audits disclosed no exceptions to conformance with generally accepted accounting principles or to the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Badawi & Associates issued an unmodified (clean) audit opinion, concluding that the City’s financial statements present fairly, in all material respects, the City’s financial position as of June 30, 2025, and the changes in financial position and cash flows for the fiscal year then ended. No instances of noncompliance, material weaknesses, or significant deficiencies were identified.

For an overview of the City’s financial condition and results of operations, refer to the Management’s Discussion and Analysis (MD&A), beginning on page 4 of the Annual Financial Report.

FISCAL IMPACT
There is no direct fiscal impact associated with acceptance of the FY2024-25 Audited Financial Statements. The cost of the annual audit was included in the adopted FY2024-25 budget under the Finance Department’s operating line expense items.

By: Kiran Bawa, Finance Director

ATTACHMENTS
A. Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025, and Auditor’s Letter on Compliance and Internal Control B. Measure BB Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025
C. Measure F Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2025
D. Parking Citation Processing for the Year Ended June 30, 2025 E. Appropriations Limit Calculation as of June 30, 2026 F. Letter Communicating with Those Charged with Governance G. SLFRF Award Examination for the Year Ended June 30, 2025 Agenda Report Page 2
City of Piedmont
Financial Statements
and
Independent Auditor's Report
For the Year Ended
June 30, 2025
ATTACHMENT A Agenda Report Page 3
ATTACHMENT A Agenda Report Page 4
City of Piedmont
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents
Page

FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................. 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ..................................................................................................................................... 21 Statement of Activities .......................................................................................................................................... 22 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ...................................................................................................................................................... 27 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ................................................................................. 28 Statement of Revenues, Expenditures and
Changes in Fund Balances ............................................................................................................................. 29 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................................................................................................................... 30

Proprietary Fund Financial Statements:

Statement of Net Position ................................................................................................................................. 32 Statement of Revenues, Expenses and Changes in Net Position ................................................................ 33 Statement of Cash Flows ................................................................................................................................... 34 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position................................................................................................................ 37 Statement of Changes in Fiduciary Net Position ........................................................................................... 38 Notes to the Basic Financial Statements ................................................................................................................ 41 Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund .................................................................................................................... 91 Notes to Required Supplementary Information – Budgetary Accounting and Control ................................ 92

ATTACHMENT A Agenda Report Page 5
City of Piedmont
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Continued):

Defined Benefit Pension Plans:

Schedule of the City’s Proportionate Share of the Net Pension Liability Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan ........................................ 94 Schedule of Pension Plan Contributions
Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan ......................................... 96 Schedule of Funding Progress for Police and Fire Pension (Closed) Plan ................................................. 98 Other Post-Employment Benefit Plan:

Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................................ 102 Schedule of OPEB Contributions ................................................................................................................... 104 Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Facilities Capital – Major Capital Projects Fund .................................................. 109 Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................................... 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................... 114 Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:

Streets Projects ............................................................................................................................................... 116 Schoolmates Program ................................................................................................................................... 117 Measure D ...................................................................................................................................................... 118 Measure BB Sales Tax ................................................................................................................................... 119 COPS ............................................................................................................................................................... 120 Measure F ....................................................................................................................................................... 121 Athletic Facility Preservation ...................................................................................................................... 122 Equipment Replacement .............................................................................................................................. 123 Facilities Maintenance .................................................................................................................................. 124

Internal Service Funds:

Combining Statements of Net Position ......................................................................................................... 127 Combining Statements of Revenues, Expenses, and Changes in Net Position ....................................... 128 Combining Statements of Cash Flows .......................................................................................................... 129 General Fund:

Combining Balance Sheet ............................................................................................................................... 133 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ............................... 134 Report on internal control over financial reporting and on compliance and Other matters based on an audit of financial statements performed in Accordance with government auditing standards ................................................................................... 135 Schedule of Findings ............................................................................................................................................ 137 ATTACHMENT A Agenda Report Page 6
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Piedmont (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, 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 thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s 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.

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

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

ATTACHMENT A Agenda Report Page 7
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 2 ends

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison schedules for the General Fund and required pension and other post-employment benefit information on pages 5-16 and 91-105, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the 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 2 ATTACHMENT A Agenda Report Page 8
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 3 ends

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.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements and schedules and budget comparison information for capital project funds and non-major governmental funds are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual fund financial statements and schedules and budget comparison information for capital project funds and non-major governmental funds are 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. Such 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 combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2026 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
January 15, 2026
3 ATTACHMENT A Agenda Report Page 9
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4 ATTACHMENT A Agenda Report Page 10

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
The Management’s Discussion and Analysis (MD&A) provides an overview of the City of Piedmont’s activities and financial performance for the fiscal year ending June 30, 2025. The narrative overview and analysis should be read with the accompanying Basic Financial Statements to get an overall picture of the City’s financial health.

FINANCIAL HIGHLIGHTS
Government-wide
 Net position is defined as the excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources. As of June 30, 2025, the City's government-wide net position amounted to a positive balance of $76,680,969. This represents an increase of $5,212,825 from the June 30, 2024 balance of $71,468,144.
 Governmental activities represent $53,984,572, accounting for 70% of the total net position.
 Business-type activities represent $22,696,397, accounting for 30% of the total net position.  Deferred Outflows of Resources represent a consumption of net position or fund balance that applies to a future period. Of the $13,311,157 in deferred outflows, $5,259,411 reflects contribution payments made to CalPERS during fiscal year 2024-25, as well as changes in the net pension liability totaling $7,398,532. As allowed by GASB No. 68, the CalPERS measurement date is June 30, 2024, and contributions made after that date are reported as deferred outflows.

The remaining $653,214 relates to changes in the Net OPEB liability.  Deferred Inflows of Resources represent an acquisition of net position or fund balance that applies to a future period and amounts to $3,798,826. These include deferrals associated with changes in the net pension and net OPEB liabilities, along with deferrals related to leases. Notes 8, 9, and 10 discuss the impacts of these deferrals on net position.  Net position increased by $5,212,825, primarily due to the following factors:
 Net investment in capital assets increased by $4,819,555 to $55,125,699 primarily due to:
 Governmental activities increased by $1,804,175, driven by Street paving and capital improvements of sidewalks, buildings, and parks, partially offset by depreciation.
 Business-type activities increased by $3,015,080 primarily due to the aquatics center construction in progress and sewer replacements, partially offset by depreciation.
 Restricted net position increased by $2,554,151 to $26,518,719, primarily due to:
 Community development restricted net position increased by $553,615 due mostly to project payments received for Facilities Maintenance Fund  Recreation restricted net position increased by $770,198 due primarily to higher program participation and increased fee revenues across recreation classes and 5 ATTACHMENT A Agenda Report Page 11

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
camps.
 Public Safety restricted net position (police & fire) increased by $1,243,792, reflecting growth in the Police & Fire Pension Fund investments during the fiscal year.
 As of June 30, 2025, capital assets, net of depreciation, total $84,385,905, as reported in the Statement of Net Position.

Fund level
 Governmental fund balances increased by $117,144 to $34,214,793. Of this amount, the unassigned fund balance was $7,233,084, representing a decrease of $1,247,495 from the prior year.
 Enterprise fund net position increased by $4,558,782 to $22,696,397. Of this total, net investment in capital assets was $18,517,560, an increase of $3,015,080 from the prior year.

Fiduciary funds
 Trust funds net position increased by $2,349,576 to $35,121,618. The trust funds consist of the Police and Fire Pension Plan and OPEB, with balances of for $19,881,303 and $15,350,315, respectively.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components:
1) government-wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.

This report also includes required supplementary information and other supplementary information in addition to the basic financial statements.

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 format similar to that used by private-sector businesses.

The Statement of Net Position presents information on all the City’s assets and deferred outflows of resources; and liabilities and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of the City financial position.
6 ATTACHMENT A Agenda Report Page 12

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
The Statement of Activities presents information showing how the City’s net position changed during the fiscal year. All changes in net position are reported when the underlying event occurs, regardless of the timing of related cash flows. As a result, this statement includes revenues and expenses associated with items that will not result in cash flows until future periods (e.g., uncollected taxes and earned but unused vacation leave).

Both government-wide statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from those intended to recover all or a significant portion of their costs through user fees and charges (business-type activities).

The City’s governmental activities include administration, public works, public safety, and recreation. The business-type activities of the City include sewer and aquatics.

The government-wide financial statements can be found on pages 21 - 23 of this report.

Fund Financial Statements
A fund is a grouping of related accounts 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 City’s funds fall 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, the governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as the balances of spendable resources available at year-end. This information is useful in evaluating the City’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is helpful to compare the two. The governmental fund Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances each include a reconciliation to facilitate comparison with the government-wide presentation and to help readers understand the long-term impact of the City’s near-term financial decisions.

The City maintains sixteen 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, which is considered a major fund. The Facilities Capital Fund is also reported as a major fund and presented separately. The remaining fourteen non-major governmental funds are combined and reported in aggregate on the governmental funds statements. Individual information on each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. 7 ATTACHMENT A Agenda Report Page 13

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
The City adopts an annual appropriated budget for the General Fund. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 27 - 30 of the report.

Proprietary funds
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. The City uses enterprise funds to account for its Sewer and Aquatic operations.

Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City maintains internal service funds to account for its insurance activities. In the government-wide statements, the Sewer and Aquatic Enterprise Funds are included within the business-type activities, while the Internal Service Funds are included within governmental activities.

Proprietary funds provide the same type of information as the government-wide financial statements, but with greater detail. The proprietary fund financial statements provide information on the City’s business-type activities (the Sewer and Aquatic Enterprise Funds). The City’s two internal service funds are combined into a single, aggregated presentation in the proprietary fund statements. Individual information on each of the internal service funds is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 32 - 35 of this report.

Fiduciary funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City.

Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Piedmont’s own programs. The accounting used for fiduciary funds is similar to that used for proprietary funds.

The basic fiduciary fund financial statements can be found on pages 37 - 38 of this report.

Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential for a full understanding of the data presented in the government-wide and fund financial statements. The notes can be found on pages 41 - 91 of this report.
8 ATTACHMENT A Agenda Report Page 14

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information (RSI). This includes budgetary comparison schedules for the General Fund, pension required schedules, and OPEB required schedules. The required supplementary information can be found on pages 91 - 105 of this report.

Other information
The combining statements for the non-major governmental funds and internal service funds, referenced earlier, are presented immediately following the required supplementary information.

These combining individual fund statements and schedules can be found on pages 112 - 134 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position may serve over time as a useful indicator of the City’s financial health. For the City of Piedmont, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $76,680,969 at the close of the most recent year.

GASB No. 68 has a material impact on the City’s financial statements, as it establishes standards for measuring and recognizing pension-related assets and liabilities, as well as expanding note disclosures regarding the pension systems. GASB No. 68 requires the City to include the assets of the Police & Fire Pension Trust and the liabilities of the City’s CalPERS pension plan in the financial statements. The effect of these requirements is reflected in the positive unrestricted net position presented below.

GASB No. 75 also has a material impact on the City's financial statements, as it establishes standards for measuring and recognizing OPEB-related assets and liabilities, along with expanded note disclosures. GASB No. 75 requires the City to include the liabilities of the City's OPEB plan in the financial statements. The impact of this standard is also reflected in the positive unrestricted net position presented below.

The largest portion of the City’s net position represents its investment in capital assets – including land, buildings, equipment and infrastructure – less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to its citizens; consequently, these resources are not available for future spending. Although reported net of related debt, it should be noted that the resources required to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 9 ATTACHMENT A Agenda Report Page 15

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
At the end of the fiscal year, the City reported a positive net position for both Governmental and Business-type Activities, as well as for the City as a whole. The overall change in net position is summarized in the Financial Highlight section above.

Governmental Activities: On a full accrual basis, governmental activities increased the City of Piedmont's net position by $654,043, primarily due to higher charges for services, and higher interest and investment earnings.

Business-type Activities. Business-type activities increased the City's net position by $4,558,782 largely due to the City’s continued investment in sewer and aquatics capital projects, including construction in progress and system improvements. These capital investments increased noncurrent assets and contributed to the overall growth in business-type net position.

Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
2025 2024
Net
Change 2025 2024
Net
Change 2025 2024
Net
Change
ASSETS
Current and other
assets $ 43,006 $ 43,094 $ (88) $ 7,999 $ 15,804 $ (7,805) $ 51,005 $ 58,898 $ (7,893) Noncurrent assets 56,470 53,919 2,551 47,010 36,768 10,242 103,480 90,687 12,793 Total Assets 99,476 97,013 2,463 55,009 52,572 2,437 154,485 149,585 8,658 Deferred Outflows
of Resources 12,762 17,764 (5,002) 549 706 (157) 13,311 18,470 (5,159)

LIABILITIES
Current and other
liabilities 8,402 8,212 190 2,509 3,772 (1,263) 10,911 11,984 (1,073) Long-term liabilities 46,262 47,443 (1,181) 30,144 31,051 (907) 76,406 78,494 (2,088) Total Liabilities 54,664 55,655 (991) 32,653 34,823 (2,170) 87,317 90,478 (3,161) Deferred Inflows
of Resources 3,589 5,791 (2,202) 209 319 (110) 3,798 6,110 (2,312)

NET POSITION
Net investment in
capital assets 36,608 34,804 1,804 18,517 15,503 3,014 55,125 50,307 4,818 Restricted 26,519 23,965 2,554 - - - 26,519 23,965 2,554 Unrestricted (9,142) (5,438) (3,704) 4,179 2,635 1,544 (4,963) (2,803) (2,160) Total Net Position $ 53,985 $ 53,331 $ 654 $ 22,696 $ 18,138 $ 4,558 $ 76,681 $ 71,469 $ 5,212 Governmental Activities Business‑Type Activities Total Government Statement of Net Position
As of June 30, 2025 and 2024
(in thousands)
10 ATTACHMENT A Agenda Report Page 16

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
Governmental funds.

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such perspective is helpful in assessing the City's short-term financing needs and fiscal capacity. In particular, the 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. 2025 2024
Net
Change 2025 2024
Net
Change
REVENUES:

Program revenues
Charges for services $ 9,053 $ 8,157 $ 896 $ 3,177 $ 3,097 $ 80 Operating grants and contributions 4,187 3,220 967 - - - General revenues
Taxes and fees 31,053 29,861 1,192 1,353 1,337 16
Investment earnings 1,892 2,036 (144) 464 956 (492)
Other revenue 329 609 (280) - 8 (8)
Transfers (1,564) (1,002) (562) 1,564 1,002 562
Total Revenues 44,950 42,881 2,069 6,558 6,400 158
EXPENSES:

Administration 5,648 4,641 1,007 - - -
Public works 8,063 7,383 680 - - -
Street improvement 632 829 (197) - - -
Safety: police 8,959 7,832 1,127 - - -
Safety: fire 9,573 8,676 897 - - -
Recreation 6,749 6,081 668 - - -
NonDepartmental 4,193 3,838 355 - - -
Interest - 18 (18) - - -
Sewer - - - 904 2,019 (1,115)
Aquatics - - - 927 770 157
Total Expenses 43,817 39,298 4,519 1,831 2,789 (958)
Change in net position 1,133 3,583 (2,450) 4,727 3,611 1,116 Net position ‑ beginning, as restated 52,851 49,748 3,103 17,969 14,527 3,442 Net position ‑ ending $ 53,984 $ 53,331 $ 653 $ 22,696 $ 18,138 $ 4,558 Governmental Activities Business‑Type Activities
Changes in Net Position
For the Years Ended June 30, 2025 and 2024
(in thousands)
11 ATTACHMENT A Agenda Report Page 17

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
As of the end of the fiscal year, the City's governmental funds reported combined ending fund balances of $34,214,793, an increase of $117,144 compared with the prior year. Of this total, $7,210,138 represents the unassigned fund balance, which is available for emergencies or unexpected shortfalls, and other unforeseen financial needs.

General Fund
The General Fund is the City’s chief operating fund. At the end of FY2024-25, the General Fund balance totaled $12,554,251, of which $7,233,084 was unassigned. This unassigned balance reflects a decrease of $1,247,495 from the prior year. The decrease occurred after the City transferred $2,600,000 from the General Fund to designated capital and maintenance reserves intended to rebuild long-term funding capacity. The transfers included $1,500,000 to the Facilities Capital Fund, $250,000 to the Facilities Maintenance Fund, and $850,000 to the Equipment Replacement Fund.

General Fund revenues totaled $41,489,371 for the fiscal year. The positive variance from budget is primarily attributable to several stronger-than-expected revenue sources. Real property transfer tax receipts exceeded both the budget and prior-year actuals, driven by an increase in home sales as well as higher average and median sales prices. Recreation revenues were higher than budgeted, reflecting strong participation in classes, camps, and related programs. Permit and planning fees also outperformed expectations, largely due to increased construction activity and higher project valuations. Investment income exceeded budget as interest rates remained elevated throughout FY 2024–25. These gains were partially offset by property tax revenues that came in slightly below budget, largely due to a decline in supplemental assessments.

Due to the volatile nature of the real estate market, this category is budgeted conservatively each year. The table below shows the number of homes sold and the average sales price for the last ten fiscal years.

Fiscal Year # Sold
Average Sales
Price
Real Property
Transfer Tax
2015‑16 120 $ 1,836,197 $ 3,117,999
2016‑17 127 2,138,872 3,522,078
2017‑18 132 2,278,523 3,845,198
2018‑19 122 2,424,600 3,819,816
2019‑20 108 2,574,599 3,602,634
2020‑21 170 2,847,358 6,286,601
2021‑22 152 3,030,990 5,981,156
2022‑23 111 3,097,797 4,464,897
2023-24 115 2,757,420 4,086,499
2024-25 124 2,892,567 4,518,003
12 ATTACHMENT A Agenda Report Page 18

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
General Fund expenditures totaled $633,398 below the originally adopted budget for the year ending June 30, 2025. The savings were primarily attributable to vacancy savings and lower consulting costs due to timing shifts in several programs. While, Fire and Recreation-related expenses exceeded budgeted amounts, these overages were offset by corresponding revenues increases.

Facilities Capital Fund
The Facilities Capital Fund established in FY 2022-23 is used to provide funding for the City's facilities, primarily, and had an ending fund balance of $9,849,212.

Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Three funds comprise the City’s proprietary funds: the Sewer Enterprise Fund, Aquatics Enterprise Fund, and the Internal Service Fund.

Sewer Fund
The Sewer Fund is used to account for the sanitary sewer and storm water systems of the City. The net position of the Sewer Fund increased $1,415,349 to $16,240,071, with $2,537,544 representing the unrestricted net position.

The City Council approved a $800,000 loan to the Sewer Fund from the Equipment Replacement Fund and the Facilities Maintenance Fund to complete the rehabilitation of the sewer system. These funds were used to design documents to apply for a State Water Resources Control Board loan that will reimburse the City for design expenses incurred and underwrite the cost of construction.

Aquatics Fund
The Aquatics Fund is used to account for the operations of the Piedmont Community Pool, and at year end, the net position of the Aquatics Fund totaled $6,456,326. The former pool facility had reached end of life and closed on March 16, 2020, during the COVID-19 pandemic.

Internal Service Fund
The Internal Service Fund’s net position amounted to $1,010,586, which did not change from the prior year's balance.
13 ATTACHMENT A Agenda Report Page 19

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's total capital assets for its governmental and business-type activities as of June 30, 2025, amount to $84,385,905 (net of accumulated depreciation/amortization). Capital assets include land, construction-in-progress, Subscription-based information technology arrangements, buildings, equipment, infrastructure, and Right-Of-Use (ROU) subscription assets. The major portion of infrastructure includes the pavement, sidewalk, curb and gutter, parks, and underground utility systems of the City, as well as the sewer system. The City's capital assets increased $11,648,555 from $72,737,350 to $84,385,905.

Additional information on the City of Piedmont's capital assets can be found in Note 5 on pages 64 - 65 of this report.

Long-term Debt
At the end of FY2024-25, the City had a total long-term outstanding debt of $29,260,206, a decrease of $1,358,439 from the prior fiscal year. The City’s long-term obligations include subscription liabilities, sewer loans outstanding for Phase IV, and Phase V of the sewer rehabilitation project with the State of California Water Resources Control Board, and, the 2021 general obligation bond and EBCE loan.

At June 30, 2025, the City’s governmental and business-type activities had total long-term debts and obligations as scheduled below.
2025 2024 2025 2024 2025 2024
Land $ 5,683 $ 5,683 $ - $ - $ 5,683 $ 5,683
Construction in progress 2,582 728 29,887 19,426 32,469 20,154 Buildings & improvements 2,403 2,643 - - 2,403 2,643
Vehicles 1,717 1,626 685 978 2,402 2,604
Property and equipment 1,517 1,781 48 - 1,565 1,781
Infrastructure 22,272 21,889 16,390 16,364 38,662 38,253 SBITA Asset 1,202 1,619 - - 1,202 1,619
Total $ 37,376 $ 35,969 $ 47,010 $ 36,768 $ 84,386 $ 72,737 Total
CAPITAL ASSETS (NET OF DEPRECIATION/AMORTIZATION) (in thousands) Governmental Activities Business‑type Activities
14 ATTACHMENT A Agenda Report Page 20

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025
Additional information about the City’s long-term debt can be found in Note 6 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Property taxes remain the City’s largest General Fund revenue source, comprising approximately 46% of total revenues and supporting essential services. A combination of high inflation, elevated interest rates, and a cooling real estate market—reflected in lower average home prices and transaction volume—signals modest growth in property-related revenues, including transfer taxes.

While historically strong, transfer tax growth has slowed and is no longer increasing at prior-year rates. The City continues to budget this revenue conservatively.

Salary and benefit costs, totaling roughly $25 million or 67% of the General Fund, remain the largest expenditure category. Pension and retiree medical costs continue to rise faster than revenues.

FY2024-25 personnel costs are approximately six percent higher than the prior year’s projection, reflecting the negotiated employee contracts. Future agreements will require careful balancing of operating costs with recurring revenues.

The City’s ability to invest in aging infrastructure remains limited. Streets, sidewalks, and public buildings require significant upgrades or replacement to meet safety, accessibility, and operational standards. Critical renovations are needed in the Police and Fire Departments, City Hall, the Veterans Memorial Building, and the Recreation Department.

In FY2024-25, the City transferred a year-end balance to the Facilities Capital Fund. However, such transfers are not guaranteed and cannot be relied upon as a stable funding source. With no substantial, consistent or incremental resources expected from the real estate market, addressing critical infrastructure will remain a significant challenge. The City must continue prioritizing plans to renovate, replace, or, where necessary, close aging facilities to maintain operational effectiveness and community safety.

Type of Indebtedness
Outstanding
June 30, 2025
Outstanding
June 30, 2024
Governmental Activities
Subscription (SBITA) liability $ 767,535 $ 1,165,506
Business‑type Activities
Sewer Loan ‑ Phase III - 157,573
Sewer Loan ‑ Phase IV 715,399 813,591
Sewer Loan ‑ Phase V 3,059,878 3,251,985
2021 General Obligation Bonds 23,967,394 24,479,990
EBCE Loan 750,000 750,000
Total Business‑type Activities 28,492,671 29,453,139
Total Outstanding Debt $ 29,260,206 30,618,645 $
15 ATTACHMENT A Agenda Report Page 21

CITY OF PIEDMONT

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2025

REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Piedmont'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 addressed to the Office of the Finance Director, 120 Vista Avenue, City of Piedmont, California, 94611
16 ATTACHMENT A Agenda Report Page 22
BASIC

FINANCIAL STATEMENTS
17 ATTACHMENT A Agenda Report Page 23
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18 ATTACHMENT A Agenda Report Page 24

GOVERNMENT-WIDE

FINANCIAL STATEMENTS
19 ATTACHMENT A Agenda Report Page 25
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20 ATTACHMENT A Agenda Report Page 26
City of Piedmont
Statement of Net Position
June 30, 2025
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:

Cash and investments $ 33,909,617 $ 7,529,563 $ 41,439,180 Restricted cash and investments 5,218,407 1,038,521 6,256,928 Receivables:

Accounts 2,613,310 177,852 2,791,162
Interest 263,163 53,418 316,581
Leases 99,107 - 99,107
Prepaid expenses - 102,760 102,760
Internal balances 800,000 (800,000) -
Total current assets 43,006,364 7,999,354 51,005,718
Noncurrent assets:

Receivables:

Leases 53,827 - 53,827
Capital assets:

Nondepreciable 29,886,808 8,265,371 38,152,179
Depreciable 26,069,318 73,827,115 99,896,433
Accumulated depreciation (44,716,812) (8,945,895) (53,662,707) Total capital assets 47,010,231 37,375,674 84,385,905
Net Pension Asset - 19,040,394 19,040,394
Total noncurrent assets 47,010,231 56,469,895 103,480,126 Total assets 55,009,585 99,476,259 154,485,844

DEFERRED OUTFLOWS OF RESOURCES
2025 pension contributions 5,081,994 177,417 5,259,411
Changes in the net pension liability 330,482 7,068,050 7,398,532 Changes in the net OPEB liability 41,296 611,918 653,214 Total deferred outflows of resources 12,761,962 549,195 13,311,157

LIABILITIES
Current liabilities:

Accounts payable 1,207,704 3,166,928 4,374,632
Accrued wages and benefits 2,015 686,427 688,442
Accrued interest payable 367,618 18,791 386,409
Deposits payable - 419,357 419,357
Unearned revenue - 1,796,484 1,796,484
Compensated absences - current 272,326 1,556,352 1,828,678 Claims payable - current - 435,031 435,031
Long-term debt - current 659,550 322,660 982,210
Total current liabilities 2,509,213 8,402,030 10,911,243 Noncurrent liabilities:

Compensated absences 36,985 211,367 248,352
Claims payable - 1,171,969 1,171,969
Net OPEB liability 573,480 5,516,729 6,090,209
Net pension liability 1,700,194 38,917,243 40,617,437
Long-term debt 27,833,121 444,875 28,277,996
Total noncurrent liabilities 46,262,183 30,143,780 76,405,963 Total liabilities 54,664,213 32,652,993 87,317,206

DEFERRED INFLOWS OF RESOURCES
Leases 158,616 - 158,616
Changes in the net pension liability 110,285 470,431 580,716 Changes in the net pension asset - police & fire 830,699 - 830,699 Changes in the net OPEB liability 99,105 2,129,690 2,228,795 Total deferred inflows of resources 3,589,436 209,390 3,798,826

NET POSITION
Net investment in capital assets 18,517,560 36,608,139 55,125,699 Restricted for:

Community development - 4,093,505 4,093,505
Public safety - 273,946 273,946
Recreation - 2,556,548 2,556,548
Street improvement - 554,326 554,326
Police and fire pension - 19,040,394 19,040,394
Total restricted - 26,518,719 26,518,719
Unrestricted (9,142,286) 4,178,837 (4,963,449)
Total net position $ 22,696,397 53,984,572 $ 76,680,969 $ Primary Government
See accompanying Notes to Basic Financial Statements
21 ATTACHMENT A Agenda Report Page 27
City of Piedmont
Statement of Activities
For the year ended June 30, 2025
Operating
Charges for Grants and
Functions/Programs Expenses Services Contributions Total Governmental activities:

Administration $ 5,647,625 $ 1,341,299 $ 1,729,057 $ 3,070,356 Public works 8,063,118 1,369,213 1,782,431 3,151,644
Street improvement 631,582 - - -
Public safety - police services 8,959,180 321,850 134,335 456,185 Public safety - fire services 9,572,661 410,825 302,028 712,853 Recreation 6,748,873 5,610,105 238,900 5,849,005
Nondepartmental 4,193,520 - - -
Total governmental activities 43,816,559 9,053,292 4,186,751 13,240,043 Business-type Activities:

Sewer 903,831 3,176,796 - 3,176,796
Aquatic 927,375 - - -
Total business-type activities 1,831,206 3,176,796 - 3,176,796 Total primary government $ 45,647,765 $ 12,230,088 $ 4,186,751 $ 16,416,839 General Revenues:

Taxes:

Property tax
Sales tax
Franchise tax
Utility users tax
Real property transfer tax
Business license and rental tax
Parcel tax
Paramedic tax
Total taxes
Motor vehicle license fee
Investment earnings
Other revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Restatement
Net position - beginning of year, restated
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements.
22 ATTACHMENT A Agenda Report Page 28
Governmental Business-Type
Activities Activities Total
$ (2,577,269) $ (2,577,269) - $
(4,911,474) (4,911,474) -
(631,582) - (631,582)
(8,502,995) (8,502,995) -
(8,859,808) (8,859,808) -
(899,868) - (899,868)
(4,193,520) (4,193,520) -
(30,576,516) (30,576,516) -
2,272,965 - 2,272,965
(927,375) - (927,375)
1,345,590 - 1,345,590
(30,576,516) 1,345,590 (29,230,926)
18,920,860 1,352,767 20,273,627
219,837 - 219,837
600,913 - 600,913
1,547,283 1,547,283 -
4,515,282 4,515,282 -
717,965 - 717,965
2,690,645 2,690,645 -
69,538 - 69,538
29,282,323 1,352,767 30,635,090
1,771,140 1,771,140 -
1,892,399 464,732 2,357,131
329,021 - 329,021
(1,564,394) 1,564,394 -
31,710,489 3,381,893 35,092,382
1,133,973 4,727,483 5,861,456
53,330,529 18,137,615 71,468,144
(479,930) (168,701) (648,631)
52,850,599 17,968,914 70,819,513
$ 53,984,572 $ 22,696,397 $ 76,680,969
and Changes in Net Position
Net (Expense) Revenue
23 ATTACHMENT A Agenda Report Page 29
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24 ATTACHMENT A Agenda Report Page 30
FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
25 ATTACHMENT A Agenda Report Page 31
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26 ATTACHMENT A Agenda Report Page 32
City of Piedmont
Balance Sheet
Governmental Funds
June 30, 2025
Other Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments $ 8,956,844 $ 10,191,379 $ 12,001,585 $ 31,149,808 Restricted cash and investments 5,218,407 - - 5,218,407 Receivables:

Accounts receivable 2,357,268 - 256,042 2,613,310
Interest receivable 119,730 66,527 76,906 263,163
Leases receivable 152,934 - - 152,934
Prepaid expenses 102,760 - - 102,760
Due from other funds 22,946 - - 22,946
Advances to other funds - - 800,000 800,000
Total assets $ 16,930,889 $ 10,257,906 $ 13,134,533 $ 40,323,328

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable $ 1,329,227 $ 408,694 $ 1,286,784 $ 3,024,705 Accrued wages and benefits 672,954 - 13,473 686,427
Deposits payable 419,357 - - 419,357
Unearned revenue 1,796,484 - - 1,796,484
Due to other funds - - 22,946 22,946
Total liabilities 4,218,022 408,694 1,323,203 5,949,919 Deferred Inflows of Resources
Leases 158,616 - - 158,616
Total deferred inflows of resources 158,616 - - 158,616 Fund Balances:

Nonspendable 102,760 - - 102,760
Restricted 5,218,407 - 7,478,325 12,696,732
Assigned - 9,849,212 4,355,951 14,205,163
Unassigned 7,233,084 - (22,946) 7,210,138
Total fund balances 12,554,251 9,849,212 11,811,330 34,214,793 Total liabilities, deferred inflows of
resources and fund balances $ 16,930,889 $ 10,257,906 $ 13,134,533 $ 40,323,328 General Fund Facilities Capital
See accompanying Notes to Basic Financial Statements
27 ATTACHMENT A Agenda Report Page 33
Total Fund Balances - Total Governmental Funds $ 34,214,793 Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets were adjusted as follows:

GovernmentWide Statement
of Net Position Total
Nondepreciable $ 8,265,371 8,265,371
Depreciable, net 29,110,303 29,110,303
Total capital assets $ 37,375,674 37,375,674
Net pension asset related to the police and fire pension plan is not a current financial resource and therefore not reported in the funds 19,040,394
Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government-Wide Statement of Net Position. 1,010,586 In the Government-Wide Financial Statements, deferred employer contributions for pension and OPEB, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.

GovernmentWide Statement
of Net Position
Deferred outflows of resources related to pension 12,150,044 12,150,044 Deferred outflows of resources related to OPEB 611,918 611,918 Deferred inflows of resources related to pension (1,301,130) (1,301,130) Deferred inflows of resources related to OPEB (2,129,690) (2,129,690) Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet.

GovernmentWide Statement
of Net Position Total
Interest payable $ (18,791) (18,791) $
Compensated absences - current (1,556,352) (1,556,352)
Long-term debt - current (322,660) (322,660)
Compensated absences - noncurrent (211,367) (211,367)
Long-term debt - noncurrent (444,875) (444,875)
Net pension liability (38,917,243) (38,917,243)
Net OPEB liability (5,516,729) (5,516,729)
Total long-term liabilities $ (46,988,017) (46,988,017)

Net Position of Governmental Activities $ 53,984,572
City of Piedmont
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2025
Amounts reported for governmental activities in the statement of net position are different because:

See accompanying Notes to Basic Financial Statements
28 ATTACHMENT A Agenda Report Page 34
City of Piedmont
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2025
Nonmajor Total
Governmental Governmental
Funds Funds
REVENUES:

Property tax $ 18,920,860 $ - $ - $ 18,920,860
Sales tax 219,837 - - 219,837
Franchise tax 600,913 - - 600,913
Utility users tax 1,547,283 - - 1,547,283
Real property transfer tax 4,515,282 - - 4,515,282
Business license and rental tax 717,965 - - 717,965
Gas tax - - 596,475 596,475
Licenses and permits 872,697 - - 872,697
Intergovernmental 4,064,241 - 1,252,865 5,317,106
Use of money and property 1,450,715 507,621 462,943 2,421,279 Current service charges 5,543,832 - 1,855,234 7,399,066 Parcel tax 2,690,645 - - 2,690,645
Contributions and donations 56,745 - 317,214 373,959
Other revenues 288,356 - 30,164 318,520
Total revenues 41,489,371 507,621 4,514,895 46,511,887
EXPENDITURES:

Current:

Administration 4,918,153 5,445 88,590 5,012,188
Public works 6,681,048 70,285 45,572 6,796,905
Street improvement - - 450,145 450,145
Public safety:

Police services 8,405,434 257 81,594 8,487,285
Fire services 8,916,369 198,146 46,137 9,160,652
Recreation 4,193,032 244,057 1,521,903 5,958,992
Nondepartmental 4,193,520 - - 4,193,520
Capital outlay 473,410 2,230,396 1,634,565 4,338,371
Debt service - principal 432,291 - - 432,291
Total expenditures 38,213,257 2,748,586 3,868,506 44,830,349

REVENUES OVER (UNDER)
EXPENDITURES 3,276,114 (2,240,965) 646,389 1,681,538
OTHER FINANCING SOURCES (USES):

Transfers in 1,171,356 3,120,207 2,008,827 6,300,390
Transfers out (5,260,207) (1,487,393) (1,117,184) (7,864,784) Total other financing sources (uses) (4,088,851) 1,632,814 891,643 (1,564,394) Net change in fund balances (812,737) (608,151) 1,538,032 117,144 FUND BALANCES:

Beginning of year 13,366,988 10,457,363 10,273,298 34,097,649 End of year $ 12,554,251 $ 9,849,212 $ 11,811,330 $ 34,214,793 General Fund Facilities Capital
See accompanying Notes to Basic Financial Statements
29 ATTACHMENT A Agenda Report Page 35
City of Piedmont
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the year ended June 30, 2025
Net Change in Fund Balances - Total Governmental Funds $ 117,144 Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense. This was the amount of capital assets recorded in the current period, net of the amount related to internal service funds. 4,353,391
Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore, depreciation expense was not reported as expenditures in the governmental funds, net of the amount related to internal service funds. (2,947,187) Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government-Wide Statement of Activities based on earned leave accruals. (224,608) Debt proceeds provide current financial resources to governmental funds, but issuing debt increased longterm liabilities in the Government-Wide Statement of Net Position. Repayment of debt was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Debt principal repayments 397,971
Net change in accrued interest payable 3,039
Pension expense is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. (1,835,708) OPEB expense is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. 1,269,931 Change in Net Position of Governmental Activities $ 1,133,973 Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:

See accompanying Notes to Basic Financial Statements
30 ATTACHMENT A Agenda Report Page 36
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31 ATTACHMENT A Agenda Report Page 37
City of Piedmont
Statement of Net Position
Proprietary Funds
June 30, 2025
Governmental
Activities
Internal Service
Totals Funds
ASSETS
Current Assets:

Cash and investments 5,324,559 $ 2,205,004 $ 7,529,563 $ 2,759,809 $ Receivable:

Accounts, net 160,143 17,709 177,852 -
Interest 46,570 6,848 53,418 -
Total current assets 5,531,272 2,229,561 7,760,833 2,759,809 Noncurrent:

Restricted cash and investments - 1,038,521 1,038,521 - Capital assets:

Nondepreciable capital assets 354,380 29,532,428 29,886,808 - Depreciable capital assets - 26,069,318 26,069,318 -
Accumulated depreciation (8,945,895) - (8,945,895) -
Total capital assets, net 17,477,803 29,532,428 47,010,231 - Total noncurrent assets 17,477,803 30,570,949 48,048,752 - Total assets 23,009,075 32,800,510 55,809,585 2,759,809

DEFERRED OUTFLOWS OF RESOURCES
Changes in the net pension liability 11,828 496,071 507,899 - Changes in the net OPEB liability 4,222 37,074 41,296 - Total deferred outflows of resources 16,050 533,145 549,195 -

LIABILITIES
Current liabilities:

Accounts payable 1,131,389 76,315 1,207,704 142,223
Interest payable 53,035 314,583 367,618 -
Accrued wages and benefits - 2,015 2,015 -
Long-term debt - current portion 340,000 319,550 659,550 - Compensated absences - current 4,203 268,123 272,326 -
Claims payable - current - - - 435,031
Total current liabilities 717,023 1,792,190 2,509,213 577,254 Noncurrent liabilities:

Advances from other funds 800,000 - 800,000 -
Long-term debt 3,455,726 24,377,395 27,833,121 -
Compensated absences 36,414 571 36,985 -
Claims payable - - - 1,171,969
Net pension liability 82,824 1,617,370 1,700,194 -
Net OPEB liability 54,963 518,517 573,480 -
Total noncurrent liabilities 6,428,027 24,515,753 30,943,780 1,171,969 Total liabilities 26,307,943 7,145,050 33,452,993 1,749,223

DEFERRED INFLOWS OF RESOURCES
Changes in the net pension liability 3,980 106,305 110,285 - Changes in the net OPEB liability 48,311 50,794 99,105 - Total deferred inflows of resources 52,291 157,099 209,390 -

NET POSITION
Net investment in capital assets 13,702,527 4,815,033 18,517,560 - Unrestricted 2,537,544 1,641,293 4,178,837 1,010,586
Total net position $ 16,240,071 $ 6,456,326 $ 22,696,397 $ 1,010,586 Sewer Fund Aquatic Fund
Business-Type Activities
See accompanying Notes to Basic Financial Statements.
32 ATTACHMENT A Agenda Report Page 38
City of Piedmont
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the year ended June 30, 2025
Governmental
Activities -
Internal Service
Totals Funds
OPERATING REVENUES:

Charges for services $ - 3,176,796 $ 3,176,796 $ - $
Total operating revenues - 3,176,796 3,176,796 -
OPERATING EXPENSES:

Contract and professional services 16,716 23,447 40,163 - Services and supplies 8,367 - 8,367 -
Salaries and benefits 148,469 30,012 178,481 -
Insurance and claims expense - - - 3,309,028
Depreciation - 779,086 779,086 -
Total operating expenses 173,552 832,545 1,006,097 3,309,028 Operating income (loss) (173,552) 2,344,251 2,170,699 (3,309,028) NONOPERATING REVENUES (EXPENSES):

Property tax 1,352,767 - 1,352,767 -
Interest income 230,647 234,085 464,732 -
Interest expense (753,823) (71,286) (825,109) -
Other income (expense) - - - 3,309,028
Total nonoperating revenues (expenses) 829,591 162,799 992,390 3,309,028 Income before contributions and transfers 656,039 2,507,050 3,163,089 - CONTRIBUTIONS AND TRANSFERS:

Transfers in 2,487,394 - 2,487,394 -
Transfers out - (923,000) (923,000) -
Total contributions and transfers 2,487,394 (923,000) 1,564,394 - Change in net position 1,584,050 3,143,433 4,727,483 -
NET POSITION:

Beginning of year 14,824,722 3,312,893 18,137,615 1,010,586 Restatements (168,701) - (168,701) -
Beginning of year, as restated 14,656,021 3,312,893 17,968,914 1,010,586 End of year $ 16,240,071 $ 6,456,326 $ 22,696,397 $ 1,010,586 Business-Type Activities
Sewer Fund Aquatic Fund
See accompanying Notes to Basic Financial Statements.
33 ATTACHMENT A Agenda Report Page 39
City of Piedmont
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2025
Governmental
Activities -
Internal Service
Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers $ 3,172,529 $ (5,976) $ 3,166,553 $ - Claims and premium paid - - - (3,134,445)
Cash paid to suppliers (512,468) (896,048) (1,408,516) - Cash paid to employees (913,032) (148,778) (1,061,810) - Net cash provided by (used in)
operating activities 1,747,029 (1,050,802) 696,227 (3,134,445) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Other income - - - 3,309,028
Ad valorem tax - 1,352,767 1,352,767 -
Transfer from other funds - 2,487,394 2,487,394 -
Net cash provided by (used in)
noncapital financing activities - 3,840,161 3,840,161 3,309,028

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition of capital assets (630,885) (10,390,552) (11,021,437) - Principal paid on long-term debt (447,874) (512,594) (960,468) - Interest paid on long-term debt (75,345) (759,157) (834,502) - Net cash provided by (used in)
capital and related financing activities (1,154,104) (11,662,303) (12,816,407) - CASH FLOWS FROM INVESTING ACTIVITIES:

Interest and dividends 220,955 353,620 574,575 -
Net cash provided by (used in)
investing activities 220,955 353,620 574,575 -
Net cash flows 813,880 (8,519,324) (7,705,444) 174,583
CASH AND INVESTMENTS - Beginning of year 4,510,679 11,762,849 16,273,528 2,585,226 CASH AND INVESTMENTS - End of year $ 5,324,559 $ 3,243,525 $ 8,568,084 $ 2,759,809

RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION:

Cash and investment $ 5,324,559 $ 2,205,004 $ 7,529,563 $ 2,759,809 Restricted cash and investment - 1,038,521 1,038,521 -
CASH AND INVESTMENTS - End of year $ 5,324,559 $ 3,243,525 $ 8,568,084 $ 2,759,809 - - - -
Sewer
Fund
Aquatic
Fund
Business-Type Activities
See accompanying Notes to Basic Financial Statements.
34 ATTACHMENT A Agenda Report Page 40
City of Piedmont
Statement of Cash Flows
Proprietary Funds (Continued)
For the year ended June 30, 2025
Governmental
Activities -
Internal Service
Totals Funds

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

Operating income (loss) $ 2,344,251 $ (173,552) $ 2,170,699 $ (3,309,028) Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation expense 779,086 - 779,086 -
Pension and OPEB expense (18,375) (7,098) (25,473) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (4,267) (5,976) (10,243) - Increase (decrease) in accounts payable (1,412,021) (870,965) (2,282,986) 91,929 Increase (decrease) in accrued wages and benefits - 2,015 2,015 - Increase (decrease) in claims payable - - - 82,654
Increase (decrease) in compensated absences 58,355 4,774 63,129 - Net cash provided by (used in) operating activities $ 1,747,029 $ (1,050,802) $ 696,227 $ (3,134,445) Sewer Fund Aquatic Fund
Business-Type Activities
35 ATTACHMENT A Agenda Report Page 41
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36 ATTACHMENT A Agenda Report Page 42
City of Piedmont
Statement of Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2025
Custodial Fund
ASSETS
Cash and investments $ - - $ 389,677 $
Restricted cash and investments 19,760,274 15,350,315 - Accounts Receivable - - 3,268
Interest Receivable - 11,029 -
Total assets 15,350,315 19,771,303 392,945

LIABILITIES
Accounts payable - - 16
Total liabilities - - 16

NET POSITION
Restricted for:

Police and fire pension 19,771,303 - -
OPEB 15,350,315 - -
Individuals, organizations, and other governments - - 392,929 Total Net Position $ 15,350,315 19,771,303 $ 392,929 $
Police and Fire
Pension Plan Trust OPEB Trust
2017 Underground
Refunding Bond
Fund
See accompanying Notes to Basic Financial Statements.
37 ATTACHMENT A Agenda Report Page 43
City of Piedmont
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2025
Custodial Fund
ADDITIONS:

Assessments $ - - $ 350,424 $
Contributions from employees - 51,650 -
Investment income:

Net increase in fair value of investments 978,311 1,082,341 - Interest and dividends 456,789 - -
Total additions 1,133,991 1,435,100 350,424
DEDUCTIONS:

Pension benefits paid - 98,655 -
Administrative expenses 120,860 - 13,646
Debt service:

Principal - - 269,777
Interest - - 70,359
Total deductions - 219,515 353,782
Change in net position 1,133,991 1,215,585 (3,358)
NET POSITION:

Beginning of year 14,216,324 18,555,718 396,287
End of year $ 15,350,315 19,771,303 $ 392,929 $
Police and Fire
Pension Plan Trust OPEB Trust
2017 Underground
Refunding Bond
Fund
See accompanying Notes to Basic Financial Statements.
38 ATTACHMENT A Agenda Report Page 44

NOTES TO BASIC

FINANCIAL STATEMENTS

39 ATTACHMENT A Agenda Report Page 45
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40 ATTACHMENT A Agenda Report Page 46
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Piedmont is a residential community located in the East Bay Hills, approximately ten miles east of San Francisco, California. The City was incorporated as a municipal corporation in 1907; population at June 30, 2025 was approximately 10,705.

The City operates under the Council-Administrator form of government, with five elected Council members served by a full-time City Administrator and staff. At June 30, 2025, the City's staff was comprised of 99 full-time employees who were responsible for the following City-provided services:

Public Safety - The City employs 20 sworn and 11 non-sworn police personnel to provide round-the-clock police services from a central station, and 25 fire personnel to provide round-the-clock fire services from a central station.

Streets and Roads - The City contracts the construction and maintenance of its streets, curbs, gutters, and related public property.

Recreation, Public Works, Administration and other services are provided by a total of 42 full-time and 21 part-time employees.

In addition, the City employs approximately 108 seasonal recreational personnel.

The accounting policies of the City of Piedmont conform to accounting principles generally accepted in the United States of America as applicable to governments. Following is a summary of the more significant policies.

A. The Reporting Entity
The accompanying basic financial statements present the financial activities of the City, which has no component units.

B. Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. These standards require that the financial statements described below be presented.

Government-wide Financial Statements:

The Statement of Net Position and Statement of Activities display information about the reporting government as a whole. They include the activities of the overall City government except for fiduciary activities. Eliminations have been made to minimize the double counting of internal service activities. The City's net position is reported in three parts - net investment in capital assets; restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities.

Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in part by fees charged to external parties for goods or services.
41 ATTACHMENT A Agenda Report Page 47
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function.

Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements:

The fund financial statements provide information about the City's funds, including fiduciary funds. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories with each major fund displayed in a separate column. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:
a. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and b. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.

All remaining governmental funds are aggregated and reported as nonmajor funds in a single column, regardless of their fund type.

The funds of the financial reporting entity are described below:

Governmental Funds:

General Fund - The General Fund is the general operating fund of the City and is always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.

Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects.

Debt Service Funds - Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest.

Capital Project Funds - Capital Project Funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
42 ATTACHMENT A Agenda Report Page 48
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
Proprietary Funds:

Enterprise Funds - Enterprise funds are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector.

Internal Service Funds - Internal service funds are used to account for, and finance, services and commodities furnished by a designated department of a governmental unit to other departments of the same governmental unit. The City uses internal service funds to account for insurance activities.

Fiduciary Funds (not included in government-wide statements):

Pension (and Other Employee Benefit) Trust Funds - Pension (and Other Employee Benefit) Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other postemployment benefit plans, and other employee benefit plans.

Custodial Funds - Custodial Funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.

Major Funds
The City reported the following major governmental funds in the accompanying financial statements:

General Fund - This is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in a separate fund.

Facilities Capital Fund - This fund is used to account for the accumulation of resources used for the maintenance of capital assets used by governmental funds.

The City reports the following major proprietary funds in the accompanying financial statements:

Sewer Fund - This fund is used to account for the operations of the sewer and storm drain systems.

Aquatic Fund - This fund is used to account for the operations of the Piedmont Community Pool.

The City also reports the following fund types:

Police and Fire Pension Plan Trust Fund - This fund accounts for the pension investment activity including retirement payments to 10 retired City employees and/or surviving spouses.

OPEB Trust Fund - This fund accounts for OPEB trust investment activity for post-employment retiree healthcare benefits.

Custodial Fund - The Custodial fund accounts for resources held by the City as an agent for individuals, private organizations, and other governmental entities. This fund accounts for amounts held for one underground utility assessment district.
43 ATTACHMENT A Agenda Report Page 49
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.

Measurement Focus
On the government-wide Statement of Net Position and the Statement of Activities, both governmental and proprietary activities are presented using the economic resources measurement focus as defined in item "b" below.

In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate:
a. All governmental funds are accounted for using a "current financial resources" measurement focus. With this measurement focus, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resources, generally are included on their balance sheets.

Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.
b. All proprietary funds utilize an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and deferred outflows of resources, and all liabilities and deferred inflows of resources (whether current or noncurrent) associated with the operation of these funds are reported. Proprietary fund equity is classified as net position.
c. Fiduciary funds use the "economic resources" measurement focus and the accrual basis of accounting.

Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, both governmental and proprietary activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when "measurable and available." Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year-end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds.
44 ATTACHMENT A Agenda Report Page 50
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Proceeds from governmental long-term liabilities and acquisitions under capital leases are reported as other financing sources.

Those revenues susceptible to accrual include taxes, intergovernmental revenues, interest and charges for services. Certain indirect costs are included in program expenses reported for individual functions and activities.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of costreimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred, or economic asset is used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal operations. The principal operating revenues of the enterprise and internal service funds are charges for services.

Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed.

D. Property Taxes
The County of Alameda levies, bills, and collects property taxes and special assessments for the City as follows:

The term "unsecured" refers to taxes on personal property other than real estate, land, and buildings.

These taxes are secured by liens on the property being taxed. Property tax revenue is recognized in accordance with applicable GASB pronouncements; that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities in the current period. The County remits the entire amount of the tax levy to the City (net of County administrative fees), and handles all delinquencies, retaining any interest and penalties. The County remits a property tax clean-up payment for the current period each September following the close of the fiscal year. The City makes an exception to the 60-day recognition period to recognize this revenue in the current period.

Secured Unsecured
Valuation dates March 1 March 1
Lien/levy dates January 1 January 1
Due dates 50% on November 1 and February 1 August 31
Delinquent as of December 10 and April 10 August 31
45 ATTACHMENT A Agenda Report Page 51
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Cash and Investments
The City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures and monies held in the police and fire pension trust, and OPEB trust. The cash and investments balance in each fund represents that fund's equity share of the City's cash and investment pool. As the City places no restrictions on the deposit or withdrawal of a particular fund's equity in the pool, the pool operates like a demand deposit account for the participating funds.

For purposes of the statement of cash flows, the City considers cash and cash equivalents as short-term highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Because the only investments held by the proprietary funds are the Local Agency Investment Fund (LAIF), which meets the definition of a cash equivalent, and investments in Multi-Bank Securities, the entire pooled balance is reported as cash and investments.

F. Accounts and Interest Receivable
In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received. Receivables are recorded in the financial statements net of any allowance for doubtful accounts, if applicable, and estimated refunds due. Major receivable balances for the governmental activities include sales and use taxes, franchise taxes, grants, fines, interest, and other fees. Federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred.

In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are recorded as deferred inflows of resources in the fund financial statements in accordance with modified accrual but are not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Long-term loans in governmental funds are treated as expenditures in the year advanced and as revenues in the year repayment is measurable and available.

Loans receivables are recorded in the fund financial statements but are recorded as deferred inflows of resources to indicate they do not represent current financial resources. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Service charges and interest earnings compose the majority of proprietary fund receivables.

G. Prepaid Expenses
Payments for services that will benefit periods beyond June 30, 2025, are recorded as prepaid costs in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.

H. Capital Assets
The accounting treatment of property, plant and equipment depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.
46 ATTACHMENT A Agenda Report Page 52
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued H. Capital Assets, Continued
Government-wide Financial Statements
In the government-wide financial statements, capital assets with a cost of $5,000 or more are capitalized.

All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their acquisition value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset lives are not capitalized.

Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows:

Major outlays for capital assets and improvements are capitalized as projects are constructed. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.

Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide financial statements.

I. Compensated Absences
The City recognizes a liability for compensated absences for leave time 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 during or upon separation from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences – vacation and sick leave. The City's liability for compensated absences is recorded at the City-wide level in the Statement of Net Position for governmental activities or in the proprietary funds as appropriate. The liability for compensated absences includes salary-related benefits, where applicable. The flow assumption used by the City in estimating compensated absence amounts is that the oldest accrued leave is used first by employees (first in first out).

Building and improvements 60 years
Vehicles 4 - 20 years
Furniture, fixtures, and equipment 7 - 25 years
Pavement system 28 years
Sidewalk, curb, and gutters 40 years
Traffic signals 25 years
Street lights 25 years
Bridges 75 years
Park facilities system 25 - 40 years
Sewer and storm drains 50 years
47 ATTACHMENT A Agenda Report Page 53
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued J. Long-Term Liabilities
In the government-wide financial statements and the proprietary fund types in the fund financial statements, long-term liabilities, and other long-term obligations are reported as liabilities in the applicable governmental activities, business- type activities, or proprietary fund type statement of net position. Initial issue bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Bond issuance costs, except for insurance, are expensed in the period incurred. Amortization of bond premiums or discounts, insurance costs, and deferred amounts on refunding are included in interest expense.

In the fund financial statements, governmental fund types recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

K. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

L. Section 115 Trust
In fiscal year 2017-18, the City Council approved the creation of a Section 115 Trust Agreement with U.S.

Bank National Association, Trustee, and Public Agency Retirement Services (PARS), Trust Administrator.

The Section 115 Trust was established as a means to set aside monies to fund the City's pension obligations. Contributions to the Section 115 trust are irrevocable, the assets are dedicated to providing benefits to plan members, and the assets are protected from creditors of the City. The purpose of the creation of the Section 115 Trust was to address the City's pension obligations by accumulating assets to reduce the net pension liability. However, in accordance with generally accepted accounting principles, the assets in the Section 115 Trust are not considered to have present service capacity as plan assets and are therefore considered restricted assets of the City rather than plan assets. Accordingly, the Section 115 Trust's assets are recorded as restricted for pension benefits in the City's General Fund rather than assets of the pension plan during the measurement of the net pension liability. The assets held in trust will be considered pension plan assets at the time they are transferred out of the Trust into the pension plan. 48 ATTACHMENT A Agenda Report Page 54
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Other Postemployment Benefits (OPEB)
For purposes 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 plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

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

N. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has deferred outflows of resources related to pensions and other post-employment benefits (OPEB).

In addition to liabilities, the statement of net position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has deferred inflows of resources related to pensions, other post-employment benefits (OPEB), and leases.

O. Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.

Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

Valuation Date June 30, 2024
Measurement Date June 30, 2025
Measurement Period July 1, 2024 to June 30, 2025
49 ATTACHMENT A Agenda Report Page 55
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued P. Equity Classifications
Government-wide Financial Statements
Net position is the excess of all the City's assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three categories. These categories apply only to net position, which is determined at the government-wide level, and are described below:
a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.
b. Restricted net position - Consists of net position with constraints placed on the use either by (1) external groups such as creditors, granters, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net position that does not meet the definition of "restricted" or "net investment in capital assets."
Fund Financial Statements
The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:
a. Nonspendable - Amounts that cannot be spent because they are either (1) not in spendable form or (2) legally or contractually required to be maintained intact. b. Restricted - Amounts that are restricted for specific purposes when constraints placed on the use of resources are either (1) externally imposed by creditors, granters, contributors, laws, or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation.
c. Committed - Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority. d. Assigned - Amounts that are constrained by the City Council's intent to be used for specific purposes through a resolution but are neither restricted nor committed. The City Council assigns fund balances for specific purposes by resolution adopting the annual budget for the upcoming fiscal year, or by an amending budget resolution during the fiscal year. e. Unassigned - Amounts representing the residual classification for the general fund or any other fund with a negative fund balance.

Further detail about the City's fund balance classification is described in Note 11. 50 ATTACHMENT A Agenda Report Page 56
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Q. Leases
Lessor
The City is a lessor for several leases of property and buildings. The City recognizes a lease receivable and a deferred inflow of resources in the 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. Subsequently, the deferred inflow of resources is recognized as revenue over the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease terms, and (3) lease receipts.  The City uses its 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 are composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its leases, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

R. Subscription-Based Information Technology Arrangements (SBITA) A SBITA is defined as a contractual agreement 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 minimum contractual period of greater than one year, in an exchange or exchange-like transaction.

The City uses various SBITA assets that it contracts through cloud computing arrangements, such as software as a service and platform as a service. The related obligations are presented in amounts equal to the present value of subscription payments, payable during the remaining SBITA term. SBITA assets are reported with other capital assets and SBITA liabilities are reported with long-term debt on the statement of net position.

S. General Budget Policies
The City operates under the general laws of the State of California and annually adopts a budget for its governmental and proprietary funds to be effective July 1 for the ensuing fiscal year. From the effective date of the budget, which is adopted and controlled at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Encumbrances are considered to be expenditures in the year the commitment is entered into.

Budget appropriations lapse at the end of the fiscal year unless encumbered by specific Council approval. 51 ATTACHMENT A Agenda Report Page 57
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued T. Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates.

U. Reclassifications
Certain accounts in prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements.

V. Implementation of New Governmental Accounting Standards Board Statements In 2025, the City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
 GASB Statement No. 101, Compensated Absences - The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. The requirement of this statement applied to the City for the current fiscal year.
 GASB Statement No. 102, Certain Risk Disclosures - The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The City implemented the statement but did not result in any disclosure.

2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2025, were classified in the accompanying financial statements as follows:

Restricted Cash
Cash and and
Investments Investments Total
Governmental activities $ 33,909,617 $ 5,218,407 $ 39,128,024 Business-type activities 7,529,563 1,038,521 8,568,084
Total government-wide cash and investments 41,439,180 6,256,928 47,696,108 Fiduciary activities 389,677 35,110,589 35,500,266
Total cash and investments $ 41,828,857 $ 41,367,517 $ 83,196,374 52 ATTACHMENT A Agenda Report Page 58
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
Cash and investments were carried at fair value as of June 30, 2025, and consisted of the following:

Cash on hand $ 900
Cash in banks 337,790
Total cash 338,690
U.S. agency securities 27,909,323
Certificates of deposit 4,903,666
Local Agency Investment Fund (LAIF) 16,704,396
Held in Trust:

Equity mutual funds 15,350,315
Fixed income securities 10,198,999
Domestic equities 6,229,721
Money market funds 1,561,264
Total investments 82,857,684
Total cash and investments $ 83,196,374
53 ATTACHMENT A Agenda Report Page 59
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
Authorized Investments of the City
The table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). This table also identifies certain provisions of the California Government Code (or the City's investment policy, where 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 trustees 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.

Maximum Minimum Maximum
Maximum Percentage of Quality Investment
Authorized Investment Type Maturity Portfolio Requirements in One Issuer Local Agency Bonds 5 years None None None
U.S. Treasury Obligations 5 years None None None
State Obligations - CA and Others 5 years None None None CA Local Agency Obligations 5 years None None None
U.S. Agency Obligations 5 years None None None
Banker's Acceptances 180 days 40% None 30%
Commercial Paper - Pooled Funds 270 days 40% of the agency's money
Highest letter and number
rating by an NRSROH
None
Commercial Paper - Non-Pooled Funds 270 days 25% of the agency's money
Highest letter and number
rating by an NRSROH
None
Negotiable Certificates of Deposit 5 years 30% None None Non-negotiable Certificates of Deposit 5 years None None None Placement Service Deposits 5 years 30% None None
Placement Service Certificates of Deposit 5 years 30% None None Repurchase Agreements 1 year None None None
Reverse Repurchase Agreements and
Securities Lending Agreements
92 days 20% of the base
value of the portfolio
None None
Medium-Term Notes 5 years 30% "A" rating category or its equivalent or better
None
Mutual Funds and Money
Market Mutual Funds
N/A 20% Multiple None
Collateralized Bank Deposits 5 years None None None
Mortgage Pass-Through Securities 5 years 20% "AA" rating category or its equivalent or better
None
County Pooled Investment Funds N/A None None None
Joint Powers Authority Pool N/A None Multiple None
Local Agency Investment Fund (LAIF) N/A None None None
Voluntary Investment Program Fund N/A None None None
Supranational Obligations 5 years 30% "AA" rating category or its equivalent or better
None
54 ATTACHMENT A Agenda Report Page 60
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
The City complies with the provisions of the California Government Code (or the City's investment policy, where more restrictive) pertaining to the types of investments held, institutions in which deposits were made and security requirements. The City will continue to monitor compliance with applicable statutes pertaining to public deposits and investments.

Investments Authorized by the Police and Fire Pension Board Investment of funds in the Police and Fire pension are managed by an investment advisor. The Piedmont Police and Fire Pension Fund investment policy allows the investment advisor to manage the Pension Fund in a manner consistent with the investment objectives as outlined in the April 2006 investment policy, the Prudent Expert Rule, and the provisions of the Employee Retirement Income Security Act of 1974.

The investment policy grants the advisor full power and authority to make purchases, sales, exchanges, conversion and trades in connection therewith as the advisor deems appropriate to the provisions of Sections 2.144 and 2.145 of the Piedmont City Code. The assets in the plan are invested in a manner that is consistent with generally accepted standards of fiduciary responsibility, to insure the security of principal, and maximum yield on all pension fund investments through a mix of well diversified, high quality, fixed income and equity securities
Authorized investments include the following:

Maximum Minimum
Percentage of Credit
Authorized Investment Type Portfolio Rating
Domestic Equities 5% per issuer N/A
Foreign Equity Investments Traded on U.S. Based Exchanges 20% N/A Cash 10% N/A
S&P Stock Index Futures None N/A
Fixed Income Securities None B/B overall
portfolo
Commercial Paper None A-2/P-2
Certificates of Deposit None None
Bankers Acceptances None None
U.S. Treasury Bonds, Notes, and Bills None None
Debt Instruments of U.S. Government Agencies None None
Repurchase Agreements with U.S. Treasury Securities as Collateral None None Repurchase Agreements with U.S. Treasury Agencies as Collateral None None Corporate Notes None B/B
Asset-Backed Securities None None
Municipal Debt None Baa/BBB
Mortgage-Backed Pass-Through Securities by GSE's and CMBS None None Collateralized Mortgage Obligations None None
55 ATTACHMENT A Agenda Report Page 61
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
Investments Authorized by the OPEB Trust Fund
Investment of funds in the OPEB (Other Post-employment Benefits) Trust are managed by the same investment advisor as the Police and Fire Pension Trust. The OPEB investment policy allows the investment advisor to manage the OPEB Trust Fund in a manner consistent with the investment objectives as outlined in the May 2013 investment policy.

The investment policy grants the advisor full power and authority to make purchases, sales, exchanges, conversions and trades in connection therewith as the advisor deems appropriate. The advisor is expected to operate within the Prudent Expert Rule, the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and other pertinent state and federal laws, regulations, and rulings that relate to the investment process. The assets of the Trust shall be invested in a manner that is consistent with generally accepted standards of fiduciary responsibility to insure the security of principal and maximum yield on all investments through a mix of well-diversified fixed income and equity securities. The following are the OPEB Trust Fund investment policies and guidelines:

The investment policy specified the long-term asset allocation targets:

The cash holdings should not exceed 10% of the market value in the portfolio. The asset allocation targets are to be pursued on a long-term strategic basis and may be revised when significant changes occur within the economic and/or capital market environment or in the stream of future benefits expected to be paid.

Capital market assumptions and projections shall be reviewed annually. Benefit payments shall be reviewed quarterly. Benefit liabilities and assumptions shall be reviewed no less frequently than every three years.

The equity portion of the Trust shall be invested in marketable equity securities with certain restrictions placed:

Asset Class Minimum Target Maximum
Equity 25% 60% 75%
Fixed Income 25% 40% 75%
Equity Types Restrictions
Equity mutual funds None
Individual U.S. Stocks a. 5% maximum exposure at cost
b. 10% maximum exposure at market value
c. 5% maximum of company's outstanding shares
Individual non-U.S. Stocks (including American
Depository receipts, foreign-listed securities) 25% maximum at cost 56 ATTACHMENT A Agenda Report Page 62
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
The fixed income portion of the Trust shall be invested in marketable, fixed-income securities with certain restrictions specified below. All fixed income securities held directly must be rated B/B or better by Moody's Investors Services and Standard & Poor's Corporation.

The following investments are explicitly prohibited by the OPEB Trust Investment Policy:

Fixed-Income Types Restrictions
U.S. Treasury bonds, notes, and bills None
Debt instruments issued by U.S. Government or Agencies None Repurchase agreements with U.S. Treasury Securities and Agencies of U.S. Government as collateral None
Certificates of deposit and banker's acceptances None
Diversified fixed-income mutual funds None
Asset-backed securities None
Mortgage-backed pass through securities issued by
Government Sponsored Enterprises (GSEs) and
Commercials (CMBS) None
Collateralized Mortgage Obligations (CMOs) Has certain restrictions Commercial paper or variable rate notes
a. A-2/P-2 or higher by S&P or Moody's
b. 10% maximum exposure at market value
Private placements 5% maximum exposure at cost
Eurodollar securities and non-dollar denominated
instruments 15% maximum exposure at cost
Preferred stock 10% maximum exposure at cost
Debt for equity exchanges 5% maximum exposure at cost
Mortgage-backed derivative instruments 10% maximum exposure at cost Asset Class Prohibited Investment
Equity a. Future
b. Derivatives
c. Short sale
d. Private placements
e. Commodities
Fixed-Income a. Interest-only strips
b. Inverse floating rate notes
57 ATTACHMENT A Agenda Report Page 63
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
Investment Valuation
Investments are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: 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. Investments’ fair value measurements are as follows at June 30, 2025:

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 portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which is recorded on an amortized cost basis. The investment balance of $16,704,396 is not subject to valuation on a recurring basis.

Disclosure 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's interest rate risk is mitigated 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.

Investments Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value U.S. agency securities $ - $ 27,909,323 $ - $ 27,909,323 Certificates of deposit - 4,903,666 - 4,903,666
Held in Trust:

Equity mutual funds 15,350,315 - - 15,350,315
Fixed income securities - 10,198,999 - 10,198,999
Domestic equities 6,229,721 - - 6,229,721
Money market funds 1,561,264 - - 1,561,264
Total $ 23,141,300 $ 43,011,988 $ - $ 66,153,288
Fair Value Measurements Using
58 ATTACHMENT A Agenda Report Page 64
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
Information about the sensitivity of the fair values of the City's investments (including investments held in trust) to market rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity as of June 30, 2025:

A. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City had no investments (including investments held in trust) that were highly sensitive to interest rate fluctuations as of June 30, 2025.
12 months or
Investment Type less 1-5 years Fair Value
Police and Fire Pension Trust Fund:

Fixed income securities $ 5,218,407 $ - $ 5,218,407
Domestic equities 499,591 5,730,130 6,229,721
Money market funds 1,561,264 - 1,561,264
Total Police and Fire Pension Trust Fund 7,279,262 5,730,130 13,009,392 OPEB Trust Fund:

Equity mutual funds 15,350,315 - 15,350,315
Total OPEB Trust Fund 15,350,315 - 15,350,315
City and Custodial Funds:

Fixed income securities 4,980,592 - 4,980,592
Certificates of deposit 4,156,452 747,214 4,903,666
U.S. agency securities - 27,909,323 27,909,323
Local Agency Investment Fund 16,704,396 - 16,704,396
Total City and Custodial Funds 25,841,440 28,656,537 54,497,977 Total Investments $ 48,471,017 $34,386,667 $ 82,857,684 Remaining Maturity
59 ATTACHMENT A Agenda Report Page 65
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
B. 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 investment policy, or debt agreements, and the actual rating as of the fiscal year for each investment type.

C. Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City's investment in a single issuer of securities. When investments are concentrated in one issuer, this concentration presents a heightened risk of potential loss. The City's investment policy contains limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) at June 30, 2025, that represent 5 percent or more of total City investments are as follows:

Investment Type Total S&P Moody's
Police and Fire Pension Trust Fund:

Fixed income securities $ 5,218,407 Not rated Not rated Domestic equities 6,229,721 AA Aa1
Money market funds 1,561,264 Not rated Not rated
OPEB Trust Fund:

Equity mutual funds 15,350,315 Not rated Not rated
City and Custodial Funds:

Fixed income securities 4,980,592 Not rated Not rated
Certificates of deposit 4,903,666 Not rated Not rated
U.S. agency securities 27,909,323 Not rated Not rated
Local Agency Investment Fund 16,704,396 Not rated Not rated Total $82,857,684
Rating as of Fiscal Year End
Issuer Investment Type Amount
Federal Home Loan Banks Government agency securities $ 4,230,301 60 ATTACHMENT A Agenda Report Page 66
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
D. 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 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 investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the 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 state law (unless so waived by the government unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2025, the carrying amount of the City's deposits was $337,790 and the bank balances were $1,197,207, of which $500,000 was insured by FDIC coverage limits.

E. Allocation of Interest Income Among Funds
Interest income from pooled investments is allocated to those funds which are required by law or administrative action to receive interest. Interest is allocated monthly based on the ending cash balances of the previous month in each fund receiving interest.

3. LEASES RECEIVABLE
The City is reporting leases receivable of $152,934 at June 30, 2025. For the year ended June 30, 2025, the City reported lease revenue of $105,597 and interest revenue of $8,264 related to lease payments received.

A. Buildings
 On July 19, 2021, the City entered into an agreement with Piedmont Educational Foundation for the lease of a portion of a building. The lease has a term of 4.5 years and the lease receivable was discounted to a net present value at July 19, 2021 using 2.5% interest rate.  On May 12, 2022, the City entered into an agreement with Piedmont Center for the Arts, Inc. for the lease of a portion of a building. The terms of this agreement include monthly rental payments increasing annually based on the Consumer Price Index (CPI) for all Urban Consumers for the San Francisco/Oakland/San Jose Metropolitan Area published by the United States Department of Labor. The lease has a term of 5 years, and the lease receivable was discounted to a net present value at May 12, 2022 using a 2.5% interest rate and CPI increase 3%. 61 ATTACHMENT A Agenda Report Page 67
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

2. CASH AND INVESTMENTS, Continued
B. Cell Tower Sites
 On August 10, 2016, the City entered into an amendment to the microcell site lease agreement with New Cingular Wireless PCS, LLC. The terms of this agreement include base monthly payments of $1,200 increasing annually by 4% over the base rent paid during the previous year. The lease has a term of 10 years, and the lease receivable was discounted to a net present value at October 1, 2017 using a 2.5% interest rate and 4% annual increase.  On August 1, 2019, the City entered into an agreement for a cell tower site with AT&T. The terms of the agreement include monthly rental payments increasing annually based on the CPI. The lease has a term of 6.5 years, and the lease receivable was discounted to a net present value at August 1, 2019 using a 2.5% interest rate and CPI increase of 3%.  On March 1, 2022, the City entered into an agreement for a cell tower site with GST Towers. The terms of the agreement include monthly rental payments increasing annually based on the CPI.

The lease has a term of 5 years, and the lease receivable was discounted to a net present value at March 1, 2022 using a 2.5% interest rate and CPI increase of 3%.

Future payments due to the City under the agreements are as follows:

The City has recorded a deferred inflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2025, the balance of the deferred inflow of resources was $158,616.

4. INTERFUND TRANSACTIONS
A. Due to/from Other Funds
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. These balances normally represent to cover temporary shortages of cash in individual funds. The following presents a summary of current interfund balances at June 30, 2025:

Year Ended June 30 Principal Interest Total
2026 99,107$ $2,517 $101,624
2027 48,944 711 49,654
2028 4,883 21 4,905
Total $152,934 $3,249 $156,183
Due to Fund Amount Due From Fund Amount
General Fund $ 22,946 Capital Improvement Fund $ 22,946 Total $ 22,946 Total $ 22,946
62 ATTACHMENT A Agenda Report Page 68
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

4. INTERFUND TRANSACTIONS, Continued
B. Advances to/from Other Funds
Advances will be repaid to the advancing fund when revenue in the receiving fund is adequate. The composition of advances to/from other funds as of June 30, 2025was as follows:

Sewer Replacement Project - In October 2014, the City approved an interfund loan to the Sewer Fund from the Equipment Replacement and Facilities Funds in the amounts of $600,000 and $200,000, respectively to meet capital requirements of the Sewer Fund. The loan bears interest based on the Local Agency Investment Fund rate, not to exceed 1.0%. Interest only payments are due during the replacement of the sewer system. Principal and interest payments begin approximately in fiscal year 2028, when phase VII loan payments begin. Under this schedule, the loan is set to retire in fiscal year 2035.

C. Interfund Transfers to/from Other Funds
Transfers between funds during the fiscal year ended June 30, 2025were as follows:

Receivable Fund Payable Fund Description Amount
Governmental Funds:

Equipment Replacement Sewer Sewer replacement project $600,000 Facilities Maintenance Sewer Sewer replacement project 200,000 Total Proprietary Funds 800,000
Total Advances to/From Other Funds $800,000
Transfer From Transfer To Description of Transfer Amount Major Governmental Funds
General Fund Facilities Capital Funding for capital outlay $ 3,110,207 Equipment Replacement Funding for capital outlay 1,100,000 Facilities Maintenance Funding for capital outlay 850,000 Aquatic Fund Capital projects 200,000
Facilities Capital Aquatic Fund Capital projects 1,487,393 Sewer Fund General Fund Capital projects 923,000
Total Major Governmental
Interfund Transfers $ 7,670,600
Non-Major Governmental Funds
Projects and Services Aquatic Fund Capital projects 800,001 Projects and Services Facilities Maintenance Capital projects 30,513 Projects and Services Facilities Capital Capital projects 10,000 Schoolmates Program Facilities Maintenance Capital projects 28,314 COPS General Fund Public Safety 211,845
Measure D Fund General Fund Administrative cost recovery 36,511 Total Non-Major Governmental
Interfund Transfers $ 1,117,184
63 ATTACHMENT A Agenda Report Page 69
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

4. INTERFUND TRANSACTIONS, Continued
D. Intra-fund Transfers between Funds
Intra-fund transfers are not presented on the Statement of Revenues, Expenditures, and Changes in Fund Balances for the governmental funds as they are presented on a net basis. Intra-fund transfers during the year ended June 30, 2025, consisted of a transfer between the General Fund and the Traffic Safety fund for $40,000.

5. CAPITAL ASSETS
Depreciation was charged to functions on their usage of the related assets as follows:

Balance at
July 1, 2024 Additions Retirements Transfers
Balance
June 30, 2025
Governmental Activities:

Capital assets not being
depreciated
Land $ 5,683,095 $ - $ - $ - $ 5,683,095
Construction in progress 727,689 2,510,149 - (655,562) 2,582,276 Total capital assets not being
depreciated 6,410,784 2,510,149 - (655,562) 8,265,371
Capital assets being depreciated
Buildings and Improvements 5,698,904 62,534 - - 5,761,438 Vehicles 4,204,267 423,735 (217,138) - 4,410,864
Property and equipment 6,095,543 216,101 (256,954) - 6,054,690 Infrastructure 54,133,182 1,140,872 (247,687) 655,562 55,681,929 SBITA Assets 1,951,633 - (33,439) - 1,918,194
Total capital assets being
depreciated 72,083,529 1,843,242 (755,218) 655,562 73,827,115 Less accumulated depreciation
Buildings and Improvements (3,054,440) (304,561) - - (3,359,001) Vehicles (2,577,918) (333,097) 217,138 - (2,693,877)
Property and equipment (4,314,828) (479,422) 256,954 - (4,537,296) Infrastructure (32,244,669) (1,413,254) 247,687 - (33,410,236) SBITA Assets (332,988) (416,853) 33,439 - (716,402)
Total accumulated depreciation (42,524,843) (2,947,187) 755,218 - (44,716,812) Total capital assets being
depreciated, net 29,558,686 (1,103,945) - 655,562 29,110,303 Total Capital Assets, net $35,969,470 $1,406,204 $ - $ - $37,375,674 64 ATTACHMENT A Agenda Report Page 70
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

5. CAPITAL ASSETS, Continued
Depreciation was charged to functions on their usage of the related assets as follows:

Depreciation was charged to functions based on their usage of the related assets as follows:

Governmental Activities:

Administration $ 269,641
Public works 736,169
Street improvement 450,145
Public safety - police 531,891
Public safety - fire 310,648
Recreation 648,693
Total governmental activities
depreciation expense $ 2,947,187
Balance Balance
July 1, 2024 Additions Retirements June 30, 2025
Business-type Activities:

Capital assets not being depreciated
Construction in progress $19,426,327 $ 10,460,481 $ - $29,886,808 Total capital assets not being depreciated 19,426,327 10,460,481 - 29,886,808 Capital assets being depreciated
Vehicles 2,022,231 - (216,581) 1,805,650
Property and equipment - 55,841 - 55,841
Infrastructure 23,702,712 505,115 - 24,207,827
Total capital assets being depreciated 25,724,943 560,956 (216,581) 26,069,318 Less accumulated depreciation:

Vehicles (1,044,478) (292,373) 216,581 (1,120,270)
Property and equipment - (7,649) - (7,649)
Infrastructure (7,338,912) (479,064) - (7,817,976)
Total accumulated depreciation (8,383,390) (779,086) 216,581 (8,945,895) Total capital assets being depreciated, net 17,341,553 (218,130) - 17,123,423 Total Capital Assets, net $36,767,880 $ 10,242,351 $ - $47,010,231 Business-type Activities:

Sewer $ 779,086
Total business-type activities
depreciation expense $ 779,086
65 ATTACHMENT A Agenda Report Page 71
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. LONG-TERM LIABILITIES
Governmental activities long-term liabilities issued and outstanding at June 30, 2025 were comprised of the following:

Business-type activities long-term liabilities issued and outstanding at June 30, 2025 were comprised of the following:

Authorized
and Issued
Outstanding
June 30, 2025
Subscription (SBITA) liability $1,780,260 $ 767,535
Compensated absences 1,767,719
Total governmental activities $ 2,535,254
Type of Indebtedness
Authorized Outstanding
Maturity Interest Rates and Issued June 30, 2025
Sewer Rehab Loan - Phase IV 2031 1.00% $ 1,900,188 $ 715,399 Sewer Rehab Loan - Phase V 2037 1.70% 4,397,000 3,059,878 Ava Comm Energy (EBCE) Loan 2039 0.00% 750,000 750,000
2021 General Obligation Bonds 2051 5.00% 19,500,000 18,875,000 Premium on bonds 5,092,394
Compensated absences 309,311
Total business-type activities $ 28,801,982
Type of Indebtedness
66 ATTACHMENT A Agenda Report Page 72
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. LONG-TERM LIABILITIES, Continued
The following is a summary of changes in the City's long-term liabilities for the fiscal year ended June 30, 2025:

A description of the long-term liabilities at June 30, 2025 as follows:

A. Government Activities
Subscriptions (SBITAs)
The City has entered into SBITAs involving various software as a service subscriptions. The total of the City's SBITA assets are recorded at a cost of $1,918,194 less accumulated amortization of $716,402.

Future debt service payments on the SBITAs are as follows:

Balance at
July 1, 2024,
as restated Additions Reductions
Balance
June 30,
2025
Current
Portion
Governmental Activities:

Subscription (SBITA) liability $1,165,506 $ - $ (397,971) $ 767,535 $ 322,660 Total SBITAs payable 1,165,506 - (397,971) 767,535 322,660 Other liabilities:

Compensated absences 1,543,111 224,608 - $1,767,719 1,556,352 Total Governmental Activities $2,708,617 $ 224,608 $ (397,971) $2,535,254 $ 1,879,012 Balance at
July 1, 2024,
as restated Additions Retirements
Balance
June 30, 2025
Current
Portion
Type of Indebtedness
Sewer Rehab Loan - Phase III $ 157,573 $ - $ (157,573) $ - $ - Sewer Rehab Loan - Phase IV 813,591 - (98,192) 715, 399 99,174 Sewer Rehab Loan - Phase V 3,251,985 - (192,107) 3,059,878 195,374 Ava Comm Energy (EBCE) Loan 750,000 - - 750,000 25,002
Total loans payable 4,973,149 - (447,872) 4,525,277 319,550 2021 General Obligation Bond 19,195,000 - (320,000) 18,875,000 340,000 Premium on bonds 5,284,990 - (192,596) 5,092,394 -
Total bonds payable 24,479,990 - (512,596) 23,967,394 340,000 Other liabilities:

Compensated absences 256,150 53,161 - 309,311 272,326
Total Business-type Activities $29,709,289 $ 53,161 $ (960,468) $ 28,801,982 $931,876 67 ATTACHMENT A Agenda Report Page 73
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. LONG-TERM LIABILITIES, Continued
A. Government Activities, Continued
Compensated Absences
At June 30, 2025, compensated absences totaled $1,767,719, of which $211,367 was recorded as a current liability and the non-current portion totaled $1,556,352. For governmental activities, compensated absences are liquidated by the general fund.

B. Business-type Activities
Sewer Rehabilitation Loan - Phase IV
In October 2009, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase IV). Funds are drawn on the agreement as work is completed up to a maximum amount of $1,900,188 plus any construction period interest. The loan accrues interest at a rate of 1.0 percent annually. Annual principal payments are due each September 1, commencing September 1, 2012. Final payment is due September 2031. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.

Sewer Rehabilitation Loan - Phase V
In October 2016, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase V). Funds are drawn on the agreement as work is completed up to a maximum amount of $4,397,000 plus any construction period interest. The loan accrues interest at a rate of 1.7 percent annually. Annual principal payments are due each July 31, commencing July 31, 2019. Final payment is due July 2038. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.

Future debt service payments on the sewer rehabilitation loans are as follows:

Year Ending
June 30, Principal Interest Total
2026 294,548 $ $ 59,157 $ 353,705
2027 298,861 54,844 353,705
2028 303,241 50,465 353,706
2029 307,688 46,018 353,706
2030 312,203 21,964 334,167
2031 - 2035 1,309,037 59,707 1,368,744
2036 - 2039 949,699 16,745 966,444
Total 3,775,277 $ $ 308,900 $ 4,084,177
68 ATTACHMENT A Agenda Report Page 74
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. LONG-TERM LIABILITIES, Continued
B. Business-type Activities, Continued
2021 General Obligation Bonds
In September 2021, the City authorized issuance of the 2021 General Obligation Bonds in the principal amount of $19,500,000 to provide funds to construct new pool facilities, restrooms, and related areas. The bonds are payable in annual installments of $305,000 to $1,245,000, with an interest rate of 5% and maturity on September 1, 2051.

Future debt service payments on the general obligation bonds are as follows:

Ava Comm Energy (EBCE) Loan
In October 2023, the City authorized a financed electricity service agreement in the principal amount of $750,000 to provide funds for beneficial electrification projects on municipal buildings. The loan is payable in flat, fixed monthly fee of $4,167 based on billing cycle and maturity in December 2039.

Future debt service payments on the EBCE loan are as follows:

Year Ending
June 30, Principal Interest Total
2026 340,000 $ $ 935,250 $ 1,275,250
2027 355,000 917,875 1,272,875
2028 375,000 899,625 1,274,625
2029 395,000 880,375 1,275,375
2030 415,000 860,125 1,275,125
2031 - 2035 2,410,000 3,959,250 6,369,250
2036 - 2040 3,090,000 3,275,250 6,365,250
2041 - 2045 3,970,000 2,397,500 6,367,500
2046 - 2050 5,100,000 1,269,250 6,369,250
2051 - 2052 2,425,000 122,875 2,547,875
Total 18,875,000 $ $15,517,375 $34,392,375
Year Ending
June 30, Principal Interest Total
2026 $ 25,002 $ - $ 25,002
2027 50,004 - 50,004
2028 50,004 - 50,004
2029 50,004 - 50,004
2030 50,004 - 50,004
2031 - 2035 250,020 - 250,020
2036 - 2040 274,962 - 274,962
Total 750,000 $ $ - $ 750,000
69 ATTACHMENT A Agenda Report Page 75
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

6. LONG-TERM LIABILITIES, Continued
B. Business-type Activities, Continued
Total Business-type Activities Long-Term Liabilities Future Debt Service:

7. ASSESSMENT DEBT WITHOUT CITY COMMITMENT
In December 2017, the City administered the issuance of the City of Piedmont Reassessment District No. 2017-1 Limited Obligation Refunding Bonds in the principal amount of $3,917,261. The proceeds from the issuance of the bonds were used to refund the Dudley/Blair Underground Utility Assessment District bonds, the Wildwood/Crocker Underground Utility Assessment District bonds and the Piedmont Hills Underground Assessment District bonds and to pay the costs of issuance of the bonds. At June 30, 2025, the outstanding principal of the bond issue was $2,226,139. The City is not liable for the repayment of this debt and is only acting as an agent for the property owners in collecting the assessments, forwarding the collections to the bondholders, and initiating foreclosure proceedings. For this reason, this debt is not reported as a long-term liability of the City.

Year Ending
June 30, Principal Interest Total
2026 659,550 $ $ 994,407 $ 1,653,957
2027 703,865 972,719 1,676,584
2028 728,245 950,090 1,678,335
2029 752,692 926,393 1,679,085
2030 777,207 882,089 1,659,296
2031 - 2035 3,969,057 4,018,957 7,988,014
2036 - 2040 4,314,661 3,291,995 7,606,656
2041 - 2045 3,970,000 2,397,500 6,367,500
2046 - 2050 5,100,000 1,269,250 6,369,250
2051 - 2052 2,425,000 122,875 2,547,875
Total 23,400,277 $ $15,826,275 $39,226,552
70 ATTACHMENT A Agenda Report Page 76
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

8. DEFINED BENEFIT PENSION PLAN
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency CostSharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors six rate plans (three miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 (age 62 for Miscellaneous Plan members if membership date is on or after January 1, 2013) with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Special Death Benefit (Safety only), the Basic 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 rate plan provisions and benefits in effect at June 30, 2025 are summarized as follows:

Miscellaneous
Tier I Tier II
Tier III (PEPRA)
On or After
Hire Date Prior to January 1, 2013 Prior to January 1, 2013 to January 1, 2013 Benefit Formula 3.0% @ 60 2.0% @ 60 2.0% @ 62
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 60 and up 62 and up
Monthly Benefits, as a % of
Eligible Compensation 2.0% to 3.0% 2.0% 2.0%
Required Employee Contribution
Rates 8.00% 7.00% 7.75%
Required Employer Contribution
Rates 17.33% 10.15% 7.87%
Required UAL Contribution $970,827 $4,671 $8,917
71 ATTACHMENT A Agenda Report Page 77
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

8. DEFINED BENEFIT PENSION PLAN, Continued
A. General Information about the Pension Plan, Continued Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The City's contributions to the Plan for the year ending June 30, 2025 were $5,259,411.

B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2025, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $40,617,437.

Safety
Tier I Tier II
Tier III (PEPRA)
On or After
Hire Date Prior to January 1, 2013 Prior to January 1, 2013 to January 1, 2013 Benefit Formula 3.0% @ 50 2.0% @ 50 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 50 and up 57 and up
Monthly Benefits, as a % of
Eligible Compensation

3.0% 2.0% 2.70%
Required Employee Contribution
Rates

9.00% 9.00% 14.50%
Required Employer Contribution
Rates

29.30% 21.92% (police & fire) 14.72% (police & fire)
Required UAL Contribution $2,222,549 $7,784 (police)
$4,888 (fire)
$11,839 (police)
$1,979 (fire)
72 ATTACHMENT A Agenda Report Page 78
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

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

For the year ended June 30, 2025, the City recognized pension expense of $8,636,796. At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$5,259,411 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Proportion - June 30, 2023 0.32893%
Proportion - June 30, 2024 0.33492%
Change - Increase (Decrease) 0.00599%
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension Contributions Made Subsequent to Measurement Date $ 5,259,411 $ - Differences between Employer's Contributions and Proportionate Share of Contributions
227,745 408,917
Differences between Expected and Actual Experience 3,375,203 116,753 Changes in Assumptions 1,013,995 -
Change in Employer's Proportion 703,235 55,046
Differences between Projected and Actual Investment Earnings 2,078,354 - $ 12,657,943 $ 580,716
Year Ended
June 30,
2026 $ 2,645,206
2027 4,853,485
2028 30,627
2029 (711,502)
73 ATTACHMENT A Agenda Report Page 79
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

8. DEFINED BENEFIT PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Actuarial Assumptions
The total pension liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions:

Changes in Assumptions
There was no change in assumption for June 30, 2023 valuation date (2024 measurement date).

Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.

Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a buildingblock 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.

Valuation Dates June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Report 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality (1) Derived using CalPERS membership data for all funds.

Post Retirement Benefit Increase Contract COLA up to 2.30% until purchasing power protection allowance floor on purchasing power applies. (1) The mortality table used was developed based on Cal PERS' Membership Data for all Funds. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80 percent of scale MP 2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report available 74 ATTACHMENT A Agenda Report Page 80
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

8. DEFINED BENEFIT PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the next 20 years using a buildingblock approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The table below reflects long-term expected real rates of return by asset class.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability for the Plan as of the measurement date, calculated using the discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is one-percentage point lower or one-percentage point higher than the current rate:

Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Asset Class
Assumed
Asset
Real Return
Years 1-10
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021-22 Asset Liability Management Study Discount Rate -1%
(5.90%)
Current Discount Rate
(6.90%)
Dount Rate +1%
(7.90%)
Net Pension Liability (Asset) $ 61,829,875 $ 40,617,437 $ 23,230,273 75 ATTACHMENT A Agenda Report Page 81
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN)
A. General Information about the Pension Plan
Plan Description
The Piedmont Police and Fire Pension Plan (the Plan) is a single-employer defined benefit pension plan for the City's police and fire employees hired before July 1, 1971. The Plan is closed to new participants.

Section 26.1 of the City Ordinance grants authority to establish and manage benefit terms to the Police and Fire Pension Board (the Board). The Board is comprised of the mayor, one member of the City Council, one member of the police department, one member of the fire department, and one community representative.

As of June 30, 2025, the Plan covers 4 retired City employees or surviving spouses, who receive monthly benefits, which will continue for life.

Funding Policy
Contributions are determined by an actuarial valuation. Currently, assets exceed the total pension liability, so the contribution rate is 0%.

Benefit Terms
Benefits for service retirement - Benefit is 50% of final average salary (FAS) (average over the 12 months before retirement, 36 months if advanced in rank during the last 3 years before retirement) plus 3 1/3% x FAS for each year of service greater than 25 but less than 30 years. The maximum benefit is 66 2/3% of pay. Benefits are payable for participant's lifetime with 50% of the benefit payable to eligible spouse upon the death of the participant.

Benefits for duty related disability - Benefit is 50% of FAS plus 3 1/3% x FAS for each year of service greater than 25 but less than 30 years. The maximum benefit is 66 2/3% of pay. Benefits are payable for participant's lifetime with 50% of the benefit payable to eligible spouse or minor children upon the death of the participant.

A 2% cost-of-living adjustment is payable to certain retirees.

B. Net Pension Liability (Asset)
The City's net pension liability (asset) is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability (asset) of the Plan is based on a valuation as of June 30, 2024. A summary of principal assumptions and methods used to determine the net pension liability (asset) follows.
76 ATTACHMENT A Agenda Report Page 82
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN), Continued B. Net Pension Liability (Asset), Continued
Actuarial Assumptions
The total pension liability (asset) in the June 30, 2025 actuarial valuation was determined using the following actuarial assumptions:

Changes of Assumptions
There were no changes in assumptions.

Discount Rate
The discount rate was set equal to the long-term expected rate of return. The long-term expected rate of return was used as current assets are expected to be sufficient to cover all future benefit payments and expenses due to the magnitude of the Plan’s 2,705.0% funded ratio and the average age of the group (91).

The 5.5% long-term expected rate of return was based on an assumed long-term asset allocation of 60% equities and 40% fixed income with expected real rates of return of 4.29% and .78%. The sensitivity of the net pension liability/(asset) to a 1% change in the discount rate is shown below.

Measurement Date June 20, 2025
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 5.50%
Inflation 2.50%
Salary Increases 2.00%
Investment Rate of Return 5.50% net of pension plan investment expenses Mortality
Service retirements and benefits California PERS mortality table for healthy recipients (based on CalPERS 2000-2019 experience study), with generational mortality projection (to recognize future mortality improvement) utilizing Society of Actuaries Scale MP-2021.

Disability California PERS mortality table for work-related disabled retirees (based on CalPERS 2000-2019 experience study), with generational mortality projection (to recognize future mortality improvement) utilizing Society of Actuaries Scale MP-2021.
1% Decrease
(4.50%)
Current Discount Rate
(5.50%)
1% Increase
(6.50%)
Net Pension Liability (Asset) $ (18,996,787) $ (19,040,394) $ (19,079,265) 77 ATTACHMENT A Agenda Report Page 83
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN), Continued C. Changes in the Net Pension Liability (Asset)
The changes in the net pension liability (asset) for the Plan follows:

D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2025, the City recognized pension expense/(Income) of $(1,451,189). At June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Total Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
(Asset)
Balance at July 1, 2024 $ 788,889 $ 18,585,491 $ (17,796,602) Changes in the year:

Interest 40,676 - 40,676
Net investment income - 1,284,468 (1,284,468)
Benefit payments (98,655) (98,655) -
Net changes (57,979) 1,185,813 (1,243,792)
Balance at June 30, 2024 $ 730,910 $ 19,771,304 $ (19,040,394) Increase (Decrease)
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net differences between projected and
actual earnings on plan investment $ - $ 830,699
Total $ - $ 830,699
Year
Ended June 30
2026 $147,678
2027 (533,286)
2028 (392,096)
2029 (52,995)
78 ATTACHMENT A Agenda Report Page 84
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

10. OTHER POST EMPLOYMENT BENEFITS
Plan Description
The City of Piedmont Retiree Healthcare Plan (the "Plan") is a single-employer defined benefit healthcare plan administered by the City. Effective January 1, 1997, all City employees were enrolled in the PERS Health Care Plan. The City provides postretirement healthcare benefits to eligible employees who retire directly from the City. The City pays healthcare coverage up to a cap for eligible retirees and their dependents.

The City reports the financial activity of the other post-employment benefits (OPEB) in the fiduciary OPEB Trust Fund, and no separate financial report is prepared.

In fiscal 2010, the City established an OPEB irrevocable trust with the City Administrator and Finance Director acting as trustees for the OPEB Trust Fund.

Benefits Provided
Employees Covered
As of the June 30, 2025 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Tier 1 • Eligibility:

Hired before May 1, 2018 or January 1, 2018 depending on the MOU group Service or disability retirement under CalPERS directly from City • Retiree cap equal active cap using PEMHCA Unequal Method • Active cap is based on 2021 Kaiser Bay Area premiums plus 50% of post-2021 changes
• Maximum yearly increase $100/month (formerly unequal method) . • 2025 Monthly Retiree Caps are $963.26, $1,926.54 and $2,147.26 for Single, Dual and Family coverages respectively
• Active Members contribute $50 semi-monthly
Tier 2 • Eligibility:

Hired before May 1, 2018 or January 1, 2018 depending on the MOU group Service or disability retirement under CalPERS directly from City • PEMHCA minimum benefit is paid monthly ($158/month in 2025, $162/month in 2026) Other
• City pays lifetime Kaiser Single Non-Medicare rate for retiree hired before October 1, 1984 with a special agreement.
• No dental, vision, or life benefits
Active employees 112
Inactive employees currently receiving benefits 78
Inactive employees entitled to, but not yet receiving benefits 14 204
79 ATTACHMENT A Agenda Report Page 85
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

10. OTHER POST EMPLOYMENT BENEFITS, Continued
Contributions
Following is a summary of the City's contribution policy:
 The City pays retiree premiums outside of trust.
 The City reimburses itself from the OPEB trust for a level % of OPEB cash benefit payments beginning Fiscal Year End 2030.
 The Police and Fire Pension Plan assets are transferred to the OPEB trust once the Police and Fire Pension Plan no longer has participants. Thereafter all OPEB benefits are paid from the OPEB trust.

Net OPEB Liability
The City's net OPEB liability ("NOL") was measured as of June 30, 2025 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2025 based on the following actuarial methods and assumptions:

Changes of Assumption
In Fiscal Year 2024/25, the discount rate was increased from 5.63% to 5.72% based on the municipal bond rate as of the measurement date and crossover test.

Actuarial Cost Method Entry Age Normal Cost, level percentage of payroll Expected Long Term Rate of Return on
Investments • 5.75% at June 30, 2025
• 5.75% at June 30, 2024
20-Year Municipal Bond • 5.20% at June 30, 2025
(Bond Buyer 20-Bond GO) • 3.93% at June 30, 2024
Discount Rate • 5.72% at June 30, 2025
• 5.63% at June 30, 2024
General Inflation 2.50% annually
Mortality, Retirement, Disability,
Termination CalPERS 2000-2019 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-2021 Salary increases • Aggregate - 2.75% annually
• Merit - CalPERS 2000-2019 Experience Study
Medical Trend • Non-Medicare - 7.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076 • Medicare:

Kaiser: 5.65% for 2026, decreasing to an ultimate rate of 3.45% in 2076 Non-Kaiser: 6.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076 PEMHCA Minimum Increases Increase 3.50% annually
Participation at Retirement • Currently covered (Tier 1): 95% • Currently covered (Tier 2): 60% (eligible for PEMHCA minimum only) • Currently waived - 40%
Spouse Coverage at Retirement • Based on current election, 80% if currently waived Family Coverage at • Miscellaneous - 20% until age 65
• Safety - 35% until age 65
80 ATTACHMENT A Agenda Report Page 86
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

10. OTHER POST EMPLOYMENT BENEFITS, Continued
Discount Rate
The discount rate used to measure the total OPEB liability was 5.72 percent. The table below reflects longterm expected real rates of return presented as geometric means.

Changes in the Net OPEB Liability
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the Net OPEB Liability of the City 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, 2025:

Asset Class Component
Target Allocation
Osterweis Fund
Investment Policy
Allocation
Equity 65% 4.29%
Fixed Income 35% 0.78%
Assumed Long-term Rate of Inflation 2.50%
Expected Long-term Net Rate of Return, Rounded 5.75%
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability/(Asset)
(c) = (a) - (b)
Balance at July 1, 2024 $ 21,058,584 $ 14,216,324 $ 6,842,260 Service cost 568,384 - 568,384
Interest cost 1,185,047 - 1,185,047
Assumption changes (215,152) - (215,152)
Contributions- employer - 1,159,129 (1,159,129)
Contributions - employee - 51,650 (51,650)
Net investment income - 1,082,341 (1,082,341)
Benefit payments (1,156,337) (1,156,337) -
Administrative expenses - (2,790) 2,790
Net change 381,942 1,133,993 (752,051)
Balance at June 2025 $ 21,440,526 $ 15,350,317 $ 6,090,209 1% Decrease
(4.72%)
Current Discount
Rate
(5.72%)
1% Increase
(6.72%)
Net OPEB Liability $ 8,701,094 $ 6,090,209 $ 3,923,735
81 ATTACHMENT A Agenda Report Page 87
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

10. OTHER POST EMPLOYMENT BENEFITS, Continued
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rate The following represents 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 (NonMedicare 7.90% decreasing to 3.45%, Medicare 6.90% decreasing to 3.45%), for measurement period ended June 30, 2025:

OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2025, the City recognized OPEB expense/(income) of $(226,768). As of fiscal year ended June 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as follows:
1% Decrease
Current
Healthcare
Cost Trend Rate 1% Increase
Net OPEB Liability $ 3,797,685 $ 6,090,209 $ 8,919,368
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual experience $ - $ 856,327 Changes in assumptions 653,214 595,745
Net difference between projected and actual earnings
on plan investments - 776,723
Total $ 653,214 $ 2,228,795
For the Fiscal Year
Ending in 30, June
Recognized Net Deferred
Outflows (Inflows) of
Resources
2026 $ (287,035)
2027 (871,972)
2028 (332,156)
2029 (47,299)
2030 (3,785)
Thereafter (33,334)
82 ATTACHMENT A Agenda Report Page 88
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

11. FUND BALANCE
GASB Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions” provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balances more transparent. The following classifications describe the relative strength of the spending constraints:

Non Spendable: Amounts that cannot be spent because they are either (a) not in spendable form (not expected to be converted to cash) or (b) legally or contractually required to be maintained intact.

Restricted: Amounts subject to externally enforceable legal restrictions or constrained for a specific purpose by external parties, constitutional provisions, or enabling legislation. This fund balance type is essentially the same definition as restricted net position under GASB Statement No. 34.

Committed: Amounts that can only be used for specific purposes pursuant to constraints imposed by the formal action of City Council. Committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action (legislation, resolution, ordinance) it employed to previously commit those amounts. Action to constrain resources must occur prior to year-end; however, the amount can be determined in the subsequent period.

Assigned: Amounts that are not restricted by the funding agency but are for specific purposes and assigned by City Council for that purpose. City Council's action in creating the fund is to ensure that the funds are used for their intended purpose. That purpose is not always planned for the current fiscal year as it may take several years to build up a sufficient fund balance to be able to implement the stated purpose. This classification also represents all remaining amounts (except negative balances) reported in governmental funds, other than the general fund, that are not classified as non-spendable, restricted, or committed.

Unassigned: Residual amounts in the general fund, not classified as non-spendable, restricted, committed, or assigned. For other governmental fund types, unassigned is only used when a deficit or negative fund balance occurs.

The City Council establishes (and modifies or rescinds) fund balance commitments by approval of a resolution. Currently, the City Council has not committed any fund balances. The City Council delegates authority to the Finance Director to assign amounts to be used for specific purposes. Assignments are less formal than commitments and can be changed by the Finance Director.

The accounting policies of the City consider restricted fund balance to have been spent first when an expenditure is incurred for the purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds. 83 ATTACHMENT A Agenda Report Page 89
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

11. FUND BALANCE, Continued
As of June 30, 2025, fund balances were comprised of the following:

12. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions, and natural disasters. The City manages risk by participating in the public entity risk pools described below and by retaining certain risks.

Public entity risk pools are formally organized separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these risk pools exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities.

Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the board. Obligations and liabilities of these risk pools are the City’s responsibility.

Nonmajor Total
General Facilities Governmental Governmental
Classifications Fund Capital Funds Funds
Nonspendable:

Prepaid expenses $ 102,760 $ - $ - $ 102,760
Total Nonspendable 102,760 - - 102,760
Restricted:

Projects and services - - 400,181 400,181
Street projects - - 647,593 647,593
Schoolmates program - - 2,556,548 2,556,548
Measure D - - 52,800 52,800
Measure BB sales tax - - 2,699,210 2,699,210
COPS - - 216,413 216,413
Measure F - - 154,145 154,145
Athletic facility preservation - - 693,902 693,902
Abandoned vehicle - - 57,533 57,533
Section 115 Trust 5,218,407 - - 5,218,407
Total Restricted 5,218,407 - 7,478,325 12,696,732 -
Assigned
Facilities maintenance - 9,849,212 570,421 10,419,633
Equipment replacement - - 3,765,542 3,765,542
Sidewalk repair - - 19,988 19,988
Total Committed - 9,849,212 4,355,951 14,205,163
Unassigned: 7,233,084 - (22,946) 7,210,138
Total Unassigned 7,233,084 - (22,946) 7,210,138
Total Fund Balances $ 12,554,251 $ 9,849,212 $ 11,811,330 $ 34,214,793 84 ATTACHMENT A Agenda Report Page 90
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

12. RISK MANAGEMENT, Continued
A. Risk Pools
General Liability - Bay Cities Joint Powers Insurance Authority (BCJPIA) covers general liability claims, including excess liability, in an amount up to $34,500,000. The City has a deductible or uninsured liability of up to $25,000 per claim. Once the City's deductible is met, BCJPIA becomes responsible for payment of all claims up to the limit. During the fiscal year ended June 30, 2025, the City contributed $1,391,986 for current year coverage.

Workers' Compensation - BCJPIA also covers workers' compensation liability in an amount up to $1,000,000 per claim. The City has a deductible or uninsured liability of up to $150,000 per claim. The Local Agency Workers' Compensation Excess Insurance Joint Powers Authority (LAWCX) covers workers' compensation claims in excess of $1,000,000 per claim up to $300,000,000. During the fiscal year ended June 30, 2025, the City contributed $734,738 for current year coverage.

Financial statements for BCJPIA and LAWCX may be obtained from Bickmore & Associates, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

The City’s contribution with each risk pool equals the ratio of the City’s payroll to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.

B. Liability for Uninsured Claims
The City has retained the risk for the uninsured portion of the above claims as discussed above. Activity for the City's liability for uninsured claims was as follows for the year ended June 30, 2025:
2025 2024 2025 2024 2025 2024
Beginning balance $ 251,346 $216,778 $ 1,273,000 $1,187,000 1,524,346 $ $1,403,778 Incurred claims 55,121 109,248 315,974 557,903 371,095 667,151 Claims paid (70,467) (74,680) (217,974) (471,903) (288,441) (546,583) Ending Balance $ 236,000 $251,346 $ 1,371,000 $1,273,000 $1,607,000 $1,524,346 Current portion $ 128,708 73,587$ 306,323$ 524,297$ 435,031$ 451,152$ General Liability Workers' Compensation Total
85 ATTACHMENT A Agenda Report Page 91
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

13. PARCEL TAX RATE
Each year, the City reviews the General Fund balance to determine the appropriate parcel tax rate for the following year. The City of Piedmont is required by the Municipal Code to refund or reduce subsequent taxes regarding any excess of the ending General Fund unencumbered fund balance over 25 percent of that year's General Fund expenditures. This calculation applies only to the City's General Fund and excludes the Deposits and Bonds, Traffic Safety, and Pension Rate Stabilization Trust Funds which are combined into the General Fund for financial reporting purposes. The unencumbered General Fund balance at June 30, 2025 did not exceed the 25 percent of expenditures limitation.

14. EXCESS EXPENDITURES OVER APPROPRIATIONS
The following funds incurred expenditures in excess of appropriations in the following amounts for the year ended June 30, 2025:

15. CONTINGENCIES AND COMMITMENTS
Grant Awards
The City participates in certain federal and state assisted grant programs. These programs are subject to program compliance audits by the granters or their representatives. Any liability for reimbursement which may arise as the result of these audits is not believed to be material.

Litigation
The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City, not covered by insurance, will not have a material adverse effect on the financial statements of the City.

Contracts
At June 30, 2025, the City had construction contracts outstanding of approximately $7,979,561 related to various construction projects.

Amounts
General fund expenditures 38,196,727 $
Fund balance limitation, 25% of expenditures 9,549,182
Unencumbered General fund balance at year end 7,293,843 Amount below fund balance limitation $ 2,255,339
Excess
Fund Expenditures
Streets Projects 10,145 $
86 ATTACHMENT A Agenda Report Page 92
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2025

16. RESTATEMENTS
The City recorded the following restatements:
1) Error correction to accrued interests – The City recorded restatements for accrued interests due to investment earnings that were calculated incorrectly: For Business-type Activities, accrued interests were overstated by $9,969 and investment earnings was understated by $9,969 in the prior year. 2) Implementation of GASB 101 to compensated absences – The City recorded a restatement of the prior year’s compensated absences liability balance to comply with the requirements of GASB Statement No. 101, Compensated Absences. For Governmental Activities, compensated absences were increased by $479,930, and for Business-type Activities, compensated absences were increased by $178,670 due to the restatement in the prior year.

Change in
Accounting Error
Previously Principle - Correction -
Reported GASB 101 Accrued interests As Restated
Fund Financial
Sewer Fund $ 14,824,722 $ (178,670) $ 9,969 $ 14,656,021 Governmental-Wide Financial
Governmental Activities $ 53,330,529 $ (479,930) $ - $ 52,850,599 Business-type Activities $ 18,137,615 $ (178,670) $ 9,969 $ 17,968,914 Restatements
87 ATTACHMENT A Agenda Report Page 93
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88 ATTACHMENT A Agenda Report Page 94

REQUIRED

SUPPLEMENTARY INFORMATION
89 ATTACHMENT A Agenda Report Page 95
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90 ATTACHMENT A Agenda Report Page 96
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property tax $ 19,164,000 $ 18,994,000 $ 18,920,860 $ (73,140) Sales tax 225,000 225,000 219,837 (5,163)
Franchise tax 608,000 618,000 600,913 (17,087)
Utility users tax 1,505,000 1,505,000 1,547,283 42,283
Real property transfer tax 3,800,000 3,800,000 4,515,282 715,282 Business license and rental tax 760,000 760,000 717,965 (42,035) Licenses and permits 821,310 846,310 872,697 26,387
Intergovernmental 3,991,805 4,725,005 4,064,241 (660,764) Use of money and property 1,147,443 1,147,443 1,450,715 303,272 Current service charges 4,794,500 4,842,500 5,543,832 701,332 Parcel tax 2,690,000 2,690,000 2,690,645 645
Contributions and donations 26,000 26,000 56,745 30,745 Other revenues 340,900 210,000 288,356 78,356
Total revenues 39,873,958 40,389,258 41,489,371 1,100,113 EXPENDITURES:

Current:

Administration 5,258,003 5,291,853 4,918,153 373,700
Public works 7,449,690 7,387,052 6,681,048 706,004
Police services 8,781,398 8,772,707 8,405,434 367,273
Fire services 8,579,244 8,726,955 8,916,369 (189,414)
Recreation 4,057,849 4,131,680 4,193,032 (61,352)
Nondepartmental 4,210,471 4,450,471 4,193,520 256,951
Capital outlay 510,000 1,520,388 473,410 1,046,978
Debt service - principal - - 432,291 (432,291)
Total expenditures 38,846,655 40,281,106 38,213,257 2,067,849

REVENUES OVER (UNDER)
EXPENDITURES 1,027,303 108,152 3,276,114 3,167,962
OTHER FINANCING SOURCES (USES):

Transfers in - 300,000 1,171,356 871,356
Transfers out (3,395,932) (3,305,800) (5,260,207) (1,954,407) Total other financing sources (uses) (3,395,932) (3,005,800) (4,088,851) (1,083,051) Net change in fund balances $ (2,368,629) $ (2,897,648) (812,737) $ 2,084,911 FUND BALANCES:

Beginning of year 13,366,988
End of year $ 12,554,251
Budgeted Amounts
91 ATTACHMENT A Agenda Report Page 97
City of Piedmont
Notes to Required Supplementary Information
Budgetary Accounting and Control
For the year ended June 30, 2025

BUDGETARY INFORMATION

BUDGETARY CONTROLS
The amounts reported as the original budgeted amounts in the budgetary schedules reflect the amounts when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary schedules reflect the amounts after all budget amendments have been accounted for. The City did not formally adopt a budget for the Projects and Services, Abandoned Vehicle, Capital Improvement, and Sidewalk Repair nonmajor capital project funds.

Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The City Council approves total appropriations on a department basis. Budgetary comparison schedules are presented for all funds. The budgetary comparison schedules present both the original adopted budget and the final budget with all amendments.
92 ATTACHMENT A Agenda Report Page 98
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93 ATTACHMENT A Agenda Report Page 99
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of the City's Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan Measurement Date 2015 2016 2017 2018
Plan's proportion of the net pension liability 0.24111% 0.25701% 0.2620% 0.2700% Plan's proportionate share of
the net pension liability $ 16,549,792 $ 22,238,992 $ 25,982,764 $ 26,035,468 Plan's covered payroll $ 9,157,966 $ 9,305,356 $ 9,471,727 $ 10,265,025 Plan's proportionate share of
the net pension liability as percentage
of its covered payroll 180.71% 238.99% 274.32% 253.63%
Fiduciary net position as a percentage of the
total pension liability 78.40% 74.06% 73.29% 75.30%
Notes to the schedule:

Changes in assumptions. In 2023, the inflation rate was reduced from 2.50 percent to 2.30 percent.

In 2022, the accounting discount rate was reduced from 7.15 percent to 6.90 percent. In 2021, 2020 and 2019, there were no changes in assumptions. In 2018, assumptions for individual salary increases and overall payroll growth are reduced from 3.00 percent to 2.75 percent. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. 94 ATTACHMENT A Agenda Report Page 100
2019 2020 2021 2022 2023 2024

0.2790% 0.2900% 0.3300% 0.3250% 0.3289% 0.3349%
$ 28,550,576 $ 31,550,977 $ 17,867,729 $ 37,545,626 $ 41,035,485 $ 40,617,437 $ 10,517,384 $ 10,804,215 $ 11,098,592 $ 10,824,143 $ 12,213,712 $ 13,034,190 271.46% 292.02% 160.99% 346.87% 335.98% 311.62%

75.30% 75.10% 88.29% 76.68% 76.21% 78.08%
95 ATTACHMENT A Agenda Report Page 101
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of Pension Plan Contributions - Last 10 Fiscal Years Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan Fiscal Year Ended 2016 2017 2018 2019
Actuarially determined contribution $ 2,072,601 $ 2,295,957 $ 2,521,862 $ 2,920,619 Contributions in relation to actuarially
deemed contributions (2,072,601) (2,295,957) (2,521,862) (2,920,619) Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 9,305,356 $ 9,471,727 $ 10,265,025 $ 10,517,384 Contributions as a percentage of
covered payroll 22.27% 24.24% 24.57% 27.77%
96 ATTACHMENT A Agenda Report Page 102
2020 2021 2022 2023 2024 2025
$ 3,367,402 $ 3,776,944 $ 4,176,329 $ 4,457,038 $ 4,588,090 $ 5,259,411 (3,367,402) (3,776,944) (4,176,329) (4,457,038) (4,588,090) (5,259,411) $ - $ - $ - $ - $ - $ -
$ 10,804,215 $ 11,098,592 $ 10,824,143 $ 12,213,712 $ 13,034,190 $ 14,014,128

31.17% 34.03% 38.58% 36.49% 35.20% 37.53%
97 ATTACHMENT A Agenda Report Page 103
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of Funding Progress for Police and Fire Pension (Closed) Plan - Last Fiscal 10 Years Measurement Date 2016 2017 2018 2019

TOTAL PENSION LIABILITY
Interest $ 141,412 $ 119,038 $ 112,356 $ 104,393
Differences between expected and
actual experience (270,454) 74,556 - -
Changes in assumptions - (93,912) - -
Benefit payments, including refunds of employee
contributions (251,005) (233,036) (227,770) (223,674)
Net change in the total pension liability (380,047) (113,998) (134,770) (119,281) Total pension liability - beginning 2,480,531 2,100,484 1,986,486 1,851,716 Total pension liability - ending (a) $ 2,100,484 $ 1,986,486 $ 1,851,716 $ 1,732,435

PLAN FIDUCIARY NET POSITION
Net investment income $ (539,063) $ 1,321,041 $ 649,249 $ 833,644 Benefit payments (251,005) (233,036) (227,770) (223,674) Administrative expense (2,025) (7,183) (3,405) (12,000) Net change in plan fiduciary net position (792,093) 1,080,822 418,074 597,970 Plan fiduciary net position - beginning 11,645,257 10,853,164 11,933,986 12,352,060 Plan fiduciary net position - ending (b) $ 10,853,164 $ 11,933,986 $ 12,352,060 $ 12,950,030 Net pension liability/(Asset) - ending (a) - (b) (8,752,680) $ $ (9,947,500) $ (10,500,344) $ (11,217,595) Plan fiduciary net position as a percentage of the
total pension liability 517% 601% 1115% 1076%
Covered employee payroll $ - $ - $ - $ -
Net pension liability as a percentage of covered
payroll N/A N/A N/A N/A
98 ATTACHMENT A Agenda Report Page 104
2020 2021 2022 2023 2024 2025
$ 97,631 $ 93,213 $ 83,881 $ 68,827 $ 65,077 $ 40,676
25,239 (168,860) - (395,874) - -
(15,617) 46,239 (23,006) - - -
(210,488) (151,293) (184,495) (146,959) (127,061) (98,655) (103,235) (11,841) (292,480) (78,132) (457,858) (57,979) 1,732,435 1,629,200 1,617,359 1,324,879 1,246,747 788,889 $ 1,629,200 $ 1,617,359 $ 1,324,879 $ 1,246,747 $ 788,889 $ 730,910 $ 902,277 $ 3,914,153 (2,452,693) 1,514,029 2,579,341 1,284,468 (210,488) (151,293) (184,495) (146,959) (127,061) (98,655) (1,350) - - - - -
690,439 3,762,860 (2,637,188) 1,367,070 2,452,280 1,185,813 12,950,030 13,640,469 17,403,329 14,766,141 16,133,211 18,585,491 $ 13,640,469 $ 17,403,329 $ 14,766,141 $ 16,133,211 $ 18,585,491 $ 19,771,304 $ (12,011,269) $ (15,785,970) $ (13,441,262) $ (14,886,464) $ (17,796,602) $ (19,040,394) 837% 748% 667% 1294.02% 2355.91% 2705.0%
$ - $ - $ - $ - $ - $ -

N/A N/A N/A N/A N/A N/A
99 ATTACHMENT A Agenda Report Page 105
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of Funding Progress for Police and Fire Pension (Closed) Plan - Last Fiscal 10 Years Employer Actuarially Determined Contribution for fiscal year June 30, 2025:

Actuarially
Determined Contribution
Actuarial Contribution Employer Deficiency ADC as a % of Valuation Date (ADC) Contributions (Excess) Covered Payroll Covered Payroll 2016 $ - $ - $ - $ N/A -
2017 - - - N/A -
2018 - - - N/A -
2019 - - - N/A -
2020 - - - N/A -
2021 - - - N/A -
2022 - - - N/A -
2023 - - - N/A -
2024 - - - N/A -
2025 - - - N/A -
The actuarially determined contribution is based on the same assumptions as the net pension liability (asset). 100 ATTACHMENT A Agenda Report Page 106
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101 ATTACHMENT A Agenda Report Page 107
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of Changes in the Net OPEB Liability and Related Ratios - Last 10 Fiscal Years* (Amounts in 000's) Measurement Date 2018 2019 2020 2021
Total OPEB Liability
Service cost $ 944 1,179 $ 948 $ 675 $
Interest 1,155 1,361 1,225 1,155
Changes of benefit terms - (1,104) - -
Differences between expected and actual experience - (4,473) (1,743) - Changes of assumptions 355 (2,016) (2,620) 1,331
Benefit payments (641) (562) (772) (832)
Net change in the total OPEB liability (5,615) 1,813 (2,962) 2,329 Total OPEB liability - beginning 25,842 20,227 22,040 19,078 Total OPEB liability - ending (a) 20,227 22,040 19,078 21,407 Plan Fiduciary Net Position
Contribution - employer 1,028 642 774 834
Contributions - employee - 161 89 97
Net investment income 441 597 580 2,886
Benefit payments (562) (641) (772) (832)
Administrative expense (2) (1) (2) (2)
Net change in plan fiduciary net position 758 905 669 2,983 Plan fiduciary net position - beginning 7,171 8,076 8,834 9,503 Plan fiduciary net position - ending (b) 8,076 8,834 9,503 12,486 Net OPEB liability/asset - ending (a) - (b) $ 12,151 $ 13,206 $ 9,575 $ 8,921 Plan fiduciary net position as a percentage
of the total OPEB liability 39.93% 40.08% 49.81% 58.33% Covered-employee payroll 11,022 $ 11,344 $ 12,373 $ 13,111 $ Net OPEB liability as a percentage of coveredemployee payroll 110.24% 116.41% 77.39% 68.04% Notes to Schedule:

Changes of assumptions: For the measurement period ended June 30, 2025, the 20-Year Municipal Bond rate was changed from

3.93% to 5.20% and the discount rate was changed from 5.63% to 5.72%. For the measurement period ended June 30, 2024, the 20-Year Municipal Bond rate was changed from 3.65% to 3.93% and the discount rate was changed from 5,50% to 5.63%. For the measurement period ended June 30, 2023, the discount rate was changed from 5.47% to 5.50%. For the measurement period ended June 30, 2021, general inflation was lowered from 2.75% to 2.5%, the long-term rate of return was lowered from 6.5% to

5.5% based on capital market assumption review and the lower inflation rate, and the discount rate was updated based on crossover test from 5.22% to 5.47%. For the measurement period ended June 30, 2020, the discount rate was updated based on the crossover test, the long-term rate of return was updated due to change in the target asset allocation, Kaiser Medicare Health Trend was updated, Medicare eligibility and family coverage at retirement rates were updated based on the City's experience, and the mortality improvement scale was updated to Scale MP-2019. For the measurement period ended June 30, 2019, the discount rate was changed from 5.54 percent (net of administrative expense) to 5.42 percent. * Schedule is intended to show information for ten years. Fiscal year 2018 was the first year of implementation, therefore only seven years are shown. Additional years' information will be displayed as it becomes available. 102 ATTACHMENT A Agenda Report Page 108
2022 2023 2024 2025
$ 754 $ 579 $ 591 $ 568
1,132 1,084 1,115 1,185
247 - - -
(1,626) - (474) -
(1,168) (68) 728 (215)
(949) (1,106) (1,188) (1,156)
(1,610) 489 772 382
21,407 19,797 20,287 21,059
19,797 20,287 21,059 21,441
952 1,109 1,191 1,159
73 61 54 52
(1,728) 1,193 2,077 1,082
(949) (1,106) (1,187) (1,156)
(2) (3) (4) (3)
(1,654) 1,254 2,131 1,134
12,486 10,832 12,086 14,216
10,832 12,086 14,216 15,350
$ 8,965 $ 8,201 $ 6,842 $ 6,090

54.72% 59.58% 67.50% 71.60%
$ 14,167 13,657 $ 14,886 $ 15,183 $

65.64% 57.89% 45.96% 40.1%
103 ATTACHMENT A Agenda Report Page 109
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2025
Schedule of OPEB Contributions - Last 10 Fiscal Years* (Amounts in 000's) Fiscal Year Ended June 30, 2018 2019 2020 2021
Actuarially determined contribution 1,028 $ 642 $ 774 $ 834 $ Contributions in relation to the actuarially
determined contribution (1,028) (642) (774) (834)
Contribution deficiency (excess) - $ - $ - $ - $
Covered employee payroll 11,022 $ 11,344 $ 12,373 $ 13,111 $ Contributions as a percentage of
covered employee payroll -9.33% -5.66% -6.26% -6.36%
* Schedule is intended to show information for ten years. Fiscal year 2018 was the first year of implementation, therefore only six years are shown. Additional years' information will be displayed as it becomes available. ** The City contributes $100 per month for every Tier 1 active employee in addition to contributing the pay-as-you go cost
104 ATTACHMENT A Agenda Report Page 110
2022 2023 2024 2025
$ 951 $ 1,109 $ 1,191 $ 1,159
(951) (1,109) (1,191) (1,159)
$ - $ - $ - $ -
$ 13,657 $ 14,167 $ 14,886 $ 15,183
-6.96% -7.83% -8.00% -7.63%
105 ATTACHMENT A Agenda Report Page 111
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106 ATTACHMENT A Agenda Report Page 112

SUPPLEMENTARY INFORMATION
107 ATTACHMENT A Agenda Report Page 113
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108 ATTACHMENT A Agenda Report Page 114
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Facilities Capital - Major Capital Projects Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 300,000 $ 300,000 $ 507,621 $ 207,621 Total revenues 300,000 300,000 507,621 207,621
EXPENDITURES:

Current:

Administration - - 5,445 (5,445)
Public works 430,000 430,000 70,285 359,715
Public safety:

Police services 200,000 - 257 (257)
Fire services - 50,000 198,146 (148,146)
Recreation 326,500 431,500 244,057 187,443
Capital outlay 4,295,000 4,915,000 2,230,396 2,684,604
Total expenditures 5,251,500 5,826,500 2,748,586 3,077,914

REVENUES OVER (UNDER)
EXPENDITURES (4,951,500) (5,526,500) (2,240,965) 3,285,535 OTHER FINANCING SOURCES (USES):

Transfers in 2,050,932 2,115,800 3,120,207 1,004,407
Transfers out (1,000,000) (1,500,000) (1,487,393) 12,607 Total other financing sources (uses) 1,050,932 615,800 1,632,814 1,017,014 Net change in fund balances $ (3,900,568) $ (4,910,700) (608,151) $ 4,302,549 FUND BALANCES:

Beginning of year 10,457,363
End of year $ 9,849,212
Budgeted Amounts
109 ATTACHMENT A Agenda Report Page 115
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110 ATTACHMENT A Agenda Report Page 116
City of Piedmont
Nonmajor Governmental Funds
The following funds are reported in total on the Governmental Fund Financial Statements under the column Other Governmental Funds.

Special Revenue Funds
Streets Projects
Accounts for revenues and expenditures associated with the maintenance and improvements of the City's roads and street landscaping that is funded through the receipt of the City's share of gas tax.

Schoolmates Program
Accounts for the operating of the before-and-after school child care program for elementary school age children operated by the Piedmont Recreation Department.

Projects and Services
Accounts for the Private Contribution Fund. The Private Contribution Fund is used to account for all citizen and other private contributions and donations to the City.

Measure D
Accounts for surcharges collected for the continuation and expansion of municipal recycling programs.

Abandoned Vehicle
Accounts for abandoned vehicle abatement funding as the City is a participant in the Alameda County Abandoned Vehicle Program for receiving reimbursement of expenses arising from the investigation of reported abandoned vehicles.

Measure BB Sales Tax
Accounts for a tax approved by Alameda County voters in November 2014 to provide for the direct funding for local streets projects and bicycle and pedestrian projects based on population and road mileage.

COPS
Accounts for revenues and expenditures of the State of California funded Supplemental Law Enforcement Services grant.

Measure F
Accounts for the additional $10 fee associated with registering a vehicle in the County. Fees are restricted to reduce traffic congestion and vehicle related pollution.

Athletic Facility Preservation
Accounts for funds to be used for repairing, refurnishing, and replacing City athletic facilities.

Capital Projects Funds
Capital Improvement
Accounts for the City's major capital projects.

Sidewalk Repair
Accounts for the sidewalk reimbursement revenue associated with the repair/replacement of City sidewalks under article V, section

18.26 of the City code.

Equipment Replacement Fund
Accounts for the accumulation of resources used for the replacement of capital assets used by governmental funds.

Facilities Maintenance Fund
Accounts for the accumulation of resources for the maintenance of capital assets used by governmental funds. 111 ATTACHMENT A Agenda Report Page 117
City of Piedmont
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
ASSETS
Cash and investments 408,017$ $ 2,556,715 $ 647,593 44,687$ 57,109$ $ 2,883,125 Receivables:

Accounts Receivable 52,662 224 7,504 - 187,979 -
Interest Receivable 4,503 19,524 609 - 424 18,126
Advances to other funds - - - - - -
Total assets 465,182$ $ 2,576,463 $ 647,593 52,800$ 57,533$ $ 3,089,230 Liabilities:

Accounts payable 65,001$ $ 6,442 $ - -$ $ 390,020 - $
Accrued wages and benefits - 13,473 - - - -
Due to other funds - - - - - -
Total liabilities 65,001 19,915 - - 390,020 -
Deferred Inflows of Resources
Total deferred inflows of resources - - - - - -
Fund Balances:

Restricted 400,181 2,556,548 647,593 52,800 57,533 2,699,210 Assigned - - - - - -
Unassigned - - - - - -
Total fund balances 400,181 2,556,548 647,593 52,800 57,533 2,699,210 Total liabilities, deferred inflows of
resources and fund balances 465,182$ $ 2,576,463 $ 647,593 52,800$ 57,533$ $ 3,089,230 Special Revenue Funds
Streets
Projects
Schoolmates
Program
Projects and
Services Measure D
Abandoned
Vehicle
Measure BB
Sales Tax
112 ATTACHMENT A Agenda Report Page 118
Total Nonmajor
Governmental
Funds
250,534$ 145,422$ $ 688,998 $ 19,988$ - $ 3,599,375 $ 700,022 $ 12,001,585 - 7,673 - - - - - 256,042
3,535 1,050 4,904 - - 20,610 3,621 76,906
- - - - - 600,000 200,000 800,000
254,069$ 154,145$ $ 693,902 $ 19,988$ - $ 4,219,985 $ 903,643 $ 13,134,533 37,656$ -$ $ - $ - -$ 454,443 $ $ 333,222 $ 1,286,784
- - - - - - - 13,473
- - 22,946 - - - - 22,946
37,656 - 22,946 - - 454,443 333,222 1,323,203
- - - - - - - -
216,413 154,145 693,902 - - - 7,478,325 -
- - - 19,988 - 3,765,542 570,421 4,355,951
- - (22,946) - - - - (22,946)
216,413 154,145 693,902 (22,946) 19,988 3,765,542 570,421 11,811,330 254,069$ 154,145$ $ 693,902 $ 19,988$ - $ 4,219,985 $ 903,643 $ 13,134,533 Special Revenue Funds
COPS Measure F
Athletic
Facility
Preservation
Capital Projects
Capital
Improvement
Sidewalk
Repair
Equipment
Replacement
Facilities
Maintenance
113 ATTACHMENT A Agenda Report Page 119
City of Piedmont
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2025
REVENUES:

Gas tax 596,475$ $ - $ - -$ $ - $ -
Intergovernmental - - - - 2,610 1,071,479
Use of money and property 7,163 107,648 3,293 - 2,809 104,827 Current service charges - 1,772,646 - - - -
Contributions and donations - 277,814 - - - -
Other revenues - - 30,164 - - -
Total revenues 603,638 1,880,294 277,814 33,457 5,419 1,176,306 EXPENDITURES:

Current:

Administration - - - - - -
Public works - - 6,076 - - -
Street improvement 450,145 - - - - -
Public Safety:

Police services - - - - - -
Fire services - - - - - -
Recreation 1,081,783 - - - - -
Capital outlay - - - - 186,453 -
Total expenditures 450,145 1,081,783 6,076 - 186,453 -

REVENUES OVER (UNDER)
EXPENDITURES 153,493 798,511 277,814 27,381 5,419 989,853 OTHER FINANCING SOURCES (USES):

Transfers in - - - - - -
Transfers out - (28,313) (840,514) (36,511) - -
Total other financing sources (uses) - (28,313) (840,514) (36,511) - - Net change in fund balances 153,493 770,198 (562,700) (9,130) 5,419 989,853 FUND BALANCES:

Beginning of year 246,688 1,786,350 1,210,293 61,930 52,114 1,709,357 End of year $ 400,181 $ 2,556,548 $ 647,593 $ 52,800 $ 57,533 $ 2,699,210 Special Revenue Funds
Streets
Projects
Schoolmates
Program
Projects and
Services Measure D
Abandoned
Vehicle
Measure BB
Sales Tax
114 ATTACHMENT A Agenda Report Page 120
Total Nonmajor
Governmental
Funds
-$ -$ $ - $ - -$ $ - $ - $ 596,475
134,335 44,441 - - - - 1,252,865 -
22,136 5,848 32,588 - - 157,438 19,193 462,943
- - 82,588 - - - 1,855,234 -
- - 39,400 - - - - 317,214
- - - - - - - 30,164
156,471 50,289 154,576 - - 157,438 19,193 4,514,895
- - - - - 41,677 46,913 88,590
- - - - - 39,496 - 45,572
- - - - - - - 450,145
42,176 - - - - 39,418 - 81,594
- - - - - 46,137 - 46,137
- - 36,984 - - 403,136 - 1,521,903
107,104 - - - - 930,781 410,227 1,634,565
149,280 - 36,984 - - 972,458 985,327 3,868,506
7,191 50,289 117,592 - - (815,020) (966,134) 646,389
- - - - - 850,000 1,158,827 2,008,827
(211,846) - - - - - (1,117,184) -
(211,846) - - - - 850,000 1,158,827 891,643
(204,655) 50,289 117,592 - - 34,980 192,693 1,538,032
421,068 103,856 576,310 (22,946) 19,988 3,730,562 377,728 10,273,298 $ 216,413 $ 154,145 $ 693,902 $ (22,946) $ 19,988 $ 3,765,542 $ 570,421 $ 11,811,330 Special Revenue Funds
COPS Measure F
Athletic
Facility
Preservation
Capital Projects
Capital
Improvement
Sidewalk
Repair
Equipment
Replacement
Facilities
Maintenance
115 ATTACHMENT A Agenda Report Page 121
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Streets Projects - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Gas tax $ 599,500 $ 599,500 $ 596,475 $ (3,025)
Use of money and property (142,000) (142,000) 7,163 149,163 Total revenues 457,500 457,500 603,638 146,138
EXPENDITURES:

Current:

Street improvement 440,000 440,000 450,145 (10,145)
Total expenditures 440,000 440,000 450,145 (10,145)

REVENUES OVER (UNDER)
EXPENDITURES 17,500 17,500 153,493 135,993
Net change in fund balances $ 17,500 $ 17,500 153,493 $ 135,993 FUND BALANCES:

Beginning of year 246,688
End of year $ 400,181
Budgeted Amounts
116 ATTACHMENT A Agenda Report Page 122
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Schoolmates Program - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 40,000 $ 40,000 $ 107,648 $ 67,648 Current service charges 1,431,000 1,481,000 1,772,646 291,646 Total revenues 1,471,000 1,521,000 1,880,294 359,294
EXPENDITURES:

Current:

Recreation 1,443,344 1,466,698 1,081,783 384,915
Total expenditures 1,443,344 1,466,698 1,081,783 384,915

REVENUES OVER (UNDER)
EXPENDITURES 27,656 54,302 798,511 744,209
OTHER FINANCING SOURCES (USES):

Transfers out (27,000) (32,000) (28,313) 3,687
Total other financing sources (uses) (27,000) (32,000) (28,313) 3,687 Net change in fund balances $ 656 $ 22,302 770,198 $ 747,896 FUND BALANCES:

Beginning of year 1,786,350
End of year $ 2,556,548
Budgeted Amounts
117 ATTACHMENT A Agenda Report Page 123
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure D - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 1,000 $ 1,000 $ 3,293 $ 2,293 Other revenues 35,000 35,000 30,164 (4,836)
Total revenues 36,000 36,000 33,457 (2,543)
EXPENDITURES:

Current:

Public works 36,500 36,500 6,076 30,424
Total expenditures 36,500 36,500 6,076 30,424

REVENUES OVER (UNDER)
EXPENDITURES (500) (500) 27,381 27,881
OTHER FINANCING SOURCES (USES):

Transfers out - (20,000) (36,511) (16,511)
Total other financing sources (uses) - (20,000) (36,511) (16,511) Net change in fund balances $ (500) $ (20,500) (9,130) $ 11,370 FUND BALANCES:

Beginning of year 61,930
End of year $ 52,800
Budgeted Amounts
118 ATTACHMENT A Agenda Report Page 124
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure BB Sales Tax - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 1,125,000 $ 1,125,000 $ 1,071,479 $ (53,521) Use of money and property 25,000 25,000 104,827 79,827
Total revenues 1,150,000 1,150,000 1,176,306 26,306
EXPENDITURES:

Capital outlay 1,125,000 1,825,000 186,453 1,638,547
Total expenditures 1,125,000 1,825,000 186,453 1,638,547

REVENUES OVER (UNDER)
EXPENDITURES 25,000 (675,000) 989,853 1,664,853
Net change in fund balances $ 25,000 $ (675,000) 989,853 $ 1,664,853 FUND BALANCES:

Beginning of year 1,709,357
End of year $ 2,699,210
Budgeted Amounts
119 ATTACHMENT A Agenda Report Page 125
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual COPS - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ - $ 100,000 $ 134,335 $ 34,335
Use of money and property 10,000 10,000 22,136 12,136
Total revenues 10,000 110,000 156,471 46,471
EXPENDITURES:

Current:

Public safety:

Police services 320,000 115,000 42,176 72,824
Capital outlay 60,000 60,000 107,104 (47,104)
Total expenditures 380,000 175,000 149,280 25,720

REVENUES OVER (UNDER)
EXPENDITURES (370,000) (65,000) 7,191 72,191
OTHER FINANCING SOURCES (USES):

Transfers out - (240,000) (211,846) 28,154
Total other financing sources (uses) - (240,000) (211,846) 28,154 Net change in fund balances $ (370,000) $ (305,000) (204,655) $ 100,345 FUND BALANCES:

Beginning of year 421,068
End of year $ 216,413
Budgeted Amounts
120 ATTACHMENT A Agenda Report Page 126
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure F - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 40,000 $ 40,000 $ 44,441 $ 4,441
Use of money and property 1,000 1,000 5,848 4,848
Total revenues 41,000 41,000 50,289 9,289
EXPENDITURES:

Capital outlay 40,000 40,000 - 40,000
Total expenditures 40,000 40,000 - 40,000

REVENUES OVER (UNDER)
EXPENDITURES 1,000 1,000 50,289 49,289
Net change in fund balances $ 1,000 $ 1,000 50,289 $ 49,289 FUND BALANCES:

Beginning of year 103,856
End of year $ 154,145
Budgeted Amounts
121 ATTACHMENT A Agenda Report Page 127
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Athletic Facility Preservation - Special Revenue Fund
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 10,000 $ 10,000 $ 32,588 $ 22,588 Current service charges 68,000 68,000 82,588 14,588
Contributions and donations 30,000 30,000 39,400 9,400
Total revenues 108,000 108,000 154,576 46,576
EXPENDITURES:

Current:

Recreation 42,000 42,000 36,984 5,016
Total expenditures 42,000 42,000 36,984 5,016

REVENUES OVER (UNDER)
EXPENDITURES 66,000 66,000 117,592 51,592
Net change in fund balances $ 66,000 $ 66,000 117,592 $ 51,592 FUND BALANCES:

Beginning of year 576,310
End of year $ 693,902
Budgeted Amounts
122 ATTACHMENT A Agenda Report Page 128
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Equipment Replacement - Capital Projects
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 85,000 $ 85,000 $ 157,438 $ 72,438 Total revenues 85,000 85,000 157,438 72,438
EXPENDITURES:

Current:

Administration 54,840 54,840 41,677 13,163
Public safety:

Police services 12,000 - - -
Capital outlay 1,528,335 1,076,335 930,781 145,554
Total expenditures 1,595,175 1,131,175 972,458 158,717

REVENUES OVER (UNDER)
EXPENDITURES (1,510,175) (1,046,175) (815,020) 231,155
OTHER FINANCING SOURCES (USES):

Transfers in - - 850,000 850,000
Total other financing sources (uses) - - 850,000 850,000 Net change in fund balances $ (1,510,175) $ (1,046,175) 34,980 $ 1,081,155 FUND BALANCES:

Beginning of year 3,730,562
End of year $ 3,765,542
Budgeted Amounts
123 ATTACHMENT A Agenda Report Page 129
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Facilities Maintenance - Capital Projects
For the year ended June 30, 2025
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $ 15,000 $ 15,000 $ 19,193 $ 4,193 Total revenues 15,000 15,000 19,193 4,193
EXPENDITURES:

Current:

Administration 23,000 23,000 46,913 (23,913)
Public works 68,000 68,000 39,496 28,504
Public safety:

Police services 21,000 21,000 39,418 (18,418)
Fire services 13,000 13,000 46,137 (33,137)
Recreation 257,500 257,500 403,136 (145,636)
Capital outlay 700,000 700,000 410,227 289,773
Total expenditures 1,082,500 1,082,500 985,327 97,173

REVENUES OVER (UNDER)
EXPENDITURES (1,067,500) (1,067,500) (966,134) 101,366
OTHER FINANCING SOURCES (USES):

Transfers in 1,132,000 882,000 1,158,827 276,827
Total other financing sources (uses) 1,132,000 882,000 1,158,827 276,827 Net change in fund balances $ 64,500 $ (185,500) 192,693 $ 378,193 FUND BALANCES:

Beginning of year 377,728
End of year $ 570,421
Budgeted Amounts
124 ATTACHMENT A Agenda Report Page 130
City of Piedmont
Internal Service Funds
Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues and expenses of each internal service fund are eliminated by netting them against operations of the City departments that generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the fund financial statements.
125 ATTACHMENT A Agenda Report Page 131
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126 ATTACHMENT A Agenda Report Page 132
City of Piedmont
Combining Statement of Net Position
Internal Service Funds
June 30, 2025
Totals
ASSETS
Current Assets:

Cash and investments 2,213,969 $ 545,840 $ 2,759,809 $
Total current assets 2,213,969 545,840 2,759,809
Total assets 545,840 2,213,969 2,759,809

LIABILITIES
Current liabilities:

Accounts payable 94,300 47,923 142,223
Claims payable - current 128,708 306,323 435,031
Total current liabilities 223,008 354,246 577,254
Noncurrent liabilities:

Claims payable 1,242,292 (70,323) 1,171,969
Total noncurrent liabilities 1,242,292 (70,323) 1,171,969 Total liabilities 1,465,300 283,923 1,749,223

NET POSITION
Unrestricted 748,669 261,917 1,010,586
Total net position $ 748,669 $ 261,917 $ 1,010,586
Workers'
Compensation
Insurance
Liabilities
127 ATTACHMENT A Agenda Report Page 133
City of Piedmont
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the year ended June 30, 2025
Totals
OPERATING REVENUES:

Total operating revenues $ - - $ - $
OPERATING EXPENSES:

Insurance and claims expense 1,862,704 1,446,324 3,309,028 Total operating expenses 1,862,704 1,446,324 3,309,028
Operating income (loss) (1,862,704) (1,446,324) (3,309,028) NONOPERATING REVENUES (EXPENSES):

Other income (expense) 1,862,704 1,446,324 3,309,028
Total nonoperating revenues (expenses) 1,862,704 1,446,324 3,309,028 Income before contributions and transfers - - -
CONTRIBUTIONS AND TRANSFERS:

Total contributions and transfers - - -
Change in net position - - -
NET POSITION:

Beginning of year 261,917 748,669 1,010,586
End of year $ 261,917 748,669 $ 1,010,586 $
Workers'
Compensation
Insurance
Liabilities
128 ATTACHMENT A Agenda Report Page 134
City of Piedmont
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2025
Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Claims and premiums paid (1,303,916) $ (1,830,529) $ $ (3,134,445) Net cash provided by (used in) operating activities (1,830,529) (1,303,916) (3,134,445) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Other income 1,862,704 1,446,324 3,309,028
Net cash provided by (used in)
noncapital financing activities 1,862,704 1,446,324 3,309,028 Net cash flows 32,175 142,408 174,583
CASH AND INVESTMENTS - Beginning of year 513,665 2,071,561 2,585,226 CASH AND INVESTMENTS - End of year $ 545,840 2,213,969 $ 2,759,809 $

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

Operating income (loss) (1,446,324) $ (1,862,704) $ (3,309,028) $ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Changes in assets and liabilities:

Increase (decrease) in accounts payable 44,408 47,521 91,929 Increase (decrease) in claims payable 98,000 (15,346) 82,654 Net cash provided by (used in) operating activities $ (1,830,529) (1,303,916) $ (3,134,445) $ Insurance
Liabilities
Workers'
Compensation
129 ATTACHMENT A Agenda Report Page 135
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130 ATTACHMENT A Agenda Report Page 136
City of Piedmont
General Fund
The following funds are reported in total on the Governmental Fund Financial Statements under the column General Fund.

General Fund
The general operating fund of the City and is used to account for all financial resources.

Deposits and Bonds
Accounts for the receipt and use of deposits held by the City.

Traffic Safety
Accounts for City revenue from vehicle code fines and parking ticket citation fees. The revenue comes from Alameda County and the Superior Court of California as a result of vehicle code violations and parking enforcement efforts by the Police Department. At the end of each fiscal year, revenue in the fund is transferred to the General Fund.

Pension Rate Stabilization
Accounts for funds held in a Section 115 Trust with the Public Agency Retirement Services (PARS) to aid in funding future pension expense and allow the City to smooth the effect of rising pension costs. 131 ATTACHMENT A Agenda Report Page 137
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132 ATTACHMENT A Agenda Report Page 138
City of Piedmont
Combining Balance Sheet
General Fund
June 30, 2025
Total
General Fund
ASSETS
Cash and investments $ 8,494,329 $ 419,002 $ 43,513 $ 8,956,844 - $ Restricted cash and investments - - 5,218,407 - 5,218,407 Receivables:

Accounts receivable 2,356,955 - 313 2,357,268 -
Interest receivable 119,730 - - - 119,730
Leases receivable 152,934 - - - 152,934
Prepaid expenses 102,760 - - - 102,760
Due from other funds 22,946 - - - 22,946
Total assets $ 11,249,654 $ 419,002 $ 43,826 $ 5,218,407 $ 16,930,889

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 1,325,217 $ 2,185 $ 1,825 $ - $ 1,329,227 $ Accrued wages and benefits 672,954 - - - 672,954
Deposits payable 2,540 416,817 - - 419,357
Unearned revenue 1,796,484 - - - 1,796,484
Total liabilities 419,002 3,797,195 1,825 - 4,218,022
Deferred Inflows of Resources:

Leases 158,616 - - - 158,616
Total deferred inflows of resources - 158,616 - - 158,616 Fund Balances:

Nonspendable 102,760 - - - 102,760
Restricted - - - 5,218,407 5,218,407
Unassigned 7,191,083 - 42,001 - 7,233,084
Total fund balances - 7,293,843 42,001 5,218,407 12,554,251 Total liabilities, deferred inflows of
resources and fund balances $ 419,002 11,249,654 $ 43,826 $ 5,218,407 $ 16,930,889 $ General Fund
Deposits and
Bonds Traffic Safety
Pension Rate
Stabilization
133 ATTACHMENT A Agenda Report Page 139
City of Piedmont
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance General Fund
For the year ended June 30, 2025
Total
General Fund
REVENUES:

Property tax $ - 18,920,860 $ - $ - $ 18,920,860 $
Sales tax 219,837 - - - 219,837
Franchise tax 600,913 - - - 600,913
Utility users tax 1,547,283 - - 1,547,283 -
Real property transfer tax 4,515,282 - - 4,515,282 -
Business license and rental tax 717,965 - - - 717,965
Licenses and permits 872,697 - - - 872,697
Intergovernmental 4,064,241 - - 4,064,241 -
Use of money and property 1,030,299 - 41 420,375 1,450,715 Current service charges 5,543,832 - - 5,543,832 -
Parcel tax 2,690,645 - - 2,690,645 -
Contributions and donations - - 56,745 - 56,745
Other revenues 288,356 - - - 288,356
Total revenues 41,012,210 - 56,786 420,375 41,489,371
EXPENDITURES:

Current:

Administration 4,918,153 - - 4,918,153 -
Public works 6,681,048 - - 6,681,048 -
Public safety:

Police services 8,388,904 - 16,530 8,405,434 -
Fire services 8,916,369 - - 8,916,369 -
Recreation 4,193,032 - - 4,193,032 -
Nondepartmental 4,193,520 - - 4,193,520 -
Capital outlay 473,410 - - - 473,410
Debt service - principal 432,291 - - - 432,291
Total expenditures 38,196,727 - 16,530 38,213,257 -

REVENUES OVER (UNDER)
EXPENDITURES 2,815,483 - 40,256 420,375 3,276,114

OTHER FINANCING SOURCES (USES)
Transfers in 1,211,356 - - 1,211,356 -
Transfers out (5,260,207) - (40,000) (5,300,207) -
Total other financing sources (uses) (4,048,851) - (40,000) (4,088,851) - Net change in fund balances (1,233,368) - 256 420,375 (812,737) FUND BALANCES:

Beginning of year 8,527,211 - 41,745 4,798,032 13,366,988 End of year $ 7,293,843 $ - $ 42,001 $ 5,218,407 $ 12,554,251 General Fund
Deposits and
Bonds Traffic Safety
Pension Rate
Stabilization
134 ATTACHMENT A Agenda Report Page 140

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
We have audited, in accordance with the 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Piedmont, California (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 and have issued our report thereon dated January 15, 2026.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

ATTACHMENT A Agenda Report Page 141
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California

Page 2 ends

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Emeryville, California
January 15, 2026
136 ATTACHMENT A Agenda Report Page 142
City of Piedmont
Basic Financial Statements
Schedule of Findings
For the year ended June 30, 2025
Current Year Findings
A. Financial Statement Audit Finding
None reported.

Prior Year Findings
A. Financial Statement Audit Finding
2024-001: Information Technology Control (Significant Deficiency) Criteria:

The City is responsible for an effective internal control system for software applications that involve financial transactions.

Condition:

As part of our audit, we noted the following matters related to the City’s general information technology controls across critical applications, such as Caselle in the Finance Division, Community Pass in the Recreation Department, and ComDev in the Planning and Building Department:

1. User Provisioning and Termination Process
The lack of a formal process for granting and revoking access to the aforementioned applications increases the risk of inappropriate access, particularly when employees join, leave, or change roles. Without formal procedures, there is no guarantee that user access is appropriately managed, monitored, and terminated in a timely manner, potentially leaving sensitive data vulnerable to misuse.

2. Password Security in ComDev
The current version of the ComDev application does not enforce password requirements that align with minimum or best industry practices. This oversight weakens the security posture of the system, exposing it to higher risks of unauthorized access and potential data breaches.

3. Segregation of Duties (SOD) Risk
The Finance Director is currently designated as the super user with admin-level access to all the aforementioned applications. This role concentration creates a conflict of interest and introduces segregation of duties (SOD) risks, as the individual responsible for overseeing financial activities also has the ability to configure and manage the applications. This overlap between administrative and financial duties can lead to unauthorized changes to financial data or the system, circumventing critical controls that are meant to protect the integrity of financial reporting. 137 ATTACHMENT A Agenda Report Page 143
City of Piedmont
Basic Financial Statements
Schedule of Findings
For the year ended June 30, 2025

4. Absence of SOC Report Evaluations
There is no evidence that management or the IT contractor performs SOC (System and Organization Controls) report evaluations over the control objectives, audit opinions, and complementary user entity controls for the SaaS applications in use. Without a thorough evaluation of the relevant SOC reports, management cannot be assured that third-party service providers are maintaining the necessary security and control measures to safeguard data and operations.

Cause:

The City’s internal controls for financial transactions involving its software applications are not comprehensive and raise the concern of inappropriate access.

Effect:

The identified issues create multiple vulnerabilities, including unauthorized access, potential data breaches, and inadequate security controls. The lack of a formalized access management process and the absence of industry-standard password protections expose the City to a higher likelihood of data compromise. The concentration of admin-level access with the Finance Director creates a significant risk of conflicts of interest, which could result in manipulation or misuse of sensitive financial information.

Moreover, failure to review SOC reports means that management cannot ensure that their third-party service providers maintain adequate controls to protect critical data.

Recommendation:

1. Implement a formal user provisioning and termination process for all aforementioned applications, ensuring that access is granted, modified, and revoked in a timely and controlled manner. This should include role-based access controls (RBAC) and a mechanism to ensure that no users retain access after their employment or role changes.

2. Update the ComDev application to enforce strong password policies, aligning with best industry practices for password length, complexity, and expiration.

3. Limit admin-level access to the IT team or designated control owners who are independent of financial operations to mitigate SOD risks. Conduct a comprehensive review of access permissions to ensure that users have only the necessary privileges to perform their job functions.

4. Implement a process for evaluating SOC reports for all relevant SaaS providers, ensuring that their controls meet the City’s security and compliance requirements. Management should evaluate the SOC reports at least annually or whenever there are significant changes in the service providers' systems or controls.
138 ATTACHMENT A Agenda Report Page 144
City of Piedmont
Basic Financial Statements
Schedule of Findings
For the year ended June 30, 2025
Management Response:

Terminations: By August 30, 2025, the City will deny all access for terminated employees by setting the account to inactive, locking the account, and enabling the deny access option to ensure proper access control.

Passwords: The City will work with the its IT team to develop a plan to address the establishment of 4- digit passwords. Since this change will impact all users and require update to existing passwords, the City will develop a plan for implementation no later than December 30, 2025.

Admin Level – Finance Director: The City will work with its IT team to develop a plan consistent with Caselle’s recommendation and that will address the segregation of duties conflict by the end of December 2025.

Status:

Implemented.
139 ATTACHMENT A Agenda Report Page 145
City of Piedmont
Measure BB Funds
Piedmont, California
Financial Statements and
Independent Auditor’s Reports
For the year ended June 30, 2025
ATTACHMENT B Agenda Report Page 146
ATTACHMENT B Agenda Report Page 147
City of Piedmont
Measure BB Fund
For the year ended June 30, 2025
Table of Contents
Page
Independent Auditor’s Report .............................................................................................................................. 1 Financial Statements:

Balance Sheet .......................................................................................................................................................... 5 Statement of Revenues, Expenditures and
Changes in Fund Balances .................................................................................................................................... 6 Notes to Financial Statements .............................................................................................................................. 7 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ......................................................................................................................... 9 Report on Compliance and on Internal Control
over Compliance for Measure BB .................................................................................................................... 11 ATTACHMENT B Agenda Report Page 148
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ATTACHMENT B Agenda Report Page 149
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Measure BB Fund of the City of Piedmont, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the Measure BB Fund of the City, as of June 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Measure BB Fund 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 opinion.

Emphasis of Matter
As discussed in Note 2, the financial statements present only the Measure BB Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2025, and changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Management has omitted a management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, 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 financial statements in an appropriate operational, economic, or historical context.

Our opinion on the basic financial statements is not affected by this missing information.

ATTACHMENT B Agenda Report Page 150
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California

Page 2 ends

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 Measure BB Fund’ 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.

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

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
2 ATTACHMENT B Agenda Report Page 151
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California

Page 3 ends

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
3 ATTACHMENT B Agenda Report Page 152
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4 ATTACHMENT B Agenda Report Page 153
City of Piedmont
Measure BB Fund
Balance Sheet
June 30, 2025
Streets and Bikes and
Roads Pedestrians Total
ASSETS:

Cash and investments 2,422,942 $ 460,183 $ $ 2,883,125
Other receivables 175,200 12,779 187,979
Accrued interest receivable 18,126 - 18,126
Total assets $ 2,616,268 $ 472,962 $ 3,089,230
LIABILITIES AND FUND BALANCES:

Accounts payable $ 390,020 - $ $ 390,020
Total liabilities 390,020 - 390,020
Fund Balances:

Restricted for Measure BB capital projects 2,616,268 82,942 2,699,210 Total fund balances 2,616,268 82,942 2,699,210
Total liabilities and fund balances $ 2,616,268 $ 472,962 $ 3,089,230 See accompanying Notes to Financial Statements.
5 ATTACHMENT B Agenda Report Page 154
City of Piedmont
Measure BB Fund
Statement of Revenues, Expenditures and Changes in Fund Balances Streets and Bikes and
Roads Pedestrians Total
REVENUES:

Measure BB pass-through revenues
pass-through allocation 998,641 $ 72,838 $ $ 1,071,479
Interest income 104,827 104,827 -
Total revenues 1,103,468 72,838 1,176,306
EXPENDITURES:

Public works 186,453 186,453 -
Total expenditures - 186,453 186,453
NET CHANGE IN FUND BALANCE 917,015 72,838 989,853
FUND BALANCES:

Beginning of year 1,699,253 10,104 1,709,357
End of year $ 2,616,268 $ 82,942 $ 2,699,210
For the year ended June 30, 2025
See accompanying Notes to Financial Statements.
6 ATTACHMENT B Agenda Report Page 155
City of Piedmont
Measure BB Fund
Notes to Financial Statements
For the year ended June 30, 2025

1. BACKGROUND – MEASURE BB
Measure BB is a tax that was approved by the voters of Alameda County in November 2014, which implemented a 30-year Transportation Expenditure Plan. The measure extended Measure B which was the original 0.5 percent transportation sales tax approved in 2000 from ending April 1, 2022, to April 1, 2045, and increased the tax by 0.5 percent. This resulted in a 1 percent total sales tax in the County dedicated to transportation expenses. The City receives a portion of the proceeds to be used for transportation-related expenditures. The Measure BB Fund accounts for the direct funding from the measure for local street projects and bicycle and pedestrian projects based on population and road mileage provided by the additional 0.5 percent.

Projects funded by Measure BB during the year were as follows:

Street Resurfacing - To improve, repair, and overlay cities streets.

Bike and Pedestrian - To provide sidewalk and ADA improvements and to implement the bikeway network.

The pool of funds held by the County is allocated among the cities in the County, based on the cities' populations and the number of roads within their city limits for other transportation-related projects.

Funds allocated for streets and roads, bike lanes and pedestrian lanes are recorded as a special revenue fund.

2. SUMMARY OF SIGNIFICNAT ACCOUNTING POLICIES
A. Reporting Entity
All transactions of the Measure BB Fund of the City of Piedmont, California are included as separate special revenue and capital project funds in the basic financial statements of the City. The financial statements are intended to present the financial position, results of operations and cash flows of only transactions recorded under the Measure BB Fund. The fund itself is included in the financial statements of the City.

B. Basis of Presentation
The Measure BB Fund's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. 7 ATTACHMENT B Agenda Report Page 156
City of Piedmont
Measure BB Fund
Notes to Financial Statements
For the year ended June 30, 2025

2. SUMMARY OF SIGNIFICNAT ACCOUNTING POLICIES, Continued C. Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.

All governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when measurable and available and expenditures are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

D. Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. CASH AND INVESTMENTS
The Measure BB fund participates in the City's cash and investment pool. See the City's Basic Financial Statements for disclosures related to cash and investments and the related custodial risk categorization.

4. COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs did not require a Single Audit during the year ended June 30, 2025. However, these programs are subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 8 ATTACHMENT B Agenda Report Page 157

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
We have audited, in accordance with the 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, the financial statements of the Measure BB Fund of the City of Piedmont, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, and have issued our report thereon dated December 29, 2025.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting in relation to Measure BB Fund (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

ATTACHMENT B Agenda Report Page 158
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California

Page 2 ends

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure BB Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
10 ATTACHMENT B Agenda Report Page 159

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL

OVER COMPLIANCE FOR MEASURE BB
Independent Auditor’s Report
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Report on Compliance for Measure BB
Opinion on Compliance for Measure BB
We have audited City of Piedmont’s (City) compliance with the types of compliance requirements described in the agreement between the City and Alameda County Transportation Commission that could have a direct and material effect on its Measure BB Fund for the year ended June 30, 2025.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its Measure BB Fund for the year ended June 30, 2025.

Basis for Opinion on Measure BB
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the agreement between the City and Alameda County Transportation Commission. Our responsibilities under those standards and are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for the City’s Measure BB Fund.

Our audit does not provide a legal determination of the Measure BB Fund’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s Measure BB Fund.

ATTACHMENT B Agenda Report Page 160
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 2 ends

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Measure BB Fund’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Measure BB Fund’s compliance with the requirements of the agreement between the City and Alameda County Transportation Commission.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, 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 Measure BB Fund’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the agreement between the City and Alameda County Transportation Commission, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Other Matters
Under Measure BB, approved by the voters of Alameda County in 2014, the City has received a total of 12 months of revenue from July 2024 through June 2025. The Local Street and Roads program has received $998,641and the Bike and Pedestrians program has received $72,838. 12 ATTACHMENT B Agenda Report Page 161
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 3 ends

Report on Internal Control over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined below. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of the agreement between the City and the Alameda County Transportation Commission on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the agreement between the City and the Alameda County Transportation Commission will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the agreement between the City and the Alameda County Transportation Commission that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the agreement between the City and the Alameda County Transportation Commission. Accordingly, this report is not suitable for any other purpose.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
13 ATTACHMENT B Agenda Report Page 162
City of Piedmont
Measure F Fund
Piedmont, California
Financial Statements and
Independent Auditor’s Reports
For the year ended June 30, 2025
ATTACHMENT C Agenda Report Page 163
ATTACHMENT C Agenda Report Page 164
City of Piedmont
Measure F Fund
For the year ended June 30, 2025
Table of Contents
Page
Independent Auditor’s Report .............................................................................................................................. 1 Financial Statements:

Balance Sheet .......................................................................................................................................................... 5 Statement of Revenues, Expenditures and
Changes in Fund Balances .................................................................................................................................... 6 Notes to Financial Statements .............................................................................................................................. 7 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ......................................................................................................................... 9 Report on Compliance and on Internal Control
over Compliance for Measure F ........................................................................................................................ 11 ATTACHMENT C Agenda Report Page 165
This page intentionally left blank.

ATTACHMENT C Agenda Report Page 166
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Measure F Fund (Fund) of the City of Piedmont, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund of the City, as of June 30, 2025, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Emphasis of Matter
As discussed in Note 2, the financial statements present only the Measure F Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, or the change in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Such missing information, 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 financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

ATTACHMENT C Agenda Report Page 167
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California

Page 2 ends

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 Fund’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.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
2 ATTACHMENT C Agenda Report Page 168
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California

Page 3 ends

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
3 ATTACHMENT C Agenda Report Page 169
This page intentionally left blank.
4 ATTACHMENT C Agenda Report Page 170
City of Piedmont
Measure F Fund
Balance Sheet
June 30, 2025
Local Road
Improvement
and Repair
Program
ASSETS:

Cash and investments 145,422 $
Other receivable 7,673
Accrued interest receivable 1,050
Total assets $ 154,145
Fund Balance:

Restricted for Measure F capital projects 154,145 $
Total fund balance 154,145
Total liabilities and fund balance $ 154,145
See accompanying Notes to Financial Statements.
5 ATTACHMENT C Agenda Report Page 171
City of Piedmont
Measure F Fund
Statement of Revenues, Expenditures and Changes in Fund Balance Local Road
Improvement
and Repair
Program
REVENUES:

Measure F pass-through revenues
pass-through allocation 44,441 $
Interest income 5,848
Total revenues 50,289
50,289
FUND BALANCE:

Beginning of year 103,856
End of year $ 154,145
For the year ended June 30, 2025

CHANGE IN FUND BALANCE
See accompanying Notes to Financial Statements.
6 ATTACHMENT C Agenda Report Page 172
City of Piedmont
Measure F Fund
Notes to Financial Statements
For the year ended June 30, 2025

1. BACKGROUND – MEASURE F
The Measure F Alameda County Vehicle Registration Fee (Measure F) was approved by the voters in November 2010, with 63 percent of the vote. The fee will generate about $10.7 million per year by a $10 per year vehicle registration fee. The collection of the $10 per year vehicle registration fee started in the first week of May 2011. The goal of Measure F is to sustain the County's transportation network and reduce traffic congestion and vehicle related pollution. The program includes the following four categories of projects:
 Local Road Improvement and Repair Program (60 percent)  Transit for Congestion Relief (25 percent)
 Local Transportation Technology (10 percent)
 Pedestrian and Bicyclist Access and Safety Program (5 percent) The Alameda County Transportation Commission administers the program and distributes an equitable share of funds among the four planning areas of the county over successive five-year cycles. Geographic equity will be measured by a formula, weighted 50 percent by population of the planning area and 50 percent of registered vehicles of the planning area.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
All transactions of the Measure F Fund of the City of Piedmont, California (City) are included as a separate capital project fund in the basic financial statements of the City.

The accompanying financial statements are intended to present the financial position and results of operations of only transactions recorded under the Measure F Fund. The fund itself is included in the financial statements of the City.

B. Basis of Presentation
The Measure F Fund's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

C. Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.
7 ATTACHMENT C Agenda Report Page 173
City of Piedmont
Measure F Fund
Notes to Financial Statements
For the year ended June 30, 2025

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Basis of Accounting, Continued
All governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when measurable and available and expenditures are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

D. Description of Fund
The accounts are maintained on the basis of fund accounting. A fund is a separate accounting entity with a self-balancing set of accounts. The City uses special revenue funds to account for the proceeds of specific revenues (other than for capital projects) that are legally restricted to be expended for specified purposes.

E. Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. CASH AND INVESTMENTS
The Measure F fund participates in the City's cash and investment pool. See the City's Basic Financial Statements for disclosures related to cash and investments and the related custodial risk categorization.

4. COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs did not require a Single Audit during the year ended June 30, 2025. However, these programs are subject to further examination by the granters and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 8 ATTACHMENT C Agenda Report Page 174

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
We have audited, in accordance with the 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, the financial statements of the Measure F Fund (Fund) of the City of Piedmont, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, and have issued our report thereon dated December 29, 2025.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

ATTACHMENT C Agenda Report Page 175
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California

Page 2 ends

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure F Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
10 ATTACHMENT C Agenda Report Page 176

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL

OVER COMPLIANCE FOR MEASURE F
Independent Auditor’s Report
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Report on Compliance for Measure F
Opinion on Compliance for Measure F
We have audited City of Piedmont’s (City) compliance with the types of compliance requirements described in the agreement between the City and Alameda County Transportation Commission that could have a direct and material effect on its Measure F Fund for the year ended June 30, 2025.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its Measure F Fund for the year ended June 30, 2025.

Basis for Opinion on Measure F
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the agreement between the City and Alameda County Transportation Commission. Our responsibilities under those standards and are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

Our audit does not provide a legal determination of the Measure F Fund’s compliance with the compliance requirements referred to above.

ATTACHMENT C Agenda Report Page 177
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 2 ends

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Measure F Fund’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Measure F Fund’s compliance with the requirements of the agreement between the City and Alameda County Transportation Commission.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, 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 Measure F Fund’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the agreement between the City and Alameda County Transportation Commission, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such opinion is expressed.

Page 3 ends

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Badawi & Associates, CPAs
Emeryville, California
December 29, 2025
13 ATTACHMENT C Agenda Report Page 179
City of Piedmont
Parking Citation
Processing
Piedmont, California
Agreed-Upon Procedures report on
Compliance With California Vehicle
Code Section 40200.3
For the year ended June 30, 2025
ATTACHMENT D Agenda Report Page 180
ATTACHMENT D Agenda Report Page 181

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES January 15, 2026
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
We have performed the procedures enumerated below on the parking citation processing system compliance with the California Vehicle Code Section 40200.3 of the City of Piedmont (the City) as of June 30, 2025. The City's management is responsible for compliance of the parking citation processing system with the California Vehicle Code Section 40200.3.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of the California Vehicle Code Section 40200.3.

Additionally, the Office of the Auditor-Controller of the County of Alameda has agreed to and acknowledged that the procedures performed are appropriate for its purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedure and associated findings are as follows:

1. We reviewed the procedures for recording parking citation cases to evaluate the controls over the recording process.

2. We performed the following tests on a sample of 3 monthly reports prepared by the outside processing bureau.
(a) We reconciled the number of paid citations listed on the detail reports of citations paid with the number reported on the summary report of citations paid.

No exceptions were noted.
(b) We reconciled the amount of bail paid listed on the summary report of citations paid with the bank deposits.

No exceptions were noted.

ATTACHMENT D Agenda Report Page 182
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 2 ends

(c) We reconciled the number of citations subject to surcharge as reported on the summary report of citations paid with the number reported on the surcharge calculation prepared by the outside processing bureau.

No exceptions were noted.
(d) We recalculated the total surcharge calculated by the outside processing bureau to verify its accuracy.

No exceptions were noted.
(e) We compared the amount of the surcharge calculated by the outside processing bureau to the copy of the remittance to the County.

No exceptions were noted.

3. We reviewed the date of remittance to the County for each month during the year to determine whether remittance was made no later than 45 days after the last day of the month in which the fines were received.

No exceptions were noted.

4. We compiled the following data from the records generated by the parking citation processing system of the City for the fiscal year ended June 30, 2025:

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the compliance of the City's parking citation processing system with the California Vehicle Code Description Citations Surcharge
Criminal Justice Construction Fund surcharge 790 994.50 $ Courthouse Construction Fund surcharge 790 994.50
County General Fund #1 surcharge 790 663.00
County General Fund #2 surcharge 790 663.00
State Courthouse Construction Fund surcharge 790 994.50 Immediate & Critical Needs Account surcharge 790 1,989.00 Trial Court Trust Fund (SB 857) surcharge 790 1,989.00
Total surcharges 8,287.50
Surcharges remitted to the County 8,287.50 $
2 ATTACHMENT D Agenda Report Page 183
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

Page 3 ends

Section 40200.3. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet out other ethical responsibilities, in accordance with the relevant ethical requirements related to out agreed-upon procedures engagement.

This report is intended solely for the information and use of management and the City Council of the City and the Office of the Auditor-Controller of the County of Alameda and is not intended to be and should not be used by anyone other than those specified parties.

Badawi & Associates, CPAs
Emeryville, California
January 15, 2026
3 ATTACHMENT D Agenda Report Page 184
City of
Piedmont
Piedmont, California
Independent Accountants’ Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the fiscal year ending June 30, 2026
ATTACHMENT E Agenda Report Page 185
ATTACHMENT E Agenda Report Page 186
INDEPENDENT ACCOUNTANTS’ REPORT
To the Honorable Mayor and Members of City Council of the City of Piedmont Piedmont, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Piedmont (City) for the fiscal year ending June 30, 2026. The City’s management is responsible for the accompanying Appropriations Limit Schedule.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of the requirements of Section 1.5 of Article XIII-B of the California Constitution.

Additionally, the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) has agreed to and acknowledged that the procedures performed are appropriate for their purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures performed and our findings are described below:

1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the fiscal year ending June 30, 2026, and determined that the limit and annual calculation factors were adopted by resolution of City Council. We also determined that the population and inflation options were selected by a recorded vote of City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Schedule, we added the prior year’s limit to the total adjustments, and agreed the resulting amount to the current year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.

Finding: No exceptions were noted as a result of our procedures.

4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Schedule to the prior year appropriations limit adopted by the City Council during the prior year.

Finding: No exceptions were noted as a result of our procedures.

ATTACHMENT E Agenda Report Page 187
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record, and its distribution is not limited.

Badawi & Associates, CPAs
Emeryville, California
January 15, 2026
ATTACHMENT E Agenda Report Page 188
City of Piedmont
Appropriations Limit Schedule
Amount Source
Appropriations limit for the year ended June 30, 2025 $ 32,425,416 Prior year schedule Revised prior year Measure Y voter approved increase 2,690,000 Client's budget A. Revised Appropriations limit for the year ended,
June 30, 2025 29,735,416
B. Calculation Factors:

1. Population increase % 1.0031 State Department of Finance

2. Inflation increase % 1.0644 State Department of Finance

3. Total adjustment factor % 1.0677 B1*B2
C. Annual Adjustment Increase $ 2,013,088 [(B3-1)*A)]
D. Other Adjustments
Voter Approved Increase 3,228,000 Client's budget
E. Total Adjustments 5,241,088 (C+D)
F. Appropriations limit for the year ending June 30, 2026 $ 34,976,504 (A+E) For the fiscal year ending June 30, 2026
ATTACHMENT E Agenda Report Page 189
City of Piedmont
Notes to Appropriations Limit Schedule
For the fiscal year ending June 30, 2026

1. PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes.

Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.

2. METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-1987, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

3. INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Piedmont for the fiscal year 2025- 2026 represents the change in per capita income in the State of California.

4. POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction’s own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City of Piedmont for fiscal year 2025-2026 represents the annual percentage change in population for the County.

5. OTHER ADJUSTMENTS
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services, to, or from, another government agency or private entity. The adjustments made for fiscal year ending June 30, 2026 was the Measure Y voter approved increase.

ATTACHMENT E Agenda Report Page 190
City of
Piedmont
Piedmont, California
Auditor’s Communication with
Those Charged with Governance
For the year ended June 30, 2025
ATTACHMENT F Agenda Report Page 191
ATTACHMENT F Agenda Report Page 192

January 15, 2026
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
We have audited the financial statements of the City of Piedmont (City) as of and for the year ended June 30, 2025, and have issued our report thereon dated January 15, 2026. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated August 5, 2025, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America.

Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.

However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

ATTACHMENT F Agenda Report Page 193
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California

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Piedmont City CouncilJanuary 20, 2026

Piedmont City Council
January 20, 2026